Enterprise Network Investment Strategy Missing Key Technology Advances
One-fifth (20 per cent) of UK businesses are missing out on the operational and cost benefits of new network technologies by using equipment that is more than three years old, compared with just eight per cent of businesses in Germany. This was among the findings of an independent study commissioned by Ciena (NYSE: CIEN) into the enterprise IT investment strategies of 500 large British and German organizations in the face of growing reliance on high-speed data.
The study revealed significant investment disparity between these two major European markets, with the UK spending less annually and demonstrating a general focus on longer-term amortization of network assets in the front office environment and data center. However, outside of the data center, infrastructure is increasingly run for much longer in both markets, which means that renew cycles are not keeping pace with the rest of IT in the business. Advances in Wi-Fi technology, faster Ethernet protocols and support for new broadband and fiber standards are not being fully exploited, meaning organizations may struggle to cope with greater data volumes being transferred in and out of the network, as well as within it.
- The mean average spent annually on data center network infrastructure is £161,000 in the UK, with a further £86,000 spent on WAN and interconnects. In Germany, companies are spending an average of €326,000 annually on data center network infrastructure and €140,000 on WAN and other interconnects.
- More than one-quarter (27 per cent) of UK businesses are also using WAN connections up to five years old, potentially missing out on service improvements and new services. This compares with just 18 per cent in Germany.
- Both UK and German organizations identified the latest fiber data center interconnects as the most critical investment they would make, if money was no object. According to the study, roughly 40 per cent of UK respondents would invest in this along with 42.8 per cent in Germany.
- Over one-fifth (22 per cent) in the UK would invest in site-to-site fiber in order to improve internal data speeds between sites, compared to 11 per cent of German organizations.
- From a market sector standpoint, the study concluded that the services sector is the most likely to invest in data center infrastructure, with 94 per cent having invested in key data center network hardware (fiber, cabling, switches, routers, firewalls etc.) in the last three years. This compares to 92 per cent in the healthcare sector, 89 per cent in the financial services sector and 87 per cent in the retail sector. In addition, roughly 50 per cent of healthcare respondents had done this investment within the last year.
“As traffic volumes in both the data center and in the office environment continue to surge, businesses are looking to extract maximum value from their infrastructure investments. As the study shows, investment in external WAN bandwidth and interconnects is critical, but if it’s being connected to legacy equipment, the potential benefits of better and fluid bandwidth won’t be realized.”- Keri Gilder, Vice President and General Manager, EMEA, Ciena
Ciena (NYSE: CIEN) is a network strategy and technology company. We translate best-in-class technology into value through a high-touch, consultative business model – with a relentless drive to create exceptional experiences measured by outcomes. For updates on Ciena, follow us on Twitter @Ciena, LinkedIn, the Ciena Insights blog, or visit www.ciena.com.
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