Data-centric applications like ERP and adoption of converged networks is driving bandwidth requirements in the connected enterprise

The shortage of bandwidth (or the glut of it) has often been the subject of discussion in CIO circles. There has been much concern about actual throughput and quality of service. But connectivity becomes imperative when business grows and extends to multiple locations. And bandwidth becomes a focus area with the deployment of data-centric enterprise applications. In fact 94 percent of the respondents in this survey said there has been an increase in bandwidth requirement. About 39 percent of all respondents said bandwidth is their main focus area. The average rate of increase in bandwidth requirement is 48 percent.

Enterprises use bandwidth either for Net connectivity or LAN/WAN/Campus connectivity. For this survey we have considered both separately.

Net Connectivity
Within this segment the various connectivity options are ISDN, dialup, leased line, satellite, DSL, and cable. Of these ISDN, leased line and dialup are the most popular solutions for Net access. About 65 percent of the respondents said they use ISDN for Net access and the same number use dialup. Also, 56 percent of the respondents said they use leased lines.

One of the reasons why CIOs have chosen ISDN for Net connectivity is that it can also be used for voice calls and video conferencing.

Dialup is also favored as a back-up connectivity solution, and is ideal for those who do not need always-on connections.

Leased lines offer always-on Net connectivity. The existing LAN/WAN can be connected to an Internet gateway via leased lines offering shared Net access to all users within the enterprise. And if there are many users, this seems to be a cost-effective method for Net connectivity.

The demand is high for leased lines in 2002-03. About 55 percent of the respondents said they have a requirement for leased lines. On the other hand fewer enterprises are going in for ISDN or dialup connectivity—41 percent of the respondents said they require ISDN and 21 percent said they require dialup. Bandwidth-hungry applications like VoIP and ERP/CRM (within a WAN) that require always-on connectivity coupled with falling costs are the main drivers for leased lines.

WAN Connectivity
Within this segment the various connectivity options are VSATs, Leased Lines, RF (Radio Frequency) Links, Frame Relay, ATM, and MAN (Metropolitan Area Network).

Enterprises are favoring VSATs, Leased Lines and RF links for LAN/WAN connectivity. VSATs are used for connecting remote locations or areas where terrestrial infrastructure is scarce. VSATs are also favored for their reliability. More businesses are embracing VSATs as they extend operations to the smaller towns in remote (rural) areas.

Leased lines are widely used and are chosen for point-to-point WAN links. RF links are also growing popular because, for the same cost as leased lines they offer better bandwidth. RF links are chosen for connecting locations over shorter distances, especially in areas where it is difficult to deploy terrestrial infrastructure. In many cases they are also used as backup alternatives, in case the main network goes down.

About 27 percent of the respondents said they have opted for VSAT connectivity, while 19 percent said they have leased lines and 14 percent said they use RF links. Just 8 percent of the respondents said they use Frame Relay and 5 percent use ATM. The requirement for VSATs and leased lines is growing—24 percent said they require the former while 23 percent said they require leased lines.

Doubled investment
The budget allocation for bandwidth is the second highest (about Rs 346 lakh), just below converged networks. This budget allocation is almost double that of last year (about Rs 178 lakh).

Many respondents in the survey are investing up to Rs 25 lakh in bandwidth. Last year 44 percent of the respondents fell in this slab and this year 33 percent of the respondents have allotted up to Rs 25 lakh of the budget for bandwidth.

Enterprises are making incremental increases in bandwidth capacity and are not spending elaborately on new connectivity options at the moment.

isdn, vsats favoured
About 54 percent of respondents across all industries said bandwidth is covered in the current budget. Bandwidth is a main focus area for almost all industry segments.

Analyzing industry-wide bandwidth usage for Net access, we observe that leased lines, dialup and ISDN are most favored across all industry segments. DSL, Cable and Satellite being relatively newer entrants are still fighting to gain a strong foothold. In 2002-03 the investment is going to be more on leased lines than any other connectivity technology. Dialup is definitely on its way out as far as enterprise connectivity is concerned.

VSATs are the most favored options for WAN connectivity across all industry segments closely followed by leased lines. VSATs offer inter-office connectivity between remote offices, something that may not be feasible using a leased line. About 47 percent of the respondents in the Manufacturing sector already use VSATs for WANs while 79 percent in IT/Telecom sector use leased lines for Net access. This year the requirement is again highest for VSATs and leased lines.

Outlook
As we've said before, converged networks and data-centric applications are going to drive bandwidth requirements. The main requirement will come from service-oriented companies (such as banks, call centers, etc) or that are heavily dependent on networks and centralized databases.

Enterprises which are already well connected will make incremental upgrades in bandwidth without overhauling networks thereby avoiding heavy investment in any new connectivity alternative.

VSATs and leased lines will continue to be the most favored options for WAN connectivity. But more companies will consider RF links for connecting locations over short distances where terrestrial links are not possible or as a redundancy solution.

Research Snapshots 94 percent of the respondents said there has been an increase in bandwidth requirement 65 percent of the respondents say they use ISDN for Net access and the same number use dialup For Net connectivity, the demand is highest for leased lines in 2002-03. About 55 percent of the respondents said they have a requirement for leased lines Fewer enterprises are going for ISDN or dialup connectivity for Net access Bandwidth-hungry applications like VoIP and ERP/CRM (within a WAN) that require always-on connectivity coupled with falling costs are the main drivers for leased lines RF links for connecting locations over short distances are growing popular The requirement for VSATs and leased lines for WAN connectivity is growing Enterprises are making incremental increases in bandwidth capacity and are not spending elaborately on new connectivity options at the moment

Top 4 benefits CIOs SEEK Reliable communication Better connectivity with regional offices Cost saving Better information management