Enterprises Rely On Service Providers To Aid In Modern ... · refresh and/or optimize their network...

A Forrester Consulting Thought Leadership Paper Commissioned By Intel

November 2018

Accelerate Network Transformation To Win BusinessEnterprises Rely On Service Providers To Aid In Modern Networking Initiatives

Table Of Contents

Executive Summary

Network Transformation Is A Critical Component Of Digital Transformation

Outsourced Providers Fill Skill Gaps And Accelerate Adoption

Service Providers Must Optimize Speed, Cost, And Reliability

Key Recommendations

Appendix

1

2

4

6

8

9

ABOUT FORRESTER CONSULTING

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Project Director: Mark Brozek, Principal Market Impact Consultant

Contributing Research: Forrester’s Infrastructure & Operations research group

Executive SummaryThe past has been lean for service companies in the networking space. Generally speaking, telcos provided equipment, and internal teams managed enterprise networks on their own. But the world is changing. With the proliferation of internet of things (IoT), cloud, and other digital transformation initiatives, enterprise networks must spread digital services across vast locations, supporting a wide range of evolving, data-hungry technologies. Most businesses are not equipped to build and scale these new networks on their own. Internet service providers (ISPs), managed service providers (MSPs), and other networking service partners are innovating and competing head-on to deliver the best services and win business from enterprises as they transform their infrastructure.

In May 2018, Intel commissioned Forrester Consulting to evaluate global enterprise networking priorities, challenges, and investment criteria. Forrester conducted an online survey of 714 enterprise network transformation decision makers in the US, EMEA, and APAC to explore this topic. Forrester found that businesses seek partners/providers that will accelerate their digital transformations by providing architecture that enables performance at scale and connectivity everywhere, while ensuring security.

KEY FINDINGS

› Digital business transformation requires network transformation. Networks are the central nervous systems of digital businesses. Organizations that try to scale up cloud and business intelligence initiatives using legacy network concepts and components quickly run into structural limits.1 Network transformation is mandatory for any organization that wants to modernize its business technology to gain a competitive advantage.

› Enterprise networking pros can’t do it all. While most companies are primarily responsible for their own networks, they lack the knowledge or resources to keep up with the number of initiatives and the pace of change. Organizations rely heavily on various third parties to achieve their network transformation goals.

› Enterprises have many demands of their networking providers. Competition for networking services is stiff and includes traditional telecom providers as well as MSPs, value-added resellers (VARs), and others. Enterprises have a long list of criteria when considering whom to partner with. To win business, service providers must pair exceptional service with solutions that are reliable, modern, and fast to deploy.

Network modernization is required to support emerging cloud and IoT initiatives, but most businesses need help.

1 | Accelerate Network Transformation To Win Business

Network Transformation Is A Critical Component Of Digital TransformationDigital transformation is primarily driven by the desire to leverage technology to better understand, engage, and satisfy customers. To this end, technology executives cite improving innovation and insight-driving analytic capabilities as top priorities for the next year.2 These are not small projects; success requires unprecedented agility and scalability. Retooling the underlying IT infrastructure — with cloud at the forefront — is a must for organizations looking to achieve these goals. And of course, this must include a network that can connect everything and move data at the speed of the business. Our study found that enterprises are undergoing significant network transformation as part of their digital transformation initiatives:

› Existing networks cannot handle the demands of a digital business. Across regions and industries, enterprises have several IT initiatives on their agendas. They plan to pursue cloud-based services, internet-of-things initiatives, software-defined networking (SDN) and data centers, increased business intelligence, etc. Overwhelmingly, survey respondents indicated that they require new and/or upgraded network tools and services to support each of these initiatives (see Figure 1).

In 2018, at least 50% of businesses plan to virtualize their networks, deploy upgraded wireless access, and become more software-defined.


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Base: 714 enterprise network transformation decision makers Source: A commissioned study conducted by Forrester Consulting on behalf of Intel, May 2018

“Which of the following IT initiatives does your company have on the agenda for the next year that will cause the company to procure new network/telecom services, refresh the network, or upgrade the network?”

This is on our agenda and will require new network tools and/or services

This is on our agenda and will require updates/upgrades to existing network tools and/or services

Cloud-based services 44% 38%

Internet-of-things initiatives 44% 37%

Software-de�ned networking, virtual network, or network function virtualization

43% 38%

Private cloud and/or software-de�ned data center (SDDC) rollouts

42% 38%

Business intelligence and decision-support tools and services

41% 37%

Consolidated or rationalized enterprise application portfolio

36% 42%

Uni�ed communications 37% 40%

Digital transformation initiatives require new network infrastructure.

› Network changes are large, varied, and driven by cloud. Networking pros have a lot on their plates. In 2018, at least half plan to virtualize their networks, deploy upgraded wireless access, and become more software-defined. Many also have planned to refresh and/or optimize their network access and control, security architecture, power management, and campus and branch office switches (see Figure 2).

› The whole business has a stake in networking. If we needed any further evidence that businesses rely on their networks for a competitive advantage, survey respondents told us that 50% of final decisions for networking platforms now involve business executives, and 33% involve other line-of-business stakeholders. These roles are also the ones most commonly building the initial business case for networking investments. IT and technology teams may still take on the lion’s share of researching, deploying, and implementing network technologies, but they are answering to a growing bevy of business stakeholders.


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Base: 714 Enterprise network transformation decision makers Source: A commissioned study conducted by Forrester Consulting on behalf of Intel, May 2018

“What are your biggest network and telecommunications priorities in 2018?”

57% Adopt network-as-a-service

53% Build/expand network functions virtualization (NFV)

52% Virtualize the network or create a virtual network

50% 4G/LTE wireless access or 5G wireless access

50% Build/expand software-de�ned networks (SDNs)

44% Install network access and control (NAC)

42% Zero Trust security architecture

41% Use low-power technologies for IoT connectivity

40% Build out Wi-Fi infrastructure

37% Refresh or upgrade campus and branch of�ce switches

Outsourced Providers Fill Skill Gaps And Accelerate Adoption Organizations must be both strategic and comprehensive in their digital transformations. They need to map out their approaches, pick the right components, integrate them properly, and optimize them for maximum performance. Naturally, each step of this takes time, and the business needed it yesterday. Speed and agility — the very goals businesses are hoping to achieve — are incongruous with radical infrastructure overhauls. This paradox poses a major challenge, particularly for larger and older enterprises with complex and interdependent legacy infrastructure. Networking decision makers inevitably have trouble and often lean heavily on service providers to help. Specifically, our study found that:

› Seventy-six percent of enterprises manage their networks in-house but struggle to do so. Fifty-eight percent of the businesses in our study retain full-time networking professionals who focus solely on the network, and another 18% have in-house employees who design, deploy, and manage their networks as just a partial component of their jobs. As they evaluate a new and expansive list of network technologies, they face many challenges. Top-ranked challenges for these organizations include optimizing operational efficiency, overcoming a lack of skills/knowledge regarding new technology rollouts, and simply having enough resources to support the volume and velocity of digital initiatives that the organization requires (see Figure 3).


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Base: 543 enterprise network transformation decision makers who primarily manage networks in-houseSource: A commissioned study conducted by Forrester Consulting on behalf of Intel, May 2018

“What are your organization’s biggest challenges with networking infrastructure and/or operations?”

Optimizing operations or improving operation ef�ciency

Having the right professionals or knowledge base for new technology rollouts, such as SDN

Having enough resources to support all the digital initiatives

Getting brought in early enough to ensure the network is ready for each new digital or

IT initiative

Making changes at the speed the business or other technonlog teams require

Deciding on the right set of components/architecture to carry the business over the

next �ve years

12% 12% 10%

8%

9% 10%

9% 10% 8%

9% 9% 10%

9% 9% 10%

Networking teams have a lot of new initiatives and struggle to keep up and make decisions around optimization.

Rank 1 Rank 2 Rank 3

12%

10%

11%

5

› Service providers offer extensive value. The common approach to overcoming barriers to network transformation is to use service providers — whether consultants, telecom service providers, VARs, or MSPs. Enterprises lean heavily on these partners to manage and/or assist in various transformation initiatives (see Figure 4). The resulting value that these partners deliver is phenomenal: At least 89% of networking decision makers said that the service providers were “important” or “very important” to each initiative they were involved in.

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“To what extent are service providers involved in supporting each of the following initiatives?”

Business intelligence and decision-support tools and services

Cloud-based services

Private cloud and/or software-de�ned data center (SDDC) rollouts

Uni�ed communications

Software-de�ned networking, virtual network, or network function virtualization

Internet-of-things initiatives

35% 56%

35% 56%

34% 60%

32% 60%

30% 60%

29% 64%

Consolidated or rationalized enterprise application portfolio

28% 62%

Primarily responsible Somewhat or very involved

6

Service Providers Must Optimize Speed, Cost, And ReliabilityTelecom and service providers of all types have a major opportunity to win the business of enterprises that are under the gun to revamp their networks to be fast, resilient, and highly modernized but lack the time and skill sets to do so on their own. To deliver maximum value to these organizations, service providers should consider the following:

› Top service provider relationships are formed based on a combination of trust, service, and cutting-edge technology. We asked network decision makers to think of a service provider relationship that they valued and to tell us what made that relationship successful. Two primary themes emerged: 1) exemplary service, including a reliable, communicative, and trusting relationship; and 2) technology that is modern, high-quality, and efficient to deploy. These themes reemerged when we asked about their top criteria for selecting outside services for network services, which included a combination of expertise, service capabilities, and reliable, integrated solutions (see Figure 5).

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“How important are the following criteria when selecting outside services for networking services (e.g., WAN optimization, load balancing, security, etc.)?” (Showing top six “very important” considerations)

Networking service provider selection criteria include a blend of service and technology considerations.

Reliable solutions

Integration expertise

Customer service

Bundled solutions

Security experitse

Consistent service performance/availability

› Competition for telecommunications services is stiff. Carriers once had a much stronger hold on the enterprise data center network, but other types of service providers have come to play, offering abstracted, aggregated, or proprietary alternatives for connectivity. The increased competition has spurred business innovation throughout the entire telecommunications industry, with new offerings, including expanded coverage and reach, increased cloud tools and services, and cutting-edge IoT and 5G capabilities.3 Enterprises value these extended technology tools and service offerings and rank them highly in their list of telecommunications provider considerations along with performance, availability, and cost (see Figure 6).

› Enterprises need pre-integrated offerings that “just work.” Networking professionals hunger for solutions that are relatively plug-and-play. They desire reliability, performance, integration, and speed of deployment — all of which are easier to achieve if their primary networking hardware and software components are designed and optimized to work together. Eighty-four percent of our survey base has purchased bundled, pre-integrated solutions for at least some of their networking initiatives to date (see Figure 7). Almost all said that they would at least possibly consider doing so again, with 52% saying that they would strongly consider bundled network components to accelerate the speed of transformation. Service providers that are able to deliver the best integrated solutions that that can be deployed quickly, reliably, and securely will be competitive options.

Figure 6

“Which of the following criteria are most important to you when selecting a service provider for telecommunications services?” (Showing those who selected as their top 5 priorities)

Base: 714 enterprise network transformation decision-makers in the US, EMEA, and APACSource: A commissioned study conducted by Forrester Consulting on behalf of Intel, May 2018

42% Consistent service performance (SLAs)

41% Service availability/coverage

38% Overall cost and pricing options (Stabilized or �exible/tiered)

38% Access to technology choices

37% Ability to quickly provision new sites, services

36% Additional value-added/managed services


Figure 7

Base: 714 enterprise network transformation decision makers Note: Percentages do not total 100 because of rounding.Source: A commissioned study conducted by Forrester Consulting on behalf of Intel, May 2018

“Have you purchased any bundled, pre-integrated hardware and software components as part of your network transformation?”

46% Yes; many of our networking purchases have been bundled, pre-integrated solutions

38% Yes; a few of our networking purchases have been bundled, pre-integrated solutions

15% No

Key RecommendationsEmerging digital technologies present great opportunities for enterprises but demand infrastructure changes that internal teams can’t easily manage on their own. The service community has a stronger value proposition to companies in these scenarios than they have in the past. But competition is steep, innovative, and coming from all directions. Forrester’s in-depth survey of global enterprises yielded several important recommendations for service providers to win business and deliver maximum value in this environment:

Deliver relevant emerging technologies. Generic IT systems, such as email or enterprise resource planning systems, are standard resources that offer little competitive differentiation. Most digital initiatives tie directly to the market the business serves. To stand out from the crowd, tune your solutions to a particular business, market, or vertical, and focus on supporting emerging digitals such as cloud, IoT, and SDN.

Eliminate science projects. Businesses don’t have the time or resources to create unique systems like many tier 1 cloud providers have developed over the last decade. To remain relevant, businesses need integrated systems that can be launched and scaled quickly, similar to software-as-a-service. The faster you can help them to get up and running, the more valuable your services will be. Time is of the essence in the era of the mobile mind shift.4

Augment, don’t replace, internal resources. Many businesses aren’t looking to replace their teams but to augment them. Internal teams are an invaluable source of information about the business and legacy systems but are largely focused on running and maintaining that existing infrastructure. The business needs service providers to extend the reach of the business using digital technologies outside of their internal teams’ knowledge and experience.


Appendix A: Methodology In this study, Forrester conducted an online survey of 714 enterprises with 500+ employees in the US, Germany, UK, China, South Korea, Japan, and India to evaluate their networking priorities, challenges, and investment criteria. Survey participants included manager-level and above IT decision makers with responsibility for networking strategies. Respondents were offered a small incentive as a thank you for time spent on the survey. The study was conducted in May 2018.

Appendix B: Demographics/Data

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UK 14%

GEOGRAPHY

COMPANY SIZE

CH 14%

JP 14%

IN 15%

KR 14%

DE 14% US 14%

Base: 714 Enterprise network transformation decision-makers in the US, EMEA, and APACNote: Percentages do not total 100 because of rounding.Source: A commissioned study conducted by Forrester Consulting on behalf of Intel, May 2018

INDUSTRY

8%

8%

7%

6%

5%

5%

5%

5%

5%

5%

5%

4%

4%

4%

4%

4%

4%

4%

4%

3%

IT

Manufacturing and materials

Electronics

Consumer product manufacturing

Financial services and insurance

Construction

Transportation and logistics

Business or consumer services

Retail

Education and non pro�ts

Chemicals and metals

Media and leisure

Legal services

Energy, utilities, and waste management

Government

Healthcare

Telecommunications services

Agriculture, food, and beverage

Advertising or marketing

500 to 999employees

15%

1,000 to 4,999employees

43%

5,000 to 19,999employees

27%

20,000 or moreemployees

16%

Travel and hospitality


Appendix C: Supplemental Material RELATED FORRESTER RESEARCH

“Predictions 2018: Cloud Computing Accelerates Enterprise Transformation Everywhere,” Forrester Research, Inc., November 7, 2017.

“Adapt Your Network Strategy To Thrive In A Shifting Ecosystem,” Forrester Research, Inc., July 28, 2017.

Appendix D: Endnotes1 Source: “Five Tenets Define Virtual Network Infrastructure, A Bold New Business Network,” Forrester Research, Inc., October 20, 2016.

2 Our study found that among VP and C-level technology executives responsible for network transformation, the top five business priorities for the next year include growing revenue, improving the ability to innovate, reducing costs, improving the use of data insights in business decision making, and accelerating the shift to digital business.

3 Source: “Adapt Your Network Strategy To Thrive In A Shifting Ecosystem,” Forrester Research, Inc., July 28, 2017.

4 Mobile mind shift is the idea that a customer can get what they want, when they want it, wherever they are at. Source: “The Mobile Mind Shift Maturity Framework,” Forrester Research, Inc., November 20, 2017.


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