Save on IT expenses with satellite technology

Even if you're not increasing your IT spending, you need to maximize the return on your network investment. Shifting to satellites is an easy way to cut costs while improving your network capabilities.

By Joe Amor

The down market has found IT executives on the horns of a dilemma with their counterparts in the financial department. Financial executives are putting the brakes on technology investments; meanwhile, technology executives are still expected to maximize the effectiveness of their networks with the latest, most sophisticated applications. I'll explain how IT executives can break through this impasse while making points for being fiscally responsible.

First the bad news
There are precious few signs of recovery in the IT spending slowdown for the rest of this year—or next year, for that matter. This past March, The Goldman Sachs Group surveyed 100 IT decision makers and concluded that average IT spending will be well below 1 percent of overall spending in 2003, and may not pick up until 2004 or later.

Economic recovery happens through innovation. According to leading industry analyst firm Jupiter Media Metrix, a variety of business network applications demand enterprise attention. Customer or partner training, B2B collaboration, earnings calls, financial services, product launches, and internal announcements are all mission-critical functions; they cannot be sacrificed in exchange for the next quarter's profit margins.

At the same time, businesses are overtaxing their companies' ground-based telecommunications networks. What’s the answer to this IT challenge? Satellite technology may give you a way to provide access to high-bandwidth enterprise applications while protecting the cash position of your business. Some enterprise users of satellite technology have found this simple enhancement to their network infrastructure has saved as much as 98 percent on their networking bills.

The cost advantage of satellite broadcasting
Satellite broadcasting is the right choice for sending identical content, such as training information, inventory files, point-of-sale pricing tables, daily summary reports, software updates, and business television broadcasts, from one location to multiple other locations (point-to-multipoint). This type of content may only require a one-way satellite connection, as opposed to two-way, point-to-point connections from a telco company.

The benefits are clear when you do the math. Let’s say your company wants streaming media content delivered to its 691 separate field offices. That’s about $1.4 million in monthly fees if you use standard telco high-speed lines. A satellite broadcast network could deliver comparable service for less than $34,000 per month, reducing your cost from over $16 million to $400,000 annually.

That’s the cost benefit. Now let’s look at the network availability benefit. Say you’re sending financial information to each of your 691 locations. A large file of financial information is bandwidth-intensive, and may take an hour to send. With point-to-point circuits such as telco lines, files are often distributed one after the other. Sending information that way would take 691 hours to reach the remote locations. With a satellite broadcast network, all sites get the content at the same time. In this case, they receive it in one hour. That’s the advantage of point-to-multipoint content delivery.

Satellites in use
How are companies using satellite networks to deliver applications? Here are just a few examples.

Distance learning
If you have a geographically scattered sales force, ongoing product and related training can be a nightmare. Sales associates can be based in home offices, headquarters, regional offices, or call in from the road.

In one case, a company with an 8,000-person sales force continually introduced new products and services to its salespeople. Employees were trained on a rotating 60- to 90-day basis. Historically, the company gathered its employees at a central training location for this ongoing education, and then sent them back to the field. Every training session cost the company approximately $500,000. With distance learning delivered to remote locations by satellite, the company almost cut out completely any need for centralized training. Even better, the sales associates had more time to spend with customers.

Business television
Business TV is an excellent way to deliver the same message to all employees at the same time. More than 250 business TV networks operate in North America today, broadcasting daily, sometimes offering multiple programs. Typical content might include industry analyst updates, new company policies, and new product announcements. Of course, only a portion of all employees needs to or wants to see certain programs. That’s why it may make sense to offer separate broadcasts for training of specific staff members like salespeople or customer service reps.

A dramatic example of using business television came about a couple years ago, after September 11, 2001. Many New York City financial services offices were destroyed. Wall Street was shut down. Worldwide investors were in a panic. The chairman of one financial services firm used business television from a remote studio to tell his employees in regional offices across the country that the business would survive, and its people would rebuild.

A call to action
The business case for satellite networking can be summed up by Christopher Baugh, principal analyst with Northern Sky Research. "The typical business uses its network for applications including earnings calls, distribution of financial information, sales training, employee education, multimedia file delivery, and business television, to name a few," noted Baugh. "Our research indicates that moving to satellite distribution of these services may allow companies to maintain these sophisticated networking capabilities and protect their cash position at the same time."

By making a simple switch from landline to satellite delivery for broadcast-type applications in your business, you can save as much as 98 percent in annual network costs. That’s a compelling return for a decision that will be transparent to your organization—and it will definitely break the impasse that the economy has created between you and your financial executive counterparts.

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