Why Is Networking Growing So Fast?

LAS VEGAS — Did you know that the growth of networking spending is
outpacing all other sectors of IT? Abner Germanow, director of enterprise networking at IDC, gave his reasons why to a standing-room only audience during a morning session here at Interop.

According to Germanow’s IDC data, enterprise networking
growth was 17 percent in 2006. In contrast, servers grew by
6 percent, packaged software grew by 8 percent and
storage grew by 6.2 percent.

When he reported the figures to his management at IDC, they asked him to double check since they couldn’t believe that networking could be growing
that fast because it’s a mature market.

So what is propelling networking? According to Germanow it
boils down to five driving factors.

The No. 1 reason is voice and video. Germanow noted that analysts and vendors
have been talking about voice and video for years, mostly as a
future-proofing topic. But in 2006, voice became a reality.

IDC is projecting an 11 percent growth in
compound annual growth rate (CAGR) for IP-PBXs
(define) through 2011 and a 22 percent CAGR for IP
phone gear. That growth will fuel additional demand on
the network.

Video is also a massive networking bandwidth hog and is
placing large demands on IT infrastructure. It’s
not just YouTube users that are driving networking video
demand, either. Germanow noted that there is a solid case
also for IP surveillance and video training, and that there
is a lot of excitement around conferencing and

The No. 2 reason for the growth of networking is the
rise of network-based businesses. Because the network is the business, Germanow said, networking-based business is all businesses and not just Amazon, Google and eBay.

“The way that companies succeed is the applications that
they use to reach their customers,” Germanow said.

There is also a shift toward an appliance-based model
across the networking space where both hardware and
software services co-exist in one form factor.

Originally appliances were just for security devices but now the
trend is more wide spread. “The new context for hardware appliances is as a simple service delivery component,” Germanow said.

The third reason for the growth of networking, according to Germanow, is the fact that intelligent networks are winning. With all the applications and users coming onto the network, the need for intelligent networking gear is a key enterprise requirement.

The fourth reason for the growth of networking is end-point growth. Germanow noted that their has been an explosion of network touch points, which means that more items are connecting to the network.

Virtualization is the No. 5 reason on Germanow’s
list of factors driving networking growth.

This article was first published on InternetNews.com. To read the full article, click here.