IT recession: telco spending slashed, but demand for security appliances grows


IT recession: telco spending slashed, but demand for security appliances grows

Cliff Saran

Businesses are buying fewer call control systems for private branch exchanges but are spending more on security appliances during the recession, according to analyst Canalys.

Canalys reported that investment in call control systems, which provide PBX telephony functionality, declined sharply in Q4. The total lines shipped fell 11% year-on-year to 5.8 million.

"Enterprise telephony sales are primarily driven by replacement in EMEA, and especially in Western Europe, and these are typically large Cap-ex-based deals," said Matthew Ball, senior analyst at Canalys. "With pressure to cut costs immediately, many sales that were expected to close in Q4 were delayed. Businesses shifted available budget to higher-priority IT projects. Some telephony projects will be cancelled altogether as needs are re-evaluated and a greater emphasis is placed on ROI in the future."

Canalys expected investment in enterprise security to remain strong due to compliance requirements and the continued threat of attacks. Infrastructure security investment rose, while client security software spending continued to be scaled back.

Analyst Nikki Babatola noted that businesses were buying security appliances to reduce the cost of IT security. "Enterprises are looking to consolidate infrastructure and cut costs by adopting a single appliance for all security functions. This reduces the need for individual point products, which take up valuable space and need a lot of power and cooling."

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