What recession? Bandwidth upgrades, MPLS, Ethernet migration continue

Despite the soft economy, Forrester Research has found that enterprises are still looking to upgrade their WAN bandwidth. Also, enterprises are still migrating from frame relay and private lines to MPLS IP VPNs and site-to-site Ethernet technology.

This Content Component encountered an error

Despite the weak economy, enterprises are upgrading their wide-area networks (WANs). According to Forrester Research's annual report, "The State of Enterprise Networks and Telecommunications," 77% of enterprises have identified upgrades to site-to-site network speed and bandwidth as a priority this year.

"Historically, we haven't collected data on bandwidth," said Ellen Daley, vice president and research director at Forrester. "The reason we put it on the survey this year was that there is a tremendous amount of interest, we've learned from enterprises, in upgrading bandwidth, even in the softening economy."

Daley said much of this need for increased bandwidth is driven by the proliferation of video traversing the WAN.

Cost-cutting moves are the highest-priority telecom initiative for enterprises, Daley said. For instance, 91% of respondents told Forrester that cutting communication and telecom costs was a priority this year, and 24% said it was a critical priority. The other two highest priorities that enterprises identified also related to cutting costs, she said, with 83% saying they need to consolidate data centers and 81% saying they need to perform server centralization.

Although cost-cutting initiatives top the list for many enterprises, Daley said, many organizations are taking the money they save and spending it on other high-priority infrastructure investments, particularly bandwidth upgrades.

This means that WAN engineers who are struggling to supply the bandwidth their users need should do everything they can to support cost-cutting initiatives such as data center consolidation. If such a consolidation works out, the savings realized could be used for critical bandwidth upgrades.

More on MPLS, Ethernet services

MPLS' 'dirty little secret': Dropped packets


MPLS, Ethernet services more critical as network habits, strategies change

"They're taking those savings and translating [them] to spending in other areas," Daley said.

Forrester also found that site-to-site MPLS IP VPN remains the priority technology for WAN upgrades. Sixty percent of companies have already migrated or will complete their migration to MPLS by the end of 2010, but Ethernet-based WAN technologies are also gaining traction and will be in place for portions of corporate WANs by 2010, with 36% adopting point-to-point solutions and 32% adopting multi-point solutions. In fact, Daley said, Ethernet services are starting to catch up to MPLS in terms of enterprise spend as companies find that they can get similar performance and features out of Ethernet services. Sometimes, those Ethernet services are also cheaper than MPLS services. Depending on the region and the size of the enterprise, she said, Ethernet expenses can be 2% to 20% lower.

Infonetics Research announced its own findings on Ethernet and IP MPLS VPN services spending this month, saying that the economy is not slowing down the migration to the latest WAN technologies. Infonetics reported that service provider revenue for Ethernet services grew by 36% in 2008 to $16.9 billion and forecast that those revenues would reach $33 billion by 2013.

Finally, WAN optimization technology has become almost ubiquitous for enterprises. Only 15% of companies said they were not interested in the technology, while 8% said they are expanding their use of it, and 25% said they are implementing or already have it. Another 11% said they are piloting it, while 27% are considering it.

"Most firms are really interested in optimizing their WAN, and the reason for that is multifold," Daley said. "They're having application investment that they can't necessarily upgrade the network for. So they're looking at ways of peaking out applications performance through WAN optimization. Also, with the continued focus on improving internal employee communication, just accelerating content and applications on their WAN," she said. "Most are doing something. How they're doing it, whether buying a behind-the-firewall solution like Riverbed or going through a service like Akamai, Verizon or AT&T really [varies on a case-by-case basis]."

Dig deeper on Bandwidth and capacity planning

Pro+

Features

Enjoy the benefits of Pro+ membership, learn more and join.

0 comments

Oldest 

Forgot Password?

No problem! Submit your e-mail address below. We'll send you an email containing your password.

Your password has been sent to:

-ADS BY GOOGLE

SearchNetworking

SearchUnifiedCommunications

SearchTelecom

SearchSDN

Close