Businesses being forced to look for alternatives to cut costs of bandwidth growth, finds Teneo survey

• 38% of network managers report falling IT budgets this year

Teneo, a leading infrastructure optimisation specialist, has conducted a survey of network managers which reveals that businesses have stopped increasing their bandwidth provisions and are looking to investigate solutions such as WAN optimisation.

The survey conducted at two recent Teneo seminars revealed that 42% of network managers were not planning to increase bandwidth provision during the next six months with 45% of respondents looking at alternatives such as WAN optimisation. This figure contrasts to a recent Teneo survey conducted in November 2008, where 63% of network managers were looking to increase bandwidth.

Bandwidth costs have levelled off as the economic downturn has taken hold, with 85% of respondents stating that their bandwidth costs have remained the same over the last six months, compared to 60% of respondents experiencing increases in the last Teneo survey eight months ago.

IT budgets have remained static or fallen, with only 8% of network managers reporting a budget increase over the last 6 months; 54% reported no budget increase with 38% reporting a fall in their department’s budget. Managers are actively looking for department cost savings; most managers are protecting their staff with only 17% looking to reduce staff or contractors. Energy and maintenance costs are singled out by network managers for savings with 58% and 65% respectively.

Capital expenditure by IT departments is being squeezed, with 67% of network managers looking for savings. Funding for projects is increasingly coming from operational budgets with a reluctance to sign off on big ticket capital projects. Teneo has recently introduced leasing arrangements for businesses who want to benefit from WAN optimisation technology without the upfront capital cost.

James Hall, marketing director, Teneo, commented:
"These figures are very revealing as they demonstrate that companies realise that the answer to better network performance isn’t always just to add extra bandwidth, but to use the available bandwidth more efficiently. It is no surprise that network managers are facing a budget squeeze and IT consolidation and virtualisation will rise further up the agenda as departments look to reduce maintenance and energy costs. We also believe that leasing new technology such as Riverbed WAN optimisation appliances rather than upfront purchase will be attractive to many businesses in the current climate, and we are receiving a great deal of interest in our leasing arrangements."