Companies upgrade their Ethernet switching infrastructure every four years because, in descending order of priority, the gear is near the end of its useful life, bandwidth is running out or they require new features.
Those are some of the conclusions found in a Goldman Sachs bulletin released this month that is based on a survey of 100 network managers in Fortune 1000 companies.
Unlike PCs, where purchasing cycles are more obvious because of processor advances, it has been hard to gauge LAN upgrade cycles. Goldman Sachs says its survey “showed evidence that enterprise switching equipment has a rolling upgrade cycle centered on a four-year equipment life.”
And most of the companies surveyed, 46%, said end-of-life replacement is what drives their Ethernet upgrade decisions. Another 28% said they trade up because they need more bandwidth for things such as VoIP and multimedia and collaboration applications.
A smaller percentage, 19%, said they are driven to upgrade by the need for new features. More than half of the users in this camp say they are upgrading to enhance security. Of the others looking for new features, 19% cited VoIP as the driver, another 19% said they wanted to add support for wireless LANs, and 10% said they needed Power over Ethernet.
The survey also drilled down into enterprise VoIP plans. Only 29% of respondents who said they are deploying VoIP are doing so across their organizations, while the rest are implementing it in certain locations (23%) or in limited pilot groups (28%).
“The survey indicates that enterprise VoIP deployment in 2005 has momentum, but a significant portion of the 2005 deployments may be tactical rather than strategic,” Goldman Sachs concludes.
For those ready to make the VoIP plunge, the survey shows Cisco is the partner of choice. Of the respondents who said they are planning to deploy VoIP equipment in 2005, 43% have Nortel PBXs today, and 38% have Avaya gear. The VoIP equipment they are most likely to migrate to? Cisco got 58% of the votes, 17% said they will use Avaya, and 13% will install Nortel.
Goldman Sachs inquired about interest in IP Centrex and found that more than a quarter of the respondents “will use VoIP services in some locations, our own equipment in others.”
While the findings about upgrade cycles essentially verify what most people could have guessed, having a reputable third party put it in writing might prove useful in future project justifications.
