By Pankaj Maru.
It is hard to imagine the dominance of IT without thinking of networking. The technology has evolved and expanded extensively to great lengths. In recent times, the proliferation of cloud computing and mobile devices has had a significant overall impact on network infrastructure.
“We are seeing more and more devices going wireless and secondly, with increasing traffic, networks are becoming more and more important in the overall scheme of things,” adds Dias.
In the past, according to Paul, when networks went down it didn’t matter as much as it does now: today the network is a central and critical part of IT.
“From that perspective, we are seeing that networking is actually growing exponentially. Virtualization is another aspect that has pushed networking; the demand for faster networks
providing higher bandwidths has gone up,” says Dias.
As the networks are pushed for higher speeds, Dias points that from a networking speed perspective, 10 Gigabit per second has become the de facto standard and customers are looking to move towards 40 Gigabit kind of infrastructure in future.
“With the increasing traffic, another key aspect of networking that we are seeing is simplicity, automation and configuration. More and more customers are saying they want to reduce complexity of networks as today, a lot of applications are not on physical instances or hardware but are moving into on virtual environment like VMs (virtual machines) sitting on servers, and so networks need to be virtual as well,” elaborates Dias.
Dias points that networks should be aware of virtualization and be able to automatically configure as well as scale up in a very autonomous fashion.
On virtualization, Gupta of Allied Telesis stresses that concepts like virtualization have become a standard offering from multiple networking vendors and today, it has become an industry standard.
The huge impact of IT has brought new challenges as well for networking. With the rise of cloud, mobility and BYOD, today the demands of high bandwidth and faster speeds are increasingly growing and networks are faced with complex problems and management challenges.
“As an IT manager or network administrator, you are loosing control of the networks as those devices and applications are putting immense load and pressure on the security and performance of the networks,” points out Paul. More so, he adds that enterprises moving towards hybrid clouds and converged infrastructure further impacts networks to an extent.
According to research firm IDC, LAN and WLAN distinction would further thin out due to increased acceptance of hybrid networking setup.
Certainly, going by the views of networking players, it is quite easy to gauge the kind of changes and impact the networking industry has witnessed over the past years. Importantly, from an enterprise stand point, the technological shift in networking space has a strong connect with the way businesses and organizations are operating today, according to industry experts.
Changing business models
With networking coming under a significant impact and overall changes in the IT domain, the technology is also faced with new challenges that were not present in the past.
“For the government, its about taking various public welfare schemes and governmental initiatives to masses under a range of e-Governance projects. While for private companies and businesses, it is about reaching to potential customers across India. And so, networks are of high significance and integral for businesses,” says Singh.
From a geographic perspective, Singh points out that India is a very complex, wide (terrain) and tough market to cater. “So networking has huge role to play in the area of communication or connectivity,” says Singh.
Today’s business model is more customer centric that ever before. It’s all about reaching to potential customers and users rather than expect them to come to businesses. Internally, on the other side, enterprises and organizations are slowly transforming themselves to the concepts like BYOD, centralized IT resources and application.
BYOD, SDN
BYOD, for instance, is largely a youth workforce oriented concept many organizations are adopting in recent years. With a lot of pressure to reduce operational cost, organizations are also open to allow work from home or anywhere, which has resulted in centralized cloud-based enterprise applications getting being accessed outside enterprises environment.
Concepts like BYOD, SDN, social media and others are adding lot of pressure on the IT within the organization along with networking. “Networks have not changed but there’s high expectations on networks to adopt to those changes in the IT,” says Singh of Gartner.
Singh points out that for instance, SDN offers features like decoupling of software and networking, networking based security, intelligence and programming. He says that such features on networking were unavailable before and that is where managing networks is very crucial today.
Research firm IDC observes that the increased adoption of the BYOD concept in enterprises would ensure the demand for next generation .ac wireless products promising Gigabit speeds as well as associated network infrastructure.
Gupta of Allied Telesis says that managing networks is an expensive affair for large scale companies and organizations, which is where most vendors are trying to make networks that are simplified in nature and less complex. “From a business and customers perspective, networks are becoming highly traffic intensive and need to be in real-time and customers cannot afford to have to any downtime,” explains Gupta.
With networking vendors trying to push SDN-based products to enterprises, Gupta informs, “We are tying to reduce complexities for enterprises through simple and intelligent networking solutions and switches. Our simple intelligent switches are SDN equivalent and helps organizations in networking automation.”
SDN would continue to gain traction as a concept from the vendor perspective however end user adoption would take more time, as per IDC.
Changing role of networking
The role of networking infrastructure has become extremely crucial to support businesses and services. This role is not restricted just to IT, ITeS, telecommunication and media domains but today it is almost becoming omnipresent and ubiquitous in nature, spanning across industries and segments like banking, insurance, financial services, logistics and so forth.
“The transportation of voice, video and data virtually everywhere through ubiquitous, secure, reliable and high capacity connectivity can radically transform business operations beyond just ERP connectivity. CIOs/CTOs need to look beyond conventional leased line/VPN approach and take advantage of Cloud and connectivity options available,” explains Kumar.
Sharing the experience from the logistic industry, Raj says that the logistic domain has now evolved from traditional client server technology to cloud-based SaaS or PaaS services and the network infrastructure has moved from x25 network to internet based VPN and Frame Relay services.
“The field force which depends mainly on a 2G or 3G network, still face network issues and the cost for 3G services is still high taking into consideration the amount of field staff in a logistics company. These services have to be more stable and cheaper to penetrate into the domain,” explains Raj, talking about how the network infrastructure plays part in the operations of logistic company.
According to Kumar of Tikona Digital Networks, enterprises are increasingly looking for on-demand provisioning of services spanning across multiple service providers. “Service delivery networks are increasingly using Software Defined Anything (SDx) and virtualization to cater to such demands. Mobile applications are redefining how and where computing takes place,” says Kumar.
“The mobile application client running on an internet-connected device takes a load of computing while the application servers are hosted in an increasingly elastically scalable cloud computing platform. With increasing use of mobile application and cloud computing, Wi-Fi is clearly emerging as preferred delivery network inside homes and offices,” adds Kumar.
While quality services remain core to businesses and enterprises, it is the networking infrastructure that comes under tremendous pressure to deliver services without getting disrupted due to technical glitches or maintenance based downtime.
All this demands the networking infrastructure to be highly scalable, robust, secured and reliable to meet service demands. And to enhance the networking infrastructure, companies would require to make with investment of sizable amounts.
According to IDC, data offloading to Wi-Fi hotspots would gain traction as the service providers are looking at alternatives to cater to increasing bandwidth demand from consumers. Further, Access and edge routing spend would continue to grow as the service providers would continue to enhance network coverage while 4G service would trigger fresh investments but would pick up with time, the research firm IDC observes.
“Investment in networking infrastructure to ensure there is connectivity across offices is critical. Thus investment in both network infrastructure and network security plays a key role,” explains Raj.
On the other hand, the evolution of virtualization, SDN, cloud, wireless mobility, 4G or LTE and Internet of Things are pushing networking and network infrastructure to its extreme levels. Such evolution in technology is directly linked to the kind of service demands (both consumer and enterprise related) and costs that are seen in the market today.
Though some of these technologies are yet to mature, Raj of CriticaLog India opines that there is still a long way to go in terms of network stability and reach across India. “Though telecom players are introducing new technologies, the stability and service provided is not in line with the customers expectation, hence failing in lot of areas,” says Raj.
“Consumer services will continue to demand more value (read GB) for money. Affordable and reliable services shall be key. Service providers shall adopt technologies which can lower cost per GB while improving capacity and coverage,” explains Kumar.
Open source technology
Given the cost pressures today, there’s a growing adoption and acceptance of non-proprietary technologies also termed as open source technologies. Off-late the networking industry is moving into open technology and following open standards like Open Network Foundation driven OpenFlow to provide based solutions. However, Singh of Gartner observes that open standards did exist before, but were not moving fast and in parallel with proprietary.
“Open source software alternatives are gaining huge traction in enterprise space. Coupled with cloud services, enterprises shall focus on taking cost advantage from newer technology components while improving security and reliability in their network,” informs Kumar.
Kumar, however stresses that with the increasing complexities in enterprise networks, the need for managed services shall be even more acute. Past many years, organizations have become more dependent on service providers and the concept of managed services has become a standard norm in IT consolidation as well as reducing the overall operational expenses of large enterprises.
Continuing with Kumar’s view, Paul of Juniper Networks says that CIOs are looking at reducing the cost of ownership and looking for cost advantage. “Enterprises in next 2 to 5 years will move into an opex model and will be more dependent on service providers and managed services. Large enterprises are looking for data center consolidation and are moving into primary data centers and data recovery (DR) sites,” explains Paul.
Consolidation though has its own downside as Paul points out that the effect of consolidation is like baking too many things in one bucket. “Enterprises are concerned with complexity, network outages, downtime, management and upgrade issues of software and hardware that coming from the service provider’s side,” says Paul.
Growing demands
Obviously, with so much rapid and radical changes happening in the technology space over the past few years, there is an emerging demand in the networking segment within the IT domain.
However, from an enterprise perspective, the demand for networking products and solutions is typical in nature, largely defined by the business needs as well as technology competitiveness.
Today, vendors and technology suppliers do understand and value what enterprises and their CIOs are looking for.
Compared to IT refreshment cycles, networking and network infrastructure upgrades takes place every 5-6 years on an average, as per industry experts. Given such extended refreshment cycles, for enterprises, investments in networking technology or related procurements are heavily scrutinized.
According to Dias of Brocade Communications, the BFSI is one of the most digitized and networked vertical because everything happens over the network.
“When you compare verticals like IT, ITeS, retail, manufacturing or any other sector, today from my perspective, networking is the underlined fundamental layer for businesses. In today’s time where businesses are running from telephony, videos, voice, mission-critical apps to SAP, CRM and etc., the network is at the heart of the body and you cannot do away by investing in low cost computing,” comments Dias.
However, Dias says that Indian enterprise customers are at par with global customers and points that in today’s time, customers are not looking for vendor brands but are looking for technologies and innovations in terms of automation, integration with virtualization, network function virtualization. These are trends that most CIOs are looking for when it comes to networking technology.
From CIOs’ perspective, Dias explains that with bandwidths and networking hungry applications and high data traffic, the important aspect that CIOs need to look for is networking characteristics such as, how quickly can they configure networks in a simple seamless manner and functionality aspects.
Brocade Communications in the enterprise segment is largely focused on storage area networking, Ethernet campus switches and data center virtualization. In India, the company is seeing demands for storage area networking solutions from telecom and banking. For their IT products, there’s demand coming from government, IT, ITeS and education sector, according to Dias.
Even Gupta of Allied Telesis points that the networking demands are largely comings from IT and banking verticals, besides that demands are seen in the infrastructure, energy and power sectors as there are several government projects in progress through public private partnership (PPP) and joint ventures.
Meanwhile, Gupta points that most CIOs while procuring networks and networking infrastructure are highly concerned on the total cost of ownership, reliability and scalability as well as automation, so that they can reduce cost of manpower in managing networking infrastructure. Beside large enterprises, Gupta adds that SMBs and small organizations today are also investing in networking.
Though the networking industry is all geared to tap any opportunity that comes its way, analysts are closing monitoring the market sentiment amidst the prevailing uncertain sluggish business environment in global markets.
Overall, the networking market looks tough given macroeconomic scenario and demands are not looking very strong, observes Singh of Gartner. He is of the view that networking vendors will need to evolve to remain relevant in the market. “They will try to support SDN or OpenFlow technology to sell their products and solutions or will try to bring new technology that can look at fulfilling requirements of customers,” says Singh.
With technology standards getting more standardized today, Singh reckons that for vendors there are two areas to focus on — emerging markets with new technologies and the established or
matured markets for technology upgrades related requirements.
Unlike IT refreshments, the networking technology upgrades happening mostly after 5 to 6 year’s period, and Singh cautions the market to prepare itself to face tough challenges in the year. “Overall, the market is going through tough challenges with demands on the slower side and technology changing more rapidly than before,” explains Singh.
The IT infrastructure market comprising of servers, storage and networking equipment is expected to reach $3.01 billion by 2016, according to Gartner. The enterprise network equipment market in India, which includes enterprise LAN and WAN equipment, is expected to grow from $861 million in 2012 to $1.2 billion in 2016, estimates Gartner.
ITeS, government, BFSI and manufacturing, besides IT and telecom as potential growth sectors for the IT and networking industry, predicts Singh.
In addition, analysts expect more movements in the area of WLAN, SDN and Internet of Things.
“The increased adoption of BYOD concept in enterprises would ensure the demand for next generation .ac wireless products promising gigabit speeds,” adds Iyer. The overall switch market in 2013 is set to grow by about 0.3% and routing market by about 0.8%, compared to 2012, according to Q3 Enterprise Networking tracker, IDC. However, the more dynamic and the comparatively smaller WLAN market is set to grow by a whopping 36% for the same period, the report reveals.
BFSI, ITeS and government are the driving verticals for LAN segment while manufacturing, construction, media and entertainment are emerging focus verticals. LAN segment is pegged to register a growth of less than 5% year-on-year in 2014 over 2013, estimates IDC.
Further, education, healthcare and hospitality are emerging verticals in the WLAN space where the last mile connectivity is preferred to be Wi-Fi. The WLAN segment is expected to grow in the range of 15-20% year-on-year growth in 2014 over 2013, says IDC.
have geared up as SDN-ready, looking at future demands.
Like big data analytics, Internet of Things is the latest concept popping up in the networking industry. Interestingly, the Internet of Things concept is being driven by different vendors in different ways, say analysts.
“Internet of things would essentially transform the way humans and machines connect and interact. This would essentially evolve to an $8.9 trillion market worldwide by 2020 (according to IDC) and would transform business processes, decision making and essentially the customer experience. The journey has already begun with an increasing number of cars, machines and electronic devices being plugged into the network,” says Sharma of IDC India.