As signs emerge of slight upturns in IT spending, Siliconrepublic takes soundings from industry figures about developments in communications and networking – and what role these can play in an IT strategy. Dermot Corrigan reports.
With many Irish businesses feeling the pinch right now, management is turning to the IT department for help. Networking and communications strategies can have a major role to play in helping companies to deliver a better service for their customers, while also delivering much-needed cost savings and efficiencies.
Most organisations’ IT strategies for 2010 revolve around enabling higher staff productivity while simultaneously cutting costs, according to Cisco Ireland’s general manager Kim Majerus.
“Businesses are still reeling from the economic issues which have affected everyone,” she says. “People are looking for ways to be more productive with less. They want to increase individual productivity, while cutting costs. They are looking for tools that allow them to do that.”
Kim Majerus, general manager of Cisco Ireland
Companies will generally only invest in technologies or solutions which show a clear return on investment, says Karl McDermott, sales director at Damovo. “Companies are prepared to invest in technology, but the technology has to show a pretty quick return on investment (ROI),” he says. “Previously, clients might have looked at ROI over a year or two. Unless they see it now within six months, it is very hard for them to justify any spend.”
However, now might be a good time for companies to ensure their IT purchases give value for money, according to Gartner Ireland associate Joel Boulton. “Companies should look to use the immediate trends in pricing to renegotiate deals and, if possible, accelerate capital purchases,” he says. “As consolidation continues in the next two years, pricing will bottom out at some point.”
Emerging technologies
The technologies companies are introducing to implement in their 2010 communications strategies include IP telephony, mobility solutions, productivity tools and network upgrades.
Voice over IP (VoIP) telephony continued to grow in popularity among Irish business, says Tom Perry, director of marketing EMEA with ShoreTel.
“Although the market for telephony has declined, the market for IP telephony has actually increased and now represents approximately 25pc of the overall market,” says Perry. “IP telephony is the area in which cost savings can be clearly demonstrated. It also offers extra capability and features, such as presence, personalised call handling and email integration as standard.”
Gaining access to IP telephony does not necessarily require a big up front investment, says McDermott. “People might keep their existing phone systems, and add a small gateway to enable them to access the benefits of VoIP,” he says. “They can then put their voice calls across their data network and consolidate all their mobile calls through it, too. We see huge interest in fixed/mobile convergence as this impacts greatly on companies’ overall telephone bills.”
Having the technologies in place to support flexible work practices are key considerations for companies this year, says Edel Creely, managing director, Trilogy Technologies.
“The proliferation of smartphones is changing how people work,” Creely says. “Having access to technology on the move is becoming almost a given. People are accessing their email on their phone, or their laptop to access voice and data whether they are at home, on the road, in a coffee shop or wherever they are. Networks with good security and performance levels are important to facilitate that.”
Edel Creely, managing director of Trilogy Technologies
Unified communications (UC) was another ‘productive’ technology that companies were looking to invest in, says Stephen Mulligan, unified communications specialist at Eircom.
“Before UC, there were gaps in my day when I could not send an email or make a call that I needed to,” he says. “UC bridges those gaps. Now I have a smartphone that lets me read emails, send text messages and make phone calls on the move. My mobile broadband plugs into my laptop so it is connected wherever I am. I can plug into my home broadband to be connected there, and in the office I can move around wirelessly.”
Businesses are tapping into the potential of social media this year, says Jason Flynn, country manager with Avaya Ireland.
“Customers will initiate more company interactions via social media tools like Facebook,” says Flynn. “Any consumer with a laptop, desktop or web phone will have richer, multimedia experiences with company representatives. More businesses will be mining social networks, capturing new opportunities to increase customer loyalty and brand preference by providing better service, addressing issues more swiftly and satisfactorily.”
Mulligan says that companies implementing new bandwidth-hungry applications or systems must ensure their networks are able for the additional work.
“If you put video over your WAN, you need some quality of service on that network, so that you can guarantee that everyone else’s emails and internet traffic is not slowed down,” he says.
Companies implementing virtualisation technologies should also be assessing their networks, says Francis O’Haire, technical director with the IT distributor Data Solutions. “Desktop virtualisation is really taking off this year, which will have an effect on companies’ networking infrastructure,” says O’Haire. “People are centralising as much as possible, so they need to get their network infrastructure right with security and optimisation technologies.”
Market trends
Developments and trends introduced by IT service providers, equipment vendors and telecoms companies are also feeding into companies’ comms policies this year. McDermott says the downturn has seen an increase in companies outsourcing elements or all of their IT networks or infrastructure.
“With people concentrating on their core business, some IT staff have been let go,” he says. “We have moved a lot of customers from break/fix maintenance contracts to fully managed services over the last 12 months. These managed services are priced similarly to the previous maintenance contracts, because the downturn has brought the price of everything down.”
Overlaps are emerging between the IT services offered by different vendors and providers in the current competitive marketplace, says Vincent McFadden, head of convergent solutions with BT.
“Telecoms companies are proactively looking to maintain existing customers and offering attractive propositions to retain them,” says McFadden. “Manufacturers are also competing in new markets as the lines between IT and network, and fixed and mobile telephony have been further blurred.”
The big telcos were introducing better connectivity and using it to offer services direct to companies, says McFadden.
“This year has seen the launch of next-generation networks (NGNs), where services are delivered through high-speed, fibre-based pipes into the customer’s premises,” he says. “These networks will start to take off from the middle of 2010. Companies, particularly larger enterprises, will rapidly start to see the benefits.”
Majerus says sustainability and environmental agendas are coming more to the fore this year. “Market trends in IT play into an organisation’s green responsibilities, such as reducing carbon emissions and eliminating unnecessary travel,” she says. “You might be buying a productivity tool, but it can also tick a number of other boxes from the overall business perspective.”
The next step
IT support remains fundamental to overall business strategy, which may be undergoing radical change in the current difficult business climate, says Boulton.
“The business environment has a high rate of change, and planners would be well advised to anticipate what their top business leaders, including the chief executive, may do next,” he says. “This may include radical business restructuring, the elimination or reassignment of business units, employment reductions and merger or acquisition activity.”
The next big development for companies to consider will be cloud computing, where data and applications are hosted off-site and accessed via the internet, says McDermott.
“We see a lot of people talking about cloud computing,” he says. “Companies can move their office applications to a service provider. Also coming down the line is hosted telephony services delivered over the internet.”
Flynn believes companies will increasingly replace network hardware elements with software options in the medium term. “Using SIP (session initiation protocol), voice, video, presence, messaging and web applications can be decoupled from the physical network,” he says. “Businesses can deliver services to users regardless of vendor, location or device meaning significant time and money savings.”
NEW DEVELOPMENTS IN NETWORKING
Cloud computing
With ‘cloud computing’, resources, software and information are accessed on-demand from any device in any location. The cloud concept refers to the industry shorthand for any connection to the internet. It was introduced by pioneers like Salesforce.com and Amazon but is now being applied right across IT in areas such as storage, applications, infrastructure, networking and telephone services. Cloud computing (also known as utility computing) offers business benefits in areas including scalability, access, maintenance, security and reliability.
Convergence
In communications, convergence is the combination of multiple services on a single channel or network. This can mean data and voice being carried over a company’s LAN (local area network), for example. A focus for many businesses in 2010 is fixed-mobile convergence, which allows mobile phones to make and receive calls over a company’s internal networks, leading to significantly reduced phone bills.
Mobility/flexible working
Many staff now do their most important and productive work far from their desk, whether on the road, with clients, or at home. Hence the need for mobile and flexible internet connectivity providing access to information and applications from individuals’ laptops and smartphones, with significant knock-on productivity benefits and cost savings.
Unified communications (UC)
Unified Communications brings together disparate communications methods, including voice calls, email, fax, instant messaging and conferencing into one easy-to-use application. Users just have ‘one number’ which reaches them wherever they are on whatever device is most useful – mobile phone, landline, laptop or PC and can also manage their ‘presence’ – letting colleagues and partners know if they are currently available and how they wish to be contacted.
Virtualisation
Virtualisation technologies began in the server and storage realms, but have quickly crossed over into the networking environment. Organisations look set to be more and more interested in ‘network virtualisation’ – which combines hardware and software network resources and functionality into a single, virtual network hosted and managed in-house or off-site.
VoIP
With ‘Voice over Internet Protocol’ or VoIP telephony, voice calls are carried over the internet instead of travelling via the traditional phone network. The initial driver for VoIP was generally to achieve significant cost savings a la Skype, but this year’s trends are for VoIP-enabled networks to introduce productivity extras, such as call routing, ‘click to talk’ functionality, ‘hot-desking’ and integration with systems such as email clients and customer relationship management (CRM) applications.
By Dermot Corrigan
