CIO Networking Survey: Thumping Support for Upgrades

The ‘C’ word is still around the corner–but today it stands for

caution, costs, and being cash positive. Communications and convergence have

taken a back seat and consolidation of the existing infrastructure is the

driving paradigm now. And how are businesses consolidating and leveraging their

communications infrastructure during these lean economic times? Well,

VOICE&DATA found out that almost every enterprise was trying to extend the

life of the existing equipment through upgrades, rather than go whole-hog for

replacements. However, no one was willing to consider saving 20-45 percent by

buying used or refurbished equipment–which is an accepted practice globally.

Further, businesses pointed out that they would check their existing

service-level agreements.

The first two quarters of the current fiscal have been testing times for

almost all networking vendors. Most of the vendors have had the same story to

narrate: "People are interested, but most of the decisions are on hold.

Selling even one box is becoming tough." The series of discussions we had

with the top people who are taking decisions on networking buys confirm this.

The reason ascertained by businesses was that they were looking at costs and

consolidation.

Another paradigm that came to the fore was that Internet technology was being

seen by businesses as the tool for higher yields and productivity. A majority of

the respondents felt the need and urgency for using the technologies

effectively. And everyone agreed that Internet (e-mail) had become an integral

part of enterprise-wide communications.

One basic point, that technology is not that important as empowering people

with the technology, was amiss. Also, a comprehensive strategy in this regard

was not in place. CIOs, however, agreed that this was an important matter and

they would be considering it seriously. Networking head said that the strategy

will be a comprehensive one, and look at the technology from a business point of

view. Also, it will keep issues like the choice of technologies and vendors in

mind, and entail the involvement of employees as well as customers. While they

said that the choice of technology or vendor was not the biggest issue, but

taking an integrated approach keeping in mind the business goals and the user

empowerment was the biggest challenge.

Networking chiefs also pointed out that executives didn’t decide what

networking and communications goals were appropriate for the company. Further,

there was no study to identify the merits and demerits of existing systems,

which include the telephone system, voice mail, and LAN.

Is the total cost of ownership (TCO) factor kept in mind while building,

leasing, or outsourcing the communications infrastructure? While the objective

is there, by the time the decision is taken there is a drift in the stated

position. Two key reasons were assigned for this: first, executives are focused

on running the business and they are not able to spend much time over discussing

new communications capabilities for business advantage. Second, keeping abreast

with the changing technology is not easy.

Decisions with regards to the telecom and networking equipment have so far

been taken on a need-to-need basis. However, on the IT application and

deployment front, the decision-making has taken a more organized route. But

today, when one has a plethora of connectivity options, the TCO will have to be

taken very strongly into consideration, according to CIOs.

Respondents were unanimous of the view that the basic communication needs

continued to be telephony, e-mail, and data networking. However, the fact that

these systems are separate and non-integrated, remains the cause for a perpetual

headache. Often, systems are installed to meet a particular need and there is

difficulty in managing diverse systems. They point out that the admin

department, which undertakes the study to find out the USP of solutions, limits

itself to the comparable cost, support, and some newer features. And

interestingly, no one wants to get blamed when the system fails.

Given this general backdrop, what are the findings of the CIO Networking

Survey specific to the telephone system, LAN, WAN, and server/storage systems?

What kind of systems are enterprises using, what features are they looking for,

and what new technologies will they welcome in the next 6—12 months? Read

on...

EPABX

• Over 95 percent of the respondents want to procure an EPABX solution from
  
  a vendor directly and an MNC brand

• Over 85 percent of the respondents feel there is no
  
  confusion while deciding a solution–KTS versus EPABX or IBPX

• Over 95 percent of the respondents say that vendors
  
  create the necessary awareness and conduct confusion eradication programs

• However, respondents are divided over vendors making
  
  sufficient efforts to understand businesses’ requirements toward providing
  
  a total and scalable solution. Only 70 percent respondents think that
  
  vendors try to understand their requirements.

• About 90 percent of respondents believe they are using
  
  only about 26-50 percent of the features available in the EPABX.

• The five most used features in EPABX are Automated Call
  
  Distribution, Music on hold, Direct-dial Phone Numbers, Voicemail, and Call
  
  Detail Records/CTI.

• Over 95 percent of respondents say they are not looking
  
  at replacing the existing system. At best, some may expand it.

• Not a single respondent has any plans to shift the
  
  current EPABX system to a IP-based EPABX system in the near future (6—12
  
  months).

• The three key parameters that respondents look at while
  
  deciding for a buy are: upward and backward compatibility, value-added
  
  features, and after-sales support

LAN Environment

Passive Components (Structured Cabling)

• Over 95 percent respondents say they possess Cat 5/Cat 5
  
  E solutions, and are not looking at Cat 6 solutions in the immediate future.

• Over 85 percent respondents say they are not looking at
  
  making new investments in the next 6-12 months. And even if they do, that
  
  will be to expand an existing system and not to replace it.

• Almost all respondents prefer MNC brands.

• While most of the IT companies contemplated to go with a
  
  subcontractor or an architect, manufacturing and finance-related businesses
  
  favor the networking company as the preferred partner.

• Over 95 percent respondents say a clear no to fiber till
  
  the desktop

Active Components

• The days of hubs seem to be over. All the respondents say
  
  a clear yes to switches in their networks.

• On the type of switches, everybody finds Layer 2 switches
  
  to be sufficient. And they believe that Layer 3 switches are still not
  
  affordable on the price point.

• About 40 percent respondents see the performance of LAN
  
  as an important factor to face the challenges for VoIP, others don’t think
  
  so.

• Interestingly, 100 percent of the businesses have been
  
  using individual management platform and none has used an integrated
  
  management platform for LAN/WAN/security

WAN Environment

• Almost all respondents have a private network. But the
  
  choice is divided over the preferred media. While 95 percent respondents
  
  from the IT industry prefer terrestrial, only 75 percent in the finance and
  
  manufacturing sectors go for it. Others prefer VSATs

• About 75 percent of the respondents feel VSATs are not
  
  reliable for voice and only 10 percent are looking at new investments in the
  
  next 6-12 months in VSAT.

• Most of them expect the VSAT prices to drop soon.

• While there is good news for VPNs, there is bad news for
  
  VoIP. Almost all the respondents have a WAN connection. Nonetheless, over 85
  
  percent of the respondents said they would look at deploying VPNs.

• Over 95 percent respondents don’t prefer Internet
  
  backbone for voice. Only five percent are looking at the option but only as
  
  a separate channel.

• Almost everybody says no to investing in a VoIP solution.

• As many as 60 percent of respondents prefer VSNL or BSNL
  
  as their ISP.

• Over 95 percent respondents say that reliability is the
  
  dominant parameter for choosing an ISP. Connectivity or value-added services
  
  like managed network services and hosting are not so important.

• Over 95 percent respondents are ready to consider
  
  shifting to other service providers, though not immediately. About 60
  
  percent like to wait and watch, while 15 percent say they will actively
  
  shift. Only 25 percent say they will stick with the present ISP.

Storage

• Only 40 percent respondents have a storage solution in
  
  place. Most of them are using direct attached storage only.

• Most of the respondents are planning for a storage
  
  solution. About 70 percent prefer a network attached storage (NAS) solution,
  
  while over 25 percent say they will consider storage area networks (SANs).

• Most of the respondents feel that vendors have done a
  
  good job in creating awareness about various solutions. And although they
  
  are not sure about the capacities that they will be looking at, they will be
  
  preferring a good vendor.

• Three key parameters for selecting a storage solution
  
  are: reliability and scalability, speed of access across LAN, and vendor
  
  independent integration of storage solutions.

• Interestingly, the three key parameters that respondents
  
  look at while selecting their storage partner are: sales/services support,
  
  price-performance ratio, and help desk accessibility.

Security

• While respondents from the IT and banking sectors say that security
  
  solutions are very important and are having a security solution in place,
  
  the rest acknowledge that they consider it important but are yet to have one
  
  in place.
• Interestingly, 70 percent of respondents say they are willing to pay for
  
  security solutions.
• About 90 percent respondents, who already have a security solution in
  
  place, say that they also have their own security policy. But 50 percent of
  
  those looking for security solutions say they may opt for an outsourced
  
  policy.
• A good news for security solution providers: over 95 percent respondents
  
  say they have special budgets for execution of security or are actively
  
  considering the same.
• Besides, 80 percent of those having private networks reiterate that they
  
  will nonetheless invest in security solutions.
• Overall, 95 percent respondents indicate they will enable employees to
  
  access mails through VPNs.

Servers

• Servers seem to be a commodity now. But 70 percent respondents don’t
  
  have a preference for any server brand/vendor.
• The preference for the processing power of the server is also not clear.
  
  However, four-way and six-way servers seem to be in.
• However, over 65 percent respondents are currently using Compaq and Sun
  
  for NT and DNS environments.
• About 90 percent say they are not looking at upgrading to newer
  
  architectures
• The choice of the OS seems to be Unix and Windows NT. Most of them have
  
  both.
• The three key vendor selection criteria are: customized solutions,
  
  value-added service and flexibility, reach and support.

Ch Srinivas Rao