BIoT Canada

2009 Look Ahead

The bad news might be a bitter pill to swallow. Canada's economy will struggle to eke out a tiny bit of growth this year and next, the Bank of Canada says. "The global economy appears to be heading in...

November 1, 2008  

Print this page

The bad news might be a bitter pill to swallow. Canada’s economy will struggle to eke out a tiny bit of growth this year and next, the Bank of Canada says. “The global economy appears to be heading into a severe recession, led by a U. S. economy already in recession.”

Canada’s economy is expected to grow just 0.6% next year, the bank announced recently. The good news is that Canada’s economy is expected to weather the economic storm better than the world’s leading industrialized nations, says the International Monetary Fund. All of the major industrialized countries are grappling with the worst economic crisis since the Great Depression in the 1930s, the IMF said.

That being the case, the open question is what strategy companies should employ to ensure their networks are ready for the next economic boom times? To be sure, the U. S. economy will recover from what many economists forecast as a sustained recession, and (eventually) enter a period of economic expansion and investment with lessons learned from previous mistakes.

“There is no doubt that there are currently some capital expenditure constraints in most companies,” says Iain Grant, managing director of SeaBoard Group, an IT consulting firm. “Even so, one of the chief issues will be worker empowerment to ensure that they have the tools to drive the company’s top and bottom lines. This is also a time to study more, which means a greater role for consultants.”

Despite the difficult over-all economic climate, many are bullish on the prospects for structured cabling and networking. Among them is Frank Bisbee, president of Communication Planning Corp. in Jacksonville, Fla., who says: “In financially unpredictable times, technology is a very good place in which to be, mainly because we are moving forward rapidly.”

To be sure, much of the efforts in the next few years will be finding ways to save money, chiefly through the use of greener energy initiatives, server virtualization and upgrading networks with a combination of copper and fiber infrastructure.

Companies cannot stand still, says Luc Adriaenssens, vice-president of R&D (enterprise solutions) for CommScope Inc. in Richardson, Tex. “With structured cabling, it’s pretty hard to say we are not going to do something. Bandwidth continues to increase. If you delay things, you are just shifting things by a quarter or two.”

Copper Still Good, But Fiber Catching Up: For years, many analysts have said that that copper’s best years are behind it. For Bisbee, the writing’s on the wall for copper. Speeds of processors and the forecasted increase of IP video and other visual networking demands will make it harder for companies to justify a purely copper infrastructure.

Frank Murawski of FTM Consulting in Hummelstown, Pa., says that the worldwide market for structured cabling will grow from US$15.3 billion in 2008 at an annual compound rate of 13.7% to US$29.1 billion by 2013. Much of the growth is expected to take place with fiber, where Murawski predicts that in 2013, fiber will account for 60.1% of the total structured cabling systems market.

Not so fast. “Unless there is a strong business case to do so, I would question whether many companies would switch over to fiber so quickly,” says Jason Bremner, director of infrastructure hardware for IDC Canada in Toronto. “Because of the level of economic uncertainty, organizations will scrutinize such decisions very carefully.”

Although companies might not be ready to rip out their copper infrastructure just yet, it might make sense to increase the use of fiber through the use of zone cabling, Bisbee says,” which extends the fiber backbone beyond the intermediate distribution frame to the work area.”

It is not fiber to the desktop (FTD), but brings the cable closer to the user, and reduces the need for copper.

Undoubtedly, copper faces serious technical limitations, particularly as speeds go beyond 10-Gig, it will remain an important component in the cabling infrastructure. “Copper is not going away,” Bisbee admits. “It’s still a major part of the cabling infrastructure, but instead of being the homerun cabling solution, it might be reduced to a very long patch cord.”

There is not much talk of Category 7 becoming standardized in North America. The thinking is best summed up by Stephane Bourgeois, product line manager (copper connectivity) at Belden in Saint-Laurent, Que. “Cat 7 is a European solution.”

When it comes to choosing a fiber or copper infrastructure, however, power consumption is not much of a factor for most companies, when one considers the cost of the transceiver device. The decision is chiefly based on cost and space considerations. “It comes down much more to cost, which favours copper, and physical density, which favours fiber,” Adriaenssens says. Thus, if space is limited, fiber has the advantage in that it delivers more bandwidth per square centimetre than doe’s copper.

Yet in data centres, things differ. Companies will scrutinize more their data centres and see how they can become more efficient. “For new companies that own the data centre or building,” Adriaenssens says, Cat 6a has become the clear medium of choice for supporting 10-Gig on copper.” Like many others in the copper sector, Adriaenssens does not see fiber as a threat for data centres. Most of the reasons centre on the cost and energy considerations for the transceivers necessary for a fiber infrastructure. “The general trend is to use copper when you can, multi-mode fiber where you cannot and single-mode when you absolutely have to,” he says.

Green Data Centres Leave a Smaller Footprint: Energy consumption, however, is a large looming issue for data centres. Many are running out of power and space, says a recent report from IBM Corp entitled In The Green Data Center. The report’s authors write that they cannot add more servers because they have reached either their power or space limits, or perhaps they have reached the limit of cooling capacity.

That greatly explains the increased trend to server virtualization and consolidation, says IDC’s Bremner. “Companies that have already started the process will continue it. If they have not, they will scrutinize further investment and look at the business case behind it.” In other words, we will see less data centres worldwide.

ADC Telecommunications Inc., a U. S.- based network infrastructure provider, has reported some notable examples of consolidation:

• Hewlett Packard is reducing its 85 global data centres to 63, which will be mirrored disaster-recovery sites. HP says this will produce an annual savings of US$1 billion.

• IBM is consolidating 3,900 servers into 30 virtualized mainframes running under Linux. The company anticipates an 80% reduction in energy use and a significant reduction in its 2.4 million square me- tres of data centre space.

• Microsoft is well along in its efforts of data centre consolidation, generating savings of US$23.2 million — a 40% reduction in its pre-consolidation spending.

Monitoring energy consumption and all its environmental implications is fast becoming corporate policy at the highest levels. According to a recent IBM survey, 53% of companies in North America have someone at the board level responsible for energy and environmental issues. In addition to server and data centre consolidation, companies will rely more on external data centres, external hosting and cloud computing.

One option is cloud or Internet-scale computing, which allows organizations to switch from company-owned hardware and software to per-use service-based models available on the Internet. “That is some of the beauty of such technologies, its ability to shift workload from one machine to another, and shut off machines that are not being used,” says Laura Anderson, program director at IBM Almaden Research Lab in San Jose, Calif. “The combination of cost-effectiveness and environmental considerations make this an attractive o

The projected shift to cloud computing will result in dramatic growth in IT products in some areas and in significant reductions in other areas. There are some concerns, however, that revolve around privacy and security, notably the best ways to protect corporate data once it is on a public network like the Internet.

Convergence is Here: Look for increased use of unified communications (UC), the real-time delivery of communications such as instant telephony, voice mail, e-mail and video. The idea behind UC is that recipients can have real-time access to whether data they need when they need it. One major contender in this area is Microsoft Canada, which launched its Communications Server 2007 Release 2 in October, one year after initially releasing it.

One of the chief benefits of the company’s software is that companies can keep their legacy PBXs, and get the benefits of VoIP. “This allows customers to transition to the new platform without undergoing an expensive rip-and-replace upgrade of their network,” says Bryan Rusche, unified communications and collaboration product manager for Microsoft Canada in Mississauga, Ont. “Customers do not need to deploy and adopt dozens of different applications to make unified communications a reality. For example, a user can respond to an e-mail with an instant message or a telephone call, and add video to that phone call while bringing in a particular application like a spreadsheet, Word document or PDF file.

“Other people can be brought in, such as a subject- matter expert, and it can involve as many people as are necessary for that particular scenario,” Rusche says.

The software makes videoconferencing more accessible, without the need to book a videoconference through a service provider, he says.

There is a decided economic benefit in such technologies, says Paul Kish, director (systems and standards) for Belden in Saint-Laurent, Que. “Current economic conditions will likely curtail travel, making such technologies as video-conferencing more attractive.”

Although teleconferencing and audio- visual meetings have decided benefit, Grant of SeaBoard Group says, “People still need to meet face to face.”

The Network Is Getting Bigger and Faster: The Internet is expanding quickly. According to Cisco Systems Inc.’s global IP traffic forecast, “consumer video will be responsible for the majority of the traffic growth between 2007 and 2012.” (see sidebar, Approaching the Zettabyte Era.) As Cisco sees it, “Service providers are accelerating their infrastructure upgrade plans in response to traffic growth. Corporate networks will also feel the effects, and be forced to upgrade.

One way around spending wads of cash is to look to wireless. “One of the smartest strategies is for companies to use wireless overbuilds in the short term,” Grant says. “One of the issues for the structured-cabling industry is to ensure that they have that finger in that pie to ensure that companies do not develop ad-hoc wireless solutions obtained at Business Depot or Staples.”

This is where the cabling professional can make a huge difference, Grant points out. “There are security and management implications that would argue that professionals take on this work and not be left to individual IT departments.” Security concerns would argue against such an approach.

To be sure, the recession has some unplanned benefits. “For the cabling sector, there’s actually a positive side to lots of change,” CommScope’s Adriaenssens points out. “If companies shrink dramatically because of the economic conditions, then chances are they have to move to another building. It’s likely then that they’ll have to put in a whole new cabling solution in that building.”

Grant remains equally optimistic about the march of progress. “We’ll always be able to find things that can be cost-justified. The next generation of processors and applications will be cost-justified.”

When things improve, and they eventually will, the economy and business will be zipping along on more stable ground. CNS

Perry Greenbaum, a Montreal-based freelance writer, has been covering the business of technology since 1996. He can be reached at


The economic news might be desperate, but even so, the structured cabling and networking sectors are in an excellent position to capitalize on the need for companies to upgrade their infrastructures. In fact, the next few years might prove to be the busiest yet.


“In financially unpredictable times, technology is a very good place in which to be, mainly because we are moving forward rapidly.” -Frank Bisbee


Although companies might not be ready to rip out their copper infrastructure just yet, it might make sense to increase the use of fiber through the use of zone cabling.