Converged networks on the rise

More than 80 per cent of large organizations are implementing, or planning to implement some form of converged network.

That’s according to a new survey from the Economist Intelligence Unit, which discovered that only 19 per cent of large organizations have no plans to converge their voice and data networks. The survey, sponsored by Nortel Networks Corp., also found that cutting telecoms costs is the main motivation for introducing converged networks.

There still appears to be some confusion about the benefits of the technology, however. Dennis McCauley, director of Global Technology Research for the EIU, said that there was a gap between senior managers’ expectations for employee productivity.

The survey revealed that only about 50 per cent organizations cited improved productivity as a benefit, but as McCauley pointed out, the two leading converged applications were video-conferencing and collaboration software — both applications designed to improve employee effectiveness.

McCauley said there was also lots of confusion as to the level of cost savings that could be expected. The survey revealed that 33 per cent of respondents thought that they’d save more than 30 per cent of telecoms costs, although 45 per cent thought that the savings would be between 10 and 20 per cent.

McCauley said that any organization that wanted to get significant cost savings had to ensure that there were structural changes to the organization as well: IT changes alone would not cut costs.

This view was endorsed by Peter Finter EMEA director enterprise networks for Nortel Networks. He pointed out that the business case for convergence is not fully understood but an organization that changed the way that it operated could make massive cost cuts.

The EIU questioned 103 executives representing 17 industries across the globe.

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