October 30, 2009

The State Of WAN Services Adoption In North America 2009: CIOs Lead On Cost Reduction

by Phil Sayer

with Simon Yates, Christian Kane

Executive Summary (This is a document excerpt)

The need to cut costs dominates North American enterprises' 2009 plans for wide-area networks (WANs). This is the top priority for almost three-quarters of enterprises as part of IT budget cuts mandated at board level. At the same time, network traffic is growing rapidly to support projects like server centralization, data center consolidation, videoconferencing, and collaboration designed to reduce IT infrastructure and employee travel costs. Firms need to innovate constantly to meet these apparently contradictory objectives. MPLS IP VPNs are in mass adoption, but some enterprises are starting to replace them with carrier Ethernet any-to-any networks based on the virtual private LAN service standard (VPLS). North American firms continue to buy fewer managed telecom services than Europe. They are, however, making strategic decisions to purchase managed services. This is driven by a long-term plan to simplify operational management and to focus on core competencies, rather than by a short-term imperative to reduce capex budgets or headcount during the current recession.

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