Nemertes Research

May 12, 2008
FOR IMMEDIATE RELEASE

For more information, contact:
Karen Wucher
Nemertes Research Inc.
Phone: 972-335-7028
Cell: 970-846-4768
Karen.Wucher@nemertes.com

Diverse Business Needs Driving Wireless Applications Wide Array of Technologies
Companies find plethora of mobility solutions

NEW YORK, NY – May 12, 2008 – The next-generation of wireless technology has a new focus: enabling mobile business operations. This transcends the old wireless goals of voice roaming and a local data dynamic in favor of a new focus on enabling business operations remotely. Data-capable devices are in wide deployment, with nearly 90% of IT executives indicating their organizations either support or use such instruments, according to Nemertes’ latest benchmark study, “Next-Generation Wireless”.

WiFi integration is now becoming an important business tool that has largely been deployed to reduce the cost of cellular access. “Enterprises are demanding mobility solutions,” said Mike Jude, research analyst with Nemertes Research. “Vendors and carriers must understand and develop wireless solutions that are aimed at improving business operations. “

Another key finding is that next-generation wireless requires a shared service responsibility between the enterprise IT organization and the carrier. Nemertes found that support for mobile devices continues to increase, with 23% of IT executives indicating support for Blackberry devices, up from 13.8% in 2007. Yet these devices are actually on carrier networks. Improved service expectations of users can only be met by closer collaboration between IT organizations and carriers.

Overview:

Advanced Communications Services have become increasingly relevant to
businesses in large part because of the proliferation of branch offices, remote
workers, and the need for access to centrally provided data and applications.
These services, including Multi-Protocol Label Switching (MPLS), Ethernet,
Internet access, peering, hosted connectivity and mobile offerings, are becoming
even more critical because the way we work is changing dramatically.

The majority of companies now:

• Rely on MPLS VPN services for site-to-site connectivity.
• Are increasingly using Ethernet as part of their WAN strategies, eitherfor access to MPLS-VPNs,
  or to supplement (or even replace MPLSVPN services) with Layer-2 services.
• Are running multiple traffic types including voice, video, and/or data, across their WANs.
• Are increasing demands for bandwidth, both to the branch as well as to the Internet.
• Are deploying SIP trunking to reduce PSTN access costs while increasing call routing flexibility.

Consequently, understanding trends in service availability, features and
pricing around MPLS, Ethernet, Internet and SIP services is vital. IT have
aggressively leveraged these new service options to reduce operating costs, or
reduce per-bit cost of bandwidth enabling their organizations to meet everincreasing
demands for bandwidth with little or no increase in monthly operating
costs.

The limiting factor for many services continues to be availability as larger
providers are often slow to ramp up Ethernet or SIP-trunking service offerings, or
they must overcome challenges related to integrating past acquisitions. This has
led enterprise IT architects to leverage service offerings from emerging providers
as an alternative to their established service providers.

In the never-ending quest to stay ahead of industry trends, IT executives
are investigating hosted peering options to increase Internet resiliency. Finally, a
small number of organizations are investigating IPv6 to provide new
functionality or to meet growing governmental requirements.

The Issue:

IIT security staff, faced with the challenge of securing the inevitable flux in
their infrastructure, are usually stuck in reactive mode. They react – to systems
upgrades, mergers, and acquisitions; to the re-centralization of most IT function
into data centers and the consolidation of data centers; and to the spread of all
sizes and kinds of organizations over ever more space as a result of the
continuing 9 to 11% growth in the number of branch offices. Proactive security –
helping plan and execute security changes to enable adoption of new tools and
technologies – falls by the wayside.

IT security is set up to prevent and react to security problems, not to set
acceptable levels of risk. Significant increases in risk are traditionally viewed as
automatically “bad”. Given the difficulty of securing the complex interfaces
among different architectures, silos, and generations of technology, optional
changes and elective complexity are resisted if not simple to secure. How then
can IT security shift from a reactive to a proactive position?

One action security teams and IT are increasingly performing to reduce
risk and manage complexity is set policies to guide ongoing operations. By
defining policy, one can lay out more secure operational modes for everyone and
make dealing with complex infrastructures less a matter of individual memory,
capacity, and preference, and more a matter of documented practice.

Overview:

IT spending is generally up for 2008 and 2009 in terms of overall dollars
devoted to this area. But a growing number of organizations are decreasing their
IT spends or anticipating flat budgets moving into next year.

At the same time, communications budgets are not seeing hard times, with
many companies expecting increases in these budgets. This means that moving
into 2009, a greater percentage of IT spending will go toward communications
services costs.

This volume examines general trends in IT and communications spending.
Additionally, we review how different sizes of companies and different vertical
markets plan to spend their IT and communications dollars.

As the U.S. economy slows, it is key for companies to optimize every dollar
spent both in IT overall and within communications. Given the communications
budget is becoming a larger part of the overall IT budget, it’s imperative to stretch
a nickel into a dime. For example, managed services are one way companies can
leverage their communications spends because those services can help offload the
IT and network staffs.

In order to get the biggest bang for the buck, companies must devote time
and resources to effective carrier contract negotiations and procurement. In this
volume, we provide detailed recommendations on how to get the best deal from
the carriers. We also analyze what companies are doing today and where they fall
short.

Overview:

Advanced Communications Services have become increasingly relevant
to businesses in large part because of the proliferation of branch
offices, remote workers, and the need for access to centrally provided
data and applications. These services, including Multi-Protocol Label
Switching (MPLS), Ethernet, Internet access, peering, hosted
connectivity and mobile offerings, are becoming even more critical
because the way we work is changing dramatically.

The majority of companies now:

• Centralize their applications and data in primary and backup data centers;
• Open new branch locations, with an average growth rate of about 12% a year;
• Expand the percentage of employees who telecommute full- or part-time;
• Implement new collaborative applications to improve productivity, customer service, and remote management of staff.

Nemertes Impact Analysis

Expert Insight On How Recent News Affects You

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Everyone into the Pool! Storage Virtualization Reaches for
the Desktop

Server and storage virtualization increase utilization and decrease space and
energy footprints by aggregating IT assets into resource pools. Start-up Kapsean
is looking to extend the resource pooling to include desktop computers' disks.

Nemertes' benchmark, New Data Center, found that the majority of
participants already use at least one storage virtualization technology -
chiefly backup to disk. As desktop storage is well suited to this application,
Kapsean's offering may meet with a warm reception if pitched and priced
properly.

Impacts:

Thirst for Bandwidth Increases across Branch, Internet, and Data Center
Financial-services companies plan greatest increase according to Nemertes study

NEW YORK, NY –May 1, 2008 – Bandwidth demands at branch locations are skyrocketing, according to Nemertes Research’s Advanced Communications Services benchmark. The study found that IT executives expect an 84% increase in bandwidth available in 2008, and a 99% increase in 2009, up from a 72% increase in 2007.

“The continued demand by remote workers for high-performance collaborative and centralized business applications is the driving force behind these increases,” says Robin Gareiss, Nemertes’ executive vice president and senior founding partner .

Nemertes also found the adoption of managed services at the branch is increasing, and has been for the past three years. Now, 63% of companies use some type of managed service at the branch, compared with 46% in 2007, and 27% in 2006. Participants tend to use traditional carriers for network-based services, such as router management, WAN management and implementations. With resellers, the focus is ongoing management of applications, installation and training. With systems integrators, the focus is on design and implementation. With outsourcers, they center on network or application management.

Other key findings of the research include:

Nemertes Impact Analysis

Expert Insight On How Recent News Affects You

Sign up to receive the Nemertes Impact Analysis or register for access to free web site content.

Virtual Machine Hardening: Tripwire Makes it Easier

Tripwire, a privately held company, announced availability of VMware
(NYSE:VMW) hardening policies for Tripwire Enterprise for VMware ESX Server.
Through Tripwire, organizations will be able to automate the implementation and
management of VMware's secure configuration recommendations. Proper VM
configuration management is a baseline security best practice as discussed in
Nemertes Issue Paper Virtualization Risk Analysis, and the upcoming,
Virtualization Security Market Analysis.

The Issue:

Major tectonic shifts in the way enterprises work with and provision their
core applications are forcing changes in the way the enterprise has to think about
securing them.

One shift is the continuing opening of the enterprise, with the gradual
federation and interpenetration of IT systems between an enterprise and its
partners, customers, and suppliers. The figurative walls of the data center are
being filled with doors, windows, and access ducts, and now serve more as a
framework for structuring the flow of information than as a barrier to it.
Another shift is the rise of service-oriented architectures (SOAs).

Enterprises are looking to SOA to provide an integration method for their
applications, a development methodology and framework, and an overall
architecture and philosophy for deploying new functionality. As enterprise
applications gain services interfaces, and sometimes are actually atomized and
turned into constellations of loosely-coupled services, each service creates on the
network a new set of access points; perhaps tens or hundreds of times as many as
there were before. Things that used to happen within an application, on a single
server, become network traffic among servers and even among data centers.
Some formerly internal functions even become invocations across the Internet of
software-as-a-service (SaaS) packages, or services in partner or supplier data
centers. Moreover, components in a SOA can scale independently of each other:
new instances of an application running on a Java application server might be
created to handle peak loads, and then destroyed as the load subsides.

Read this Issue Paper:

Clients:New Suit of Armor: Securing the Data Center

The Issue:

The very essence of “work” is changing. All across the world, but even
more so in the U.S., society is changing the definitions of “work” and “office”. As
communications and connectivity become more powerful and ever more widely
available, work has become less and less a place and more an activity which takes
place anywhere. In the last 4 years Nemertes Research has tracked the number of
employees working away from their company headquarters. That number has
gradually trended up, exceeding 90% in 2006. Today, branch office and mobile
workers dominate, and knowledge workers are increasingly mobile, operating out
of home offices, hotel rooms, airport lounges, coffee shops and taxis. As their
work habits have changed through enabling communications technologies, they
have in turn pushed adoption of those technologies by their companies: laptops,
wireless Ethernet, smart phones, and web applications.

Large companies have gradually shifted more and more of their critical
applications to the web. Through a web browser, the same application can be
delivered to a desktop, a laptop, a phone, regardless of location, operating system
or (mostly) browser. This “webification” of applications has become a catalyst for
further mobility and fluidity of the workforce.

Read this Issue Paper:

Clients - The Center is Everywhere

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