By Brian Boyko
Editor, Network Performance Daily

There are numerous influences on the value of the U.S. dollar [USD], from the trade deficit to the housing market. (CNBC business news pundit Jim Cramer certainly has some opinions on the latter.) If I tried to analyze why the dollar is dropping in value, I'd probably make a naïve, amateurish mistake and get it completely wrong. It would take a Ph.D. in macroeconomics in order to get it completely wrong with any authority.

Nevertheless, it is clear that the dollar is dropping in value, and for IT departments of U.S.-based multinational corporations, that can mean quite a bit of upheaval.

If you've got an overseas branch with its own IT department, each one of those servers, in dollar terms, costs more. If you pay your IT department in the native currency, their salary costs went up. If you pay your IT department in USD, you risk losing your best and brightest to those companies within the country they're located, who can pay them in the native currency and keep up with their cost-of-living.
In either case, resources invested in IT departments overseas - human and capital - become strained in a low USD value environment.

As such, it provides an additional compelling factor (besides taking advantage of virtualization technologies,) to bring as many servers and as many IT team members back into the home office datacenter. The less people and equipment overseas, the less you have to worry about the unstable exchange rates between currencies. What a difference from the days when you moved IT operations overseas because it was cheaper!

Server consolidation and moving operations back into the data center from the branches only works, however, if the wide area network and server infrastructure can handle the load and make the transition as transparent as possible to the end-user. This causes a push for network performance monitoring solutions - to verify the ability of the WAN to handle the new traffic - and WAN optimization devices, which may improve performance by reducing the amount of traffic on the link through caching, data reduction, compression, and TCP optimization technologies.