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Fortune 1000 and MidSize Enterprise Organizations Say Immediate Spending Will Include Telepresence and Unified Communications

May 17, 2010 | Howard Lichtman

Study looks in depth at how the economic slowdown is forcing new networking strategies

NEW YORK--(BUSINESS WIRE)--TheInfoPro, an independent research company for the IT industry, today released the results of its biannual networking study, which shows the extent to which midsize enterprises and the Fortune 1000 are adopting proven cost-cutting strategies such as telepresence and unified communications (UC) to combat the economic downturn. The results are positive, with the study indicating that telepresence has met the objectives of 77 percent of enterprises, with an overwhelming 66 percent of respondents planning to expand telepresence capabilities to additional sites. The data also shows that WAN optimization solutions remain in favor, although there are signs that that rate of adoption is slowing down.

"As with 2009, the key trend of 2010 among enterprises is striking a balance between cost-efficiency and effectiveness".

"As with 2009, the key trend of 2010 among enterprises is striking a balance between cost-efficiency and effectiveness," said Bill Trussell, managing director of networking research. "For companies that have been forced to either eliminate or reduce travel budgets due to the downturn and rising fuel prices, telepresence and UC have offered solutions that are both highly productive and low-cost to the network budget."

While airlines don't need to brace for major revenue loss just yet, the networking study indicates that 18 percent of enterprises have adopted telepresence with cost reduction as the primary business objective, and 14 percent indicated that they plan to move to telepresence within the next 12 months.

Unified communications maintains its position at the top of the Heat Index of data voice and video networking infrastructure solutions, with 25 percent of large and midsize enterprises indicating that they expect to boost the use of email, unified messaging, audio conferencing and instant messaging as a part of their UC strategies this year.

TheInfoPro's Networking Heat Index® is widely regarded as an effective measure of user demand for a technology, and from a vendor's perspective, a good indicator of the relative size of the market opportunity.

WAN optimization remains high on TheInfoPro Heat Index, coming in at seventh in the top 10; 64 percent of respondents indicated that WAN has achieved its intended purpose. When respondents were asked about spending changes, citations for increases in spending dropped from 46 percent six months ago to 28 percent for 2010, indicating that an expected maturation process may have begun. In fact, 62 percent of respondents who do not have WAN optimization in use indicated that it was unlikely they would reach a decision to utilize WAN optimization in the next 12 months, further supporting slower adoption growth.

Overall, a shift toward 802.11n standards moved increasing wireless LAN bandwidth up the priority list (5 percentage point bump in the past six months), ensuring it maintained the top spot on the Heat Index of data network infrastructure solutions.

Study Identifies Vendors Best Positioned to Take Advantage

The shift toward remote business technology has incredible potential for continued growth, which should come as an enormous benefit to Cisco and Juniper, both of which are well positioned to increase market share.

While 64 percent of enterprises are unlikely to change their provider in 2010, among those that will, Juniper captures the largest percentage - a direct result of increased favorability, most notably in terms of product ratings. In fact, the spending picture for Juniper is among the brightest in the industry.

Meanwhile, Cisco, which continues to battle Riverbed for WAN optimization solutions in plan, maintains strong customer loyalty. Spending has increased positively within all sectors as enterprises look for networking expenditure value, and the Tandberg acquisition places Cisco in the enviable position of second most frequently cited provider in the tightening IP video conferencing solutions market. Moving forward, Cisco's 2010 outlook looks bright, aided by pent-up demand for 802.11n wireless solutions and burgeoning clamor for 100Gb Ethernet adoption brought on by the growth of virtualization.

Both Juniper and Cisco exceeded the averages for promise and fulfillment criteria for customer ratings.

Virtualization: A Trend to Watch

Unsurprisingly, the study confirms the cloud's continued growth - nearly one-third of enterprises are using cloud computing services, with an additional 46 percent intending to do the same within the next two years. However, while 43 percent of enterprises indicate that virtualization has had a positive effect on their network, it remains to be seen whether capacity concerns slow down the virtualization revolution, with 34 percent of respondents very concerned about the impact of cloud services or architecture on their network.

NOTE: Specific vendor data is available upon request; please contact Bernadette Abel at [email protected].

About TheInfoPro's Networking Study

TheInfoPro's Networking Study was conducted in February 2010 and takes an in-depth look at key trends occurring across all areas of information networking, including usage patterns for management software, security infrastructure, voice and network infrastructure, and wireless networking services. The study is completed biannually through hourlong interviews with key networking decision-makers within Fortune 1000 and midsize enterprise organizations. The interview results are collected in comprehensive research reports that provide continuous business intelligence within key areas such as technology roadmaps, spending plans and vendor performance ratings.

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About TheInfoPro

TheInfoPro is a leading advisory and research firm that provides real-world perspectives on the customer and market dynamics of the information technology landscape by using a unique research methodology that harnesses the collective knowledge and insights of leading IT organizations worldwide. Through a combination of expert advice, actionable analysis and our extensive network of IT professionals, TheInfoPro serves as a conduit between IT decision-makers, technology providers and institutional investors. Founded in 2002 by alumni of Gartner, Giga, EMC and Bell Labs, TheInfoPro is headquartered in New York City. To learn more, visit www.theinfopro.com or email [email protected].







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