The worldwide networks industry experienced irrevocable changes during 2002. These were marked by large declines in business volumes in the traditional lines of business, namely WAN and LAN.
While SA largely bucked the trend in business volumes, the market has been affected by the drive into new technologies that the decline has forced. This will have a positive effect, as these technologies will be the new growth drivers in 2003 and 2004.
According to Tim Schumann, Group Executive: Technology Infrastructure for Comparex Africa: "While we are cautious about an increase in ICT spending, specifically in the communications sector, technologies such as enterprise management, voice and data convergence, wireless networks and security are products that give clients better management and control of their infrastructures. These are the technologies that sweat the assets and give the competitive edge."
He says the focus is on return on investment. "Extending product lifecycles is one method of improving ROI. These technologies allow for better optimisation of existing infrastructures," says Schumann.
A further factor that may underpin growth for the ICT sector this year is the strong rand.
"Most current ICT budgets were done at R11 to the dollar. This means that CIOs have a 30% spending capacity in their budgets at the moment," says Schumann, "there cannot be a better time to invest in new dollar-based technologies."
Schumann believes that spending capacity, for the new technologies, will be further improved by the trend towards VPN services.
"Traditionally enterprise clients built their own WANs at costs exceeding R10 million depending on the size of the enterprise. Today, in SA, there are a number of companies offering managed VPN services that are far more cost-effective than owning a WAN," says Schumann. "Telkom is the leader in this market and as there is a lot of bandwidth capacity, it is very price competitive. Money that would have flowed into a WAN can now be diverted into the new technologies."
These technologies directly underpin improvements in a client`s business processes, specifically those with which enterprises engage their clients. Easier communication and interaction with your clients equal greater competitiveness and profitability.
As a result, experienced network integrators like Comparex Africa will move up the value chain as the technologies that it installs and integrates become less discrete in improving client interaction.
"Comparex Africa has a broad base of skills that uniquely position us to play a direct role in optimising business processes and thus ensuring our clients` success," says Schumann.
Other networks business drivers will be bandwidth demand, driven by increased content delivery needs.
"A simple example would be of a researcher, in say, an investment firm. In the past, most research information was simply text-based. Today researchers can download full colour pictures, graphs and video clips to qualify their research," comments Schumann. "This is quickly becoming the norm and we already see the trend on bandwidth requirements."
Schumann says that you`ll also see this trend in the home market when Telkom starts to deploy ADSL, and services such as video streaming to the home become a reality, again driving demand.
"In the short-term, enterprises will become more comfortable using VPNs which will increase investment in voice and data convergence. The more information that flows, the more intense your security needs become. Each technology drives the other," concludes Schumann, "and don`t forget that the better and more user-friendly that applications become, the more bandwidth demand increases."
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