A Digital‐Native Network 

The Role of Ethernet in WAN Transformation 

Digital Transformation Redefines Network Requirements 

In a world where change is the only constant, it is hard to ignore the theme of digital transformation. It is a headline in the public domain, dominates business conversations, and has found its way into the boardroom. Its advent is rooted in what IDC calls the 3rd Platform, a new phase of innovation and growth that is built upon four key pillars: cloud, Big Data and analytics, mobility, and social business. With these foundation technologies firmly embedded into many ICT architectures, we are seeing them enable the emergence of "innovation accelerators," which include the Internet of Things, augmented and virtual reality, robotics, 3D printing, artificial intelligence, and next-generation security. As organizations embrace DX, they are increasingly leveraging these technologies, not to change a single process, but to fundamentally change the way they do business.

Figure 1 The 3rd Platform Drives Digital Transformation 

Source: IDC 

The corporate focus around digital transformation is shifting increasingly from strategy development to execution. IDC's FutureScape Poll, 2019 revealed that 79% of European CEOs are now under pressure to execute a successful DX strategy. This should transform their company into what IDC calls a digital-native enterprise. Such an organization can innovate at pace, empowers the workforce to make customer-centric decisions very quickly, and takes an ecosystem approach to running the

IDC Executive Brief 

Sponsored by:  Ciena and Vodafone 

Author: Jan Hein Bakkers 

March 2020 

 

 

A DIGITAL‐NATIVE NETWORK

business. IDC expects 75% of European organizations to have transformed into digital-native enterprises by 2029.

The success of digital transformation and the adoption of 3rd Platform and innovator accelerator technologies depends on a capable network. At the end of the day it comes down to delivering the right end-user experience for each location, user, and application, and the network will need to support this. Network requirements will be driven to new heights on the back of this. Security, cost, and volume are seen as the top drivers of network requirements for end-user organizations, before flexibility and bandwidth, as underlined in Figure 2.

Figure 2  

Security is Key Driver of Network Requirements Q. What key factors will drive your network requirements over the next 2 years? 

 Source: IDC European Enterprise Communications Survey, 2019 (UK organizations, 

n=154) 

Cloud plays a central role in many digital transformation initiatives, and organizations are increasingly adopting cloud-first, hybrid cloud, and multicloud strategies. Many of today's enterprise networks, and wide-area networks in particular, have not been architected for cloud-based delivery, but for applications residing in a corporate datacenter, and adapting this traditional architecture to the new reality is proving a challenge for many. Complexity is becoming a challenge, as organizations often have to manage multiple networks and providers, while upgrading capacity or deploying new sites, features, or functions can be a cumbersome and lengthy process.

While many IT organizations are becoming more agile and developing faster, network teams often have their hands tied by the architecture. The cost of connectivity is another typical pain point, as traffic volumes and bandwidth requirements are growing dramatically. At the same time, many organizations pay for a backup line that is inactive most of the time. Finally, the approach to security is often fragmented as organizations may apply different models to different sites and different types of connectivity, such as MPLS, Ethernet, and internet.

27%

29%

31%

35%

38%

40%

43%

56%

Coping with an increasing number of mobile users

Bandwidth

Connecting new sites

Connecting to cloud providers

Flexibility/agility

Traffic volume

Cost

Security

 

 

A DIGITAL‐NATIVE NETWORK

A Digital‐Native Enterprise Needs a Digital‐Native Network 

Digital transformation needs to go hand in hand with network transformation. Most organizations recognize this need for change. Only 5% of UK organizations in the 2019 Enterprise Communications survey did not foresee any major changes to the way their sites connect to the WAN in the next two years. However, change can be seen as quite a challenge. In the same survey, 27% of UK organizations saw this as a top 3 IT or network challenge.

So, transforming into a digital-native enterprise requires a digital-native network — an application-centric network that supports the right end-user experience for each application and user. Figure 3 highlights the five key attributes that this digital-native network will need to bring:

Flexibility: to allow organizations to immediately respond to changing requirements, turning up and down and on and off.

Manageability: reducing complexity, providing increased visibility into network and application performance, and allowing end users to take direct action via self-service tools.

Scalability: to allow the network to cope with ever growing requirements. Cost effectiveness: to enable the balancing act between growing

requirements and much flatter budgets. Security: to safeguard data and applications from a growing range of

threats and ensure compliance.

Figure 3  

The Digital‐Native Network 

Source: IDC, 2019 

 

 

 

A DIGITAL‐NATIVE NETWORK

IDC has identified a number of key building blocks on which this network transformation will be based. Network virtualization, leveraging technologies such as software defined networking (SDN), and network functions virtualization (NFV) will play a pivotal role. SDN drives the automation, orchestration, and programmability of a network by decoupling the data and control planes. It has been used in the datacenter for a number of years and use is now increasingly spreading to other parts of the network. NFV enables network functions that used to be provided as dedicated hardware appliances to be delivered as virtual ones, unlocking benefits such as simplified management, efficiency, easier upgrades, and as-a-service models.

The use of more intelligence and automation tools will drive a reduction in complexity and the optimization of network and application performance. Monitoring and visibility tools will play an increasingly important role in measuring whether expectations are met.

Connectivity will continue to evolve to address the continuous increase in bandwidth demands. Hybrid network architectures will play an increasingly critical role. By combining the ever-increasing capacity of fixed and mobile next-generation access technologies (e.g., fiber and 5G) with different network types such as public internet, private IP, and Ethernet, organizations can optimize cost and performance for each of their locations, users, and applications.

Cloud connectivity plays a key role in this architecture. Organizations will not just access the cloud through the internet, but also via private connectivity to public cloud providers. Cloud connectivity becomes an increasingly important aspect as organizations look to balance the security and predictable performance of private networks with the ubiquity and cost-effectiveness of public internet as they move their more mission-critical applications to the cloud.

The Role of Ethernet in a Digital‐Native Network 

When it comes to WAN transformation, the spotlight is currently very much on network virtualization, and the improvements that technologies like SDN, NFV, and SD-WAN will bring in terms of flexibility, manageability, scalability, cost effectiveness, and security. However, for all these benefits, virtualization does not do away with underlay networks. In that sense, even a digital-native network is as strong as its weakest link, which means that high performance network connectivity remains a key consideration, and internet-only architectures will be the exception rather than the norm for the foreseeable future.

Hybrid network architectures are a core element of a digital-native network as they allow organizations to make the optimal combination of public and private connectivity. Ethernet services are and will be an important part of the hybrid equation for many years. In 2019, nearly 30% of fixed-data connectivity spending of UK end-user organizations with more than 10 employees was on Ethernet services1, and this proportion will increase slightly in the coming years.

 1 For the purposes of this report, Ethernet services include Optical services 

 

 

A DIGITAL‐NATIVE NETWORK

Organizations choose Ethernet services for a range of reasons, including:

Very high bandwidth, with speeds up to 100 Gbps typically available

Performance, which is high and predictable

Flexibility to choose different forms and bandwidths, increasingly available on-demand

Ease of implementation, as Ethernet is a well-known protocol in both LAN and WAN environments

Transparency to higher-level protocols and ability to transport multiple traffic types

Maintain control of layer 3 routing in-house

Security of a private network, particularly when delivered over a dedicated platform

(Ultra) low latency

Cost effectiveness in terms of cost per mbps

Ethernet services exist in switched and dedicated forms, which have different characteristics in terms of bandwidth, protocols, topology, and route determinism. Switched services typically serve more generic WAN purposes, serving sites and datacenters with speeds up to a maximum of 10 Gbps. Dedicated Ethernet, including optical services, serves scenarios that require deterministic routing, very low latency and/or very high bandwidth (up to 100 Gbps). These attributes position it as a foundation for cloud and datacenter scenarios, with connectivity between main company sites and datacenters, or datacenter interconnect (DCI) between datacenters accounting for a large proportion of the demand for dedicated Ethernet. Use cases of this are found across verticals.

Public sector demand includes central government organizations that couple high bandwidth requirements with strong security and privacy requirements, as well as local authorities that use Ethernet services as the foundation of initiatives to drive smarter cities. Higher education and research use Ethernet to connect locations (inter)nationally and drive collaboration. In health, demand builds on the research of academic hospitals and collaboration therein between different locations and institutions. At the same time, sensitive and high bandwidth information, such as images, scans, or videos, increasingly needs to be stored centrally and accessed from multiple locations.

Financial services companies have a very high need for security and privacy, in combination with growing traffic volumes. Financial trading, and particularly high frequency trading, is a very specific subsegment within the financial sector, where (ultra-low) latency is of the utmost importance, as each millisecond gained can be directly translated into additional profit opportunities. Broadcast and media organizations are seeing their bandwidth requirements accelerate, as the amount and resolution of video increases, while at the same time the popularity of their online video services drives further capacity requirements. Over the top (OTT) content providers have substantial network requirements to connect their

 

 

A DIGITAL‐NATIVE NETWORK

datacenters and store content close to their users. IT service providers typically have multiple datacenters for proximity, backup, replication, and disaster recovery. High bandwidth, low-latency connectivity between these locations is a critical element for their offering.

Essential Guidance  

Digital transformation is rewriting network requirements and driving them to new heights. To become a digital-native enterprise you will need a digital-native network that delivers the flexibility, manageability, scalability, cost effectiveness, and security that ensures the right end-user experience. Doing nothing is simply not an option.

In many organizations the network is perceived as a cost center and invisible to large parts of the organization, including senior management. You should position the network as a driver of digital transformation and build a business case for network transformation on that premise.

When it comes to enterprise networks, security is a key consideration on all counts, and this needs to be reflected in any transformation plans. Security should be an integral part of your WAN design, and you want to scrutinize the capabilities of solutions and providers in your selection process.

Think about the migration path. It is one thing to design your network for the future, it is a completely different thing to get there from your current architecture in the most seamless and risk-averse manner. Do you favor a big bang approach, or a more gradual approach, adding sites and features over time?

Hybrid architectures are a key element of the digital-native network. The very-high bandwidth and low latency characteristics of Ethernet make it an important part of this architecture for many, particularly for cloud and datacenter connectivity purposes. However, beware of looking at Ethernet connectivity in isolation; rather, consider it in the context of the wider WAN transformation.

Look for partners that address your specific requirements. Choose the deployment and sourcing model that aligns with your in-house resource and expertise levels and capex/opex preferences. A trusted partner will be able to provide the proof points that it has been serving similar clients successfully and has the required migration capabilities and resources to provide support where and when it is needed

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