Aggressive price competition in enterprise hardware and software markets has shrunk supplier revenue as much as 11 percent over the past year, Synergy Research Group says.
Across some of the largest enterprise market segments prices have plunged by an average 17 percent since the end of 2011, despite volume growth in enterprise voice, Ethernet switching and telepresence.
But Synergy Research Group analysts also say a shift to cloud computing is having an effect as well.
But it would be safe to predict additional pressure as software defined networking starts to take hold. Basically, the idea behind SDN is that network element control functions are centralized, allowing lower-cost “in the network” elements to be used, frequently also allowing a multi-vendor approach to the simpler network elements.
That means widespread SDN should lead to enterprises and other organizations being able to buy and use lower-cost devices and network elements such as routers and switches.
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