Faster technologies may be just around the corner, but the extra bandwidth will soon be used up unless corporate policies are developed to control end-user access.
Today, enterprises have four distinct wired networks: a voice in building (voice Lan), a data Lan, a voice Wan, and a data Wan.
In the wired world, convergence of voice and data will eventually bring a single ubiquitous network, but very progressively and not for everybody until 2008.
Although the core network uses high-capacity fibre links, the access has remained slow or expensive until recently. Moreover, the local loop was one of the last domains of the incumbent operator.
This is now changing fast. A number of high-speed access technologies are becoming available at significantly lower cost than before (very-high-bit-rate digital subscriber line investment for the operator can be as low as £55 per access line).
After asymmetric DSL, very high-speed DSL (VDSL) and symmetric DSL (SDSL) will soon offer up to 20mbps on copper wire. Ethernet services are also on the cards for cities. And Wi-Fi is starting to mature in a number of places with traditional operators setting up services.
Regulators are pushing the unbundling and wholesale supply of DSL services. Enterprises and providers must take these new opportunities fully into account in their contracts. Indeed, these new options will soon offer much more bandwidth at a much lower unit price.
This allows businesses to plan new IT infrastructures, with more application in datacentres and light clients, as well as the use of video, which tended to kill the network.
However, not all sites will benefit from such high and inexpensive bandwidth. Japan, South Korea and Fastweb in Milan, are among the leaders in the world to offer very high speed access for consumers and enterprises. Products and contracts must cope with a variety of local conditions as budgets need to be kept low.
Enterprises with remote sites need to compromise on latency, bandwidth or cost to find the right solution over time for each site. When signing contracts of longer than one year, enterprises must make sure the provider will offer the best possible access technology, price and bandwidth throughout the contract.
The development of computer power in general, and intranets, e-mail and file transfer in particular, steadily affects bandwidth growth. By 2008, video and the instant downloading of application applets and files will feed the growth in bandwidth use.
New machine-to-machine data exchange will then also lead the trend. Today, General Electric is already tracking more than 4,000 aircraft and diesel turbines in real time. The much-hyped video technology will conquer the desktop along with IP telephony, although only in progressive steps and in ways that may be hard to control.
For example, human resource management in large enterprises, such as banks, will try to promote the use of video, without knowledge of networking implications and costs. Network managers can persuade them to postpone such applications until cheaper bandwidth is available or limit the window size. Video from websites will invade the enterprise if no control is set up.
An absolute ban on incoming video will be counterproductive. However, where prices for broadband are too high, enterprises will have to limit bandwidth growth.
Network managers should know the bandwidth requirements of applications. They must draw up and implement a policy for the efficient use of bandwidth from a user perspective. Apart from models, enterprises should use network monitoring and management tools to support planning and contract negotiation. Intensive users need more bandwidth than most enterprises accept or they waste 5% or more of their time.
Gartner expects that from 2004 to 2008, enterprises will continue to increase bandwidth by 40%-100% per year. By year-end 2008, all enterprises, except the most conservative, will have to offer at least 256kbps per employee. In 2003 this was about 10kbps.
Enterprises which do not control undesired video use will need to install up to four to seven times more internet access bandwidth per seat by 2008.
Broadband access outside the office and mobile devices are going to change work patterns and customer relations further. The power of a mobile device is that it is a wearable appliance, and it is with a user physically more than anything else except, perhaps, a watch. It is (potentially) always on and always connected.
Exploiting these characteristics requires that the device's usage delivers relevant content now, in a concise form. Therefore, specific applications are being created to focus on the problem and achieve a usable result. However, users will rarely find a single application that justifies the use of such devices.
Mobile devices will complement but not replace other channels for customers and staff, such as traditional internet, IP VPN, interactive digital TV, kiosks, contact centres and voice-activated systems.
Thus, the need for general, multichannel solutions - integrated with corporate business processes through the enterprise nervous system - creates an enormous new challenge for users and developers. Also, enterprises will need to look beyond technology and address the process and people issues to deliver real value.
How a retailer's network might look
By taking advantage of network technologies, a retailer could connect everything via its network. All its point-of-sale, inventory tracking, customer service, contact centre, delivery service and pricing intelligence can be connected from the customer through the supply chain.
Inventory data is readily available (for nearby stores as well); customer "screen pops" show shopping history and service requirements to permit better decision making with real-time information. Sales associates' handhelds provide dynamic promotional information and pricing.
Radio frequency identification tags track goods from production, through shipping and during checkout. Networked monitors flash advertising for specific products that have higher margin or inventory levels.
Everything is tied back into operating financials to determine appropriate discount levels and margins for each product.
The customer is also directly involved in the network of information. His or her handheld has access to store information, promotions and location, and it can provide cashless payment options.
Retailers should prepare for this environment by integrating contact centres and CRM systems with in- store retail systems and supply chains. There is a mix of wired and wireless technology in the store Lan and Wan, but high-speed network access is everywhere, speeding decision cycle times for both the customer and the retailer and delivering real business value.
Jean-Claude Delcroix is a research director at Gartner. Nigel Deighton, a Gartner vice-president, also contributed to the report