Roller-coaster economic predictions offer network managers multiple worries

Throughout the past few weeks, concerns about a slowdown in the North American economy have been rising and falling like a Canada’s Wonderland roller-coaster. Until recently, the precarious little car that is consumer confidence had been hurtling along through corkscrews and loops, climbing ever higher, causing investor giddiness to rise right along with it. Recently, however, it has taken some gut-wrenching tumbles amid the harsh realities of a crumbling dot-com economy, rising oil prices and a general sense of “the-good-times-can’t-last-forever” doom.

Our neighbours to the south appear be feeling this downward pull more forcefully than we Canucks. We have been buoyed by pronouncements from our economic leaders and financial analysts that our economy is indeed stronger, and that there is little reason to worry about a sad-sack U.S. market pulling us into another recession. We’ll fare okay, even if they don’t, we are told.

This reassuring scenario may be borne out in the long run, to some degree, but it is foolhardy to believe that the U.S. elephant snoring in our bed won’t keep us up for part of the coming night. If there is but one constant to Canada’s financial history, it is that we are inexorably tied to our neighbour’s economy. It’s hard to believe that this will change at the dawn of the 21 st century.

For network managers, the concerns surrounding these developments are two-fold. Like all humble, law-abiding citizens, they must worry about rising prices from everything from food to fan belts, cutting back on luxuries, delaying long-cherished goals, et cetera. They must also begin to wonder, however, about the ways in which an economic downturn could effect their department at work.

Two prominent IT analyst houses in the U.S. (The Yankee Group and The Cutter Consortium) late last month put forth the opinion that increased belt-tightening on the part of corporations will lead to an increase in outsourcing of IT responsibilities to third parties. Companies will look to save money any way they can, argue the analysts, and handing off costly and headache-inducing aspects of their businesses, like network management duties, could be one of the first moves they make.

Unfortunately for network managers, this hypothesis has to make an alarming amount of sense. Because recent times have been monetarily fruitful for most companies large enough to require an IT department, IT managers have had the luxury of getting the attention of their CEOs and CFOs. They have used that platform to do a good job of educating these upper-level executives about the importance of things like network management, security and policy-based networking. It seems that in recent years, IT’s harping has begun to have an effect on top-level decision making, with IT spending enjoying a steady growth.

If profits continue to flow freely into the average corporate piggy bank, perhaps IT department heads will be able to continue their campaign and make their role an even more integral one within the corporate hierarchy. A dastardly economic downswing could preclude this from happening, however. If it comes, and if companies subsequently break out their cost-cutting shears, what’s going to go first – a long-established department like accounting or a few network technicians whose jobs the CEO doesn’t really understand?

While outsourcing could lead to lost network management jobs, an even darker scenario could emerge for the networking industry in general. Companies that are especially starved for cash could decide to cut more corners by foregoing the outsourcing option and doing away with a high percentage of their network management altogether. In larger, more savvy companies, this is unlikely to happen, but for mid-sized firms it could be an enticing option.

Hopefully neither of these dark scenarios will come to fruition, but it is nevertheless wise to be aware of what dangers are lurking.