Dimension Data has released the 2016 edition of its Network Barometer showing a sharp upturn in enterprise networking investments, but with many enterprises spending on technology to deliver short-term returns rather than meeting long term strategic goals.
Dimension Data found the percentage of current equipment in networks to be the highest in the eight year history of the study, 58 percent, an increase of 11 percentage points from 2015 and a reversal of a five year trend to increasingly obsolete equipment.
Paul O’Donohoe, General Manager, Networks Business Unit, Dimension Data Australia, told Computerworld that the average age of enterprise network infrastructure had fallen for the first time in the eight years that Dimension Data has been publishing the report. “In 2015 networks were the oldest they have been in the duration of this report,” he said.
O’Donohoe said the bulk of investment in networking in 2015 had been into wireless networking, particularly in Australia. “Businesses are trying to get a step change in a number of things, but specifically the user experience for both staff and customers. Wireless represents the fastest path to agility,” he said, adding: “There has also been an exploration of wireless connectivity for IoT.”
In Australia, he said, network investment had been particularly strong in 2015. “In 2014 we had about 48 percent aged or obsolete equipment and in 2015 we reduced that to 37 percent. So there has been good strong investment in networks over the past 12 months. I am seeing a lot of that going into wireless services. Businesses are trying to step change the user experience for both staff and customers and the fastest path is through wireless.”
In contrast, Dimension Data found little investment going into software-defined networks, saying: “It’s early in the adoption cycle and today, few organisational networks are capable of supporting a software-defined approach. In 2015 less than 0.4 percent of devices could support software-defined WAN and only 1.3 percent of data centre switches were SDN-ready.”
O’Donohoe said the low level of investment in SDN was in part due the rise of shadow IT shifting focus away from strategic network investments. “As more IT budget moves to shadow IT more of the decisions are made for near term gain. We don't have the same level of long-term strategy and governance and roadmapping that we had when CIOs had more control over the spend,” he said.
In addition, he said a lack of understanding of SDN and vendor-driven-confusion had hampered uptake. “There were a lot of mixed messages coming from suppliers about what SDN was. There are three models out there: ‘hardware up’, ‘software down’ and open systems’ and I think the debate between them has caused confusion in the market.”
Furthermore, he said the cost of SDN and the uncertainty as to the benefits it would deliver had dampened demand, but he predicted a change to be imminent. “Cost of SDN is coming down and acceptance is coming up. I think this year we will get some stronger adoption of SDN.”
Also driving this, he said, was a growing realisation that digital transformation and disruptive initiatives were all dependent on the network and its capabilities.
“The conversations I have with customers come down to three broad areas: they are trying to change the user experience; they are trying to create greater agility and efficiency, better return on investment; and they are trying to change their business models to create an environment where they can use technology to respond to disruptors, or become a disruptor. And often when you have that conversation with the C-suite it is not always front of mind that the network is the enabler of all those things.”
“Businesses have been sweating their network assets, seeing them as non-critical,” O’Donohoe said. “As long as connectivity wasn’t impacted they have not considered the network. Now there is a realisation that the network is the enabler of all their digital strategies.”
O’Donohoe said the report was a useful tool to help organisations achieve this realisation and assess their network investment strategies. “It is a great to show customers what is happening at a global level and to ask them where they are at on their journey. Have they considered whether their network is evolving at a pace that will take them where they want to go?”
Dimension Data compiles the report based on network information gathered from 320 technology lifecycle management assessments conducted for clients around the world, covering 97,000 devices. This is supplemented by data from its global network service centres that manage over 1.5 million devices.