Economic crisis threatens networking growth

If you look at how enterprises have spent on networks during the last couple of decades relative to their total spending on IT, you see a clear behavior shift.

Networking won hearts and minds in the '90s, then lost them again because it didn't offer the whole solution. The application connection to the network was never made by the network vendors, and so IBM and other system and software players continued to control that critical linkage -- and still do today. The decade of the '90s, when networking's influence was strong, was the time when network vendors needed to present an application story. Had they done that, they'd at least be more engaged at the application level today -- and applications are what boost productivity.

That brings us to the current crisis. My latest enterprise surveys show that in a downturn like this one, enterprises still want productivity gains and still are willing to bet that technology can provide them. They're looking for new solutions in worker communications and collaboration, new strategies for customer support, new ways to optimize information flow and customize how users see the data they use. Which technology companies will they look to? Any company with confident, credible, insightful answers. The question is which ones those might be in the current market period. In the last one, it was the computing and software players. Might it be the network players today?

Some network vendors like Cisco would like to think so, but they've all been slow to articulate an application story. Sure, Cisco offers telepresence, but that's networking. It has collaboration as a hosted service, but not collaboration as a set of enterprise software tools. It still doesn't have application middleware, either. Network services could be promoted more effectively by having those services made directly visible to software developers and integrated with software products. The Web, the most significant technology development of the boom decade of the '90s, laid the groundwork for a vision of applications as a cooperation between network and IT resources. So, why not have network vendors provide the framework?

IBM lost the network equipment war when SNA was supplanted by TCP/IP, but it didn't lose the networking war: IBM as a provider of network applications is still a giant today. WebSphere, the IBM SOA strategy, is an enterprise household word. If networking is to profit in the current crisis, a network-centric strategy has to become a household word as well. Who will provide it, and what happens if nobody does?

Enterprises tell me that in the last recession, network budgets were the first to be hit and the last to recover. It just might be that this effect was created by the fact that the systems and software vendors did a better job of getting ownership of the critical productivity issues. The technologies with the clearest benefit got the most dependable funding. If the network and the computing/software spaces are hit by the current crisis, then the role of networks in the future may depend on how well network vendors can make the application connection today.

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Thomas Nolle

Network World
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