The Network Effect

Every time there is a downturn one of the areas that suffers most is enterprise network equipment. This is because customers typically feel they can stretch the lifecycle of their network infrastructure pretty far, with some customers going as much as five years between upgrade cycles.

But not all downturns are the same and, as such, it’s worth paying attention to some of the other trends that are becoming a hallmark of this current economic cycle. In particular, customers are consolidating servers and embracing virtual machine software en masse. As this trend continues, the impact this trend will have on enterprise networks will be profound.

When a customer consolidates there servers, more applications have to be accessed over the network by remote sites. More often than not, there is a performance penalty  for doing that as more users try to access applications over fragile wide area network links. Eventually, as the customer consolidates more servers, the need to upgrade the network infrastructure increases.

Further exacerbating this performance problem is the advent of virtualization. Where a customer once might have had 20 physical servers, they can easily find themselves now managing 100 virtual servers. Those virtual servers then rely on the same network infrastructure to make application available to a more users that are trying to remotely access them.

Of course, the other issue is that the users themselves are more remote than ever. Beyond just having to support actual remote offices, more employees than ever are working out of home offices. And in these tough economic times, more people are also accessing applications from home because they are simply putting in more time than ever on the job.

Taken together, this means is that probably starting in the second half of this year, solution providers might see a significant increase in demand for enterprise network upgrades. Customers don’t normally communicate all that well across their various IT disciplines, so it will take awhile before the efforts that people who are trying to save money by consolidating servers has the anticipated effect on network performance.

But solution providers would do well to start monitoring their customers’ server consolidation efforts because wherever that activity is taking place in earnest, it’s only a matter of time before somebody starts to wonder why application performance is starting to fall off. And more often than not, the answer is going to be because the wide area network they are using was never designed to support so many end users trying to access a vastly increased number of remote applications. Once that realization happens, then an opportunity for the solution provider arises.

Of course, some solution providers might want to proactively have that network conversation with their customers now given all the activity surrounding server consolidation. But either way, as the role of the network continues to change in the enterprise, network upgrades are inevitable.

Mike Vizard is a head of the Ziff Davis Enterprise market experts group and regular contributor to Channel Insider.