Does it seem to you that network technology is advancing way faster in stories than in networks themselves? If it does, you’re right. I chatted with almost a hundred enterprises over the last three months, and they told me that their last “major network innovation” came an average of 14 years ago. Since that last innovation, they’ve been evolving and modernizing. Almost 90% of them also said that if you excluded security, the pace of “significant” innovations has slowed by half over the last 20 years. Why is this happening and what does it mean?
According to network professionals, the biggest reason for a slow-down in network technology innovation is senior management's focus on reducing costs. Suppose you have fifty sites connected and you have about 600 network devices across the entire company. It’s hard to see how you could push a technology revolution through without displacing a lot of these boxes. Enterprise network pros say that a “major” network technology innovation would require displacing at least half, and a “significant” innovation at least a third. Obviously that means buying a lot of new gear, but it also means writing off the residual value of the stuff you tossed out. That’s not a cost-reducing strategy.
But what’s got senior management so hung up on cost reduction? Are there no benefits to network improvement? One measure of how enterprises feel about this is the contribution that projects make to network budgets. When somebody figures out a new benefit to a network feature, they promote a project to add it, and justify that by citing the productivity gains or other benefits it would bring. From the year 2000 through the last of the pre-COVID era in 2019 , the portion of network spending associated with new projects dropped every single year;according to my conversations with CIOs, network spending associated with new projects now stands at about a quarter of its 2020 level. That means that the benefits a network brings are increasingly considered static, so there’s nothing to justify spending more on it.
Another problem well over three-quarters of network people cite is the senior management focus on stock performance. Not surprisingly, one of the top priorities of any executive team is increasing their stock price. Wall Street used to look at how a company’s technology decisions would impact their long-term success, but today the focus is on the current quarter and the balance of the current year. It is hard to identify a technology revolution that pays off that fast, and every time there’s a hiccup in the economy that might impact sales, executives immediately want to cut costs to keep their earnings on track. Try justifying a revolutionary change in that environment!
It is the second of these three factors that seems to be most worrisome, and that may tie in with the fact that we seem to hear about a lot of revolutionary stuff that then falls short in delivery. Yes, part of that is the news cycle, which favors excitement. A bigger part is that the network is really the “two” of the “one-two” punch of a productivity project. Double the bandwidth to a given worker and unless the worker was inadequately connected, nothing happens. The applications don’t need it, so to justify new network capabilities you need new applications. To justify new applications, you need a new model of how workers are empowered by information and computing. Only when the application piece is ready, meaning that it can be deployed, do you worry about connectivity. Therefore, the barrier to network innovation is application innovation, productivity and empowerment innovation. Network people can’t fix that, nor can network vendors.
You can see this truth swirling around in the debates over just what “unified communications and collaboration” means. Joe or Sue used to call an 800 number for support. If you offer them a video interaction with the support person, does this make the call more productive? For the thirty years I’ve studied two-party interactions, I have never seen a single study that says that video improves two-party communications productivity. If we wanted to see a massive change in UCC opportunity, we’d need to see a major change in what it delivers, and that change would have to meet a pent-up need. Where's the need? Teams or Zoom can transform meetings into virtual meetings, but they don’t do much for calls. A revolution would mean transforming how we support somebody first, and then it could transform how we connect that transformational new thing.
The cloud? During COVID lockdowns, companies relied more on the cloud to deliver data center applications and information to workers who were not in the office. That resulted in some major changes in networks, which is why I ended my discussion of project trends at the start of the pandemic. But in the end, the workers were still doing the same work in the same way, just in a different place, and collaborative requirements changed only in that they involved sharing data dynamically. The pandemic didn’t change how we collaborated, only how what we collaborated on was delivered and what tools were used. The essence of collaboration wasn’t impacted. The cloud facilitated evolution.
Since the dawn of information technology, every major boom in IT and network spending came about because we moved information closer to work, integrating it more closely ly with activity. If we want revolution in network technology, we need revolution in empowerment. We need to rethink how workers use information to do their job effectively, how to present information as needed rather than make the worker run and get it externally to the task they want to perform. The network isn’t going to do that, so we have to figure out how to stimulate application development to do it. Otherwise, we and our networks are going to evolve into old age.