Interop: IT and the Dark Economy

Datamation content and product recommendations are editorially independent. We may make money when you click on links to our partners. Learn More .

LAS VEGAS — First, the bad news: The economy’s state is as bad as you think it is, or maybe even worse.

That’s got enterprise IT managers feeling like they’re falling into a black hole — where they’re trying to contend with increasing traffic demands but declining budgets, researchers at IDC said.

Yet IDC says there’s still reason for optimism with some key opportunities for IT in the current recession.

That’s the message coming from a briefing session held today by the firm’s analysts during the Interop conference here, at which they examined the challenges facing IT budgets.

IDC analyst Abner Germanow started off the session on a grim note, however, saying that in his view, the recession is far from over. It doesn’t look as bad as the Great Depression, he said, but things are still worse than anything most people have seen in their lifetimes.

Underscoring the state of the economy is the state of the networking switch market. “Over the last five years, we’ve roughly seen 15 percent [compound annual] growth,” he said. “Last quarter, we saw a drop of 23 percent on a year-over-year basis.”

Germanow also shed some light on what type of switch ports that enterprises are buying. While 10 Gigabit Ethernet (10 GbE) is emerging, the reality is the bulk of all Ethernet ports shipped are still Fast Ethernet, which promises speeds of only 100Mbps.

“Fast Ethernet still hasn’t gone away, and still represents two-thirds of all ports shipped,” Germanow said.

Escaping the IT “black hole”

That’s potentially problematic: With much of enterprise bandwidth trapped in the 100Mbps realm, IT administrators are feeling increasingly trapped.

That’s where the black hole analogy comes in, Germanow said, adding that he commonly hears enterprise IT managers worrying about having limited options as budgets fall but network traffic rises.

And IDC agrees that they’re in a bind: The firm predicts growth in IT staff will be flat over the next three years. At the same time, however, the firm predicts that the number of interactions with customers over the same period will grow 800 percent.

What Germanow expects will now happen is that the trend of doing more with less will really break out.

“The notion that you can just continue to do what you used to do is flawed,” he said.

Fortunately, he also sees the pace of new technology developments helping to pull IT staff and enterprise users out of the black hole, he said.

“The bottom line is innovation will continue, and in fact, I think it will accelerate,” Germanow said. “The innovation that we’re seeing is focused on efficiency and helping people deal with the fact that they have fewer staff and more interactions.”

Part of IT innovation in networking is a move toward greater modularity. Some of that modularity comes from using off-the-shelf merchant silicon like CPUs/microprocessors instead of vendors’ application-specific integrated circuit (ASICs).

Following the same trend of modularity, Germanow also sees a shift to Linux for networking vendors.

“The number of networking vendors on Linux is probably half the show floor,” he pointed out.

Video

For networking vendors, video represents an opportunity and a challenge.

“Our prediction for 2009 is we predict it will be the year of the great enterprise video experiment,” Germanow said. “The experimentation is happening on every level, from Skype to full telepresence — and everything in between.”

Germanow added that the trend will prompt the evolution of new business models and business justification for video. But other changes are afoot as well: He noted that voice and video demands make existing networks insufficient, since voice and video require greater bandwidth and lower latency.

“The degree that video traffic grows will dictate the growth of the networking market, and that’s the bottom line of what we’re looking at today,” Germanow said.

Article courtesy of InternetNews.com.