Financial squeeze sees businesses sweating their assets for longer

Global research by Dimension Data has revealed that organisations are keeping their devices around for a lot longer than they use to because of cost savings and the uptake of as-a-service consumption models.

Recent findings by Dimension data indicated the effects of the global financial crisis still lingers as more than half of all devices used by organisations globally are now ageing or obsolete — the highest level it has been in six years.

The annual Network Barometer Report 2014 (PDF) showed that 51 percent of all devices are now three years or older in their product lifecycle, and 27 percent of all devices are now 'later' in their product lifecycle, reaching a point where the vendor begins to reduce support.

Dimension Data national manager for networking, Gregg Sultana, said the data reveals businesses are keeping their devices around for a lot longer.

"Over the past few years, we've seen the proportion of ageing and obsolete devices steadily increase, and the conventional assumption was that a technology refresh cycle was imminent. However, our data reveals that organisations are sweating their network assets for longer than expected," he said.

Sultana noted prior to the global financial crisis organisations took a "date based approach" to refresh their devices every five to seven years, much like how many organisations manage their building assets.

Sultana attributed the increasing trend of ageing and obsolete devices in organisations to three main drivers. These include reduced capex budgets forcing organisations to keep focus on cost savings; the growing uptake of as-a-service consumption models reducing the need for organisations to invest in their own infrastructure; and the advent of software-defined networks is causing organisations to 'wait and see' before implementing new technology.

He also predicted the 'wait and see' approach by companies will be increasing in the next 18 to 36 months, particularly as Dimension Data report showed that there was a 30 percent growth in the wireless business in the last 12 months.

"More and more organisations are trying to cope with this explosion in wireless connected devices. Traditionally they'd budget for and plan around one wireless device per person, and now it's up to three devices per person. So there's a huge demand on the network around wireless infrastructure."

By region, the report showed the percentage of ageing or obsolete devices in Australia, the Middle East, and Africa was significantly higher — over 50 percent — whereas the Americas, Europe, and Asia Pacific were closer to 40 percent.

"This coincided with the economic slowdown in the former two regions, in contrast to the slow, but stable, economic growth in the Americas, Europe, and Asia Pacific," the report said, showing that Australia's ageing and obsolete devices decreased by 4 percent from the previous year to 51 percent in 2014.

"This year, the economic slump in Asia Pacific inflated the region’s percentage of ageing devices. Steady economic growth continued in the Americas, which had a higher percentage of ageing devices than in 2013, but not quite as high as in other regions."

Although, despite the increase in ageing and obsolete devices, Dimension Data's report indicated that older networks do not cause more downtime or failures, rather they fail less frequently and take less time to repair. Instead, 84 percent of incidents aren't device-related, but are caused by human error, environment problems, or telecom failure.

Despite this, Sultana warned while it is okay for organisations to sweat their assets, it's important they do so by making an informed choice around the potential risks they could face.

He advises businesses to consider whether there will be support available to fix a device if something goes wrong, whether the company is willing to pay a higher premium for support if it's required as cost of support often goes up as a device comes to the end of life, as well as for business to understand the capex lifecycle so they can have visibility to plan for device upgrades in advance.