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Bullish About 2005

In our annual Look Ahead last year we concluded that while there are signs of a resurgence underway, the slump will only end when organizations start investing capital in networks and telecommunications again.


November 1, 2004  


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In our annual Look Ahead last year we concluded that while there are signs of a resurgence underway, the slump will only end when organizations start investing capital in networks and telecommunications again.

Among industry experts interviewed was Frank Murawski, president of FTM Consulting Inc., who indicated that three major trends would emerge during 2004: a rise in strategic spending, renewed interest in fiber to the desk and the rapidly growing importance of Voice over IP.

Well, two out of three is not bad. Fiber to the desk remains in limbo because of ongoing cost concerns, but the same cannot said about spending habits and, of course, VoIP and for that matter everything associated with IP

As freelance writer Perry Greenbaum notes in this year’s return engagement, following a five-year period of retrenching and penny-pinching, organizations appear finally ready to loosen the corporate purse strings and invest in their networking infrastructure.

The overseers of the network, he writes, are seriously looking at four areas: storage area networks (the focus of our cover story in the first issue of 2005), network security, higher capacity cable and VoIP.

The latter is about more than voice, but voice and data and video on a single network.

“If the first 50 years of the information age were ruled by computers and circuit-switched networks, the next generation will belong to intelligent IP networks and high value applications,” said Michael Sabia, CEO of BCE Inc. and Bell Canada, during a keynote address at IP World Canada in October.

“To be candid, I think the whole telecom industry – us included – has become too complex, too rigid, too cumbersome to serve customers the way they should be served. In some ways that’s related to the nature of traditional technologies and the complex processes we have all built around them. IP is the opportunity for telecom companies to take a new direction. To simplify and be more responsive to the customer.”

Whether discussing VoIP or switches or wireless, the mood appears finally to be turning bullish. As an example, a recent report from the Dell’Oro Group reveals that the Ethernet switch market resumed strong growth in the third quarter of 2004 following a slight decline in the previous quarter.

Total sales of Ethernet switches were nearly US$3.5 billion last quarter, an increase of 9% over the second quarter of 2004 and 24% increase over the third quarter of 2003.

IT organizations have also “slowly begun to dip their feet into the Wireless Land Area Network (WLAN) waters, the Meta Group reports.

By the end of this year, 30% of organizations will have transitioned WLAN trials into full production, according to research released by Meta, a provider of information technology research, advisory services, and strategic consulting.

WLAN adoption will accelerate over the next two years, with more than 50% of organizations deploying WLAN by 2006.

Frank Bisbee goes a full eight years past that in 2014: A Building Space Odyssey, which begins on p. 16 and looks at what communications requirements and systems will be like a decade from now.

My thanks to both Greenbaum and Bisbee for a job well done.