IDC Reports on Convergence

Almost three quarters of global enterprises expect to migrate to a fully converged network by the end of 2008, according to IDC research

January 17, 2006

3 Min Read

LONDON -- Almost three-quarters of global enterprises expect to migrate to a fully converged network by the end of 2008, according to research released today by industry analyst firm IDC. The research, sponsored by BT and Cisco, has found that 28 per cent of large enterprises in Europe and the US have already adopted converged technologies and this will expand over the next three years to 74 per cent.

The research shows that the two major drivers for this rapid migration to Internet Protocol (IP)-based networks include expected cost savings over existing voice services (39 per cent) and the end of serviceable life of existing Private Branch Exchange (PBX) networks (29 per cent). While reduction on voice call costs feature most prominently, additional drivers for organisations considering a converged network include enhanced productivity through flexible working, and improved business processes.

Mirroring these findings, the number one benefit anticipated by enterprises considering converged services is cost savings (73 per cent). These cost savings will be derived either directly from lower voice calls, or from other benefits such as more efficient network management (20 per cent) and increased functionality enabled by additional IP-based features such as unified communications and mobile extensions (37 per cent).

The research found that there is a significant lack of understanding in the enterprise market about the benefits that converged technologies can offer, with only 50 per cent of respondents believing they have sufficient knowledge to be able to make a decision about adoption.

Duncan Brown, consulting director at IDC, said: "As convergence reaches the mainstream of large enterprises, buying criteria shifts emphasis towards providers that can demonstrate strong track records in capability and experience. Buyers also look for proof points, such as case studies and reference clients."

Aaron McCormack, vice president network platforms and propositions, BT Global Services, said: "This research provides an extremely useful insight into the current state of convergence adoption by global enterprises, as well as a clear indication of how this market will mature over the next three years. The convergence of voice and data systems is at the heart of BT's vision for the digital networked economy, enabling businesses to achieve true flexibility and collaboration while also managing costs and simplifying their operations."

Clive Sawkins, operations director for Cisco IP Communications, said: "What this research shows is that while global enterprises may not be the first to adopt new technologies, when they can see sufficient evidence of real benefits and industry momentum then mainstream adoption will follow. Cisco has been at the forefront of providing converged services to global enterprises for a number of years, and we have designed our entire technology architecture to help enable all applications to run across a single infrastructure."

Organisations were equally split between whether they would take a phased approach when migrating their voice services to IP, or whether they would migrate the entire estate in one go. The research found that the larger organisations, with bigger and more complex networks, were more likely to take a phased approach, whereas smaller enterprises were more likely to migrate in just one implementation.

The research found that less than 20 per cent of enterprises currently use managed services for their separate voice and data networks, however 39 per cent expect to use managed services for converged voice and data services. This means that enterprises are taking the opportunity to not only modernise their networks but also their management and cost structures.

The primary reason for selecting a potential provider to manage the network was demonstrable experience and technical excellence in voice, data and convergence (46 per cent). As the majority begin their adoption, they look less for innovation and more for stability and proof points.

McCormack said: "As forerunners in the field of globally networked IT, BT and Cisco together offer a unique combination of expert advice and innovative products and services delivered over the global IP network, in a partnership structured around the needs of our customers."

IDC

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