After a torrid couple of years the networking business is finally beginning to drag itself up off the floor, with signs of recovery particularly clear in the communications market.

The recent economic and political climate has even benefited many. Companies unwilling or unable to let staff travel increased their reliance on phones, faxes, data connections and video to keep in contact with staff, suppliers and customers.

The move to converged communications is also an important step for many companies looking to outsource IT services and take advantage of economies of scale.

Recent figures from Analysys suggest that serious demand for voice-over IP products and services is growing among large organisations with phone-intensive departments such as call centres.

With teleworking also growing, the potential for converged communications, even in small businesses, is clear. Moving all communications onto an unmetered platform, such as broadband, saves money and improves productivity.

Although videoconferencing has a long history of failing to grow as fast as predicted, it has had a series of growth spurts as new, simpler and cheaper solutions appear. Its use has migrated from the specialist videoconferencing suite to PC-based ISDN services.

Now video-over-IP will allow more flexible use of bandwidth and make the systems even more affordable. Meanwhile, cost-cutting drives will reduce the amount of approved business travel, and may encourage people to do more videoconferencing.

The demand for videoconferencing has enjoyed a huge increase in 2003. While not a total replacement for traditional meetings, effective use of video can reduce their frequency, and improve the immediacy of communication where a visual element is required.

The introduction of broadband has unlocked a cheap source of always-on bandwidth at the lower end of the market, helping to reduce the price of some types of dedicated leased line.

And the cost of fatter pipes has fallen thanks to the collapse in global fibre prices and the continued shake-up of indebted telcos and global network operators such as Global Crossing.

Over the next year, companies large and small will have to look more seriously at how they will handle converged communication services.

And networking vendors will have to be clear on their use of standards and technologies, if both they and the technology are to succeed.