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Network on Demand: Reshaping businesses

November 06, 2017
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By Amit Raj Bathla, Director and Head of Marketing, APAC, Alcatel-Lucent Enterprise

Data consumption is on the rise. As noted in a report by the International Data Corporation (IDC), the growing uptake of smartphones in developing countries in the Asia-Pacific (APAC) region is expected to increase the mobile data traffic elevenfold between 2013 and 2018. Video content is likely to make up 79 per cent of all internet traffic in 2018. To this end, a stronger and more agile network is needed to accommodate the growing consumer base and its increased demand for faster and focused information flow.

According to 451 Research, an IT research and advisory company, in 2017, organisations will fundamentally change the way they use networks to reach their remotest offices through software-defined wide area network (SD-WAN) connectivity. Moreover, they will connect more users and devices through wireless local area network (WLAN) technology.

With internet of things (IoT) and machine-to-machine driving the proliferation of remote devices, the complexity of distributed networks is increasing, along with a growing focus on secure and reliable remote site management. IT departments want to order network services in real time. In such a scenario, network-on-demand provides the next-generation experience of expanding and managing the network from the cloud to attain a profitable IT infrastructure.

Need for a profitable enterprise set-up

Industries are facing a massive challenge to build profitable networking technologies and acquire skills to support them, given the budget constraints. Thus, the pay-per-use model has become a hit among enterprises across the globe, especially in the APAC region.

Businesses in this region are concentrating on accelerating their digital capabilities within enterprises. As a result, they are rapidly changing their working models and shifting their networks to cloud. IDC states that by 2020, 80 per cent of IT infrastructure will be on a pay-as-you-go basis. The focus is shifting to the new network-on-demand model since the unified and secure LAN or Wi-Fi managed services offer automated, out-of-the box cloud-managed tools.

A pay-per-use monitor mechanism has allowed enterprises across the world to measure their cloud-based IT resource use according to a predefined pricing parameter. It also generates usage logs for fee calculations and billing purposes. Some monitoring variables followed in the APAC region are request/response message quantity, transmitted data volume and bandwidth consumption.

Growth pattern of network-on-demand

Experts believe that by 2020 software and hardware purchases by enterprises will be subscription-based and that by 2018 65 per cent of the assets of all companies’ will be offsite, while a third of their IT staff will be employees of third-party service providers. This highlights the evolving role of IT as a hybrid business. The network-on-demand model improves customer experience, empowers IT managers to control networks at a simple click of a button and allows companies to only pay for what they use.

Sinking deeper into the industry

Today, industries such as education and hospitality, and government projects involving smart cities have high data usage. It is these types of businesses that are moving to a pay-per-use model to keep costs down.

With the rapid digitalisation of businesses and the scope of growth in the APAC region, network providers are realising the potential of the pay-per-use model. This is simply because the other costs related to infrastructure were high and the data quality low due to the large-scale use of broadband (LAN/Wi-Fi) service.

Trends shaping IT infrastructure

As per 451 Research’s findings on networking trends, the networking industry will get a facelift in 2017. SD-WAN adoption will effectively cap further investment in the multi-billion dollar MPLS VPN market by lowering costs for last-mile connectivity while improving the ease of operation and activation speed.

Enterprise networking vendors will pay billions for remaining WLAN pure plays to stoke their growth engines for at least the next decade. IoT, analytics and security initiatives will expand in 2017 and ownership of WLAN assets will be integral to fulfilling these initiatives. Network and service orchestration and management will continue to baffle carriers. It will be one of the largest deterrents to large-scale carrier deployment of software-defined networking/network functions virtualisation.

The onset of these trends will call for consumption-based models that would provide simple and immediate access to technology resources. The network-on-demand approach will ensure that businesses are always at or near the leading edge of technology. It is sure to add a positive flavour to many organisations across the globe, especially in APAC, since many organisations are still trying to break the shackles of the traditional approach and step into completely digitalised versions of their businesses.

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