Cisco 2600 SERIES 8MB COMPRESSION MODULE Specification Guide

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Q. What is the difference between software and hardware compression? 
Does hardware compression provide a better compression ratio than
software compression?
A. Hardware compression and software compression refer to the site in the router to which
the compression algorithm is applied. In software compression, it is implemented in the main
CPU as a software process.  In hardware compression, the compression computations are
offloaded to a secondary hardware module. This frees the central CPU from the
computationally intensive task of compression calculations.
If you assume that the router has the available clock cycles in order to perform the
compression calculationsfor example, CPU utilization remains at less than 100 percentthen
there is no difference in the efficiency of hardware compression or software compression.
 The achieved compression ratio is a function of the compression algorithm selected and the
amount of redundancy in the data to be compressed. It is not where the compression
calculations take place.
Q. What is Layer 2 payload compression?
A. Layer 2 payload compression involves the compression of the payload of a Layer 2 WAN
protocol, such as PPP, Frame Relay, High−Level Data Link Control (HDLC), X.25, and Link
Access Procedure, Balanced (LAPB).  The Layer 2 header is untouched by the act of
compression. However, the entire contents of the payload (that include higher−layer protocol
headers) are compressed.  They are compressed as described in How does data compression
work?, and use either a form of the "stacker" algorithm (based on the industry standard
Lemple Ziv algorithm; refer to the American National Standards Institute (ANSI) document
X3.241−1994), or the "predictor" algorithm, which is an older algorithm that is mostly used
in legacy configurations.
Q. What is TCP/IP header compression?
A. TCP/IP header compression removes some of the redundant fields in the header of a
TCP/IP connection.  Header compression keeps a copy of the original header on either side of
the link, removes the entirely redundant fields, and differentially codes the remaining fields in
order to allow the compression of 40 bytes of header down to an average of 5 bytes. This uses
a very specific algorithm designed around the constant structure of the TCP/IP header.  It
does not touch the payload of the TCP packet in any way.  Refer to RFC 1144, Compressing
TCP/IP Headers for Low−Speed Serial Links .
Q. When do I need to use TCP/IP header compression instead of Layer 2
payload compression?
A. TCP/IP header compression is designed to be used for slow serial links of 32 k or less, and
to produce a significant performance impact. It requires highly interactive traffic with small
packet sizes.  In such traffic, the ratio of Layer 3 and Layer 4 header to payload is relatively
high. Therefore, performance can be improved if you shrink the headers.
Layer 2 payload compression applies the selected compression algorithm to the entire frame
payload, which includes the TCP/IP headers.  It is designed to be used on links that operate at
speeds from 56 k to 1.544 M.  It is useful on all types of traffic, as long as the traffic has not
Cisco − WAN Compression FAQs