BEDMINSTER, N.J. -- A majority (61 percent) of corporate executives report they plan significant network spending increases over the next two years, and 44 percent plan to adopt some form of utility computing, according to a new survey and report on networking and business strategy from AT&T in cooperation with the Economist Intelligence Unit (EIU).
The EIU survey of 254 senior executives worldwide on the future of corporate networking reported that nearly all respondents (94 percent) said their existing networks are not adequately equipped to handle all of the business challenges they face over the next two years. These and other findings are presented in a new report called Self-managing networks: building the infrastructure for utility computing, which is now available at http://www.att.com/presskit/eiu
The survey suggests utility computing is becoming an accepted business strategy for a growing number of companies looking for new ways to reduce the cost and complexity of their existing networks. A utility computing model lets companies share information technology (IT) resources from a service provider for greater efficiency.
One of the key challenges in managing legacy IT networks is the astounding demand for new applications along with increased data traffic. According to the AT&T/EIU survey, more than 40% of all respondents anticipate implementing customer relationship management applications, voice over Internet Protocol, videoconferencing and wireless access options, such as Wi-Fi (wireless fidelity) technology within the next two years.
"This survey highlights the increasing levels of complexity -- and frustration -- faced by corporations worldwide," said Hossein Eslambolchi, president of AT&T Global Networking Technology Services. "Businesses want a networking vendor with a clear technology road map and global reach to help them leverage their IT assets more effectively."
Utility computing is about tapping IT services when needed without having to worry about how those services are delivered. Through automation and virtualization technologies, utility computing allows resources to be securely and dynamically allocated based on customer requirements.
For companies working with a managed service provider, utility computing will enable businesses to reduce their costs by not having to buy, install, maintain, operate, and scale hardware or software beyond their desktops. Usage-based pricing will mean that companies pay only for what they need. The new computing model also brings greater economies of scale, since state-of-the-art IT resources can be virtualized and shared by multiple companies.
AT&T Utility Computing & Virtual Services
AT&T is building a comprehensive set of utility services, spanning IT and networking elements, to provide customers with flexible options in service levels and usage-based pricing plans across server, storage, network and application management.
For several years now, the company has provided AT&T UltravailableŽ utility enterprise storage services for mission-critical data, utility content distribution services and utility network-attached storage services. The company plans to continue expanding these utility storage options.
In addition, AT&T offers a Virtual Hosting Service that delivers the same quality, reliability and service level agreements to meet customers' need for predictive performance at significantly lower costs. The service virtualizes the hosted infrastructure across server load balancers, firewalls and routers.
AT&T will continue to expand and announce utility services, giving customers even greater control to dynamically allocate equipment resource in real-time as requirements change and automate changes across any platform from anywhere.
AT&T Application-Aware Network
To support AT&T's utility services, the company is building its Application Aware Network (AAN) based on AT&T's global, IP MPLS networking infrastructure. AAN will address the need for computing that is more cost effective, scalable and reliable than has been generally possible with traditional IT networks.
"The significant long-term cost of owning technology lies in its ongoing maintenance and administration," Eslambolchi said. "Automation is the key to achieving significant rates of productivity growth and expense reduction along with flawless reliability. AT&T is building and deploying the tools and capabilities to make business networking environments more cost effective, scalable and reliable than has been generally possible with traditional IT networks."
AT&T's Application Aware Network will deliver greater flexibility enabling customers to move away from a fixed cost, fixed capacity IT architecture where network investments are sized for rarely used peak loads.
With AAN, fixed costs are converted to variable costs by leveraging AT&T's networking and IT infrastructure. Since the infrastructure doesn't need to be purchased, the economic penalties associated with accelerating, delaying or even cancelling the deployment of a new project are significantly reduced. Additionally, the risks associated with deploying a new application that might experience unpredictable demand can be eliminated altogether.
The result is a continuously adapting infrastructure, which enables a more efficient use of computing power with optimized network speed and throughput. Software applications and their associated data can be replicated and moved around the globe as needed so companies don't have to duplicate physical facilities for data centers and applications.
The report Self-managing networks: building the infrastructure for utility computing is the first in a series of four thought-leadership articles written by AT&T in co-operation with the Economist Intelligence Unit on the future of networking. Subsequent papers will examine the topics of security, remote working and Voice over Internet Protocol.
Survey & Research Methodology:
As part of the research for the paper, the Economist Intelligence Unit conducted an online worldwide survey of 254 executives. The majority of respondents came from Europe (40%), North America (27%) and Asia-Pacific (21%). Other respondents came from Latin America the Middle East and Africa. The top five industry sectors represented by the survey respondents were financial services, professional services, manufacturing, transportation and energy. In addition to the survey research, the EIU conducted a series of one-to-one in-depth interviews with senior executives and analysts. All of the survey research took place in March and April 2004.
About The Economist Intelligence Unit
The Economist Intelligence Unit (www.eiu.com) is the business information arm of The Economist Group, publisher of The Economist. Through its global network of over 500 analysts, the Economist Intelligence Unit continuously assesses and forecasts political, economic and business conditions in nearly 200 countries. As the world's leading provider of country intelligence, the Economist Intelligence Unit helps executives make better business decisions by providing timely, reliable and impartial analysis on worldwide market trends and business strategies.
About AT&T
For more than 125 years, AT&T (NYSE "T") has been known for unparalleled quality and reliability in communications. Backed by the research and development capabilities of AT&T Labs, the company is a global leader in local, long distance, Internet and transaction-based voice and data services.
