Most firms could save 30% of their telecommunications bill by
optimising their wide area networks and switching to Ethernet,
according to research.
The findings, by market researcher Forrester Consulting on
behalf of network operator Colt, suggest that many firms are
wasting already tight budgets by not reviewing their
telecommunications arrangements. Telecommunications already
consumes some 30% of their IT budgets, researchers said.
The Europe-wide study found that CIOs' top priorities were data
centre consolidation, server centralisation and desk
virtualisation, as well as bandwidth hungry applications such as
unified communications and disaster recovery.
These all made increasing demands on networks, but most firms
regarded networks as a commodity and not something they need to
understand, the study found. This was despite the fact that network
performance was critical to their efficiency and
competitiveness.
The study found that data traffic growth was accelerating. Law
firms, which said that their wide area network (WAN) needs were
growing by around 30% a year, and media firms, which are reporting
traffic doubling and trebling year-on-year, are seeing the greatest
data growth.
A separate survey by Forrester Research in Q1 2009 found that
24% of European enterprises surveyed said they didn't know whether
they used Ethernet in their networks or not. Some 40% said they
were not interested in using Ethernet in their WAN.
Many of the survey group who had already chosen Ethernet
services in their WAN said that low cost was the key driver,
followed by simplicity and flexibility, resilience and low latency.
This was helping to cut their communications bills by up to 30%,
Forrester found.
"Firms are now putting all their telecoms costs under the
microscope. This will increase the rate at which firms migrate to
Ethernet from older technologies," researchers said.
Although many firms were outsourcing their networks, they still
needed to pay attention to the underlying technologies proposed by
their suppliers.
"All service providers are now using MPLS core networks to
deliver Ethernet services, but their approaches vary considerably,
as does the performance of the resulting services," the study
said.
The head of Colt's enterprise business, Tanuja Randery, said:
"As managed service and cloud computing models become more
established, networks become increasingly important. It is key that
enterprises understand that there are differences between what
service providers offer in terms of resilience, latency and speed,
and make the right choice for their business."