Network convergence gaining steam

Trade

Two-thirds of companies are planning to shift applications across most or all of their business to converged voice and data networks within the next five years, according to a new global survey.

The survey, conducted by the Economist Intelligence Unit and Nortel Networks, reveals that implementation has already begun for 55 per cent of firms, albeit in selected parts of the organisation so far.  Just over 100 executives from 17 industries worldwide were
surveyed.

The survey findings indicated that voice over IP (VoIP) will attract the lion’s share ofenterprise investment over the next three years. As well as the potential to cut telecom costs, the majority of executives (57 per cent) also hope that converged networks will
spur the broader user of applications like videoconferencing and collaboration software.

On the other hand, only 13 per cent expect convergence to provide significant productivity benefits in the medium term. Barriers to deployment include the cost of implementation, which is cited by 74 per cent of executives as a significant concern, and worries about the security implications of putting all critical applications onto one network.  The quality of voice transmission on IP networks doggedly persists as a major concern.

‘The logic of converged networks is difficult to deny in the long run, but managers need to weigh the costs and benefits carefully, particularly in comparison with the existing technology,’ says Daniel Franklin, editorial director of the Economist Intelligence Unit.
‘Converged networks and the applications that run over them are only as effective as the organisation and people that use them. Management structures and work practices must be adapted to the technology to reap its maximum benefit.’

Convergence will deliver the greatest efficiencies once all applications are moved to the unified IP network, but the circumstances of many enterprises will dictate a gradual migration over time. ‘When planning, you’ve got to design a blueprint for convergence,’ said Malcolm Collins, president of enterprise networks for Nortel Networks. ‘It doesn’t need to be ubiquitous. You may only need to give it to 20 per cent of the workforce.’

20/09/04

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