The year ahead in enterprise networking looks a whole lot like the one that just passed.
That is to say it’s unlikely in 2004 there will be earth-shattering changes and differences in terms of spending, market growth and technology innovation from those that were witnessed in 2003.
Forecast business growth in Canada for the next 12 months is expected to reach approximately 9.5 per cent, from a previous year of 4.2 per cent growth. Such news would seem highly optimistic and suggest a corner has been turned in terms of corporate spending, particularly on IT, but bear in mind that most businesses have during the past two years been focused on cost cutting. Growth in spending on IT merely brings the market closer to where it used to be rather than moving dollar spends above and beyond their peak of four or five years ago. Business growth forecast for 2004 is good and will fuel IT investment, which usually means infrastructure – namely enterprise network communication systems that in most given years are the top priorities for improvement and upgrade. Just-completed research by IDC Canada in the form of a Q4 survey of more than 400 business and IT professionals in Canada shows network modifications and upgrades rank among the highest IT spending priorities for the first quarter of 2004.
Canadian businesses surveyed say they’ll focus on improving productivity, and customer services and network upgrades are seen as the singular IT investment activity which would meet these business imperatives.
The stated priorities for business in 2004 have changed little from 2003 and vendors are aware of what they must do to win the hearts, minds and wallets of today’s customers. Quite simply, Canadian buyers demand more for less and, in the case of enterprise networking, that means vendors must provide high-speed, multifunction network gear with rapid investment return and long product life.
That communications equipment must have ample speed performance is a given. Vendors continue to drive down the price of that performance, providing faster port speeds always at a lower cost. In addition, many equipment makers are incorporating value such as more simplified configuration, self-managed capability and the integration of security functions such as firewall.
Expect in 2004 to see the continuance of this multifunction-in-network-device trend. It’s what companies like 3Com and Enterasys have been crowing about for at least a year as they seek to selectively target areas of switching and routing where there is perceived limited function and few options for customers.
As it was in 2003, integrated security will no doubt be the “buzz” of 2004, dominating most discussions regarding new IT investment. Literally every IT company on the planet now speaks of security, either as something about which to be increasingly concerned, or as an area of primary focus in which to introduce functions and features into various types of products and services.
Built-in security within network gear – 3Com’s NBX platform is but one example – can be introduced as little or as much as a company may desire, for a cost commensurate with the range and type of capability needed. Enterasys and Cisco likewise offer similar functionality. The preferred approach which most vendors will speak of in 2004 will certainly focus on, among other things, elements of filtering, intrusion detection and diagnosis incorporated into all sorts of hardware and software, which ultimately would work in some sort of collective way, establishing what’s often described as a fabric for security.
A security fabric, which is particularly useful and important in network infrastructures, is generally perceived and marketed as a solution whereby the sum of the incorporated functional whole is far more effective than the individual parts.
VoIP and IP-based PBX will continue to permeate the market in Canada. But in 2004, the key question for those looking to introduce new enterprise voice systems will be the same as it has always been: whether to go fully or partially down the path of IP. The technology transition from circuit-switched to packetized is now a telephony given for most Canadian enterprises. It’s a matter of degree: should IP telephony be deployed in selected segments where it can be closely monitored, or should it be rolled out throughout the enterprise?
Applications for voice over IP introduced in 2004 could spur the latter approach. Many enterprise customers are saying that customer support, videoconferencing and unified messaging would be among the most useful applications for voice and data networks. Savvy network equipment vendors will in 2004 focus on delivering these applications.
Finally, for those looking to bone up on a new set of networking skills for 2004, consider IT security. IDC Canada research in late 2003 shows 60 per cent of respondents surveyed from large and medium business said expertise in IT security is a skill in high demand.
A great opportunity to be sure, but even greater is the demand for expertise in good old TCP/IP and Ethernet, which are skills sought by 70 per cent and 60 per cent, respectively, of these same organizations surveyed. Yet further validation that not much has changed.
McLean is director, strategic partnering and alliances research at IDC Canada Ltd. in Toronto. He can be reached at dmclean@idccanada.com.