November 2015, IDC #EMEA40560015

White Paper

Networks That Deliver Change: Key Trends and Transformation Insight for Future Proofing Your Network

Sponsored by: Dell

Andrew Buss Emir Halilovic November 2015

IDC OPINION

IT transformation and the evolution of the 3rd Platform have a strong and cumulative effect on IT infrastructure as a whole. Networking, as a part of that infrastructure, is feeling the effects in a major way, yet the pace of transformation of networking infrastructure has been traditionally seen as lagging behind the transformative processes in other parts of the IT infrastructure. In IDC's recent survey of IT and networking departments across EMEA, it is clear that networking transformation through adoption of new technologies is gaining momentum. In particular:

In IDC's view, the survey results prove that networking in datacenters and campus environments is ripe for major disruption. A large part of the challenges reported by networking operations — security, performance, and manageability — stems from the limitations of legacy networking and the slow innovation pace of traditional networking vendors. IDC believes these challenges can be tackled by using advanced networking technologies, such as SDN, network virtualization, and network function virtualization. IDC views open standards, open source software, and decoupling of networking software and hardware as key enablers of networking transformation, mainly through increased cost efficiency and by enabling better correspondence between advanced networking solutions and customer needs.

Signs of impending disruption of networking status quo are visible in the adoption of networking virtualization, which is becoming mainstream, especially in large organizations. Another trend which IDC believes will serve as a catalyst for networking transformation is adoption of integrated systems, which are extensively used by more than 60% of respondent organizations. At the same time, around a third of the enterprises have already integrated networking, storage, and server management teams.

In IDC's view, buyers of networking solutions need to develop their understanding of the link between their desired results and solutions to networking challenges on one side and emerging networking technologies (SDN, network virtualization, open networking, NFV) on the other. The chasm that exists between theoretical knowledge of advanced networking technologies and using them to solve networking challenges is evident: the great majority of respondents are well informed about advanced networking technologies, but very few are using them at present.

Skills shortage is, in IDC's view, another significant underlying issue hampering the adoption of advanced networking technologies among the respondent organizations. We believe there are two main implications to this — vendors and their partners need to accelerate the pace of their own staff development and offer advanced networking services aimed at transforming clients' networking infrastructures, while clients themselves also have to develop the skills further.

 

©2015 IDC #EMEA40560015

TABLE OF CONTENTS

P.

Methodology 1 

In This White Paper 1 

Situation Overview 2 

The Role of IT and Networking in Business 3 

Technology Adoption 4 

Organization, Management, and Automation 6 

Investment and Purchasing Behavior 9 

Skills, Certification, and Assessment 14 

Networking Challenges 15 

Future Outlook 18 

Challenges/Opportunities 19 

Conclusion 20 

 

 

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LIST OF TABLES

P.

1 Attitudes Toward IT Investment 3

2 IT Department Capabilities 4

3 IT Team Organization by Company Size 6

4 Use of Management Tools 7

5 Use of Automation in IT and Networking 8

6 Strategic Versus Ad Hoc Purchasing — IT Overall 10

7 Strategic Versus Ad Hoc Purchasing — Networking 10

8 IT Service and Support Buying Behavior 12

 

 

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LIST OF FIGURES

P.

1 IDC 2015 EMEA Networking Survey Sample by Company Size 1

2 IDC's 3rd Platform 2

3 Use of Virtualization Technologies by Company Size 5

4 Use of Integrated Systems and End-to-End Management 5

5 Enhancing IT Service Delivery 9

6 Preferred Channel for IT Purchasing 11

7 Network Life-Cycle Service Preferences 13

8 Staff Networking Certification 14

9 Assessing Networks for Capability and Maturity 15

10 Top Networking Challenges 16

11 Limitations on Improving Network Infrastructure 17

 

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METHODOLOGY

In the second half of 2015, IDC conducted a survey and combined it with IDC's ongoing research into networking and ICT technologies to identify key networking challenges that enterprises across EMEA face and their views on solutions to those challenges. The focus is on France, Italy, Switzerland, and Turkey (representing 60% of the sample). The survey also includes respondents from 14 other EMEA countries, evenly distributed among developed and emerging economies in the region. The respondents' companies all have more than 250 employees, with the sample split fairly equally between companies with 250–499, 500–999, and 1,000+ employees.

FIGURE 1

IDC 2015 EMEA Networking Survey Sample by Company Size

Source: IDC, 2015

In analyzing the survey, IDC has used its extensive coverage of IT markets through its syndicated research published in continuous information services (CISs) such as EMEA Enterprise Networks and Life-Cycle Services. For IT and networking technologies outlook, IDC has used forecasts from syndicated studies such as the EMEA Quarterly Ethernet Switch Tracker, EMEA Quarterly Router Tracker, EMEA Quarterly WLAN Tracker, and EMEA Quarterly Server Virtualization Tracker.

IN THIS WHITE PAPER

This IDC White Paper presents the results of the survey exploring the views of medium and large enterprises in EMEA on major aspects of their IT and networking operations, advanced IT and network technologies adoption trends, purchasing behavior, staff qualifications, and certification. Based on survey results, and on its ongoing IT and networking research, IDC has also analyzed the main networking trends and their adoption among the enterprises in EMEA, including qualitative projections of networking ecosystem and market transformation.

 

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SITUATION OVERVIEW

ICT environments in enterprises are facing a far-reaching technological transformation influenced by what IDC calls the 3rd Platform of ICT. Four mega trends — cloud, Big Data, mobility, and social business — are changing not only the way that ICT is deployed and used, but also the way the businesses themselves operate.

FIGURE 2

IDC's 3rd Platform

Source: IDC, 2015

For enterprises to realize the benefits of the 3rd Platform, ICT infrastructure itself has to change. Networking, as part of that infrastructure, lies at the intersection of the 3rd Platform trends: networking connects the datacenter, which is key for providing cloud services, and Big Data; it connects branch and campus environments, providing mobility to end-user devices; and it supports all four 3rd Platform trends by carrying every bit of information generated by users, autonomous devices, and applications.

When considering the transformative pressures facing networking today, IDC identifies the main axes of change as follows:

Flexibility and agility. Changing the way an enterprise network works has traditionally been a lengthy exercise, usually performed manually by a specialized team of networking engineers. Nowadays, expectations that drive networking are much more different — changes need to be implemented fast, preferably automatically in line with the demands of

 

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applications traversing the network. Similarly, introducing new services to the network should also be automated and accelerated. Thus, networks have to change along this axis from static to dynamically flexible.

Openness. Networks are probably the only sector of the current ICT environment where tight coupling of operating systems and hardware is mainstream and vendor lock-in is a major issue. To achieve transition to the 3rd Platform, enterprise networking will have to embrace openness — not for the sake of being open, but to realize the benefits of innovation and advanced architectures that enable the changing role of networks, from providing connectivity across the enterprise to supporting business goals. Becoming more open, networks will benefit from the increased pace of innovation. Likewise, decoupling of software and hardware will enable acceleration of software innovation.

Manageability. Traditional network environments required highly skilled, specialized staff to support them. In the ICT environment driven by 3rd Platform demands, the whole infrastructure will ideally be managed as one continuous space, based on application performance and demands. In IDC's view, rather than remaining the domain of very specialized staff skilled in "keeping the lights on" by maintaining connectivity, future networks will be managed as a part of integrated IT infrastructure with a view of supporting business goals by ensuring application performance and supporting the introduction of new services across that IT infrastructure.

In this white paper, we try to ascertain the actual state of development that enterprises across EMEA have achieved in transforming their networks — in absolute terms and in relation to the transformation of overall IT infrastructure.

The Role of IT and Networking in Business

When asked about the perception of IT within the senior management of their company, almost a third of respondents said that IT is increasingly tasked with helping to generate new revenue streams or aid competitiveness. This implies the need for flexibility and agility, along with the right cost structure, to deliver these benefits. However, around half of all respondents see IT as an enabler of business efficiency, while the remainder see IT as a necessary cost.

Management of smaller companies tends to see IT as a cost center much more frequently than the larger ones; the bigger the companies in the sample, the more strategic is the role of IT.

TABLE 1

Attitudes Toward IT Investment

Q. Which statement best reflects how the role of IT within the company is seen by the senior management?

250–499 500–999 1,000+ Total

IT is seen as a necessary cost 32% 13% 9% 17%

IT is seen as an enabler of business efficiency 44% 53% 54% 51%

IT is seen as a driver of competitive advantage and/or revenue growth 24% 35% 36% 32%

n = 786

Source: IDC, 2015

 

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The great majority of companies surveyed said they are thinking of IT in terms of services delivered, with only 4% saying they don't do this to a significant degree — the balance do this across a significant portion (45%) or all of their infrastructure (50%). When it comes to delivering new services across their IT infrastructure, the situation is less favorable — 23% of all respondents struggle with requests for new or enhanced services. A small number of IT departments surveyed (2%) struggle to deal with most requests, while a majority of respondents are either generally capable of delivering existing, enhanced, and new services, or have no problems delivering all services (58% and 17% respectively).

Smaller companies (38%) have the biggest issue with affecting change — larger companies are better, but there is still a lot of room for improvement.

TABLE 2

IT Department Capabilities

Q. When it comes to delivering on business requests for new or enhanced applications or services, which statement best reflects your IT department's capabilities?

250–499 500–999 1,000+ Total

We struggle to deal with most requests 6% 1% 0% 2%

We are generally OK with requests around existing applications or services, but struggle with requests for new or enhanced services

32% 26% 13% 23%

We are generally OK with requests both for existing applications and services, and new or enhanced services

41% 60% 69% 58%

We are very good at delivery on most or all requests 21% 14% 17% 17%

n = 786

Source: IDC, 2015

Technology Adoption

The attitudes toward adopting new technologies among the surveyed enterprises show that the majority of the market could be described as followers (34% wait until technology is mature and proven to work, and 11% closely follow their peers). The second largest cluster could be described as "opportunists" — 36% of respondents said they are quick to adopt new technologies if they see tangible business benefits. Finally, 13% of respondents could be described as "leaders," responding that they actively seek new technologies to support business growth.

According to the survey results, virtualization has firmly taken root in enterprise IT — but when comparing the level of virtualization in different hardware domains, networking is well behind. The survey showed that 66% of respondents extensively use storage virtualization in their infrastructure, while 64% extensively use server virtualization. In comparison, 37% of respondents reported using networking virtualization extensively, and only 14% report using network function virtualization extensively.

 

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FIGURE 3

Use of Virtualization Technologies by Company Size

Source: IDC, 2015

Virtualization usage patterns look different when viewed across company sizes — for server virtualization there are no significant differences in adoption, storage virtualization has slightly higher adoption rates in larger organizations, and network virtualization adoption is much higher in larger organizations. One way to bridge the gap in virtualization between servers and storage on one side and networking on the other would be to use integrated systems with common management interfaces. But, though the use of integrated systems is high, with 62% of respondents using them extensively, end-to-end systems management is lacking — 37% of enterprises surveyed use this extensively and 49% only to a small extent.

FIGURE 4

Use of Integrated Systems and End-to-End Management

Source: IDC, 2015

 

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The publicity and activity around SDN have been very intense over the past few years, but the survey results confirm a widely held view that practical use of SDN in enterprises is in its very early stages. Just over 20% of all enterprises surveyed have practical experience with SDN. Of those, 1% use it extensively, 4% have limited operational experience, and the remaining 14% have experience with pilot deployments. A significant share of respondents (27%) reported no knowledge of SDN, while 53% said they know about SDN but have no practical experience of it.

Similar results were recorded on the topics of decoupling networking OS from hardware — 1% of respondents use it extensively, 3% have some operational experience, and 14% are running pilot projects. The pattern repeats itself again with open networking and use of multiple vendors for networking hardware and software.

These results, in IDC's view, point to significant gaps in knowledge about SDN, awareness of practical applications for SDN, and awareness of availability of open source software, protocols, and tools that can enable easy trial deployments of SDN. IDC believes that another underlying problem affecting SDN adoption is the skills gap — with the majority of networking staff not certified or certified to perform basic tasks only, the in-house skills required to deploy new approaches to deploying and running the networks simply do not exist in many organizations.

Organization, Management, and Automation

The theme of integration and doing away with the "siloed" philosophy of operating IT infrastructure seems to be gaining ground in enterprise IT. When asked about their operations, a large number of respondents said their server, storage, and networking teams are integrated.

TABLE 3

IT Team Organization by Company Size

Q. What statement best describes the setup of your IT operations teams?

250–499 500–999 1,000+ Total

We have separate server, storage, and networking teams 10% 4% 7% 7%

We have integrated server and storage teams, with a separate networking team

24% 34% 36% 32%

We have integrated server and networking teams, with a separate storage team

21% 25% 20% 22%

We have integrated storage and networking teams, with a separate server team

4% 7% 9% 7%

We have an integrated server, storage, and networking team 41% 30% 27% 32%

n = 786

Source: IDC, 2015

An equally large number, however, said they run integrated server and storage teams, with networking separate. On the positive side, a fairly small number of organizations have all three teams working separately, while around a fifth of organizations have integrated server and networking teams. These results indicate that the enterprises, and their suppliers, should focus on

 

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enabling integration of networking teams into common operations teams. Part of this could be promoting end-to-end platforms and management tools; another, cross-certification of IT staff in more than one technology used in the infrastructure.

When it comes to the tools that organizations use for managing their infrastructure, the picture is varied, but an overarching theme is that very few respondent organizations use end-to-end management tools. For overall IT infrastructure and campus networks this percentage is 3%, and for datacenter networks end-to-end management is used in approximately the same percentage of enterprises. This, compared with the level of organizational integration, indicates a significant lag between establishing common IT practices and adopting end-to-end tools for these integrated teams.

The level of adoption of different management tools differs, particularly between overall IT management trends and datacenter networking management trends.

TABLE 4

Use of Management Tools

Q. Which statement best describes how you manage the following: IT infrastructure, datacenter network, and campus network?

IT Infrastructure DC Networks Campus Networks

Very ad hoc using spreadsheets etc. 4% 4% 2%

We mainly use out-of-the-box tools from our hardware suppliers

16% 20% 19%

We use a combination of specialized management tools with some out-of-the-box tools

55% 39% 43%

We mainly use specialized management tools 21% 34% 13%

We use an integrated end-to-end service management suite

3% 3% 3%

N/A (not applicable) 0% 1% 19%

n = 786

Source: IDC, 2015

This increased use of specialized management tools in datacenter networks likely points to the intersection of two trends affecting this domain: it is under pressure to perform in unison with other parts of DC infrastructure, while mostly remaining closed and separate from compute and storage parts of the stack. IDC views specialized tool adoption as a stepping stone toward end-to-end management and finally automation — as soon as enterprises see the efficiency gains that specialized tools provide, the focus will turn to end-to-end management and automation.

This notion is also illustrated in the current levels of automation across general IT infrastructure, and networking in particular, where the use of automation, particularly in DC networking, is higher than the use of automation in IT infrastructure overall.

 

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TABLE 5

Use of Automation in IT and Networking

Q. To what level have you adopted automation in IT infrastructure, datacenter networks, and campus networks?

IT Infrastructure DC Networks Campus Networks

Manual processes across the board 10% 2% 6%

Mainly manual processes with a small amount of automation

42% 35% 33%

A good balance of automation and manual processes

37% 54% 34%

Mainly automation with a small amount of manual processes

9% 7% 6%

Automation across the board 1% 1% 2%

N/A (not applicable) 0% 1% 18%

n = 786

Source: IDC, 2015

A dominant view on the future of automation is a cautious increase — for general IT, 56% of respondents indicated that they plan to adopt a bit more automation and 3% said they plan to automate a lot more. The results for networking differ somewhat from this — 43% and 29% of respondents responded that they will introduce more automation into their datacenter networks and campus networks, respectively; 3% said they want to increase automation in the datacenter networks a lot and 8% said the same for increasing automation in campus networks.

When it comes to IT service delivery, the dominant view seems to be that monitoring and reporting is essential, be it for the application performance, end-user satisfaction, or service level. However, closing the feedback loop between the monitoring aspect, and changes to IT infrastructure with automation, is lower on the priority list.

 

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FIGURE 5

Enhancing IT Service Delivery

Source: IDC, 2015

Investment and Purchasing Behavior

Networking investment by the companies surveyed seems to be more constrained than investment available for IT infrastructure in general. Around 24% of respondents said their company's investment in networking is not enough for, or barely covers, essential operations, compared with 16% who said the same for general IT.

The percentage of respondent organizations where investment was said to be enough for core operations, but not enough for new initiatives, was similar for networking and IT overall — 48% and

 

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49% respectively. Finally, the percentage of organizations that found investment in networking was enough for future initiatives, or future initiatives and experimentation, was 28%. The same percentage for IT overall was 37%. Purchasing behavior tends to be more strategic for IT overall than for networking — 49% of respondents said they predominantly buy their infrastructure strategically. This percentage drops to 20% for networking.

TABLE 6

Strategic Versus Ad Hoc Purchasing — IT Overall

Q. When it comes to buying IT infrastructure, what statement best describes your approach?

250–499 500–999 1,000+ Total

We buy servers, storage, or networking separately or on an ad hoc basis

15% 22% 24% 21%

We mostly buy servers, storage, or networking separately or on an ad hoc basis, but on occasion we buy them together as part of a strategic plan

37% 28% 29% 31%

We buy most of our servers, storage, and networking together as part of a strategic plan

22% 28% 24% 25%

We buy all our servers, storage, and networking infrastructure together as part of a strategic plan

26% 22% 23% 24%

n = 786

Source: IDC, 2015

TABLE 7

Strategic Versus Ad Hoc Purchasing — Networking

250–499 500–999 1,000+ Total

We tend to buy ad hoc as the need arises 31% 22% 15% 22%

We mostly buy ad hoc, but buy strategically in certain areas of the network

25% 12% 11% 15%

We have a balance of strategic investment and ad hoc buying 31% 46% 46% 42%

We mostly buy strategically, with a little ad hoc purchasing 5% 17% 21% 15%

We buy strategically as much as possible 8% 3% 7% 6%

n = 786

Source: IDC, 2015

 

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The spending constraints, and stronger likelihood of making ad hoc purchases, suggest that networking is seen as a costly part of the infrastructure that is most likely to be purchased when the existing capacity or performance is seen to be insufficient. This reflects the traditional place networking had within the overall IT infrastructure, where it is seen as little more than a connectivity provider. The differences between views on strategic buying of IT in general and networking are not dramatic, however. In IDC's view this points to the fact that networking is increasingly viewed as part of an integrated IT infrastructure, rather than as a silo on its own.

In networking equipment purchasing behavior, enterprises tend to mainly rely on general IT resellers, and this is most visible in purchasing datacenter networking — almost two-thirds of respondents buy DC networking from general IT resellers extensively. Next come service providers and system integrators. For campus networks the order of preferred channel partners is the same, but the percentages are much lower.

FIGURE 6

Preferred Channel for IT Purchasing

Source: IDC, 2015

Vendor direct sales is the least common way of purchasing networking equipment. In IDC's opinion, these results reflect the status quo — most of the legacy installed base has been sold through channel partners, and the networking industry as a whole continues to be a channel-oriented business, with the roles of vendor and partner more or less firmly established.

Channel partners' position in networking seems to be very secure in both service and support. Although IT vendors play a more prominent role as service and support providers than third parties overall, most respondents do not have a clear preference in terms of buying services from IT vendors and third parties. This indicates that although a lot of enterprises want to have close contact with the vendor when it comes to services and support, channel partners and other third parties remain a very important part of the services and support ecosystem. The preference for third parties only as providers of service and support declines with the company size. In IDC's view, this likely indicates a decreasing level of confidence in third-party skills when deployments become big and complex.

 

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TABLE 8

IT Service and Support Buying Behavior

250–499 500–999 1,000+ Total

We tend to buy IT services and support from a third-party partner organization

28% 20% 14% 20%

We to tend to buy IT services and support directly from the IT infrastructure vendors

40% 38% 39% 39%

We don't really have a preference either way 32% 42% 47% 41%

n = 786

Source: IDC, 2015

Regarding the networking life-cycle services that respondent companies acquire, the most popular are integration services, with more than half of respondent companies using them. Design, implementation, and optimization follow.

 

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FIGURE 7

Network Life-Cycle Service Preferences

Source: IDC, 2015

The least popular are trade-in and early upgrade, leasing, and assessment services. Different services exhibit different trends across company sizes as well — larger companies tend to need more assistance in design, integration, and optimization, while smaller companies tend to acquire more implementation, management services, financing, and leasing.

 

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Skills, Certification, and Assessment

Networking skills seem to be a long neglected area of expertise in enterprise IT. The percentage of respondents that do not have networking skills to develop new projects and initiatives is fairly high, at 17%. The majority of these enterprises use third parties to help with new initiatives. 46% of organizations surveyed use third parties to develop skills ahead of new projects, while 37% of enterprises develop the necessary skills themselves before new projects.

The skills gap is quite evident when it comes to staff certification — 72% of the survey sample have none, or less than half, of their networking staff certified on a basic level, while 91% are in the same situation when it comes to the advanced certifications.

FIGURE 8

Staff Networking Certification

Source: IDC, 2015

Staff certifications are viewed as important in helping staff development, partner selection, and improving the quality of IT. What is perhaps surprising is that the value of certifications is generally not in question — 73% of respondents said they provide good value for money. At the same time, 62% of respondents think they are expensive.

An underlying issue here could be the current make up of the training landscape and the perception of staff certification in the higher echelons of IT and business management. Since most of the networking installed base consists of proprietary, closed architectures, which have very poor interoperability even among generations of one vendor's equipment, a basic level of staff proficiency to keep the lights on is viewed as sufficient. For transformative tasks that bring business value, staff need to be certified to an advanced degree, but the cost of this certification, when tied to proprietary systems and closed architectures, is likely to be seen as prohibitive. Furthermore, there are numerous open standards in networking and it is unclear which standard

 

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will prevail in the end — this does not incentivize companies to certify their staff in new networking architectures or open standards. Assessing the networks for maturity and capability is in most cases an internal function in respondent organizations, but a large number of respondents either doesn't assess their networks at all or assesses them informally and internally.

FIGURE 9

Assessing Networks for Capability and Maturity

Source: IDC, 2015

The survey results in this area point to the relative immaturity and insular nature of networking within the overall IT environment. However, a large number of respondents use external assessments and this percentage increases somewhat with company size. This, in IDC's view, shows that the market is maturing, and that external, or at least formal, assessments are becoming more mainstream.

Networking Challenges

The main networking challenges highlighted by the survey respondents are a traditional set of problems, with day-to-day worries around security, performance, and costs still top of mind. In IDC's view, these challenges mostly point to the fact that in today's IT environment most legacy networks have reached their limits of efficiency and manageability.

 

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FIGURE 10

Top Networking Challenges

Source: IDC, 2015

The fact that security is listed as one of the top networking challenges by almost 60% of respondents points to the realistic limitations that static, traditional networks, deployed with a traditional perimeter-based security model, face in today's changing IT environment. Traffic patterns are unpredictable and dynamically changing, virtualization is widespread, and the use of cloud services complicates the situation even further. Overcoming the security challenge, however, is one of the main use cases for implementation of SDN. In IDC's opinion, the results of the survey in this case point to the need to emphasize the role that SDN can play to achieve excellence in network security.

Bandwidth, cost, and latency challenges again highlight the traditional networking pain points — networks are viewed as costly and are improved only to solve serious performance issues.

 

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Manageability is another top 5 challenge, showing that there is a lot of potential for improvement there, despite fairly widespread use of specialized management tools in DC networks, as seen above.

The main challenges that respondents highlighted in improving networking infrastructure also point to a preoccupation with day-to-day operations — juggling conflicting priorities, budget constraints, and lack of operational resources.

FIGURE 11

Limitations on Improving Network Infrastructure

Source: IDC, 2015

 

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Figure 11 paints a fairly grim picture of networking departments, where keeping pace with day-to-day operations seems to preclude efforts to improve the networks and enhance their capabilities. This, in IDC's view, suggests a need for fundamental change in the way networks are built, operated, and managed. These fundamental changes are best described by the following causality chain:

1. A dearth of resources for day-to-day operations can be solved by increasing automation.

2. A high level of automation requires network virtualization and/or SDN.

3. Network virtualization and SDN can be deployed cost effectively by using standard, open software solutions and architectures.

4. If network virtualization and SDN are deployed as part of an infrastructure integration effort, efficiency gains are even more pronounced.

While most networking vendors agree on points 1, 2, and 4, the third remains contentious. Some vendors maintain that only tightly coupled, proprietary software and hardware architectures can lead to proven results in SDN, and consequently in solving the main challenges that networks face today. Most market players, however, acknowledge that open environments, standards, and decoupling software and hardware can lead to equal or better results, while keeping costs under control. In IDC's view, customers, especially in this early phase of networking market transformation, are more likely to follow the path that avoids vendor lock-in, as that is the path that most early adopters are now choosing. To be able to successfully complete the transition, however, most mainstream enterprises will need information, incentives, and skills that are lacking in the marketplace today.

FUTURE OUTLOOK

IDC believes that the future of networking — as well as the overall IT infrastructure — will be shaped by increased plasticity, software innovation, and integration of previously separate technologies into integrated, converged, and software-defined clusters.

Rather than undergoing software-defined transformation on its own and maintaining separate technology domains, networking will eventually be subsumed into cloud-oriented software and hardware integrated stacks, which will increasingly lose their differentiating hardware features. In the transition phase, however, adoption of SDN principles, open standards, and network virtualization solutions will enable tighter integration of networking into IT hardware environments. These changes will have a number of repercussions. Organizational changes and integration of IT operational teams within enterprises in EMEA, as we can see in the results of the survey, are already well underway. Other trends that are already taking pace are deployment of integrated and hyper-integrated infrastructure stacks.

IDC views further adoption of architectures, techniques, and tools leading to the unified software-defined infrastructure as inevitable, but the pace of adoption is uncertain. IDC expects enterprises to adopt SDN, open networking, network virtualization, and the associated trends of automation and end-to-end infrastructure management quickly, once certain conditions are met. From the results of the survey, IDC concludes that the main conditions to be met are the following:

General awareness of and consensus on the benefits that new networking architectures bring. Many respondents said they are facing problems in their day-to-day operations that SDN, open networking, and network virtualization are designed to solve. The majority of respondents also said they know about these trends, but very few actually use SDN and other new technologies in their live networks.

 

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Networking innovation has to show practical business benefits. A large proportion of companies surveyed can be classified as "followers" when it comes to technology adoption — and networking is no exception. The momentum in new networking technologies adoption will increase once the critical mass of early adopters, across all relevant verticals, gains enough experience with SDN, open networking, and network virtualization deployments, and the business impact can be measured more precisely and practically.

Organizations need to build up their skill levels in the ecosystem. As the survey shows, there is still a networking skills shortage among surveyed organizations, and the majority of these skills are primarily focused on keeping the lights on — not transforming the infrastructure. Also, enterprises tend to leave the network design, implementation, and integration to vendors and third-party organizations. As adoption of networking innovation will in many cases be linked with significant network overhauls, vendors and their channel must develop a skilled workforce to implement new networking architectures on clients' behalf. In parallel, training and certification efforts need to intensify as well.

Once the critical mass of new networking technologies is reached, IDC expects the current trends of commoditization of networking hardware, infrastructure integration, and software innovation to accelerate and dramatically change the networking landscape, both in terms of value generated and competitive situation. In terms of value generated, the expected effect will likely be an accelerated shift of revenue from hardware to software and services. The services component will be especially important: as witnessed in the compute domain, a massive industry has grown based on open source software with services as its main revenue source. It will likely happen again in the networking, or integrated infrastructure, domain.

In terms of competitive situation, players relying on proprietary technologies will likely be forced to seek competitive differentiation from a much narrower niche in the market. The use of "merchant silicon" is a reality; in the near future, networking node designs will become open source and commoditized (some open source designs exist today). Competition among networking operating systems is also a reality, and will become mainstream in the near future. In the final stage, the differentiation between different hardware components — servers, storage, and networking — will diminish significantly. Insisting on proprietary architectures in such an environment will become unfeasible, as such architectures will either be prohibitively expensive to customers compared with open solutions or prohibitively expensive to design and deploy for vendors.

CHALLENGES/OPPORTUNITIES

The challenges facing the networking ecosystem in managing impending transformation stem from the inevitable clash of the networking status quo on one side and the networking needs of businesses and their 3rd Platform–driven IT infrastructures on the other. IDC believes that the networking ecosystem is unique in the IT infrastructure ecosystem, mainly due to the:

Overwhelming dominance of one vendor

Extremely low use of open standards and open source solutions

Isolation of networking from other parts of the IT infrastructure

Proprietary, manually managed architectures

Relatively slow pace of innovation, with the lack of industry consensus impacting interoperability and investment protection

Recently, however, some vendors have focused on these issues with a view to integrating networking further into the IT infrastructure, introducing openness into the ecosystem, accelerating innovation, and ensuring operational efficiency through automation. As the survey analyzed in this

 

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paper shows, these market developments have already started to affect the market. To bring about full-blown market disruption, vendors need to:

Increase knowledge among their partners and client base of the advanced networking techniques and benefits they can offer.

Develop a compelling set of use cases, case studies, and targeted technical solutions that show the clear business benefits of networking transformation.

Improve solution and service capability to assist enterprises in all stages of IT and networking infrastructure design, deployment and operation.

Develop or bolster the ability to support integrated IT operations within enterprises.

Accelerate training and certification of their own, partner, and client personnel in advanced networking technologies.

Disrupting the networking status quo will need action on all these fronts, in addition to keeping up the pace of innovation in fundamental networking and IT technologies.

CONCLUSION

The results of the networking survey IDC conducted in support of this white paper can best be summarized as a balance of the confirmation of some generally accepted facts and some developments that are probably proceeding faster than expected. The key points include:

The use of advanced networking techniques, network function virtualization, and automation is generally in the very early stages when it comes to live deployments, although trials are well under way and are becoming mainstream, especially for SDN. Networking virtualization and the use of integrated systems are at a much more mature phase, and IDC expects these two trends to help accelerate the former.

The main networking challenges are the result of traditional network designs and are inherent to legacy networks operating today. There's little focus on solving these challenges in enterprises because existing networking departments are too busy dealing with day-to-day operations. Overcoming current networking challenges requires much faster adoption of automation, which in turn requires adoption of SDN and virtualization. Ideally, through use of open networking, and open source in general, adoption of these technologies will be cost efficient and future-proof. Vendors and their partners need to help their clients understand this connection.

The networking skills shortage is a major issue in the surveyed organizations, especially in skills that could potentially support networking transformation; vendors and their partners need to bolster enterprise clients' capabilities here by providing advanced services. This should serve as a catalyst to accelerate adoption of advanced networking technologies.

As networking transformation takes place, networks will become a more integrated part of the unified, integrated IT infrastructure. As such, it is inevitable that networks will be more influenced by the trends toward software-centricity, software innovation, automation, and openness that are commonplace in other IT domains. The shift in value derived from deployments of such networking solutions will be gradual at first, but far-reaching, and this has already begun. In IDC's view, vendors and their partners that understand this dynamic, and act on it, will play an important role in the future. IDC believes enterprises should transform their networks in step with adopting integrated infrastructure, virtualization, and automation. Otherwise, discord between traditional, static networks and dynamic, virtualized IT infrastructure is likely to create discrepancies that will in turn lead to operational problems and disruptions in providing services to internal and external clients. For this transformation to be cost efficient and future-proof, enterprises should insist on interoperability and widespread use of open standards in software and networking architectures.

 

 

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