With global enterprise network revenue poised to reach 300,000 crore in 2017, it becomes imperative to closely examine each of the technologies that move us closer to seamless connectivity anywhere, anytime, between any group of users, devices, or applications.
Technology, the advances in communication and information technology, has changed the face and the pace of business. The changes are all around us, and coming faster than ever. No longer are we waiting and wondering how the latest digital technology innovations will change things; rather, we are taking control and shaping technology to fit our needs, large and small.
The year 2016 had seen organizations moving to software networking leveraging new IP technology to transform data center architectures and provide elastic infrastructure services on-demand to customers. Some obvious transformative trends in enterprise networking are taking shape in 2017.
Continued disaggregation of hardware and software. Enterprise networking is quickly shifting from a hardware/software construct to all-software leading to more cost-effective networks, at increased capacity, offering more flexible service models across an expanding footprint. There will be advancement in wireless network technology, as well as a subtle shift in security postures of enterprise endpoints. Users will be more connected, more often to the networked resources to be most effective.
This also means configuration management, system relationships, and other architectural elements will transition from today's admin/management approach to software development processes in short order. And that opens up the very real possibility that network oversight, like virtually everything else in data infrastructure, will be subject to the whims of artificial intelligence.
The key to building networks. Software-defined networking (SDN), network functions virtualization (NFV), and network virtualization (NV) are giving us new ways to design, build, and operate networks. Over the past two decades, we have seen tons of innovation in the devices we use to access the network, the applications and services we depend on to run our lives, and the computing and storage solutions we rely on to hold all that big data for us.
This is why SDN and NFV are happening today. They each offer a new way to design, deploy, and manage the network and its services.
SDN separates the network's control (brains) and forwarding (muscle) planes and provides a centralized view of the distributed network for more efficient orchestration and automation of network services.
NFV focuses on optimizing the network services themselves. NFV decouples the network functions, such as DNS, caching, etc., from proprietary hardware appliances, so they can run in software to accelerate service innovation and provisioning, particularly within the service provider environments.
NV ensures the network can integrate with and support the demands of virtualized architectures, particularly those with multi-tenancy requirements.
White Box uses network devices, such as switches and routers that are based on generic merchant silicon networking chipset available for anyone to buy, as opposed to proprietary silicon chips designed by and for a single networking vendor.
These were the key buzzwords in 2016 as the industry came to materially understand the significant challenges of onboarding, orchestrating, and controlling a software-defined infrastructure of network connectivity and services. As we approach 2017, we can begin to see balanced skepticism and optimism that indicates we are nearing the level of maturity needed to find real solutions.
In 2017, we can expect to see complete software-defined network infrastructure solutions that are commercially available, multi-vendor, and based on a viable ecosystem of SDN and NFV components. Proprietary platforms will begin to feel uncomfortably closed as users realize the extent of their lock-in. Adoption will rise beyond the early adopter service providers, as enterprises and private data centers begin to see a manageable path to achieve the value of a flexible infrastructure.
Convergence and coexistence. With rapid adoption of smartphones in recent years, and consolidation of mobile OS platforms, wireless user behaviors have become better understood. At the same time, users are becoming more advanced and their expectations of the network are rising accordingly. In 2017, we will begin to see the fruits of various efforts that unify local Wi-Fi and cellular mobile data networks.
The ability to offload data from cellular networks to Wi-Fi was the first significant step toward use of convergence. As the movement of traffic between the two types of networks became more seamless, thanks to developments in the network core and in the devices, the strategic value of this approach increased and also included other types of operators. In particular, wire-line service providers were able to add a wireless element to their offerings in order to create a quad play service. Cable and broadband operators, and some start-ups, have adopted a Wi-Fi-first approach, in which subscribers stay on the Wi-Fi connection by default, and only transfer to a cellular link when a strong Wi-Fi signal is unavailable.
Devices will roam seamlessly between different network technologies, and those technologies will be deployed by a surprising diversity of network operators. Moreover, devices will begin to use multiple networks simultaneously, shifting data traffic seamlessly as network connectivity changes due to capacity, resource connectivity, and mobility.
In parallel, a new generation of wireless networks will begin to adapt to user demand by shifting capacity to where it is needed. The new status quo for wireless connectivity, which will begin to emerge in 2017, will be a nearly invisible unification of different wireless networks behind the scenes of an always-on, high-capacity wireless-user experience.
Integrated security. With exponential increase in devices and applications, the threat surface area for an organization has expanded beyond traditional means. To reduce risk and complexity, security will need to be embedded within hardware and software solutions, have flexible deployment options, and work with each other to provide integrated multilayered protection. Expect security architectures to be simple, open, and automated so your network has better performance, works with other solutions, and is easier to manage.
While some organizations will attempt to legislate security via corporate policy, in 2017 the most enlightened companies will recognize the implicit threat of sub-par IT services. The most successful IT and info-sec teams will collaborate on simultaneously modernizing and securing their infrastructure with SDN, orchestrated NFV security services, advanced encryption and identity management, integration of cloud services, and compartmentalization of local apps.
IoT poised for a major boost. The Internet of Things (IoT)market will begin to develop standards that make their platforms more secure, as well as more open and sustainable in 2017. In addition to easing consumers' minds, these standards will enable an IoT ecosystem that increasingly appeals to enterprises, allows service providers to create innovative services, and enables advanced use cases that one can only imagine today.
Indian IoT market is set to grow to USD 15 billion by 2020 from the current USD 5.6 billion, according to a recent report by Nasscom and Deloitte.
The IoT sector is set to get major boost from industrial IoT, which currently accounts for 60 percent for the total market and includes integration of physical machinery with networked sensors and using the data for faster and more efficient operations.
Consumer IoT, which includes smart home devices as well as wearables, account for the remaining 40 percent of the IoT market. This is set to change, with consumer IoT's share rising to 45 percent by 2020, the report said. Owing to the e-commerce boom and regulatory changes such as GST, transport and logistics is set to increasingly utilize IoT for more efficient operations. The rise of tech-savvy consumers and increasing smartphone and mobile Internet penetration would also help in driving consumer IoT.
True Cloud Architecture Emerges
We are going to see a big shift in the understanding of the true cloud architecture. Cloud has become a buzz world over the last few years, but in its essence, it is not much different from what has been on the market for about 15–20 years – a model of providing services from a centralized location, from a shared platform, to take of IT needs of SMBs and enterprises.
In the next 12–18 months care we will see a strong trend toward creating a true cloud architecture, which will become the foundation of the cloud industry. It is very different from just provisioning individual services to individual customers. It is all about the management and service delivery layer that sits on top of the actual commodity cloud services.
Cloud vendors who are not able to offer a white-labeled, multi-tiered, multi-tenant, securely separated, and management-delegated solution will miss out on new business in 2017. Service providers and SMB customers will be looking for a solution that allows them to sign in their own distributors and sub-distributors, resellers, and sub-resellers, and has a capacity to create multiple user roles for multiple user departments. This functionality will be a critical service differentiation in the cloud space in the coming months.
This year's developments in the cloud space will create unprecedented opportunities for service providers and SMB customers. Service providers will be able to grow their business by packaging and reselling ISV-hosted services through existing channel ecosystems, without any capital investment. This will also open new opportunities for SMBs, who will continue replacing in-house IT infrastructure with cloud-based services, taking advantage of the OpEx model of service consumption.
Machine learning is everywhere. In 2017, machine learning (ML) will expand as a fundamental technology driving innovation in every industry. In the context of network technology, ML techniques will be applied to problems that were previously thought to be impractical to solve. Combined with SDN and NFV, ML will be a core competency for any vendor trying to build next-generation platforms for vehicular networking, IoT, MEC, cloud, and security.
AR and VR. Augmented reality (AR) and virtual reality (VR) technology have an almost limitless potential. They can start new categories or add a new dimension to established categories. Indeed, these two platforms, which share much underlying technology, join the IoT and artificial intelligence as technologies that excite the imagination of manufacturers, entrepreneurs, investors and, most of all, end users.
According to Vishwa Ranjan, head of augmented and virtual reality at Infosys, hype around VR will die down – but this is a good thing. "Next year we'll see companies view AR and VR as legitimate technologies that they should be researching and investing in, rather than tech fads simply tied to games and entertainment. And while gaming will remain an important pillar for the industry, next year companies will move toward AR and VR for enterprise – and customer – implementations as they realize their potential to transform our day-to-day interactions, our work, and our processes. However, wider adoption would not be until we have better and more affordable hardware on the market as well as find that killer app.
In 2017, we will overcome this hurdle. 360 video (pre-recorded or live) based apps will be the initial drivers of these content-driven technologies with focus on surveillance, collaboration, and telepresence," Ranjan added.
The enterprise network has never been more vital to enterprise success than it is today.
Connected devices are on the rise. Cloud-based applications are changing the way enterprises work, from the products they manufacture and the services they offer to the way their employees interact with each other, or with customers and partners. More things than ever are designed to be connected. Fifty billion devices are expected to connect to the Internet in 2020. From connected cars to home appliances to smart sensors on city streets, manufactured products are becoming more and more sophisticated. Service enterprises are also elevating their portfolios by using both wireless and wireline connectivity to provide advanced services, such as remote monitoring, emergency response, and intelligent home and business surveillance, to name just a few.
With virtualization, enterprises now have the choice of moving from MPLS-based VPN connectivity to a less expensive, more flexible, and more operationally straightforward software-defined WAN (SD-WAN). The dozens of SD-WAN startup vendors and service provider implementations are a testament to the momentum behind this new technology. The estimate is of nearly 20 percent CAGR of SD-WAN revenues through 2019.
WLAN today is the predominant enterprise campus network access medium, as mobility and cloud transform IT. Enterprise networking vendors in the coming year will be inclined to pay billions for remaining WLAN pure plays to position themselves for growth in the next decade. WLANs and access point aggregation switches are blurring the edge of the network with software-defined networking (SDN), virtualization and cloud management, imbuing the network with the same dynamic, on-demand characteristics that we are seeing in the storage and compute environments.
It seems that enterprises will forever be in the hackers' crosshairs. Data breaches can trigger irreparable damage to a company's reputation and its ability to conduct business in the future, even drive some enterprises to bankruptcy. Cyber-attacks and data breaches are increasing at an alarming rate. According to the recent Verizon Data Breach Investigation Report, there were 64,199 security incidents in 2016, affecting organizations in 82 countries and a wide range of industries. Cyber-attacks affect businesses of all sizes – 36 percent of cyber-attacks are conducted against small and medium business (SMB), of which 60 percent go out of business within six months of the attack. Yet 77 percent of SMB owners believe their companies are safe from cyber security breaches.
The previously mild-mannered auto industry is now creating cars that require a new class of network. Self-driving cars seem to be creating a new class enterprise networks. Connected vehicles use mobile data infrastructure to enhance driver assistance, power autonomous driving capabilities, accelerate emergency response, and enable remote diagnosis and support to name a few examples. However, vehicles that automatically download the latest software at night to fix bugs and turn up new features and enhancements demand networks that can provide scalable storage and computing power. Manufacturers like Toyota – the world's largest automaker – are planning to build data centers to collect and analyze data from the next generation of connected vehicles. Toyota has also created a new data analytics company in partnership with Microsoft, called Toyota Connect. This company will use Microsoft's Azure cloud computing platform to develop smart products and services, such as vehicle-to-vehicle technology to enable cars to communicate with each other to observe hazards ahead, or a virtual assistant that uses predictive analytics to determine where the driver is headed and suggest the best route to avoid traffic or to provide favorite food suggestions. Other manufacturers like Hyundai have also announced investments to pave the way for the next generation of connected vehicles.
Financial institutions demand speed to process millions of transactions daily. One millisecond might be just too long to wait. Brokerages, for example, build ultra-low-latency optical networks to complete stock transactions within milliseconds of a market-impacting event. They deploy trading solutions to perform high-frequency trading (HFT) based on complex algorithms that analyze multiple markets, identify trends, and execute orders based on market conditions. One major brokerage firm estimated that trading 1 millisecond faster in a trading application can be worth 750 crore a year of revenue. Similarly, online retailers like Amazon have stated that every 100 millisecond of latency costs them 1 percent in sales, while Google has realized that an extra half second in search page generation time reduces profitable search traffic by 20 percent.
Network outages can be disastrous to enterprises, resulting in significant loss of revenue, even bankruptcy. Massive disruption to business operations can have a devastating impact on customer loyalty.
Business enterprise network infrastructure is rapidly responding. Service providers, enterprises, and data center owners began a migration of applications to the cloud and this is expected to increase in 2017.
The lease versus buy and capital expenditure versus operating expenditure debate is ongoing with businesses. Throughout the next year, we see service providers and enterprises looking at options to building their own networks as they explore colocation (or multi-tenant) options for data centers and leasing office buildings.
By 2018, IDC predicts that 45 percent of the ICT spending in enterprises will be on a mix of colocation, hosted and public cloud datacenters in order to react to changing data use patterns in the Asia-Pacific; this has been a consistent and ongoing trend for the past couple of years but we see the gap closing in 2017 as enterprises shift from build your own' to multi-tenant data centers.
The trends of capital investments and security are also impacting another area that we see as a big trend in 2017 – network convergence. Take buildings, for example. What was traditionally just hardwired for data and voice is now being retrofitted or designed new with wireless in mind. Building owners and operators are looking at the co-existence of wireless and wireline for the coming year but will consider the new radio spectrum, both licensed and unlicensed, that is becoming available as well as new technologies that enable the universal ceiling. As this convergence happens, we see a greater focus in 2017 on consolidation and partnerships (creating an ecosystem) to address these needs.
Indeed, digital transformation is no longer for the most daring of businesses. In 2017, those who fail to innovate and embrace digital will get left behind. Companies are looking at ways to keep up with the fast-paced change in customer demands, the proliferation of new technology, and how to bring about major change within their organizations. And networking is the foundation for digital transformation.