White Paper Managed LAN Services

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1 White Paper Managed LAN Services

2

3 Contents Addressing the challenges of digitization Managed LAN Services Challenges Potential solutions LAN consolidation is a critical success factor Managed LAN services from T-Systems

4 Addressing the challenges of digitization The future of traditional industries is generally discussed in terms of three issues: digitization, the Internet of Things and the Fourth Industrial Revolution. Digitization is creating disruption on many levels. For example, it is accelerating and simplifying collaboration within and across multiple industries, and drastically shortening innovation cycles. And it enables the rapid deployment of entirely new business models, sometimes within a matter of days which in turn threatens the position of established players. Digital processes are encouraging integration, and are blurring the lines between manufacturers and suppliers. Moreover, they allow customers to become directly involved in production processes. Against the backdrop of these developments, there is an urgent need for fast, reliable and secure data exchange real-time is now the new norm. Digitization leads to end-to-end electronic integration and management of all aspects of business organizations including manufacturing plant and equipment, end-products, and customer communication channels. This means a dramatic upturn in data traffic, pushing corporate networks to their limits. Digital processes, the adoption of SaaS offerings 1, and a fast-growing number of connected devices are generating an acute need for corresponding network resources and effective network management. These pose difficulties for all IT environments, but for local area networks (LANs) especially. Managed LAN services offer a way forward guaranteeing excellent performance, reliability and scalability. They give IT professionals visibility into available resources, and are the basis for high security. In addition, they can evolve and adapt in line with changing imperatives, and cut operating costs, for example through usage-based price-per-port models. Managed LAN services are based on standardized technologies and processes and comprehensive, efficient administration including transparent reporting, provided by highly skilled external service providers. [1] PAC, SaaS Vendor Strategy Evaluation - Market Insight - Germany,

5 Managed LAN Services The term managed LAN services describes a broad range of solutions. For the purposes of this document, managed LAN services are defined as a combination of strategies, applications, tools and abilities needed to safeguard the operational performance of local area networks. They are designed to maintain the high availability and long-term viability of the LANs. Managed service providers (MSPs) must provision and administer devices, network applications and network services to the corresponding sites. A growing number of businesses are deploying managed LAN services to achieve greater network reliability, efficiency and security. This paper aims to promote a better understanding of the need for managed services and the opportunities they bring. It will illustrate how these services can help overcome the many hurdles associated with deploying and administering network infrastructures for business applications and how they can make them more efficient, and more sustainable. The history of LANs Computers have been organized and managed within networks since the 1980s. And by 1985, the LAN market in the UK, for example, was worth 50 million dollars 2. Just four years later, in 1989, there were signs of the LAN market slowing, with a growth rate of just 8.4 percent. By 2015, LANs were deployed by practically all German businesses, of all sizes. Studies by IDC 3 and techconsult 4 indicate that the LAN market is now close to saturation point. In other words, LAN technology is familiar to most customers. LANs are an essential basis for internal communication in almost all enterprises. Their operational reliability is critical to business processes. However, many organizations focus almost exclusively on cost savings. Furthermore, many LANs have reached the limits of their capacity because, as a general rule, new parts and capabilities have only been added in an isolated and haphazard fashion. This has led to extremely complex, heterogeneous network infrastructures that are not able to keep pace with increasing demands. In addition, the growing use of mobile devices means that traditional LANs have to be expanded to include wireless components. In contrast to the stagnating market for conventional LANs, the wireless network segment is expanding 5 to 10 percent annually. These wireless access points must be monitored and administered at the network level. [2] Computerwoche, Großbritannien richtet sich erfolgreich an Standards aus,1991, on compuerwoche.de [3] IDC, EMEA Enterprise Network Equipment Forecast, 2Q15 [4] Techconsult, ICT Spendings Deutschland

6 Challenges Digitization is the number one challenge facing businesses today. This trend has a considerable impact on networks, including local, internal ones. These infrastructures underpin the new, digital services that are the basis for competitive differentiation. Moreover, digitization is reshaping customer service, the way we work, and the devices we use. By 2020, one in four dollars will be spent online 5 ; customer service will be revolutionized by context-aware and location-based technologies. The number of enterprise applications optimized for mobility is rising sharply 6 ; employees can work from anywhere. Analysts expect there will be 38.5 million IoT/ connected devices by ; the Internet of Things is fast becoming reality. The effects of these developments are apparent in two key areas. First, businesses are launching new applications to generate additional revenue or to enhance efficiency. In response, IT departments need to play a more strategic role. Second, employees are using their own, and the very latest generation of devices at work. IT departments must embrace this phenomenon, and will need to become more specialized if they are to develop and implement corresponding, cutting-edge applications. LANs are the essential basis for all of this functionality. Furthermore, they must be extremely reliable in supporting new services, and this requires major improvements to network performance. Overall, organizations must address the imperatives of digitization despite significant cost pressures and shrinking budgets. They must implement new technologies with diminishing resources which is scarcely the basis for improving service quality. Managed services offer a viable way forward. Under this arrangement, IT departments must transfer some of their responsibilities for LANs, WANs and application operations. However, even if they choose a managed model, enterprises will seek the best possible return on investment. They closely examine the investment made and the outcomes achieved. They are looking for tangible added value, such as lower operating costs and greater efficiency but while safeguarding the foundations of network management, namely security, availability and reliability. Against this background, organizations turn to managed services out of necessity and not merely for the sake of convenience. The latest generation of managed services must deliver far more than simply network access or efficient LAN administration for users. Managed services must enable appropriate network access across multiple levels of security, and maximize operational stability and these tasks must be performed within a customer-specific IT environment. To this end, managed services must include comprehensive support: from service desks (level 1) to the deployment of highly skilled, certified specialists and the involvement of experts from component vendors (level 3). A coherent, clearly structured network architecture and effective LAN management processes are the basis for standardization of network resources for all applications and all sites worldwide. However, it is difficult or impossible to master these challenges with complex, legacy network architectures. [5] Prof. Dr. Werner Reinartz, Department of Retailing and Customer Management, University of Cologne, 2014 [6] IDC: John Jackson in IDC Reveals Worldwide Mobile Enterprise Applications and Solutions Predictions for 2015 [7] Juniper Research, July

7 Potential solutions Standardization End-to-end standardization is a prerequisite for efficient LAN management. It begins with the nuts and bolts switches, LAN controllers, and similar hardware components and extends to LAN management processes. Harmonization drives down costs and generates efficiencies. Security and reliability Security and reliability are a priority for all LAN administrators, and require consistent processes and proven technologies, such as Radius, VLAN and network access control (NAC). By opting for a managed service, the customer benefits from continuous LAN monitoring. This ensures ongoing visibility into network performance and security. In addition, IT decision makers can control individual components from a central management dashboard. Managed LAN services are not limited to operations monitoring, or to the installation and replacement of components. They also play a vital part in responding to incidents, such as performance issues, outages and cyber-attacks. Per-port pricing Managing LANs in-house and owning associated hardware generates high costs without delivering a direct business benefit. Outsourcing reduces expenditure on administration, on-site services, support, and ongoing operations. Moreover, service providers frequently offer a choice of pricing models. These may be based on a price per device -- e.g. switch or a fixed monthly fee per data, voice or server port managed. Certain providers have started to offer completely scalable usage-based pricing. In addition, port-based pricing offer a simple, transparent way to distribute costs internally by allocating ports to cost centers, for example. Cloud-based network management Hardware deployed to configure and manage wireless local networks (WLANs) generates additional costs. This type of functionality is also available in the form of pay-as-you-go, multi-tenant cloud offerings. The benefit for customers is that there is no need to invest in hardware at all sites. The service provider assumes responsibility for managing the functionality. Customers can monitor their resources via dashboards. 7

8 LAN consolidation is a critical success factor CORPUS SIREO is a leading European asset management company with a real estate portfolio worth approximately 16.3 billion euros. It has a workforce of nearly 550, and 11 locations in Germany and Luxembourg. A highly advanced, flexible communications network is key to day-to-day operations. In 2014, Corpus Sireo was still operating two distinct networks a stateof-the-art MPLS network and a corporate network with direct data links. This situation was the result of a merger in 2007, and had considerable drawbacks. Activating new servers or networks entailed significant manual effort to re-configure firewalls and access rights, for example. A decision was taken to remedy the situation. Corpus Sireo tasked a managed service provider with the implementation of a standardized network landscape, including support for dial-in from mobile devices. Corpus Sireo stipulated that it did not want to invest in any new hardware. The solutions implemented by the provider resolved the customer s immediate problems at a stroke, while also opening up new possibilities. The network enables secure dial-in from beyond enterprise boundaries, and can easily be modified to enable access by mobile devices. As a result, it provides effective support for Corpus Sireo s business, which is highly dependent on rapid, reliable communications with clients. The standardized network has substantially improved IT security, data transfer speeds and employee efficiency, reports Friederike Buchheister, Executive Director for Information Technology at Corpus Sireo Holding. Conclusions Digitization is making ever-greater demands on local area networks. More and more services and applications are no longer available locally, but provisioned centrally via networks. As a result, data traffic within corporate networks is increasing. LANs therefore need to shoulder additional data loads; and more importantly, they must be equipped to meet future requirements. LANs based on outdated technology, with complex topologies and diverse management tools, are simply not equal to the task. They represent a growing risk of network outages. What is required both in technical and operational terms is consistent and lasting standardization. Only then will networks have sufficient flexibility to keep pace with changing requirements. Proactive LAN management not only enhances present performance and availability. It also safeguards network performance and usefulness going forward. Higher quality is not the sole advantage of managed LAN services. They also improve the efficiency of management, ordering and provisioning processes, and allow extensive automation. This can pare down costs by as much as 25 percent. In the cloud computing era, users of ICT services expect pay-as-you-go pricing and responsiveness to evolving business needs: managed LAN services must take these requirements into account by introducing per-port models that pave the way for completely scalable usage-based pricing. Providers should also hold certifications for IT and telecommunications security. They should possess extensive experience across a wide variety of customer projects. International delivery capabilities are essential for customer organizations with international operations. Providers must offer binding service level agreements, both for implementation projects and for ongoing LAN operations and services. 8

9 Managed LAN services from T-Systems When T-Systems provides managed LAN services, it performs all tasks related to active network components. This includes planning and demand-based provision of ports and software, hardware maintenance, and roll-out. The offering also extends to proactive monitoring, regular service level and technical reports, updates in line with vendor specifications, and comprehensive, worldwide support. T-Systems has extensive network and security skills, and performs network management on the basis of standardized processes and methods. Service industrialization and economies of scale deliver high efficiency, making substantial savings possible. Access to offshore resources, highly attractive procurement terms, and specialized competence centers contribute to low costs, coupled with high service quality. Customer-specific pricing models for managed LAN services allow flexibility in terms of one-time charges versus monthly operating costs. Prices are transparent, and can be up to 25 percent lower than the cost of managing a LAN in-house. The savings potential of externally administered LAN infrastructures has been confirmed by market researchers Experton Group. T-Systems is a specialist provider of managed services with the ability to offer a choice of service levels, in line with users requirements. Service levels include service, delivery and provisioning times, and automated ordering and provisioning processes. 9

10 Contact T-Systems International GmbH Uli Kunesch Market Intelligence Fasanenweg Leinfelden-Echterdingen, Germany T-Systems International GmbH Peter Plehp Marketing TC Division Hohestr Dortmund, Germany PUBLISHED BY T-Systems International GmbH Hahnstraße 43d Frankfurt am Main, Germany Last updated: June 2016

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