Greg Enright: Bargains could drive IS shops to revisit budgets

From the Editor

While most newspapers and business leaders haven’t quite been able to bring themselves to spell out the dreaded “r-word,” and while there are still ample signs that the Canadian economy is doing just fine, it’s hard to deny that times are getting tougher for businesses across the country. What might be making it most tough is not slashed budgets or hiring freezes, but merely the uncertainty about how low things might go.

Analysts of just about every sector of the networking market are saying that things should turn around by the end of this year. Some decent proof based on historical analysis is sometimes even provided. There is, however, no guarantee that they will. And even if they do, the end of the year is a long way off.

Smack-dab in the middle of such uncertainty, however, is some pretty good news for IT departments that are still slugging it out as best they can. Most of it centres around what equipment vendors are having to do in the face of their own economy-related calamities: namely, slashing prices. For companies looking to pick up cheap gear, in many respects this is the time to act.

In the copper-based gigabit Ethernet space, Netgear is offering a new network interface card that goes for US$90 and switches (the GS516T and the GS524T) that come in at prices ranging between US$91 and US$97 per gigabit port.

And D-Link Systems seems intent on playing their trump card of lower prices to the max in these unforgiving times. Their DGS-1008T 1000-Base T switch carries a friendly looking price tag of US$880. Combined with attractive prices for copper gigabit server adapters from larger-name vendors such as 3Com and Intel, these moves could push through a new interest in gig E infrastructure.

If this trend blossoms throughout the first half of 2002, it might not be long before those more recognizable big players have to adjust their own prices on such gear accordingly. A similar situation has existed in the PC market for quite some time, where discount manufacturers such as e-Machines took a thick slab of business away from the likes of IBM and Dell by offering quality systems at half the price, and sometimes even lower, than those offered by the more established players.

Such benefits, both real and potential, are irrelevant if your firm has put a moratorium on tech spending, or if every new equipment purchase must first be discussed and approved at four separate meetings. For those IS managers working for CIOs who have for the time being put the kibosh on IT spending, it might be worth your network’s economic health to suggest that such a policy be revisited – while the bargains are there for the taking.