Is the Corporate World Prepared For the Upcoming Bandwidth Boom?

Welcome to the YouTube revolution, where anyone with the mind to do so can instantly act in, direct and produce videos accessible to anyone else around the globe with Internet access.

And we’ve barely seen anything yet.

The explosion in Internet video and video-sharing sites like YouTube are the beginning crest of a huge wave that is rapidly growing to include network TV shows, movie downloads, interactive games, and a myriad of other video-based services.

One obvious consequence of the proliferation of video over the Internet is its influence on popular culture. Another is the mushrooming demand for bandwidth and its impact on the telecom, cable and technology sectors.

In a new ChangeWave survey, we looked at video over the Internet and its growing impact on corporate bandwidth needs. A total of 365 Alliance members participated – all of them involved with or knowledgeable about their company’s spending on telecom, wireless and optical equipment.

To gauge the growth rate in video over Internet protocol [IP] we posed the following question to respondents:

Some analysts think there will be a huge increase in the delivery of video over IP within the next 1-2 years, while others aren't so sure. Which view comes closest to your own?

Better than three-in-four (76%) foresee a ‘huge increase’ in the delivery of video over the Internet – with 33% saying it will occur within the next 2 years while 43% say it take more than 2 years.

Ready or Not

Given this coming surge, are companies ready to deal with it? In other words, is the corporate world prepared to deal with the ‘huge’ concomitant increase in bandwidth demand?

Our respondents were split right down the middle on this – with 43% confident and 42% not confident their company could handle their increased bandwidth demands.

If there were a huge increase in the delivery of video over IP, how confident are you that your company's current network could handle the increased demand for bandwidth?

With such a large percentage of companies admitting their networks aren’t yet equipped for the explosion in video content, what are the implications for corporate spending? We asked:

Is video over IP causing an increase in network related spending at your company in order to improve capacity over the next 1-2 years?

Nearly half of our respondents (46%) say their company will increase spending over the next 1 to 2 years to correct the looming imbalance in bandwidth capacity.

And the Winner Is!

During the Internet Bubble, fear of being left behind compelled companies to funnel astronomical budgets into anything related to the Net – far beyond any realistic needs.

While we don’t see anything like this happening again on a comparable scale, it’s clear that video over IP will cause a significant surge in demand for network gear. And there is virtually no doubt which company wins first and foremost.

Which equipment suppliers stand to benefit most from this increased spending and why?

In a no contest decision, Cisco (CSCO) is considered the biggest beneficiary of the coming corporate spending boom.

When asked why, corporate buyers pointed to the networking giant’s comprehensive product lines, its solid reputation for service and its long term experience.

While Cisco is the obvious winner in the video over IP sweepstakes, there are a number of smaller companies that also have wonderful opportunities to capture a piece of this rapidly expanding market.

Follow-up ChangeWave surveys will scrutinize the field of smaller companies hoping to cash in on the bandwidth boom – thereby creating big wins for their investors.
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This article summarizes the results of a recent ChangeWave Alliance survey. The Alliance is a research network of 10,000 business, technology and medical professionals who spend their everyday lives working on the front line of technological change. For more info on the ChangeWave Alliance, or if you are interested in joining, please click here.

Comments

[oldcurmudgeon2]

You make a big assumption here: There will be a huge boom in video over IP; therefore corporations will have to spend a lot to keep pace. But what if the demand is all from youtube-addict consumers? I have a hard time visualizing how my company, for example, will need a lot of bandwidth for video.

[Tom B]

"I have a hard time visualizing how my company, for example, will need a lot of bandwidth for video."

Well, if Enterprise gets a clue and converts to Mac, you could see business-related use of iChat......

[paul]

Video over IP may be a factor but the real deal will be raw bandwidth required that will allow real time information exchange. This will solve many security issues and will allow businesses to conduct themselves unlike the past. The increased BW will be a large enabler of business practices that are not now feasable.