As next-gen communications services move out of the network and into the service layer, they create some interesting delivery challenges that look suspiciously similar to those that the IT world has grappled with for years. Enterprises have long struggled with the performance, scalability, resilience, and security of their applications as they deliver them across the corporate WAN. As telcos become applications providers in a next-gen services market, they also face the same set of problems on a larger scale and with the added complication of having to support multi-tenancy.

Take Session Initiation Protocol (SIP) applications, for example. The way the next-gen voice network is currently designed is proving unscalable. "The challenge VoIP [voice over IP] providers are running into as VoIP traffic continues to grow is that SIP endpoints are connected to one another in a static way," comments Patrick Fitzgerald, Metaswitch Networks VP of Sales and Marketing, Service Broker Division, formerly known as AppTrigger Inc. "Every time a new SIP endpoint is added to the network, the switch has to be reconfigured. There is a gap emerging 'round the dynamic management of SIP traffic."

Several network-oriented companies are rushing to plug that gap. In the past six months, Tekelec Inc. (Nasdaq: TKLC) and Acme Packet Inc. (Nasdaq: APKT) have introduced SIP proxy products, and Fitzgerald makes no secret of the fact that he sees SIP session routing as a perfect fit for service broker technology.

But the growing similarity between IT and IP applications, many of which are executed in the same app server, is attracting the attention of application delivery technology suppliers to the IT side of the house. As the new Heavy Reading Services Software Insider, "Telco Application Delivery: The Network vs. IT Power Struggle" points out, several application delivery controller (ADC) suppliers, including Radware Ltd. (Nasdaq: RDWR), F5 Networks Inc. (Nasdaq: FFIV), and A10 Networks Inc. , are beginning to target their technology at IP application delivery problems.

ADC vendors have an advantage over SIP proxy vendors in that their products are multi-functional. Beyond SIP applications, they can handle a range of applications that a telco might want to deliver, including IT applications from the cloud and Web 2.0 applications/content from app stores. As telcos increasingly want to rationalize their network and data center infrastructures, driving out cost and complexity, using the same vendor and technology for multiple purposes is an attractive proposition.

And ADC vendors are extending the functionality of their deep packet inspection (DPI)-based products beyond load balancing – a prime function of the SIP session router – to cover a multitude of other areas, including security, network address translation, traffic steering and policy-controlled bandwidth management, content caching and filtering, and application function offload. Here, ADC vendors are beginning to bump up against other emerging technologies in the network, such as policy control. Some ADC vendors are beginning to spot that the way their technology is positioned in the network between client and server gives them an opportunity to monetize and personalize customer transactions. This will bring them into further conflict with the charging/policy control/DPI/personalized commerce axis emerging from network players.

So application delivery – and which vendors and systems should support it – is opening up yet another front in the demarcation dispute between IT and the network. Network-oriented vendors will question whether ADC products, with their largely enterprise heritage, are robust enough for the carrier domain. However, ADC vendors have a critical alignment with the cloud and cloud infrastructure on their side. Most of them are virtualizing their products and/or creating software-only versions of their appliances that can run on commodity hardware in a cloud infrastructure. This strategy meets the requirements of the new generation of cloud services providers, such as Savvis Inc. (Nasdaq: SVVS) and Rackspace Managed Hosting , which potentially represent the next big wave of competition for telcos.

This report suggests that the application delivery technology market will be an interesting one to watch over the coming months. So far, it has been dominated by specialist suppliers, with F5 Networks, Radware, and Zeus Technology the major names to conjure within the telco ADC space. As the cloud market grows and begins to shape network/data center convergence, there is evidence that larger companies with irons in both IT and IP fires are waking up to the application delivery technology opportunity. Cisco Systems Inc. (Nasdaq: CSCO) has been criticized in the past for lack of investment in its ADC, but the company appears to be reinvigorating this product line as it develops its cloud infrastructure story. Oracle Corp. (Nasdaq: ORCL) intends to create Sun-based appliances that support aspects of application delivery – including an appliance version of its recently acquired Convergin service broker. Juniper Group Inc. , Hewlett-Packard Co. (NYSE: HPQ), and IBM Corp. (NYSE: IBM) are also potential players in this emerging market.

What started out as a humble application switch/load balancing technology could become a very important part of a telco's application delivery capability indeed.

— Caroline Chappell, Analyst, Heavy Reading Services Software Insider

Telco Application Delivery: The Network vs. IT Power Struggle, a 26-page report in PDF format, is available as part of an annual subscription (6 bimonthly issues) to Heavy Reading Services Software Insider, priced at $1,295. Individual reports are available for $900.