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Large firms vow to open up their wallets

Survey reveals network spending will rise considerably over next 24 months

July 1, 2004  

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A majority (71%) of Canadian corporate executives report they plan significant network spending increases over the next two years, and 64% plan to adopt some form of utility computing, according to a recent survey and report on networking and business strategy from AT&T in cooperation with the Economist Intelligence Unit (EIU).

The EIU survey of 254 senior executives worldwide on the future of corporate networking, shows that Canadian companies have made more progress than most in their plans for network investment and utility computing.

In comparison, 61% of global respondents plan to increase network spending over the next two years and 44% plan to adopt some form of utility computing.

These and other findings are presented in the report called Self-managing networks: Building the infrastructure for utility computing.

The survey suggests utility computing is becoming an accepted business strategy for a growing number of companies looking for new ways to reduce the cost and complexity of their existing networks.

A utility computing model allows companies to share information technology (IT) resources from a service provider for greater efficiency.

The concept, the survey states, is made possible by network automation technologies that enable complex computers and networks to manage themselves. For the IT department that should mean less time spent on routine network management and more time focusing on the quality and cost-effectiveness of IT as a business service, says AT&T.

“Many executives at the top of the organization feel their networks impede the realization of their objectives, says Andrew Palmer, EIU’s global director of executive services. ” “Those same executives have their eye on technology that will help them overcome those challenges.”

According to the AT&T/EIU survey, more than 40% of all respondents anticipate implementing customer relationship management applications, voice over Internet Protocol, videoconferencing and wireless access options, such as Wi-Fi (wireless fidelity) technology within the next two years.

“This survey highlights the increasing levels of complexity and frustration faced by corporations in Canada and worldwide,” said David Stroud, president of AT&T Global Services Canada. “Businesses want a networking vendor with a clear technology road map and global reach to help them leverage their IT assets more effectively.”

A second survey from the two organizations released in mid-July revealed that the majority of Canadian corporate executives report that computer security is now the single most critical attribute of corporate networks.

The survey results show that 87% of Canadian respondents identified security as the top concern for corporate networks, compared to 78% of executives worldwide.

Overall, security moved to the top of the list from its number two spot in the 2003 survey, replacing network reliability and availability as the most critical network attribute.

The EIU survey of senior executives worldwide on the future of corporate networking reported that although businesses worry about security, the vast majority of executives want to further open up their networks to partners, customers and mobile workers.

Much to the chagrin of many information technology (IT) executives, it is a network’s openness that can also increase its vulnerability, findings show.

“In a global networked economy of Internet connectivity and interoperability, isolation leads to irrelevance for enterprises that can’t protect their networks,” says Hossein Eslambolchi, president of AT&T Global Networking Technology Services.

“Unless security is managed effectively, executives are right in thinking that cyber attacks may yet prove the toughest threat to the sustained development of the networked enterprise.”

The worldwide impact of cyber attacks has grown steadily from US$3.3 billion in 1997 to an estimated US$12 billion last year, according to Computer Economics in Carlsbad, Calif.

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