As IoT, AI, and 5G throw a curve ball at traditional network architectures, the prudent enterprise appreciates the need to get the new digital economy to work properly from day one, recession or no recession.
Economic jitters may have gripped the broader economy but the networking industry looks to be in a pretty good shape. Connectivity has become such a vital element in society that it is hard to imagine a dramatic pullback in deployments and upgrades, even if we are on the cusp of a slowdown.
The enterprise networking market will top USD 90 billion by 2024, according to Global Market Insights, driven primarily by the necessity of a smooth-running Internet of Things (IoT). After all, some of these connected devices, like autonomous cars and medical gear, will require real-time, uninterrupted access to data and data-processing centers, or lives could be put at risk. This means the IoT must be far more rugged and resistant to latency and bottlenecks than the traditional internet.
Adding more fuel to networking fire is the process of digital transformation that many organizations view as a life-or-death struggle heading into the new decade. A recent assessment pointed out that the real-time enterprise will require all manners of networking capabilities, such as software-defined functionality, 4G, and intelligent security, telematics, and other systems. In this world, network performance is crucial to deliver the kinds of customer experiences that differentiate winners and losers, since only a strong network foundation can support the innovative platforms and service models that keep users engaged.
On a fundamental basis, however, networking is driven by bandwidth and throughput, so it stands to reason that increased data loads and real-time connectivity require an upgrade over traditional copper infrastructure.
The trickiest part about implementing all of these new networking technologies is doing it quickly without blowing the budget. In some cases, this would not be a problem, because the new solutions represent a significant cost reduction even as they increase performance levels. A case in point is SD-WAN (wide area network), which can cut the cost of SIP trunking in half. To achieve this, however, will need to be adopted, a number of design criteria, such as NSP independence, service agnosticism, and wholesale access, not to mention commodity hardware and zero-touch automation. But in the end, this should make the enterprise more cloud-like and will reduce single-vendor dependency for wide area services.
Most industry watchers seem to think we will have another year or two of foundational infrastructure change before the IoT and other network-dependent initiatives take off in the early 2020s.
This does not mean that what happens in the next couple of years is unimportant, however. In fact, this is probably the most crucial phase of the transformation, because it lays the groundwork for everything that is to follow.
If we get this wrong, we could be in for a decade of headaches trying to get the new digital economy to work properly, recession or no recession.
AI and IoT
The fact remains that many emerging technologies require highly specialized environments of their own, and some of them require substantial changes to core infrastructure. Take, for example, the increased prevalence of vision-based applications in the enterprise. These can range from facial recognition to augmented-reality (AR) infused video services, which not only stress existing networks due to their high-volume workloads, but must also be made available to numerous business functions such as training, security, collaboration, and the like.
Artificial Intelligence (AI) is also throwing a curve ball at traditional network architectures, given its penchant for crunching massive volumes of data to influence the behavior of networks, applications, and management software. Enterprises should also be aware that AI itself will also require changes to fundamental network infrastructure. Most networks were built to support typical application workloads, mostly structured data, to on-site processing resources. AI workloads, on the other hand, support not only the parallel processing requirements of big-data solutions like Hadoop, but must accommodate a world in which remote compute capacity is readily available on demand and at scale. This means high-speed, always-available networking has become a critical element for organizations undergoing the transition to a digital services business model.
IoT presents another challenge, both for the enterprise and for regional network providers. For the enterprise, perhaps the most difficult aspect of these changes is that they are being driven by application and user demands rather than advancements in technology. In the past, new networking capabilities were deployed, then the user community set to work exploiting them to the greatest extent (and then immediately calling for newer, better technology). This time, the use cases are being defined first, and the networking team is expected to fulfil them or watch users gravitate to another network.
Making this happen on a virtual network is problematic enough; overhauling bare-metal infrastructure and basic communications protocols is going to take some time. And time is in increasingly short supply as the digital economy moves forward.
Networks gone virtual
The enterprise has long struggled with the intricacies of connecting branch offices and other remote sites to centralized data facilities. Not only does navigating the WAN require a host of third-party providers, but the terminal equipment at individual sites is often complex, expensive, and difficult to maintain.
But with the advent of the cloud as a means to support production workloads, not to mention even more disparate resources on the IoT edge, the need to simplify WAN is no longer just a helpful development but a competitive necessity.
This is the primary driver behind SDN, NFV, and other forms of virtual networking on the WAN. By converting to an abstract, software-defined architecture, long-haul networking becomes much more flexible and much easier to troubleshoot and manage. But even these advanced technologies are only marginally helpful if networked sites are still relying on complex, platform-dependent hardware. In the modern era, nothing less than a low-cost, universal networking device is warranted.
Enter the new field of universal customer premises equipment (uCPE). This new class of network device is described as the jack-of-all-trades for service providers and the enterprise. It is a converged solution that puts compute, storage, and networking on a commodity, off-the-shelf server, allowing it to provide NFV, SD-WAN, virtual WAN, and a host of other services, including security, to virtually any site on an extended network.
According to IHS Markit, the uCPE market is expected to top USD 1 billion in 2022, which is remarkable considering that it commanded barely USD 7.7 million as late as 2017. While it is likely to improve networking performance in a data center, it is expected to really shine on the network edge. The ability to deploy services faster and at locations that are closer to end users should unleash a wave of innovation influencing everything from recreation and ecommerce to healthcare and finance. This should also streamline network infrastructure across the board because organizations will be able to field a single, integrated, virtual network architecture from the data center right to the customer’s home.
The enterprise is quickly expanding its cloud environment to a hybrid multi-cloud architecture. Where once a single provider enabled little more than bulk storage and processing offload, today’s cloud encompasses numerous providers offering services as diverse as disaster recovery, advanced analytics, and quantum computing.
More than 80 percent of enterprises are already working with at least two providers, according to Gartner, and by 2023 the top 10 cloud providers will control only half of the total marketplace as users seek to avoid vendor lock-in and craft-customized solutions for individual use cases.
But this is leading to a number of challenges on the WAN. Not only must today’s WAN provide the same flexibility as the traditional local area network (LAN), it must adopt new forms of security to accommodate the multiple platforms and application loads prevalent in this diverse new environment.
Securing data in the cloud
Enterprise infrastructure has become increasingly dependent on the cloud, which is naturally leading to growing concerns about data security. While the cloud in many ways offers better security than traditional on-premises, this should not obscure the fact that complex architectures tend to have more vulnerabilities than simple ones, and the cloud is nothing if not complex.
One of the key challenges is securing data as it navigates between the cloud and the user. Data is likely to transition between multiple network providers and other handlers even if the entire wide area infrastructure is harnessed under a single WAN or SD-WAN solution. Not only does this introduce gaps in security that can be exploited, it also often leads to the deployment of multiple encryption and other security mechanisms, all of which act to hamper performance and diminish the kind of visibility the enterprise needs to manage traffic flows.
This is why many organizations are turning to network-level encryption for their entire cloud ecosystem. By roping all data communications under a single solution, organizations are finding that they can quickly fulfill the requirements of emerging regulatory regimes like GDPR and PCI DSS across their distributed data footprints, while at the same time cut down on the management headaches of having to oversee countless service- or provider-based solutions.
The network encryption market is set to expand from USD 29 billion today to USD 4.6 billion by 2023, a compound annual growth rate of 9.8 percent, according to Markets and Markets. This is, in fact, one of the few areas of the IT stack that is expected to be dominated by hardware rather than software in the coming years. With a solid hardware foundation, network security benefits from top performance in high-speed, low-latency environments, a single platform can provide robust security across all endpoints, networks and applications.
The key challenge for enterprises migrating to the cloud is to implement network encryption before workloads become scattered across multiple providers and platforms, each with their own solution. A distributed data architecture is already complicated enough without having to go back and reconfigure something as fundamental as data encryption – particularly when diminished, or even disrupted, service will have such detrimental consequences to the business model.
Time for a security update
At the moment, however, the two predominant means of securing privacy and data integrity across multiple clouds are IPSec encryption and application-level security solutions like SSL. However, neither of these is adequate for today’s production workloads.
While IPSec does have the advantages of user invisibility, application independence, and full traffic monitoring, it also suffers from high CPU overhead, lack of full support among software developers and the fact that some of its algorithms have already been compromised. Meanwhile, SSL is very effective at maintaining encrypted communications across the internet, but its elaborate data exchange mechanism to establish and authenticate connections can severely hamper performance in high-scale environments.
What is needed is a highly flexible solution that maintains robust security and protection in high-scale, highly complex environments. As well, it should be easy to implement at a low price point and should lend itself to the kinds of automated traffic management and network provisioning operations that are coming to define the modern data universe.
In this age of digital services and high customer demand for personalization and robust performance, data has become the most valuable commodity in the enterprise business model. But collecting and storing this data is of little value unless it can be shared and utilized properly.
A multi-cloud environment offers the best way to ensure peak performance and solid data protection, but only if the network between these disparate sites is outfitted with top-flight security. And as with any data infrastructure, the best time to ensure your security is adequate is before your data has been compromised, not after.
The Indian market
Enterprise networking market, which includes Ethernet switches, routers, and WLAN segments is seeing increased investments across the enterprise and service-provider deployments.
ADC and Layer 3 categories are key drivers, while Layer 2 category is not so popular. Top spending for switching segment comes from services, telecom, and financial organizations. Cisco continues to dominate the Ethernet switch market, followed by Hewlett Packard Enterprise (HPE) and Huawei.
The growth of routers is driven by enterprises and telecom service providers. Growth of SD-WAN in India is expected to be driven by banking, government, and healthcare. Cisco leads the router market, followed by Nokia and Huawei.
The WLAN market is growing marginally. While the consumer and enterprise segments are key customer segments, service provider deployments are facing marginal decline. Hewlett Packard Enterprise, Cisco, and TP-Link are aggressive in this segment.
Server market. The x86 server market dominates the overall server market in terms of revenue, with contributions from professional services vertical, followed by manufacturing, banking, government, and telcos. The education vertical saw huge growth owing to a few large deals around high-performance computing (HPC) and National Supercomputing Mission (NSM) projects. Dell and HPE dominate this segment. Cisco and Lenovo are also aggressive.
The non-x86 server segment is dominated by IBM. Aggressive presence is seen by Oracle and HPE too. Banking remains the top vertical in terms of revenue share followed by manufacturing and utilities.
The aftereffects of the general elections are seen from the lack of spending coming from the government barring deals from NSM and various ministries from the central government. However, the outlook is positive for India, with investments expected to be focused on scientific research and development, defense, smart cities, and various other projects in the year ahead.
High spend is anticipated from telecommunication vertical toward building robust enterprise IT infrastructure for projects related to OSS, BSS, IMS stack for VoLTE, VRAN, 5G testbed programs toward 5G development. From the cloud-service providers’ standpoint, capacity expansion is expected from local DC providers in the quarters to come.
Enterprise storage. Organizations are looking for storage solutions that are agile, scalable, and easy to use to address the business transformation needs. They are moving from managing storage systems to managing data, and considering new-age storage systems with built-in machine learning and analytics capabilities, which are data-aware providing real-time insights on performance and data usage. Increased storage demand from the government, professional services, and BFSI is driving demand. Technology refresh and capacity expansion, modernization initiatives, and investments on emerging technologies provide incremental growth. Advent of the third-platform technologies and digital transformation initiatives across organizations would drive incremental revenues in the near future. Dell and HPE have a combined share of about 40 percent is this segment.
HCP. The Indian hardcopy peripherals market has seen a slowdown in 2019. However, ink tank printers continue to gain traction and partially make up for the decline in laser printer shipments as well as ink cartridge printers. Demand from SMBs and SOHOs was on the lower side due to the credit issues they continue to face with banks affecting demand for laser printers. Despite the government elections, the consumption from the government remained steady. After the election dates were announced on March 10, 2019, with the Model Code of Conduct coming into effect, the government demand decreased as multiple government deals were put on hold. HP, Canon, and Epson are the leading brands, with HP maintaining its leadership position, capturing more than 60 percent of the market share.
Software market. According to IDC, India maintains its leadership position as one of the top three contributors in the Asia-Pacific excluding Japan region’s software market. “Indian organizations are increasingly looking at harnessing big data and business analytics to increase competitive advantage. Additionally, there is a renewed thrust on modernizing and evolving enterprise applications and accelerating cloud-related initiatives. Over the course of the next 24 months, Indian organizations would attempt at maximizing their investments in analytics, cloud, and artificial intelligence through appropriate monetization mechanisms. This is slated to act as a catalyst in driving digital transformation across organizations,” opines Ranganath Sadasiva, Director, Enterprise Solutions, IDC India.
IT services. With the Indian government’s higher spending on Digital India and Smart City initiatives, the BFSI, and the increased adoption of next-gen technologies by manufacturing, retail, healthcare, and education verticals are driving growth in the IT services market. The faster-growing services include hosting infrastructure services and hosted application management, followed by IT consulting and application management. Additionally, a number of technology start-ups offering niche solutions in AI, ML, IoT, blockchain, automation, and the like, have come up, which is further driving adoption of IT services in the country.
Cloud services. The IT environment for organizations in India is becoming more complex with multiple public clouds, private clouds, and traditional systems needing to be interconnected, integrated, and collectively managed. Most of the Indian organizations are clustered around early stages of cloud maturity, and find it challenging to move ahead in the adoption curve. As Indian organizations move toward a cloud-first strategy, enterprises are preferring cloud solutions for their new capability, capacity, and functionality.
India spending on public cloud services and infrastructure is expected to reach USD 2.9 billion in 2019, an increase of 34.5 percent over 2018, according to the latest update by IDC.
Telecommunications and banking are the two leading industries of the overall public cloud spend. Following this, discrete manufacturing, personal and consumer services, and process manufacturing altogether form the five industries expected to remain as the highest spenders till 2022 due to their continued investment in public-cloud solutions. However, the industries that will see the fastest spending growth are retail and professional services.
Software-as-a-Service (SaaS) is by far the dominant cloud-delivered service in the region with a share in the 60-percent vicinity, followed by Infrastructure-as-a-Service (IaaS) with about 32 percent share. Platform-as-a-service (PaaS) caters to niche requirements.
Way forward with 5G
5G is about to hit the world economy like a freight train. Most observers fully expect that by mid-decade, we will have an entirely new digital ecosystem driving new forms of communication, new markets and sales channels, and entirely new levels of wealth.
But 5G is not merely the next step in the evolution of wireless networking. It represents a distinct break from the past in many crucial ways, starting with the need to maintain strict time synchronization across multiple points on any given data chain.
This need for accuracy places a significant burden on the shoulders of service providers and enterprises alike, since the goal is no longer just to maintain the proper frequencies on a steady basis, but to ensure proper phase and time modulation as well.
World standards-setting bodies are working toward easing the transition to this new networking paradigm by updating the Precision Time Protocol (PTP) and Sync-E specifications to reflect an environment that is measured in nanoseconds, not microseconds. As well, improvements to the Global Navigation Satellite System (GNSS) will help overcome the delay variation between satellite and receiver, which should vastly improve 5G’s ability to support advanced services like autonomous driving.
Time synchronization is only one aspect of complete 5G assurance, of course. Future services are expected to be rife with network slicing, virtualization, open APIs and other elements that must all be subjected to audit and control. Not only will this require continuous monitoring on multi-point networks to track automated changes in dynamic, high-volume ecosystems, but also deep-dive inspection into encrypted data flows, protocol normalization measures, and the interface bridging between disparate networks.
But while the technology to accomplish all of these tasks is already either readily available or is in the final stages of development, the real challenge going forward will be implementation. Deploying monitoring solutions at each and every site is difficult enough, but then there is the fact that interpreting and analyzing this kind of data is a highly specialized skill that demands top salaries.
Compared to driverless cars, remote surgeries, and automated drone deliveries, the monitoring and synchronization aspects of 5G will rarely steal the headlines. But the fact is that none of the exciting services, currently dominating the 5G hype cycle, will see the light of day without a more refined system of coordination between network devices.
With this much data flying through the air, providers will need to make sure the intricacies of high-speed connectivity are maintained at all times, or risk spoiling the 5G party before it even begins.