EMEA EnterpriseNetworking

Top 5 Trends for 2019

Moving Toward Digital-Native Networks

An IDC eBook

2019 will see more disruption from software-based networking start-ups capitalizing onthe disaggregation of network hardware andsoftware, as well as shifts from networkvendors and life-cycle services firms to aligntheir portfolios, business models, and talentstrategies to move toward the long-termgoal of delivering end-to-end digital-nativenetworks.

MORE FLEXIBLE,AUTONOMOUS,AND SECUREEND-TO-ENDNETWORKS.

P A G E   1

2019 will be another year of changeas the industry strives toward end-to-enddigital-native networks

The entire network infrastructure marketis moving toward the long-term goal ofend-to-end digital-native networks built onthe convergence of previously distinctboundaries between network types andlocations. These new networks will leveragesolutions such as machine learning, SDN,and intent-based networking to createmore flexible, autonomous, and secureend-to-end networks that simplifyenterprise adoption of tools and processessuch as edge IoT and multicloudenvironments.

P A G E 2

Enterprises need simpler networking solutions todeliver the business outcomes promised bydigital transformation

EMEA SD-WAN Revenue

The enterprise networking industry ischanging as network hardware andsoftware becomes increasinglydisaggregated and the rapid adoptionof new use cases such as edge IoT andmulticloud applications push networkrequirements further than ever before. Legacy, hardware-centric networkswere not built to support thesedemands. In the short term this isdriving interest in more flexiblesoftware-defined networking solutions,such as SD-WAN, and hardware-agnostic network management andorchestration providers such as Apstra. This focus on network software isdecreasing the perceived value ofnamed-vendor hardware, drivingincreased interest in white-box networksolutions and prompting traditionalhardware vendors like Juniper andCisco to start competing on thesoftware layer through acquisitionsand partnerships.

This need for simplicity is also driving demand for consultingand integration services from NLS providers, as enterpriseswant to repurpose as much of their existing infrastructure aspossible. This is a big change from the traditionalinfrastructure services approach, driving transformation inskills and business models.

P A G E 3

Hardware will still be important in the world ofvirtualized networks, especially for key use cases

Although network virtualization is disruptingthe entire market, hardware will still play akey role in certain areas: • Demand for bandwidth and low latencywill continue to grow, especially when newuse cases such as machine learning,augmented reality, and video analyticsbecome widely adopted. These use cases arestill hardware dependent. • Edge IoT use cases in the manufacturing,mining, and oil and gas verticals will requiremore specialized networking equipment, alsodriving hardware value in these verticals.

2019 will see the introduction of two newtechnologies — WiFi 6 and 400Gb Ethernet —reflecting the increasing demand for bandwidthboth at the network edge and in thedatacenter. These new technologies will seeinitial adoption in key verticals: •For WiFi 6, most early deployments willsupport edge IoT use cases in verticals such ashospitality (primarily stadiums), education, andretail. Manufacturing will follow. •For 400GbE, verticals that require superiordatacenter performance, such as financialservices, will be key targets.

2019WILL SEE THEINTRODUCTIONOF TWO NEWTECHNOLOGIES.

To successfully deliver digital-nativenetworking solutions, vendors and life-cycleservices firms need to rethink their strategiesin three key areas: • Technology portfolio• Business models• People and skills Some vendors already started to do this in2018 through M&A and strategicpartnerships, but this is just the tip of theiceberg. We expect to see more M&As throughout2019 as well as new strategy announcementsfocused on these three areas.

P A G E   4

Network vendors and life-cycle services firmsneed to rethink their core strategies to deliverdigital-native networks

CUSTOMERNEEDS

VENDORS ANDLIFE-CYCLESERVICES FIRMSNEED TO RETHINKTHEIR STRATEGIES.

P A G E   5

Based on this market landscape, we expect to seethe following in 2019

Enterprises will struggle to meet their digital transformation goals with legacyinfrastructure and seek cost-effective alternatives. This will drive opportunities for software-defined networking products thatoffer simplicity across multicloud environments.

Software-based solution providers will continue to disrupt the market acrossall domains: branch, edge, core, and datacenter. Hardware-centric vendors will realign their strategy to compete in the era ofdigital-native networks, driving M&As and portfolio changes in 2019.

Vendors who effectively leverage machine-learning and automation will winthe race to offer end-to-end digital-native networks. This will drive M&A and ecosystem partnerships with AI specialists andsoftware-based networking start-ups in 2019.

Edge IoT deployments in verticals like manufacturing, utilities and extractiveindustries will become a key battleground for network hardware vendors. This will drive vertical-focused product releases and strategic partnershipsbetween IT and OT providers.

Enterprise’ talent and skills shortages will drive demand for network lifecycleservices, especially in consulting and integration. To meet this need services firms will have to increase skills in design-thinkingand problem-solving, to be able to deliver more value to enterprise customers.

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This eBook is based on selected results from:

- EMEA Datacenter Network Infrastructure Forecast, 2018–2022

- Western Europe Network Life-Cycle Services Forecast, 2018–2022

- 2018 Year at a Glance: Enterprise Networks and Life-Cycle Services

- EMEA Enterprise Network Equipment Forecast Update, 2018–2022

- EMEA Enterprise Network Equipment Market Shares, 1H18

- Cloud-Managed Networking: Transformation Strategies

- Enterprise Networks for Cloud: How Cloud Maturity is Driving Network

- The Evolution of Cisco Services: Shifting from Hardware to Software

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For more information:

Roz ParkinsonResearch Managerrparkinson@idc.com

Ksenia EfimovaSenior Research Analystkefimova@idc.com

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