In TheInfoPro’s just-completed Networking study, WAN optimization hardware and software rose to the rank of number three (from the rank of number five it held in the prior two studies) on the Data Networking Infrastructure Technology Heat, which gauges the immediacy of user needs and planned spending for each networking technology in the coming budget cycle.

This reflects the ongoing reliance of enterprises on a cost-containment strategy that seeks to meet growing bandwidth requirements by making more efficient use of existing WAN bandwidth rather than adding costly WAN capacity. The continued success of this technology shows how vendors have been able to make a compelling business case for WAN optimization hardware and software with a fairly short ROI, typically of less than 12 months.

Also noteworthy is the fact that pure-play WAN optimization vendor Riverbed overtook longtime market leader Cisco as the lead vendor in plan, i.e., among all respondents (in both large and midsize enterprises) intending new investments in the technology in the coming budget cycle.

Heat Index: WAN Optimization

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Study looks in depth at how the economic slowdown is forcing new networking strategies

New York – May 17, 2010 – TheInfoPro, an independent research company for the IT industry, today released the results of its biannual networking study, which shows the extent to which midsize enterprises and the Fortune 1000 are adopting proven cost-cutting strategies such as telepresence and unified communications (UC) to combat the economic downturn. The results are positive, with the study indicating that telepresence has met the objectives of 77 percent of enterprises, with an overwhelming 66 percent of respondents planning to expand telepresence capabilities to additional sites. The data also shows that WAN optimization solutions remain in favor, although there are signs that that rate of adoption is slowing down.

“As with 2009, the key trend of 2010 among enterprises is striking a balance between cost-efficiency and effectiveness,” said Bill Trussell, managing director of networking research. “For companies that have been forced to either eliminate or reduce travel budgets due to the downturn and rising fuel prices, telepresence and UC have offered solutions that are both highly productive and low-cost to the network budget.”

While airlines don’t need to brace for major revenue loss just yet, the networking study indicates that 18 percent of enterprises have adopted telepresence with cost reduction as the primary business objective, and 14 percent indicated that they plan to move to telepresence within the next 12 months.

Unified communications maintains its position at the top of the Heat Index of data voice and video networking infrastructure solutions, with 25 percent of large and midsize enterprises indicating that they expect to boost the use of email, unified messaging, audio conferencing and instant messaging as a part of their UC strategies this year.

WAN optimization remains high on TheInfoPro Heat Index, coming in at seventh in the top 10; 64 percent of respondents indicated that WAN has achieved its intended purpose. When respondents were asked about spending changes, citations for increases in spending dropped from 46 percent six months ago to 28 percent for 2010, indicating that an expected maturation process may have begun. In fact, 62 percent of respondents who do not have WAN optimization in use indicated that it was unlikely they would reach a decision to utilize WAN optimization in the next 12 months, further supporting slower adoption growth.

TheInfoPro’s Networking Heat Index® is widely regarded as an effective measure of user demand for a technology, and from a vendor’s perspective, a good indicator of the relative size of the market opportunity.

Overall, a shift toward 802.11n standards moved increasing wireless LAN bandwidth up the priority list (5 percentage point bump in the past six months), ensuring it maintained the top spot on the Heat Index of data network infrastructure solutions.

Study Identifies Vendors Best Positioned to Take Advantage
The shift toward remote business technology has incredible potential for continued growth, which should come as an enormous benefit to Cisco and Juniper, both of which are well positioned to increase market share.

While 64 percent of enterprises are unlikely to change their provider in 2010, among those that will, Juniper captures the largest percentage – a direct result of increased favorability, most notably in terms of product ratings. In fact, the spending picture for Juniper is among the brightest in the industry.

Meanwhile, Cisco, which continues to battle Riverbed for WAN optimization solutions in plan, maintains strong customer loyalty. Spending has increased positively within all sectors as enterprises look for networking expenditure value, and the Tandberg acquisition places Cisco in the enviable position of second most frequently cited provider in the tightening IP video conferencing solutions market. Moving forward, Cisco’s 2010 outlook looks bright, aided by pent-up demand for 802.11n wireless solutions and burgeoning clamor for 100Gb Ethernet adoption brought on by the growth of virtualization.

Both Juniper and Cisco exceeded the averages for promise and fulfillment criteria for customer ratings.

Virtualization: A Trend to Watch
Unsurprisingly, the study confirms the cloud’s continued growth – nearly one-third of enterprises are using cloud computing services, with an additional 46 percent intending to do the same within the next two years. However, while 43 percent of enterprises indicate that virtualization has had a positive effect on their network, it remains to be seen whether capacity concerns slow down the virtualization revolution, with 34 percent of respondents very concerned about the impact of cloud services or architecture on their network.

NOTE: Specific vendor data or full report downloads are available by contacting Bernadette Abel at bernadette@theinfopro.com.

About TheInfoPro’s Networking Study
TheInfoPro’s Networking Study was conducted in February 2010 and takes an in-depth look at key trends occurring across all areas of information networking, including usage patterns for management software, security infrastructure, voice and network infrastructure, and wireless networking services. The study is completed biannually through hourlong interviews with key networking decision-makers within Fortune 1000 and midsize enterprise organizations. The interview results are collected in comprehensive research reports that provide continuous business intelligence within key areas such as technology roadmaps, spending plans and vendor performance ratings.

About TheInfoPro
TheInfoPro is a leading advisory and research firm that provides real-world perspectives on the customer and market dynamics of the information technology landscape by using a unique research methodology that harnesses the collective knowledge and insights of leading IT organizations worldwide. Through a combination of expert advice, actionable analysis and our extensive network of IT professionals, TheInfoPro serves as a conduit between IT decision-makers, technology providers and institutional investors. Founded in 2002 by alumni of Gartner, Giga, EMC and Bell Labs, TheInfoPro is headquartered in New York City. To learn more, visit www.theinfopro.com or email info@theinfopro.com.
info@theinfopro.com.

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WAN acceleration and optimization appears to be on the verge of a shift in architecture as new host-based and virtual technologies move in on the hardware appliance model that has dominated so far.

The movement got a kick-start earlier this month when Riverbed rolled out a cloud computing initiative that uses a new set of virtual WAN acceleration and iSCSI storage appliances. The technology uses largely the same protocol of the company’s flagship Steelhead appliance, except that instead of deploying in remote offices, the modules reside instead in public clouds like Amazon’s EC2.

Such a move is clearly intended to support Riverbed’s hardware platform as much as it is to extend its reach into the new cloud platforms. Not so for technologies coming out of Microsoft. The company is said to be working on a new compression and redundancy-elimination scheme that would reside in enterprise host systems, reducing much of the application data load before it leaves the data center and largely eliminating the need for additional acceleration on the WAN. The research, conducted mostly in India, is probably a few years away from actual implementation, but it could nonetheless represent a serious challenge to a number of well-entrenched optimization vendors.

And many of the leading indicators that WAN acceleration will continue to be one of the strongest IT spending areas for the foreseeable future. Research firms like TheInfoPro continue to flag acceleration as a key requirement in IT budgets due to its high ROI factor. It expects IT spending to accelerate in 2010 as the world economy pulls out of recession.

Of course, hardware implementations are generally the most expensive way to introduce new capabilities to the enterprise. The question is whether organizations will still have to devote significant resources to WAN optimization, or will the new cloud and software technologies help to lighten the financial load just a bit.

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While a boom year may not be ahead in 2010, many observers say that it will be better than 2009. New research from TheInfoPro shows an increase in spending on infrastructure, optimization and quick ROI, including projects such as virtualization, and unified communications and video conferencing.

No one is forecasting a boom year for 2010, but many observers are making predictions that point to some smart growth in terms of spending within IT organizations.

And TheInfoPro is no exception. The research firm’s most recent research looking into trends for Fortune 1000 and midsize enterprises reveals that these organizations plan to focus their budget dollars and man-hours on improving infrastructure and optimizing performance in 2010.

“There’s no truth to the hype that we are going to see a quick spending rebound after the year we’ve just had, but there is still a lot to be pleased with in terms of anticipated 2010 budgets,” says Ken Male, CEO of TheInfoPro, in a prepared statement.

“We had hoped in the second half of 2009 business units would demand new projects, applications, lines of business, etc., but that has not been the case,” he adds. “However, there is benefit from these tough times; for example, IT departments will expand services based on the consolidation and virtualization measures that have worked well for them to get through this recession.”

The new infrastructure focus will come at the expense of new pilots and projects, according to the research which is based on interviews with more than 1,000 IT decision makers from more than 800 organizations.

Key infrastructure areas that TheInfoPro asked about included storage, servers, networking, information security, virtualization and cloud computing.

Other key spending trends include:

• A focus on technology purchases that focus on optimization of existing server, networking and storage assets, and requiring a 6 to 12 month return on investment (ROI).
• Similarly, emerging technology will more likely get the green light if it can demonstrate quick ROI.
• Investments in upgrades will be made to support virtualization demands, particularly in networking.

As for investments in storage technology, IT professionals say they focused on consolidation in 2009 but expect to return to spending in 2010. However, there’s uncertainty around whether they will invest in new applications. Storage budgets did not suffer as much in 2009 at midsized companies, and in 2010, those budgets are expected to increase again.

The research also found that NAS activity has continued to expand for business analytics, application optimization and virtual server adoption.

As for servers, research showed that spending will turn net positive, with 30 percent of IT decision makers saying that they will increase spending for this technology while 22 percent said they will decrease it.

And while companies will need to invest more in hardware, not all vendors are created equal. The research showed that Dell and HP are the first choice in terms of hardware vendors.

In terms of virtualization, one area that will see a major increase in pilot programs and installations in 2010 is desktop virtualization, according to TheInfoPro research.

Networking spending trends are as follows:

• Early projections show fewer big networking budget cuts in 2010 compared with 2009, with 58 percent of IT decision makers saying they expect spending to have flat to 10 percent growth. High ROI projects such as WAN optimization continue to be deployed. And to a lesser degree, unified communications in terms of unifying voice and video into the enterprise network backbone, is also moving forward when it can be accomplished without large infrastructure upgrades.
• 15 percent of organizations are planning IP video conferencing solutions as a strategy to offset travel expenses and improve organizational effectiveness.
• An additional 29 percent of companies, or nearly 75 percent of the current adoption rate, have unified messaging solutions in their plans for the next 12 months.

Cloud computing continues to gain momentum, even if it is not mainstream. While nearly 60 percent of server organizations are not evaluating or planning to use cloud computing, the number of organizations indicating interest in cloud computing has nearly doubled in the past year, going from 20 percent to 40 percent.

TheInfoPro says that 30 percent of those interviewed said they would be slow to adopt cloud computing because of immaturity of the technology, with another 25 percent saying they were reluctant because of security concerns.

While internal models were favored by 53 percent, a big chunk of organizations – 34 percent – are looking at a hybrid of internal and external models.

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• Spending will focus on increasing existing infrastructure needs versus IT departments embarking on new projects or pilots.
• Technology purchases will focus on the optimization of existing server, networking and storage assets, requiring a six- to 12-month ROI.
• Hot new trends in technology will be prioritized if they’re easy to bring on and demonstrate a quick ROI.
• Upgrade investments will be made to support virtualization performance demands, especially in the area of networking.

The theme is obvious – containing spending is still the order of the day. Specific to the infrastructure sectors, we see the following trends:

Storage – storage organizations we see F1000 storage pros forecasting a positive budget for 2010; however, new application demand remains uncertain. Interestingly, F1000 budgets are recovering better than MSE (medium-sized enterprises). Deduplication, both backup and primary, solid-state disk, and 8Gbps refreshes top end users’ storage hardware priorities, while thin provisioning, archiving and e-discovery top end users’ storage management priorities.

Servers – For 2010, organizations are projecting net positive spending, with 30% of respondents indicating increased spending and 22% noting decreases. Virtualization will see continued spending with desktop virtualization also seeing a major increase in pilot programs and installations in early 2010.

Networking – early projections indicate fewer significant budget cuts in 2010 as compared to 2009, with 58% of respondents expecting spending to be flat to 10% growth. High ROI projects like WAN optimization continue to be deployed.  To a lesser degree unification of voice and video onto the enterprise backbone network is also moving forward when it can be accomplished without large infrastructure upgrades. IP video and unified messaging are also expected to see jumps in adoption in the 12 months. Both are positioned as cost cutting measures.

Overall, we would categorize organizations as being cautiously optimistic about 2010. We will be gathering more data points in early 2010 which will give us increased visibility into how real this optimism is within these organizations.

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State of the IT marketplace in 2010 and beyond – new research from TheInfoPro

New York – November 18, 2009 – New research from TheInfoPro announced today at Interop New York 2009 outlines where Fortune 1000 (F1000) and midsize enterprises (MSEs) intend to focus their budget dollars and man-hours throughout 2010.

Based on interviews with more than 1,000 information technology decision-makers from more than 800 organizations in North American F1000 and MSE spaces, TheInfoPro’s research outlines where IT departments within these organizations stand in terms of budgets, technology roadmaps, and technology provider choices and ratings. Core infrastructure areas are covered including: storage, servers, networking, information security*, virtualization and cloud computing.

A key theme prevalent in the majority of organizations interviewed is that almost all respondents will see a continued halt on new IT projects, with available dollars being geared toward optimization projects and refresh components of the existing storage, networking and server infrastructures to support growth in virtualization.

Emerging Themes for 2010

Spending
While spending is expected to increase for 2010 and budgets are projected to be more fruitful, TheInfoPro’s studies provide the following themes across all sectors of IT:

• Spending will focus on increasing existing infrastructure needs versus IT departments embarking on new projects or pilots.
• Technology purchases will focus on the optimization of existing server, networking and storage assets, requiring a six- to 12-month ROI.
• Hot new trends in technology will be prioritized if they’re easy to bring on and if they demonstrate a quick ROI.
• Upgrade investments will be made to support virtualization performance demands, especially in the area of networking.

“There’s no truth to the hype that we are going to see a quick spending rebound after the year we’ve just had, but there is still a lot to be pleased with in terms of anticipated 2010 budgets,” said Ken Male, CEO of TheInfoPro. “We had hoped in the second half of 2009 business units would demand new projects, applications, lines of business, etc., but that has not been the case. However, there is benefit from these tough times; for example, IT departments will expand services based on the consolidation and virtualization measures that have worked well for them to get through this recession.”

Storage

• After a year of consolidation, F1000 storage pros forecast a positive budget for 2010; however, new application demand remains uncertain.
• In 2009, MSE budgets fared better than F1000 budgets. In 2010, the F1000 budgets are expected to increase more.
• Deduplication, both backup and primary, solid-state disk, and 8Gbps refreshes top end users’ storage hardware priorities, while thin provisioning, archiving and e-discovery top end users’ storage management priorities.
• NAS activity continues to expand for business analytics, application optimization and virtual server adoption.

Servers and Virtualization

• Server spending turned net positive, with 30% of respondents indicating increased spending and 22% noting decreases for 2010.
• Companies will need to invest more in hardware, but not all vendors will reap the benefits of those sales; respondents point to Dell and Hewlett-Packard as first-choice vendors.
• Desktop virtualization will see an major increase in pilot programs and installations in 2010.

Networking

• Early projections indicate fewer significant networking budget cuts in 2010 as compared to 2009, with 58% of respondents expecting spending to have flat to 10% growth.
• High-ROI projects like WAN optimization continue to be deployed. To a lesser degree, unification of voice and video onto the enterprise backbone network is also moving forward when it can be accomplished without large infrastructure upgrades.
• Fifteen percent (15%) of organizations are planning future adoption of IP video conferencing solutions. The increased use of this technology is meant to offset travel expenses and improve organizational effectiveness.
• Citations for future adoption of unified messaging remain strong; an additional 29%, or nearly 75% of the current adoption rate, have unified messaging solutions in their plans for the next 12 months.

Cloud

• While nearly 60% of server organizations are not evaluating or planning to use cloud computing, the percentage of these organizations indicating interest in adopting cloud computing has nearly doubled in the past year, going from 20% to 40%.
• Thirty percent (30%) of respondents indicated they would be slow to adopt cloud computing due to immaturity of technology. Concerns over security followed closely behind, with 25% of respondents indicating this as their number one concern for adoption.
• While internal models are favored (53%), there is a substantial number of organizations looking at a hybrid of both internal and external models (34%).

At Interop New York this week, Chief Research Officer Anders Lofgren will be joined by panel of colleagues discussing “The Best of Both Worlds: Can Hybrid Clouds Convince the Enterprise?”When: Wednesday, Nov. 18, 2009, from 4 p.m. to 5 p.m. EST
Where: Interop New York, Jacob Javits Convention Center

*TheInfoPro’s information security study is currently in the field. The most recent information in this area will be available around the end of 2009. For data from our last study, please click here.

NOTE: Specific vendor data is available upon request; please contact Nicole Caruso at nicole@theinfopro.com.

TheInfoPro is a leading advisory and research firm that provides real-world perspectives on the customer and market dynamics of the information technology landscape by using a unique research methodology that harnesses the collective knowledge and insights of leading IT organizations worldwide. Through a combination of expert advice, actionable analysis and our extensive network of IT professionals, TheInfoPro serves as a conduit between IT decision-makers, technology providers and institutional investors. Founded in 2002 by alumni of Gartner, Giga, EMC and Bell Labs, TheInfoPro is headquartered in New York City. To learn more, visit www.theinfopro.com or email info@theinfopro.com.
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