Half of networks are likely to be totally obsolete in five years

New market dynamics are changing the face of technology lifecycle management

New data released by global ICT services and solutions provider, Dimension Data, today reveals that 45% of the network estates of the nearly 300 organisations the Group assessed during 2011 will be totally obsolete within five years. This figure is an increase of 38% on last year. In addition, of the devices that are now in the obsolescence cycle, the percentage that are end-of-sale (EoS) increased exponentially from 4.2% in calendar year 2010 to 70% in calendar year 2011.

According to Dimension Data’s 2012 Network Barometer Report released today, a key factor for this massive leap in early stage obsolescence is that equipment providers are moving more products to end-of-sale to allow for newer technology. At the same time, the percentage of devices sitting at the higher risk end-of-contract-renewal (EoCR) and end-of-engineering (EoE) stages has dropped dramatically from 86.2% to 20.8%.

The Report covers aggregate data compiled from 294 Technology Lifecycle Management (TLM) Assessments¹ conducted by the Group in 2011 on organisations of all sizes and in all industry sectors.

Raoul Tecala, Dimension Data’s Business Development Director for Network Integration says, “In the last two years, there’s been a significant shift from product-oriented development to architectural-
oriented development, in order to ensure support for the larger macro-technology trends such as virtualisation, video and enterprise mobility. A good example is Cisco’s Borderless Networks product portfolio: in the past few years, every major routing and switching product family has undergone a refresh,” he explains.

At the other end of the spectrum, the drop in devices at EoE and EoCR indicates that IT managers have embarked on implementing an intensive refresh cycle at the lifecycle milestones² that represent real operational risk. Interestingly, at 9.2%, the percentage of devices that were last-day-of-support (LDoS) has moved only 0.2% from 9.0% 2010.

“The fact that the LDoS percentage has flatlined in the context of such movement in other milestones suggests there could be an obsolescence benchmark. We think that organisations may be choosing to not refresh these devices because they’ve assessed that they are not carrying mission critical traffic, and therefore there’s minimum risk in letting them die off.

“All these changes point to clients having a higher level of visibility over their network estate and an improved understanding of where to sweat assets in relation to their risk profile, and this is exactly what we wanted to see,” Tecala points out.

But even with the data pointing to enhanced client visibility, the market is moving faster, which means organisations must revisit their refresh plans and budgeting if they want to keep up.

“The pace of technology innovation means that the usable life of the capital asset is smaller than ever before. Historically, clients planned and budgeted around a seven-year depreciation of their network. This data demonstrates that almost half of clients’ network estates will be LDoS within five years.

“What’s more, devices in earlier stages of obsolescence that still look to have usable life may be unable to support strategic technology investments such as mobility or video. Clients holding out for calendar-driven refreshes over upgrades motivated by business agility risk lagging behind their more future-focused competitors,” said Tecala.

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