Cost to company and acquiring a meaningful return on investment are the two most obvious influences shaping the corporate network space today, writes Paul Luff, country manager of SMC Networks South Africa.
While it the market expects to pay a premium for the latest available infrastructure solutions, the global economic slowdown is forcing businesses to adopt a very tactical approach to investment and shy away from the traditional 'buy now and see later' IT networking philosophy.
One of the main tell-tale signs that economic pressure is having an impact on IT spend in the network arena is large scale optimisation of current technology. Where previously a decision maker would simply launch an assault of mounting financial resources to alleviate an issue or address a problem, today the emphasis is on existing resources and human intelligence that intervenes to provide better throughput.
In the short term there is less product being sold at the top and noticeable growth in the low end.
Interestingly enough this scenario is symbolic of a double-edged sword for those operating in the industry. On the one hand there is definite apprehension at the high end of the market, consolidation and downscaling on purchases, but the lower end is showing signs of activity and opportunity as small-to-medium sized operators look to capitalise on the trend.
Ultimately, irrespective of what segment of the market a business falls within, the network is still regarded as the engine room of a credible operation.
With this in mind decision makers now actively seek to extract the maximum benefit from features built into more advanced products that do route and implement the fastest channel.
In the day-to-day fundamentals of networking, the challenges and objectives from a corporate communication point of view mean that users can leverage off products that offer up a certain level of problem analytical processes.
A decision is made on the most stable and most expedient route – however, issues and problems inside a network can never be corrected by the products alone.
Another significant trend within the local market is the proliferation of VPN-style networks. This is being fueled by the establishment of smaller/ secondary home offices which is evident in the level of VPN-capable products being traded.
The benefits speak for itself – it is now possible to organise a seamless office of 30 people in 30 different locations working on the same network.
Voice type products are also gaining popularity within the low end of the market.
At present the networking market is expanding at a commodity level and not at an infrastructural level. We will reach the stage where main infrastructures will need to change to accommodate the extra flow.
For the foreseeable future we anticipate a slow down in high end infrastructure sales, but a sudden change because of a turnaround in the economy and the demand for improved throughput and bandwidth.
Eventually these factors will rejuvenate the high end and create more balance in the channel.