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Networks As a Service Adoption To Accelerate

Businesses will experience profound changes as employees’ transition to hybrid work environments following COVID-19, in turn changing the way IT teams procure and consume networking solutions. In response to the pandemic, IT leaders are now investing more in cloud-based and AI-powered networking technologies as business recovery plans take shape. That’s according to a global survey of 2,400 IT decision-makers (ITDMs) commissioned by Aruba, a Hewlett Packard Enterprise company.

As IT leaders respond to the challenges associated with enabling a highly distributed workforce and the emergence of the hybrid workplace – with people needing to move seamlessly between working on campus, at home and on the road – they are looking to evolve their network infrastructure and shift away from CapEx investments towards solutions consumed ‘as a service’. The average proportion of IT services consumed via subscription will accelerate by 72% in the next two years, from 64% of the total today to 82% in 2022, and the share of organizations that consume a majority (over 50%) of their IT solutions ‘as a service’ will increase by approximately 72% in that time.

“With the emergence of the hybrid workplace, IT leaders are being asked to deliver a delicate balance between flexibility, security and affordability at the edge,” said, Prakash Krishnamoorthy, Director – Aruba India. “Every part of the workplace needs to evolve: the campus must be embedded with technology to support social distancing and contactless experiences, and the home office must offer enterprise-level connectivity, security and support. It’s increasingly clear that, to support these new needs in a financially challenging environment, IT decision-makers are attracted to the reduced risk and cost advantages offered by a subscription model.”

The report, which surveyed ITDMs in over 20 countries and eight key industries, looked at how they have responded to IT and business demands in the wake of COVID-19, what investment decisions are being made as a result, and the consumption models now being considered. A number of key findings stood out:

IMPACT OF COVID-19 HAS SIGNIFICANT IMPLICATIONS

ITDMs report that the impact of COVID-19 has been significant both on their employees and short-term network investments:

·         50% describing the impact on their employees as ‘significant’ (widespread furlough or layoffs), while 35% considered it ‘moderate’ (temporary reductions in some functions), and 15% ‘low’ (very few jobs impacted). 

·         ITDMs in India (57%) and Brazil (34%) were most likely to cite a significant impact on their employees, while those in Hong Kong (12%) and Mexico (10%) reported the least, highlighting a massive swing in experiences between regions.

·         77% said that investments in networking projects had been postponed or delayed since the onset of COVID-19, and 28% indicated that projects had been cancelled altogether.

·         Project cancellations were highest in Sweden (59%) and lowest in Italy (11%), showing there are also significant disparities between countries within the same region, while 37% of ITDMs in education and 35% in hotels and hospitality globally said they have had to cancel network investments.

THE FUTURE IS BRIGHT: INVESTING FOR EMERGING NEEDS

By contrast, future plans are aggressive, with the vast majority of ITDMs planning to maintain or increase their networking investments in light of COVID-19, as they work to support the new needs of employees and customers. Along with which, ITDMs could increase its penetration at an ease with the increase in potential sectors and consumers.

·         An astounding 38% globally will increase their investment in cloud-based networking, with 50% maintaining the same level, India market and 15% scaling back. The APAC region was the global leader with 45% stating increased investment in cloud-based networking, rising to 59% among ITDMs in India. With cloud solutions allowing for remote network management at large scale, these capabilities are particularly enticing for IT teams when being on-premises is not possible or challenging.

·         ITDMs are also seeking improved tools for network monitoring and insight, with 34% globally planning to increase their investment in analytics and assurance, 48% indicating that they will maintain their level of investment and 15% reducing it. This allows IT organizations to troubleshoot and fine-tune the network more efficiently, as demands on it are augmented by a distributed workforce. 

·         There is also an emphasis on innovative technologies that simplify the lives of IT teams by automating repetitive tasks. We found 35% of ITDMs globally are planning to increase their investment in AI-based networking technologies, with the APAC region leading the charge at 44% (including 60% of ITDMs in India and 54% in Hong Kong).

·         Anyhow Indian statistics shows a positive response in investing the emerging needs of the market under IT organisations for a better comeback on the networking investments.

ADOPTION OF NEW CONSUMPTION MODELS IS ACCELERATING

As ITDMs shape their investment plans, they are looking at alternative modes of consumption to achieve the best balance of value and flexibility.

·         55% globally say they will explore new subscription models for hardware and/or software, 20% managed services for turnkey hardware/software and 35% financial leasing – all as a result of the impact of COVID-19. This reflects the increased need for more financially flexible models in a challenging environment.

·         Networking subscription models are more popular in APAC (61%) than in the Americas (52%) or EMEA (50%), and at a country level the highest demands are in Turkey (73%), India (70%) and China (65%).

·         The industries that most likely to be considering the subscription model are hotels/hospitality (66%), technology and telecom (58%) and education (57%). The impact of COVID-19 on IT behavior has made the desire for flexibility and predictability in spending, while reducing risk from initial capital costs, greater than before. Well in India every industry is ready to do investments in the networking systems, because of the contactless work culture is promised.

·         In stark contrast, just 8% globally plan to continue with only CapEx investments, though the proportion is higher in the Netherlands (20%), US (17%), Spain (16%) and France (15%). Across industries, 15% in retail, distribution and transport will continue to focus solely on CapEx investments, versus just 5% in IT, tech, education and telecoms, and 2% in hotels and hospitality.

“With the needs of customers and employees having changed so comprehensively in recent months, it’s no surprise to see IT leaders seeking more flexible solutions. They are having to adapt fast and ensure that more complex, distributed networks can securely support the experiences users demand. The need for agility and flexibility in network management is now greater than ever”, says Prakash Krishnamoorthy, Director – Aruba India.

While the pandemic has clearly negatively impacted ongoing projects, this research suggests it will also catalyze medium-term investment into advancing networking technologies, and a shift to more flexible models of consumption that limit up-front capital demands. Trends that were already taking hold will now accelerate, including the move to the Edge and the adoption of cloud-based and AI-driven intelligent networks.

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