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Completing the Budget Circuit
It's easy to see why this is the case. Network vendors are touting "new technology advances", "key enablers of video collaboration", the mechanisms for using mobility to "keep management in touch". While this is happening, enterprises are saying that general productivity enhancement is their primary budget driver. The people who approve the funding are having a hard time connecting the dots here.
Let's face it; from its inception, networking has been plumbing. Expensive, complicated, global in scope, ever evolving...plumbing. When applications and productivity were constrained by lack of connectivity, as they were in the 1990s and earlier, networking was an essential piece of the productivity puzzle, but today the problem is different. Work processes need to be changed to enhance the way that workers use information and work together, and these processes aren't network bits, they're software applications.
Many of today's networking buzzwords, including "unified communications" could be viewed as an attempt to bring networking into direct contact with business processes, but even UC is a tool that has to be applied in a context of how work is done, and how many workers share the context. How many workers today are impacted by "collaboration" based on PCs? Here are some numbers from my research. Only one in three workers has any IT component to their job whatsoever. How many workers today are impacted by "mobility"? Only 15% are mobile. You can understand how a senior executive at an average large company might be having a problem making the connections between either of these "technology benefits" and massive, widespread, productivity benefits.
Enterprise networking fell into a "technology benefits" trap because networks don't run real applications. You do payroll or ERP or CRM over the network, but not in it. Lacking application differentiators, network equipment vendors have tried to popularize the technology tools and not what the tools would be supporting-and that has disconnected them from the real justification for investing in technology in the first place.
What makes all this sad is that there is an increased opportunity for network vendors to play a true application role. In 2002, our research found that the "feature value" of technology to the enterprise, a measure of what features the enterprise thought was important to their goals, was almost equally balanced between network and IT. Since then, IT has gained the upper hand in terms of what they control, but not because the balance has shifted. In fact, a kind of DMZ has grown up, a feature space that is neither network nor IT, but could in theory be provided by vendors in either space. A "business zone", in short. My research says that by 2010 this will envelop most of the features critical to the managers who sign the budgets. The growth of this space has shrunk both the "native" IT and network share of the feature pie. It's a new space open for players in both networking and IT to enter, and it will eventually command most of the dollars and differentiation.
Think of this zone today and you think "IBM" or "Oracle" or "Microsoft". Why has IT done better with what should be a new and competitive zone between the network and the datacenter? Because the IT vendors have targeted this zone and the network vendors have not. Unified communications is a good example; it fits in that zone and the big names in UC are IT players. The same is true for the SOA revolution in applications; many elements of SOA could have been fielded by network vendors, but the IT guys have the space sewed up today. Cisco's about the only big-name network vendor that is messaging any kind of value in this critical middle-zone feature space, and even Cisco's position there is still too "plumbing-centric".
The biggest budget share goes to the organization that has the strongest connection to the business value proposition that justifies spending in the first place. The old days of "connectivity" or "convergence" making an executive sign a big check are over. If networking executives want to get traction for their spending plans they need to find a way to get into the business zone.