MSP Today Expert Feature
July 08, 2014

Cloud Initiatives to Top Enterprise Network Equipment Spending During the Next Year

Enterprises are opting to spend their networking technology budgets in new ways, a reflection of the drastic changes in how business is being conducted as well as the overall evolution of the IT department. New research from Infonetics (News - Alert) shows that cloud spending will be the top item on enterprise networking budgets during the next year, an initiative unlikely to change anytime soon.

The 2014 Network Equipment Spending and Vendor Leadership: North American Enterprise Survey from Infonetics Research (News - Alert) showed that organizations spent an average of over $1.1 million on networking equipment last year, with plans to increase that amount by 19 percent this year. And as enterprises embrace the cloud and “as-a-service” model for applications and networking architecture, cloud spending has risen considerably.

"One of the most interesting findings is that cloud has emerged as the number one networking initiative over the next 12 months,” said Matthias Machowinski, directing analyst for enterprise networks and video at Infonetics. “Companies are embracing the cloud in a services model as well as building their own cloud-architected data centers, and this means upgrades to network infrastructure."

The research certainly jives with a recent report from IDC (News - Alert) showing that spending on worldwide public cloud services hit $45.7 billion last year and is expected to grow at a healthy 23 percent CAGR through 2018. Cloud software comprised nearly 86 percent of that spending while infrastructure made up 14 percent, a significant number in the broader scheme. Of the infrastructure spending, servers and storage made up the biggest components.

According to the Infonetics survey, Wireless LAN budgets are also increasing, positioned to become the second largest area of spending this year. Enterprises are also investing in branch offices as the economy recovers and businesses embrace expansion opportunities.

Of the 207 North American enterprises surveyed, around three-quarters referred to Cisco (News - Alert) as the top networking equipment vendor, along with Juniper, Avaya and other networking bigwigs. Infonetics queried organizations with at least 100 employees for the survey.

Edited by Adam Brandt