Recovery in IT Investment
One of the key factors that determine the level of demand for LAN cables is IT investment activity, especially amongst medium and large business enterprises. Over the last eighteen months a variety of factors, driven ultimately by pressure to retain customers and to improve profits, have led to a resumption in IT investment amongst medium and large business enterprises. The collapse of the dot.com bubble in 2000 and 2001 had a major adverse impact on activity in the premises (datacom) sector, though the fall was not as dramatic as in telecoms. There has been recovery since then in most markets, though the pace of the improvement has been generally quite slow.
New Technologies Adopted
There is now a higher profile for technology as a means through which enterprises can attain better levels of internal productivity, generate cost savings and deliver better customer service. Thus there has been an increase in the use of technologies that have existed for several years, but which are now finding more widespread acceptance. These applications and protocols include CRM (Customer Relationship Management) systems, VoIP (Voice over Internet Protocol), Video-conferencing, Multimedia and Wireless.
Clear Benefits Needed
One clear trend in all geographic regions is that, compared to the boom in the late 1990s, there is now a much more measured approach to IT investment, with companies even keener than before to ensure that there will be a clear and tangible benefit to their operations as a result of capital expenditure. But, as with all IT related upgrades, investment in one bottleneck area is likely to require subsequent upgrades in related areas, thereby further straining already tight budgets.
Trends Point To More Mobile Workers
Working practices in many countries have also been gradually changing, resulting in many more employees either working remotely from their main office location on a permanent basis, or travelling regularly across different countries, with little time spent at any one location. In moves to cut costs, it is becoming more effective to establish more but smaller branch or satellite offices, with each branch gaining more autonomy in IT terms. This means that the individual employee invariably has more applications attached to their desktop computer. It also means that the IT manager is likely to face greater complexity through having more diverse operations to service.
Online Transactions Grow
As has been frequently reported, there has been strong growth in online business, as more customers are encouraged to purchase goods and services online, reducing transaction costs. While this growth in online business may have been slower than was suggested by some of the early hype, the trend is unmistakable. For many companies the online business is additional to their established business, not a replacement for it (so adding yet more complexity for the over-stretched IT manager!), but in some cases it can mean a fundamental shift in the business model. Online transactions have affected not only businesses addressing consumer markets, but also the business-to-business sector, as, for example, suppliers compete for contracts from their customers via on-line auctions.
Importance of Network Grows
These continuing changes in the fundamental operations of a business clearly have an impact on the business’s internal communications network. There has been a significant increase on the amount of two-way data traffic being transported between an enterprise headquarters, its sister offices and ultimately its customers. This additional volume has created pressure on the level of performance delivered by the network. This is especially true for businesses, such as call centres, that are required to operate 24 hours per day, 7 days per week. Expectations in turn have been raised over access to the network, with high speed and consistent quality of service now crucial elements. There is no tolerance for network downtime, given the potential amount of revenue lost as a direct result of even a few hours’ failure.
Network Security Vital
These moves towards greater efficiency and operational transparency within the business have also led to more confidential and sensitive information needing to be being shared over the network. This clearly has implications for network security, while incidents such as theft of laptop PCs have been increasing. Hence, at this most basic individual level, guaranteed security has arguably never been so vital.
Wireless Technology Poses Problems
Whilst IT managers may feel reasonably comfortable in meeting the challenges thrown up by their wired networks, they do not have so much confidence with regard to wireless facilities. The benefits through enabling employees to operate via wireless connections have forced the management of these systems back onto the agenda. Companies that initially opted to ignore wireless technology have nevertheless been forced to incorporate it into their network planning, as employees were simply using their own wireless devices regardless. A major problem for all IT managers is how to protect their systems against potential hackers that simply roam areas to identify free wireless access zones and use these liberally.
Wireless Adds To Security Pressures
In such instances, IT managers do not have ultimate control over where access zones are located, but have to deal with ensuing interferences over their enterprise networks. How best to resolve the issues of quality of service and security will remain with the wireless industry for some time to come. On this basis alone, it does not seem likely (as has been suggested by some commentators) that wireless networks will anytime in the near future erode the dominance of the wired network within the enterprise space. Simply attempting to manage wireless access as a complementary feature of the overall network is proving problematic enough.
Data Handling Needs Increase
The IT industry consensus on how to best manage the enterprise network has fluctuated over the years. The current thinking is that a centralised, rather than decentralised, approach is best. On the day-to-day side, IT managers have been tasked with aligning IT resources with current business priorities, whilst maintaining flexibility to cope with future needs. In very basic terms, the datacom network is now being thought of as the “fourth utility”, to enable unused capacity to be redeployed to where it’s best needed at the workstation level.
New Hardware Being Deployed
Server utilisation rates in many instances typically run as low as between 10% and 20%. This is attributed to the fact that when equipment purchases have been made in the past, management has not bought only the capacity relevant to their immediate needs, and has tended to over-provision on a “just-in-case” basis. IT managers have been deploying practices that increase not only the flow of data traffic, but also its storage and internal use, to tie in with current and future potential threats to security. Such practices include the use of network grids, SANS (storage area networks) and new hardware, including servers and blades. The impact of the use of this type of hardware lies at the heart of all current network-related discussions.
Compliance Forcing Enterprises To Change
The preference for a centralized approach bucks the trend of decentralization emerging at the desktop, offering distributed applications. This change in stance is partly related to compliance and regulatory issues surrounding the storage of all incoming and outgoing data. Whilst most enterprises would question the need for this level of scrutiny, the spate of high profile corporate fraud cases that have recently come to light have led to legislation. This is most relevant to North America, but it has set a precedent for other parts of the world.
