The dynamics of our uncertain and fast-paced market

For a few weeks late in the summer, this magazine conducted a survey among some of its subscribers who are classified as end users; they are individuals who manage, maintain, repair, or otherwise administer...

Oct 1st, 2003

For a few weeks late in the summer, this magazine conducted a survey among some of its subscribers who are classified as end users; they are individuals who manage, maintain, repair, or otherwise administer the cabling systems for their organizations' voice and data communications systems.

The survey asked users about the current makeup of their voice and data cabling systems, about how soon they plan to upgrade their systems, and about the media they will use during that next upgrade. The results of that research were presented in a special session at last month's Cabling System Conference & Exhibition, and I think a few of them are noteworthy enough to share with you here.

The strongest point that our survey respondents made—and they made it several times—is that there is a significant degree of uncertainty in their upgrade plans. The exact wording of one question was: "When is the next major cable-plant upgrade or new installation planned for your facility?" Respondents had the following options: before the end of 2003; sometime between January and June 2004; sometime between July and December 2004; sometime in 2005; sometime after 2005; unsure.

A total of 41.4% said they are unsure.

To a question that asked the expected total cost of the next major upgrade or installation, an even larger number—46.2% in total—said they are unsure.

That level of uncertainty was not a complete shock. Everybody knows the condition that our industry is in, and that budgets have been stripped bare. It stands to reason that many end users do not know when they will have funding to upgrade their cabling systems, even if their network performance is telling them that an upgrade is called for.

What did surprise me was the apparent polarity of responses to this line of questions. By that I mean while more than 41% of end users don't know when their next upgrade will take place, 43% of those responding to our survey said their next upgrade will take place before the end of 2004. And a total of 20.7% said their next upgrade will take place before the end of 2003.

Just as I was getting encouraged by all the near-term activity taking place in our market, the reality of uncertainty crept in again. Among those who will upgrade their cabling systems over the next nine months (by June 2004), more than 17% do not know how much they will spend on that upgrade. I suspect that in most of these situations, they don't know how much money they will be allotted for the cabling project. I say that because among that same group of users (upgrading by June 2004), only about 5% are unsure how many workstations will be involved in the upgrade.

So, many of these users know they'll be commencing a cabling project, and they know how many workstations will be involved; they just don't know what they will be spending.

Overall, however, the impression I got from these research results was that our marketplace continues to move quickly. My amateur analysis of the numbers tells me that many of those in the "we're-upgrading-soon" population were very recently in the "we're-not-sure-when" population. Likewise, I think that for many of the 41.4% who are currently unsure of their upgrade plans, when that next upgrade does come up, it will be planned and executed quickly. Our research indicates that there is not a lot of mid- or long-term planning going on.

This analysis of system end users has obvious business implications for both the cabling contractors who serve their design and installation needs as well as for vendors who supply product for these projects. And to those entities, I believe there is a message of optimism in these numbers. For as much uncertainty as there is today, opportunities come up quickly and, I think, pretty steadily.

Finally, I'd like to express my sincere thanks to those of you who responded to our survey and made this insight possible. We will use the information to sharpen our editorial focus and continue to meet your information needs.

Patrick McLaughlin
Chief Editor
patrick@pennwell.com

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