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Network Transformation: The Elephant in the Office

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by Phil Hugus
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Companies can't overlook the critical role of the network in adopting new tech like AI and IoT. Here are some ways to begin tackling the challenges of next-generation networking.

“We are a technology company,” Goldman Sachs CEO Lloyd Blankfein said in 2015. That comment may seem a little strange if you bank with Goldman, but Blankfein was just giving voice to a common CEO sentiment in the era of technological disruption.

The “digital pivot” is the No. 1 priority for most companies these days. Management teams are losing sleep over how to take advantage of new tech including big data, AI, robotics, the internet of things, and the “cloud” to get closer to consumers and to secure an edge over competitors.

What gets lost in the sexy terminology, though, is the central role of the network. It’s not glamorous, but for any of these new technologies to work companies must transform and transition their networks to handle massive, ever-growing bandwidth demand and a quickly evolving set of provider choices.

The enterprises that ultimately win the digital race may well be those that take the network challenge most seriously. Companies are waking up to this fact, with well over 50% of ISG’s current client network sourcing engagements including technology transformation and transition considerations, up 10% 18 months ago.

How companies can best to tackle the network transformation will be at the core of the ISG Future Networks Summit September 24-25, 2018 in Chicago, where we’ll be discussing available technologies, determining which technology solution is right for a company, and other factors that should be considered, including mobile, security, and automation.

The nice thing about the next generation of networking is that companies have dozens of options for solving their problems -- a vast departure from the like-for-like, rigid, “one-size- fits-all” approach that was common in the past. The challenge is choosing the right option and then executing.

MPLS remains the backbone of the enterprise for now, but it is becoming less and less capable of handling all of a company’s bandwidth needs. SD-WAN is the technology of the future that will allow corporations to fully digitize and take advantage of the cloud, but there are some barriers to its near-term adoption. These barriers include carrier-based solutions that aren’t quite ready for roll out and client organizations with large, unwieldy legacy infrastructures that will be complex and costly to transform. In the meantime, hybrid WANs can be a step towards SD-WAN, enabling some cost cuts while still falling within corporations’ transformation comfort zones.

The direction a company chooses will depend on a number of factors, such as size, legacy infrastructure, cloud utilization, risk appetite, current provider, and contractual environment.  ISG has a hierarchy of archetypes that can serve as a starting point to help companies sort through these factors:

Bleeding-edge -- These clients are typically newer, younger companies that don’t have much legacy technology. They regularly seek to use new technologies to continuously improve their entire value chain and view technology as an enabler to their entire existence.

Aggressive early adopter -- These clients can range from small to large enterprises, but all have players who strive to be early adopters, with or without the approval of the IT organization. They may adopt new technologies through sanctioned pilots but will have to address legacy infrastructure and budgetary constraints before full-scale adoption.

Moderate -- Many businesses tend to fall into this category. They have few resources available for testing and typically seek cost-out models.  They will adopt new technology when the value proposition is clearly delineated, when it solves a specific problem, or when the carrier forces them off the old technology with higher pricing.

Conservative -- These clients are most often the largest enterprises and have traditionally purchased from a set of major providers. They demand the lowest pricing and the highest levels of support and run the risk of being late adopters of SD-WAN.

Regardless of where companies fall in this spectrum, they need to think about the following points:

Mobility -- Where is the workforce accessing the network from, and how is that changing? Are more and more employees working remotely? What sort of devices are they using? What information do they need to access?

Security -- How sensitive is the data? Can some of it be transmitted over the open web? Is it OK for mobile users to come into a network and then go back out to the cloud to access information as a way of handling security authentication requirements, or can authentication be transferred to the cloud?

Automation -- How can a firm leverage automation both from a tech transformation perspective and a network operations perspective? Options include billing, process completion like disconnects, transactional back office solutions like invoicing, and first level trouble management.

Join us to discuss all of these topics at our Future Networks Summit September 24-25, 2018 in Chicago. For more details click here.

This article originally appeared in Network Computing.

About the author

Phil Hugus serves as Partner, leading ISG’s Provider Services consulting and benchmarking practice. For the past twelve years with the firm, Phil and his teams have led hundreds of client procurement, contract negotiation, benchmarking and market guidance engagements. Phil leads a team of industry provider experts providing global market intelligence and benchmarking support for ISG’s provider and network carrier clients. Phil’s vast experience in the telecommunications industry includes merger-related operations and restructuring, strategic development, market development and launch, strategic contract negotiations, and international management.