IT DEPARTMENTS ‘WILL WASTE $100 BILLION ON NETWORK OVERSPENDING’
Over the next five years, IT departments across the globe will spend some US $100 billion more than they need to on network products and services, according to Gartner analysts Mark Fabbi and Bob Hafner.
An ITWorld Canada article reports this startling message, delivered to the IT Expo symposium by two of industry analyst Gartner’s principal researchers.
Fabbi and Hafner identified a number of areas of likely overspend, including running gigabit ethernet to desktops, which they believe will alone waste some $10 billion. Fabbi believes that IT departments will move to a two-year horizon and buy only what they know they will need for that period, rather than buying against the possibility that network requirements will grow. "More often than not, ‘just-in-case’ never comes" says Fabbi.
Gartner believes that several other areas of cost saving will become increasingly important over this five-year period and these give rise to tough challenges for Communications Providers. While some of Gartner’s predictions make uncomfortable reading, they also point to some genuine opportunities for providers.
WAN OPTIMISATION
Rather than buying more bandwidth, companies will be looking to reduce network traffic with WAN optimisation tools that, according to Gartner, can produce 60% savings. Bandwidth needs will continue to grow but making better use of existing capacity will allow companies to defer purchases. Gartner has calculated that there are some $20 billion of cost savings in this strategy.
UNIFIED COMMUNICATIONS
Gartner is also predicting the demise of desk phones within ten years and is recommending against making heavy investment in, for example, IP phones with large display screens. Deploying cheaper handsets or, better still, softphones tied into PCs (offering more useable large display screens) leaves money in the company budget for buying unified communications, which improves productivity all round.
‘BANDWIDTH ARBITRAGE’
Companies are waking up to the fact that they can save money by exploiting small differences in the costs of different networks. Instead of running all their traffic over one provider’s network, they will increasingly look for hybrid approaches and switch some traffic to the public internet – even when the saving is only slight – and accept the minor differences in service. Communications Providers will need to react to this strategy by improving their service offerings and reducing their own costs.
PLAYING HARDBALL
Gartner predicts that companies can save some $15 billion over this period by adopting a harder negotiating stance with their vendors and making them "earn their business." Successful Communications Providers will be those who have deployed the best and most cost-effective of modern technologies and can meet these tougher market conditions.
READ BETWEEN THE LINES
Over the next few years, customers will be looking increasingly to save on unnecessary spend – though they will still want to use all the latest technologies and applications.
Consider using some of BT Wholesale’s expertise and experience to ensure that you are in a position to step up to these challenges by offering your customers what they need. Our portfolio of scalable and flexible network, hardware and software systems will help your customers avoid unnecessary expenditure, limit upfront capital investment and reduce their exposure to risk.
BT Wholesale products are future-proofed to protect the value of customers’ investments – leaving room in their budgets to buy into new technologies as these come to market. Or you can let BT Wholesale take on more by using our range of fully managed services to give you the systems and support you need at keenly competitive prices.