Mobility, video, cloud to increase network revenues in 2012: IDC

FRAMINGHAM, Mass. — A perfect storm of growth in enterprise mobility, video consumption and cloud infrastructure will come together just in time for a major refresh cycle in 2012, driving worldwide revenues for enterprise network manufacturers  to US$39.4 billion by the end of the year, IDC predicts.

Based on its research during the third quarter of 2011, IDC forecasts 8.7 per cent growth in enterprise network equipment spending in 2012, a substantial increase from the 3.8 per cent growth the firm saw in the market last year. Another contributing factor is the end of many companies’ five-year refresh cycles for network equipment purchases and upgrades, according to IDC.

Cindy Borovick, research vice president for IDC’s enterprise communications and datacentre network services, says spending will rise because “the enterprise network is becoming much more critical” to high-priority business initiatives that will gain further momentum this year.

“When you think about planning for 2012, certainly cloud, mobility and video will drive the market,” Borovick says.

The effect of mobility on the network stems from continued rapid growth in smartphone shipments, which doubled those of laptops last year, IDC says.

“As we saw last year in 2011, mobility clearly made a lot of waves, raised a lot of flags in terms of the best ways to contain handheld growth from a technology perspective and from a business perspective, while empowering users with the devices of their choice,” says Rohit Mehra, IDC’s director of enterprise communications infrastructure.

Sales of consumer-targeted mobile devices will continue to have an impact on the enterprise, with employees further perpetuating the bring-your-own-device (BYOD) trend that has gained momentum in the past few years. Consumerization will generate an increase in network equipment spending as more companies reevaluate their network resources in order to support a diverse range of smart phones and tablets.

However, the rise of consumerization does not mean the end of traditional enterprise mobility practices, according to Mehra.

“BYOD will continue to proliferate. At the same time, with IT now getting more of a handle on these devices, and corporate policy starting to change, we see that BYOD will not take over the enterprise,” Mehra says. “I think we are well on our way to finding the right balance between BYOD and other ways that corporate IT supports mobile devices.”

Similarly, video consumption in the enterprise will also grow as a result of consumer activity on enterprise networks, IDC predicts. In 2011, an estimated 590 million people around the globe watched streaming video over the Web. With more employees, especially those with mobile devices, now connected to social media and entertainment sites more often, the amount of video content employees access on the company network is set to rise.

When combined with enterprise use of video, which will range from digital marketing initiatives to the growing trend in videoconferencing, video will be the main driver for enterprise network upgrades in 2012, IDC says.

Similarly, a shift in the way businesses approach the cloud will also generate a massive increase in network equipment spending. According to Borovick, many companies have so far approached the cloud in “ad hoc” fashion, migrating only specific applications at the time that they need them. In 2012, the enterprise migration to the cloud will become so much more dynamic that businesses will reach a breaking point, IDC predicts, and will invest in the WAN to prepare for widespread cloud deployment.

“It’s really about moving away from the current piecemeal approach to bringing the WAN into the era of the cloud, and bringing a level of simplicity to the network architecture so it’s easier to manage,” Borovick says.

Ethernet switch spending will account for the majority of global enterprise network revenue, at 51 per cent, followed by IP telephony at 21 per cent and WLAN equipment at 9 per cent, IDC predicts.

By 2013, these trends will further change the face of the worldwide enterprise network market, pushing revenues to $42.5 billion, according to IDC.

(From Network World U.S.)

Would you recommend this article?

Share

Thanks for taking the time to let us know what you think of this article!
We'd love to hear your opinion about this or any other story you read in our publication.


Jim Love, Chief Content Officer, IT World Canada

Featured Download

Featured Articles

Cybersecurity in 2024: Priorities and challenges for Canadian organizations 

By Derek Manky As predictions for 2024 point to the continued expansion...

Survey shows generative AI is a top priority for Canadian corporate leaders.

Leaders are devoting significant budget to generative AI for 2024 Canadian corporate...

Related Tech News

Tech Jobs

Our experienced team of journalists and bloggers bring you engaging in-depth interviews, videos and content targeted to IT professionals and line-of-business executives.

Tech Companies Hiring Right Now