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Analysts: Unfocused network spending could waste $100 billion by 2011

A Gartner analyst warns that companies using obsolete criteria to evaluate network service demand are wasting billions on the wrong kind of technology.

Networking technology will become even more important to the function of most businesses during the next five years, according to a new report from Gartner Inc. But those same businesses will waste more than $100 billion on networks designed to support business processes that have already become outmoded.

Large companies buy their technology using best-practice manuals and rules of thumb that focus on solving problems that have already been solved, or that have never existed, according to Gartner analyst Mark Fabbi.

Allocating large parts of a budget to building a network big and fast enough to run Gigabit Ethernet to the desktop makes no sense if users are only consuming a tenth of the bandwidth that already exists, he said.

Spending as much as $150 apiece for IP phones with screens and sophisticated standalone functions makes much less sense than using unified-communications tools that extend a PC's functions to include Voice over IP using a cheaper handset, he said.

Companies will also waste as much as $55 billion by blindly expanding wide area network bandwidth rather than analyzing what kind of network functions they need and targeting their spending more carefully.

The most effective technologies on which to function, Fabbi said, are those that deliver on near-term requirements rather than those projected to increase in two to three years, and those that increase productivity by increasing mobility and collaboration within the business.

The original version of this story appeared on TechTarget's

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