Network strategy and technology company Ciena argues that UK organisations stifle innovation by holding onto their network assets for too long, lagging far behind their German counterparts.
Independent research commissioned by the company found that one-fifth (20%) of UK businesses are missing out on the operational and cost benefits of new network technologies by using equipment that is more than three years old, compared with 8% of businesses in Germany.
The study was looking into the enterprise IT investment strategies of 500 large British and German organisations in the face of growing reliance on high-speed data.
The study revealed significant investment disparity between these two major European markets, with the UK spending less annually and demonstrating a general focus on longer-term amortisation of network assets in the front office environment and data centre.
However, outside of the data centre, infrastructure is increasingly run for much longer in both markets, which means that renew cycles are not keeping pace with the rest of IT in the business. The company says that advances in Wi-Fi technology, faster Ethernet protocols and support for new broadband and fibre standards are not being fully exploited, meaning organisations may struggle to cope with greater data volumes being transferred in and out of the network, as well as within it.
- The mean average spent annually on data centre network infrastructure is £161,000 in the UK, with a further £86,000 spent on WAN and interconnects. In Germany, companies are spending an average of €326,000 annually on data centre network infrastructure and €140,000 on WAN and other interconnects.
- More than one-quarter (27%) of UK businesses are also using WAN connections up to five years old, potentially missing out on service improvements and new services. This compares with just 18% in Germany.
- Both UK and German organisations identified the latest fibre data centre interconnects as the most critical investment they would make, if money was no object. According to the study, roughly 40% of UK respondents would invest in this along with 42.8% in Germany.
- Over one-fifth (22%) in the UK would invest in site-to-site fibre in order to improve internal data speeds between sites, compared to 11% of German organisations.
- From a market sector standpoint, the study concluded that the services sector is the most likely to invest in data centre infrastructure, with 94% having invested in key data centre network hardware (fibre, cabling, switches, routers, firewalls etc.) in the last three years. This compares to 92% in the healthcare sector, 89% in the financial services sector and 87% in the retail sector. In addition, roughly 50% of healthcare respondents had done this investment within the last year.
Keri Gilder, vice president and general manager, Europe, Middle East and Africa (EMEA), Ciena, says, “As traffic volumes in both the data centre and in the office environment continue to surge, businesses are looking to extract maximum value from their infrastructure investments. As the study shows, investment in external WAN bandwidth and interconnects is critical, but if it’s being connected to legacy equipment, the potential benefits of better and fluid bandwidth won’t be realised.”
Mervyn Kelly, EMEA Director, Ciena, adds: “If there’s one key take away from this research, it is that a two-tier strategy for technology renewal cycles will always result in missed opportunities. New client and server hardware unlocks many benefits for users and the wider business. It makes little sense to curtail these by using obsolete network infrastructure that becomes a bottleneck for new IT investments instead of an enabler.”
If proved accurate not only could companies be missing out on key benefits, there should be opportunities for network and data centre companies to deliver the up-grades needed.