As the credit crunch bites and global economic confidence slumps in the wake of the sub-prime mortgage crisis, rising unemployment and the rise in the cost of energy, IT managers will come under even greater pressure to justify the business case for IT expenditure. Companies of all sizes are facing budget constraints and, as a consequence, IT managers will need to choose which projects to propose with care.“In tough times, risk tolerance for projects decreases due to the increase in other business uncertainties, so convincing management to spend will be a tougher sell,” said Andy Woyzbun, lead analyst with Info-Tech Research Group. “IT leaders will need to pick their battles in terms of which technologies they choose to champion for investment this year.”
However, its not all doom and gloom. Several technologies lend themselves to the cost-efficient agenda and Info-Tech says IT managers should consider several solutions that can deliver bottom-line cost or efficiency savings. These include deploying software-as-a-service (SaaS) to lower costs and accelerate business critical applications enhancement, power-optimised hardware for redeveloping data centres and virtualisation, and WAN optimisation to reduce the number of servers, costs and energy consumption in data centres.
According to Infonetics Research, worldwide sales of WAN optimization appliances jumped 71% from 2006 to 2007 to exceed US$800m. The analyst firm also forecasts that unit shipments of WAN optimization appliances will double in the period 2007 to 2010.
WAN optimisation products, which seek to accelerate a broad range of applications accessed by distributed enterprise users by eliminating redundant transmissions, staging data in local caches, compressing and prioritising data, have gained a lot of attention in recent years.
Matthias Machowinski, directing analyst for enterprise voice and data at Infonetics Research, commented; “The WAN optimisation market had a good year [in 2007] as vendors ramped up shipments of new products. Things were a little quieter on the enterprise router front, due to deterioration in the low-end of the market. Cisco’s recent announcement of the ASR 1000 should inject some excitement into the market in 2008 and keep the high-end router battle between Cisco and Juniper worth watching.”
Machowinski has only muted projections for the enterprise router sector. Worldwide enterprise router sales slowed 2% between the third and fourth quarters of 2007 and were up just 1% for the year, reaching a total value of US$4.3bn last year.
Against this backdrop, Woyzbun, at Info-Tech, emphasises that IT leaders need to strike a balance between security and compliance-driven policies and procedures and innovative projects. “In the current economy, business leaders are in for a challenging ride but due diligence surrounding strategic and practical IT investments will help them stay the course,” he added.