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Networking takes the fall

Networking takes the fall

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It will be remembered as the year the networking sector was held accountable for delivering on real business benefits, and not technology for technology's sake.

At least this is the way Netbridge's managing director David Evans sees it. And his is a view shared by most as the sector experienced a downturn sparked off by a lack of global confidence in the telco sector.

"For the first time the industry has been held accountable, and that's a good thing," said Evans.

Geoff Johnson, senior analyst at Gartner, said the dramatic downturn in the telco sector damaged vendors like Lucent and Nortel, which have written off millions in staff cuts over the course of the year.

"The whole investment in the sector is gone," said Johnson.

"The interesting thing will be the recovery."

With US vendors axing thousands of staff worldwide and the collapse of One.Tel, and to a lesser extent Ansett, Ross Chiswell, CEO of wireless networking distributor Integrity Data Systems, said it was the first time the Australian market had dramatically felt the follow-on effects of poor business management and economic conditions in other regions.

As a result, 2001 saw Australia become the branch-office economy, and in many respects was at the mercy of boardroom decisions made on the other side of the world.

And of course there was that day in September.

"I don't want to state the obvious but [September 11] has made business contingency planning strategies foremost on companies' minds," said Glen Jones, marketing manager of Lan 1. "It has always been a burning issue, but never before have we had a significant world event to bring it home. It's made companies re-evaluate where they're spending their IT budgets."

Jones said 2001 has continued the trend of major compliance issues, which began with Y2K and the introduction of the GST. Companies are now forced to deal with the new privacy legislation and the introduction of the e/c.

Jones takes an optimistic view of these events: "It seems like every time the market can't sustain itself, the government steps in and says ‘right, we'll create the demand'."


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