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Enterprises ramping up network investments, but for quick returns

Stuart Corner | Nov. 9, 2016
Slow growth for SDN, Dimension Data Network Barometer finds.

Dimension Data has released the 2016 edition of its Network Barometer showing a sharp upturn in enterprise networking investments, but with many enterprises spending on technology to deliver short-term returns rather than meeting long term strategic goals.

Dimension Data found the percentage of current equipment in networks to be the highest in the eight year history of the study, 58 percent, an increase of 11 percentage points from 2015 and a reversal of a five year trend to increasingly obsolete equipment.

Paul O'Donohoe, General Manager, Networks Business Unit, Dimension Data Australia, told Computerworld that the average age of enterprise network infrastructure had fallen for the first time in the eight years that Dimension Data has been publishing the report. "In 2015 networks were the oldest they have been in the duration of this report," he said.

O'Donohoe said the bulk of investment in networking in 2015 had been into wireless networking, particularly in Australia. "Businesses are trying to get a step change in a number of things, but specifically the user experience for both staff and customers. Wireless represents the fastest path to agility," he said, adding: "There has also been an exploration of wireless connectivity for IoT."

In Australia, he said, network investment had been particularly strong in 2015. "In 2014 we had about 48 percent aged or obsolete equipment and in 2015 we reduced that to 37 percent. So there has been good strong investment in networks over the past 12 months. I am seeing a lot of that going into wireless services. Businesses are trying to step change the user experience for both staff and customers and the fastest path is through wireless."

In contrast, Dimension Data found little investment going into software-defined networks, saying: "It's early in the adoption cycle and today, few organisational networks are capable of supporting a software-defined approach. In 2015 less than 0.4 percent of devices could support software-defined WAN and only 1.3 percent of data centre switches were SDN-ready."

O'Donohoe said the low level of investment in SDN was in part due the rise of shadow IT shifting focus away from strategic network investments. "As more IT budget moves to shadow IT more of the decisions are made for near term gain. We don't have the same level of long-term strategy and governance and roadmapping that we had when CIOs had more control over the spend," he said.

In addition, he said a lack of understanding of SDN and vendor-driven-confusion had hampered uptake. "There were a lot of mixed messages coming from suppliers about what SDN was. There are three models out there: 'hardware up', 'software down' and open systems' and I think the debate between them has caused confusion in the market."


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