Hi Ravidran,
First of all your LAN proxy settings have nothing to do with Optimize COntroller port 8080. I have same port being used in my LAN and it never gives any problem.
Secondly try using ur HOSTNAME or IP rather LOCALHOST. it might work.
Thirdly, rather than Starting Optimize from SERVICES, try starting them from command line which will give you details in case there is some other reason for failing.
Fourthly You can always change the port of Controller in STATION.PROPERTIES file from <controller\conf\local\station>
But in that case make sure that Satellite are not getting distured due to change in this port.
If in case you are facing any other problem then feel free to post it here.
Regards,
Ramnish.
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