Industry takes stock in wake of U.S. tragedy

The terrorist attacks carried out in New York and Washington on Sept. 11 could have wide-ranging effects on both the Canadian telecom and networking markets, as well as on the development of new network security and management technologies.

While the impacts of that now-infamous day’s events on corporations pale in comparison to those felt by the victims and their families, those in the networking industry nevertheless began to examine how the sector would be affected by the tragedies.

According to Mark Quigley, an analyst with The Yankee Group in Canada in Kanata, Ont., firms might begin to re-evaluate their decision to keep a tight watch on the amount they spend in the area of telecommunications.

“The slowdown in the economy had resulted in a slowdown of overall telecom spending, whether it was for hardware or on the service provider side as well. What these events perhaps have the potential to do is compress that slowdown somewhat,” he said.

Whereas many pundits had anticipated that it wouldn’t be until 2002 that we might begin to see a recovery in the telecom market, “this may have the effect of compressing that timeline somewhat in that it will result in perhaps a sharp reinvestigation of spending, a sharp pull-back quicker than may have happened otherwise, but with the resulting faster return to investment and spend as well,” Quigley said.

Specifically, Quigley speculated that the events of Sept. 11 could result in network managers placing greater importance on storage technologies.

“One of the immediate effects on the corporate side is in terms of remotely backing things up, what [companies] do in terms of disaster recovery, etc. Events of this nature are obviously something that I don’t think anyone was able to predict….It may accelerate those kinds of purchasing decisions as well, simply because it unfortunately highlights what can happen.”

Other products that could receive extra attention are those in the area of security and intrusion detection, according to Dan McLean, director of enterprise network services research for IDC Canada Ltd. in Toronto. This wouldn’t involve the “traditional stuff that we think about around intrusion detection, but automating physical security types of things. …They’re already talking about the use of biometric types of technologies at airports in order to see through baggage better, put more wraps on processing people through immigration and things like that.”

Much of this future technology, McLean added, is hard for us to conceive of today.

“What a situation like this does is create a fertile ground for all sorts of technological innovation, because [technology] is sort of the one advantage that you might have in this fight against terrorism.”

And it would be surprising, McLean said, if that innovative technology developed to fight terrorism eventually manifests itself in products for the consumer and enterprise markets.

“I would imagine that there are some basic things that might quickly translate into enterprise products, particularly around the management side of things,” he said. “I think you’ll see a lot of that come to the forefront. (Products that offer a) better sense of trying to bring order to this inherently connectionless environment that I think most people are dealing with on their networks.”

One company already offering network monitoring and testing equipment did its part to assist in the relief efforts in the weeks following the events of Sept. 11. Fluke Networks Inc. offered up its cable certification and connectivity verification tools to firms that were directly affected by the attacks in Washington and New York. This involved expediting previous orders for such equipment and loaning out tools to both Fluke and non-Fluke customers that needed help.

According to Fluke Networks spokesman Paul Stone, the firm’s head office in Everett, Wash. received two requests from New York and one directly from the Pentagon for expedited orders on some of the company’s tools. He added that many other requests had been handled by Fluke field personnel.

“We didn’t ask for a [purchase

order] or any of the other paperwork that usually goes along (with these requests), we just pulled them and shipped them,” Stone said.

Much of the equipment was being used in the establishment of backup sites by companies whose first-tier equipment was lost in the terrorist attacks.

“We’re finding that a lot of the organizations that were in the devastated areas are moving to secondary sites and routing communication through there and that’s where we’re finding a lot of usage for our solutions, is bringing those sites up and running,” Stone said.

If the U.S. and Canadian economies are hit hard by the effects of the terrorist attacks, The Yankee Group’s Quigley said that smaller Canadian tech companies, such as the many startup service providers that have cropped up recently, could be in for a rocky financial ride.

“A company that was struggling for financing that needed to get that second round may find itself in a little different position, simply because I would imagine in the next couple months there’s going to be a little bit of a pullback in terms of financing small startup companies,” he said. “We’ve seen that already, but [these events have] the potential to exacerbate that.”