More Macro Trends
Ronin has compiled a white paper targeted at service providers seeking to understand industry trends and prioritize their investment strategy, as well as investors looking to diversify communications services portfolio. In it, we identify key B2B user trends, technology trends and industry trends impacting communications service providers; areas for service provider growth, investment and focus in the coming months.
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Software-defined networking (SDN), network functions virtualization (NFV), software-defined wide-area networking (SD-WAN), secure access services edge (SASE), 5G, IoT, and edge. Buzzwords, the hottest trends, or significant new technologies? Let’s throw-in one more from years past— fixed-mobile convergence (FMC). Network operators have an opportunity to leverage their connectivity assets and edge presence to bring to market a secure enterprise access offering aligned with today’s requirements.
In our work with carriers, solution providers, and enterprises, we at AvidThink are seeing a common set of critical requirements growing in importance in the enterprise space:
- Security and protection —Employees working from their unprotected home networks, the rise of mobility and IoT, and the increasingly visible ransomware attacks on multiple industry verticals have increased the threat surface, making enterprise CIOs place security at the top of their IT priority lists.
- Cloud-centricity —The shift from capex to opex for non-core/non-strategic enterprise purchases which are delivered as cloud services will continue in 2021. As enterprises get more sophisticated, they will consume services across multiple hyperscale clouds and demand secure, efficient connectivity to and between these clouds.
- Mobility —Enterprises value the agility of a mobile workforce. The ability to work-from-anywhere was a desired trait of productivity workers, and the recent pandemic accelerated this migration. Work-from-home and hybrid arrangements will continue past the end of the pandemic.
- Digitization —Companies are looking to leverage automation for business processes, transforming analog and manual processes and data into digital equivalents. Part of this effort involves investment in the Internet of Things (IoT), including industrial automation and intelligent sensors. Digitization allows for automation, analytics, and eventually AI and machine learning (ML) to derive new insights, improve yields, optimize processes, and reduce costs.
Carriers have an opportunity to address all these needs in a single, secure network access offering. If we look at the unique assets that network operators have, it’s clear what actions they will need to serve their enterprise customers.
Network operators control both wireless and fixed last-mile connectivity to businesses and consumers. Using DSL, hybrid-fiber/coax (HFC), fiber-to-the-premises, mobile wireless, fixed wireless or satellite, network operators have a pre-existing relationship with enterprises (and consumers) today in providing them with connectivity services. On the other end of this connection sits the operator edge: central offices (COs), POPs, gateways, mobile switching offices (MSOs) and cable head-ends. This carrier edge can deliver a new generation of secure enterprise access that securely delivers mobility and cloud access, enabling digitization.
This last mile access has the advantage of topologically being the first hop from and to the enterprise premises, the at-home worker, or the mobile user. These locations are increasingly being bulked up with fiber buildout to carry increasing amounts of broadband internet and 4G/5G mobile traffic. Likewise, many of these locations are strategically linked directly to hyperscale clouds, co-location-hosted meeting points, and major web properties, all in service of improved customer experience.
It makes sense for service providers to host a secure access edge service that provides enterprises with a converged network and security offering — one that can replace today’s patchwork of firewalls, secure proxies and access gateways. An as-a-service offering that collapses network and single-pass security into one provides the convenience and operational effectiveness that enterprises seek. And by tying together multiple access silos (wireline, fixed wireless, mobile) into a single management domain, enterprises achieve the unified visibility, resiliency and control they need. The low-latency edge location, coupled with a direct access to popular web services (and augmented with high-speed backbones), will provide enterprises with the performance desired.
In the next two years, AvidThink envisions an increasing number of rollouts of these edge-powered services, either directly built by the network operators or in concert with security and network solution providers (including cloud-based providers). These services will prove to be a compelling enterprise value-add service over “naked” connectivity and one that helps defend operators’ turf against other solution providers.