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EIU: Convergence networks to boom by 2009

EIU: Convergence networks to boom by 2009

Two-thirds of companies are planning to shift applications across most or all of their business to converged networks within the next five years, according to a new global survey.

Implementation has already begun for 55 per cent of the firms, although most of these have been deployed only in selected parts of the organisation so far.

The survey, conducted by the Economist Intelligence Unit (EIU), explores the topic of network convergence with 103 executives representing more than 17 industries across the globe. The survey was sponsored by Nortel Networks.

For the purposes of the survey, convergence is defined as the coming together of voice, data, video and other applications on a single broadband delivery platform-networks based on IP (Internet protocol).

The survey findings, published in a white paper entitled Deploy or delay? Converged networks in the enterprise, indicate that, among convergence applications, Voice over IP (VoIP) will attract the lion’s share of enterprise investment over the next three years.

VoIP’s potential to slash telephone costs is currently a key motivation for executives in pushing network convergence, as is the broader promise of reduced network management costs.

The majority of executives surveyed (57 per cent) also hope converged networks will enable broader use of applications such as videoconferencing and collaboration software, which enables multimedia dialogue and document sharing between teams.

At the same time, only 13 per cent expect convergence to deliver significant productivity benefits in the medium term.

Concerns remain which continue to hold some companies back from deployment.

Paramount among them is the cost of implementation, cited as a significant or very significant concern by 74 per cent of executives.

Implementation and IP equipment costs are declining, but so are the costs of traditional services and equipment.

Executives also worry about the security implications of bringing all critical applications together on one network.

Last but not least among lingering concerns is the quality of voice transmission on IP networks.

“The logic of converged networks is difficult to deny in the long run, but managers need to weigh the costs and benefits carefully, particularly in comparison with the existing technology,” editorial director of the Economist Intelligence Unit, Daniel Franklin, said.

Converged networks — and the applications that ran over them — were only as effective as the organ­isation and people that used them, he said.

“Management structures and work practices must be adapted to the technology to reap its maximum benefit,” Franklin said.

Convergence will deliver the greatest efficiencies once all applications are moved to the unified IP network, but the circumstances of many enterprises will dictate a gradual migration over time.

“When planning, you’ve got to design a blueprint for convergence,” Nortel Networks president for enterprise networks, Malcolm Collins, said.

“It doesn’t need to be ubiquitous. You may only need to give it to 20 per cent of the workforce.”


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