Evidence of WAN resurgence emerges

In early February, we spent quite a bit of time in Silicon Valley (a.k.a., “Death Valley West”) chatting with network equipment providers.  The general attitude there now seems hopeful. This is in sharp contrast to the blue mood that pervaded the high-tech region last fall.  Admittedly, we’re not seeing – and we don’t expect to see – the extreme and unrealistic exuberance of the late 1990s.  But at least the industry is starting to move again.

From our discussions, it seems that the primary activity is coming from small and midsized businesses (SMB). Larger enterprises and service providers are also moving in a positive direction, but more slowly.

This makes sense. SMBs, by their very nature, have less opportunity to “overindulge.” This market segment has never had the financial resources to overreact to the perceived economic euphoria by going full tilt for the next generation of hip technology.

Following the old proverb, it seems that to a certain extent, the bigger they were, the harder they fell.  And this was especially true in the case of the service providers.  Nevertheless, even this segment seems to be starting to recover, particularly for solid, nonesoteric applications such as voice over IP (VoIP).

Among the evidence is data reported by Sage Research, which just published its seventh bi-monthly Service Provider Confidence Index, based on current and future conditions and expectations of 125 professionals in service provider companies.  According to the report, “This is the only time the…index has risen significantly since its inception one year ago. The increase is due primarily to rises in service development spending in Q1 and less of a sense that industry conditions ‘are as bad as they can get.’ “

For details, the Sage report is available at (registration required).

https://www.webtorials.com/main/newsletters/sage/index.htm