O p t i m i z i n g t h e N e t w o r k t o M e e t T o m o r r o w ' s I C T D e m a n d s

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1 EXECUTIVE BRIEF O p t i m i z i n g t h e N e t w o r k t o M e e t T o m o r r o w ' s I C T D e m a n d s Adapted from IDC research by Eric Owen Click here to enter text. September 2014 INTRODUCTION The ICT industry has evolved considerably over the last half century as new technologies and capabilities have dramatically increased its benefits to organizations. IDC believes that the ICT industry is now in its third phase of fundamental evolution also known as the foundation of the ICT industry's 3rd Platform. Each phase or platform results in fundamental replacement of old ways with the new. FIGURE 1 Emergence of the ICT Industry's 3rd Platform Trillions of Things Billions of Users Social Business Mobility 2011 Big Data/ Analytics Cloud Millions of Apps Hundreds of Millions of Users LAN/ Internet PC 1986 Client- Server Tens of Thousands of Apps Millions of Users Thousands of Apps September 2014, #IDCEB12W

2 Figure 1 illustrates this evolution, which started with the mainframe era in the mid-1900s (1st Platform). This was replaced by the 2nd Platform in the late 1980s, also known as the client server era, and now the 3rd Platform has arrived. The 3rd Platform is built on four pillars cloud, mobility, Big Data, and social business which are used to develop innovative industry solutions for businesses. As Figure 1 shows, over the period the number of users and applications has increased dramatically and now we are in the era where connected things will also become very important. 3RD PLATFORM CHANGES THE RELATIONSHIP BETWEEN ICT AND BUSINESS AND THE ROLE OF THE CIO In the past ICT was used to support the business and control costs; now, in the 3rd Platform era, it is being used as a competitive differentiator to grow the business. ICT is now used to transform business processes and models to enable better customer interactions, to get products to market quicker, and to improve innovation, business resilience, and reliability. As a result the role of the CIO is changing, from a controller of ICT systems to a facilitator of ICT solutions within the company. Most 3rd Platform demands will come from line-of-business (LOB) executives in the future and the CIO must be in a position to facilitate while keeping costs under control. In a recent survey of 1,100 medium and large companies in Europe it was found that budget control for over 50% of new ICT projects was with the LOB. The same survey revealed that less than 10% of companies surveyed considered advanced ICT as being low priority aimed mainly at internal efficiency improvements, with the vast majority considering it a critical strategic priority aimed at business growth and competitive advantage. It is now clear that many companies will have two main sources of budget for ICT: The traditional CIO budget, the majority of which will be saddled with supporting essential infrastructure and software maintenance. The LOB budget, which will be much more 3rd Platform oriented. INCREASED IMPORTANCE OF THE NETWORK Nothing will work without the network and it must cope with 3rd Platform evolution, which means higher traffic loads, more connected devices, more content, more on-demand access, and more applications. Consider the implications for the network of the four pillars of the 3rd Platform: The network must be able to handle cloud applications, which demand more agility and flexibility and will create differing traffic flows. The drive by enterprises to mobilize applications and their workforce will bring its own new challenges to the network in the form of variable endpoints and traffic patterns. Growing use of Big Data analytics will force an increase in the scale of computing and network and will demand greater application-to-network visibility. Social business will drive increased application integration and drive up server-to-server and cloud volumes IDC #IDCEB12W 2

3 FIGURE 2 Exploding Traffic Growth Stressing Networks: Datacenter to Edge In this rapidly changing market landscape, datacenters have become the cornerstone of businesses, and are required to support the need for new and flexible service delivery models and the enablement of entirely new web-based businesses. This means the need for high-performance networking has never been greater and that network investment will be shaped by the need to reconcile the fallout of the economic crisis and everincreasing demands on the network. CONSIDERATIONS Speed of 3rd Platform Adoption Companies are now well under way in adopting 3rd Platform solutions. Mobility is now well beyond the BOYD phase in companies as they start to think "mobility first" when they introduce new user applications, while smartphones and tablets grow in importance in the enterprise. Big Data/data analytics is a little slower than the others in being adopted by companies and has some challenges to overcome, but IDC believes that real-time monitoring of streaming data will be pervasive by 2020 and overall data analytics spend will reach $20 billion worldwide by Data volumes will continue to explode. The market for social enterprise software will grow by over 40% annually through 2016 and social networking will become embedded in cloud platforms and in many enterprise applications. Cloud adoption is well under way and IDC believes most large companies in Europe will have 50% of their IT assets in the cloud by IDC #IDCEB12W 3

4 More than 70% of all companies recently surveyed by IDC are in the process of using, planning, or researching cloud strategies. In the process, they have been transitioning to a shared, dynamic, automated, "elastic" IT environment that is delivered through a private, public, or hybrid cloud. The "mature" cloud-centric IT organizations are achieving improved application performance, greater staff productivity, more operational cost efficiency, and increased opportunities for business innovation. As this implies, cloud computing enables organizations to transform the way they staff and manage their IT organizations, while better optimizing the way they source and deploy their IT resources. Stages of Cloud Migration IDC has developed the Cloud Maturity Model to help organizations assess their current progress toward cloud and identify gaps in their adoption plans. The model defines five stages of cloud migration, which are shown on Figure 3. FIGURE 3 Stages of Cloud Adoption Stage 1: Ad Hoc Companies are beginning the exploration process to increase their awareness of cloud technology options, key considerations, and cloud's contribution toward IT efficiency. There is limited enterprisewide awareness of these activities, and some instances may be unauthorized. Stage 2: Opportunistic Companies are experimenting with more standardized offerings and developing short-term improvements regarding access to IT resources via cloud. They are also promoting buy-in to cloud computing across the company and acknowledging the need for a companywide approach. They are testing their ability to transition workloads from existing traditional in-house or outsourced IT deployments as well as new ones. Stage 3: Repeatable Companies are enabling more agile access to IT resources through aggressive standardization, identifying cloud best practices, and increasing governance. Business and IT users are beginning to rely on self-service portals to access cloud services based on cost and quality of service and to automate approvals and workflows that are necessary to rapidly provision and activate services. Stage 4: Managed Companies are expanding the boundaries of how and why they use cloud. This is a consistent, best-practice, enterprisewide approach to cloud, speeding iterative improvement cycles to increase cloud adoption and business value. Companies in this stage are orchestrating service delivery across an integrated set of resources and collaborating internally and externally to support their future technology needs. Stage 5: Optimized Companies are driving business innovation through seamless access to IT resources from internal & external service providers and making informed decisions based on the true cost and value of the services. They are using cloud to lower costs and speed up delivery. The business impact is most noticeable for new initiatives, and for high business value or highly innovative projects, where some level of customization of IT resources is critical, and risk sharing creates an environment that fosters innovation. IDC estimates that less than 10% of companies are currently in stages 4 and 5 combined. While the number of companies investing in cloud is expected to grow dramatically, progression from stage 1 to stage 5 requires increasing financial and organizational investment as greater business value is created. A key technology that organizations are investing in particularly to reach the latter stages of cloud migration is software-defined virtual application delivery controllers IDC #IDCEB12W 4

5 Increased Intelligence in the Network is Key An application delivery controller (ADC) is a computer network device, typically located in a datacenter, which balances traffic between computing devices as well as improving performance by offloading services from the web servers themselves. In addition to load balancing, ADCs now provide a robust set of capabilities such as SSL VPN, IPv6 gateway, web application firewall, and WAN optimization and programmability. Many enterprises are leveraging ADCs pursuant to their private and public cloud computing objectives. As the cloud more closely aligns existing and emerging IT infrastructure with business-critical applications, ADCs will maintain a prominent role in datacenters worldwide. Because ADCs can programmatically redirect traffic based on application awareness, they have the potential to play a critical role in new software-defined networking architectures. The core of the demand in the ADC market will be for a variety of use cases including load balancing, application availability and reliability, security, and enhancing the overall performance of a variety of established and emerging applications. As cloud migration continues apace in its private, hybrid, and public forms, ADCs will maintain a valuable role in assuring the performance and availability of application workloads and related cloud services. From an architectural point of view, ADCs will replace traditional network load balancers in the enterprise and ADC form factors have evolved from physical appliances into virtual appliances and now on to multitenant appliances. The virtual-appliance form factor is key, as this makes ADCs ondemand and low-cost for small to midsize enterprises. ADCs can also run on common x86 servers and in some cases common switch fabric. To gain maximum effectiveness ADCs need to be integrated into the network management system. As SDN evolves ADCs L4-7 services can then be provisioned on-demand as part of an application service chain in true SDN fashion. FIGURE 4 Network as a Platform Business applications API Network Management Cloud, Converged Infrastructure and the Datacenter Mobile/Access Edge 2014 IDC #IDCEB12W 5

6 Network Design: Needs to be Consolidated and Flexible We have already established that the network is a critical component of a company's evolving ICT environment. Recent surveys of CIOs in Europe revealed that network infrastructure is now a high priority item. The network has been somewhat neglected over the last few years as it was an easy area in which to cut costs and sweat existing assets. However, now things have changed and 3rd Platform evolution cannot move forward without the network. Trying to predict the demands on the network has become difficult as the 3rd Platform is taking the network into new, largely uncharted areas. Therefore the temptation is to over-provision on network elements; this has come about through traditional network capacity planning where network architects determine the expected traffic levels over the lifetime of the hardware and essentially pay for tomorrow's capacity today. The best-case scenario is that the company never quite uses everything purchased; the worst case is that the network or web assets fail, with financial impact to the business, since adding capacity to the network stack is never quick and easy under-provisioning could be catastrophic to the business. However, a major issue with over-provisioning is the cost to the global business of underutilized networking appliances in terms of acquisition cost, maintenance, and cooling/power. This is where intelligence in the network is essential and has led to the emergence of on-demand elasticity, lower TCO through consolidation, open network platforms capable of running multitenant workloads, the ability to expand hardware seamlessly without downtime, the use of the cloud as an availability zone, being able to focus more on app delivery and less on programming, as well as the successful combination of performance, security, and a great user experience. CONCLUSION The network has traditionally been a transport system for IT traffic which in the past was relatively easy to predict and plan for. Today things have changed and now the network has to become more intelligent and more aligned with what users need from both an access and application perspective. Failure to invest effectively in the intelligence of the network can be both catastrophic and very costly to the business. Companies need to consider the following with regards their networks for the 3rd Platform: Companies moving at the speed of the new economy dictates a new approach that reduces costs and increases IT agility, and this requires a rethink on the network: take costs out and increase flexibility. The ways that information is collected, analyzed, used, and preserved is demanding new innovations on the network. Architect your network for tomorrow's needs this requires an intelligent, secure network that excels in application performance and is based on open standards IDC #IDCEB12W 6

7 About IDC International Data Corporation (IDC) is the premier global provider of market intelligence, advisory services, and events for the information technology, telecommunications and consumer technology markets. IDC helps IT professionals, business executives, and the investment community make factbased decisions on technology purchases and business strategy. More than 1,100 IDC analysts provide global, regional, and local expertise on technology and industry opportunities and trends in over 110 countries worldwide. For 50 years, IDC has provided strategic insights to help our clients achieve their key business objectives. IDC is a subsidiary of IDG, the world's leading technology media, research, and events company. IDC U.K. Chiswick Tower 389 Chiswick High Road London W4 4AE, United Kingdom idc-insights-community.com Copyright Notice The analyst opinion, analysis, and research results presented in this IDC Executive Brief are drawn directly from the more detailed studies published in IDC Continuous Intelligence Services. Any IDC information that is to be used in advertising, press releases, or promotional materials requires prior written approval from IDC. Contact IDC Go-to-Market Services at or the GMS information line at to request permission to quote or source IDC or for more information on IDC Executive Briefs. Visit to learn more about IDC subscription and consulting services or to learn more about IDC Go-to-Market Services. Copyright 2014 IDC. Reproduction is forbidden unless authorized.

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