Businesses
will experience profound changes as employees' transition to hybrid work
environments following COVID-19, in turn changing the way IT teams procure and
consume networking solutions. In response to the pandemic, IT leaders are now
investing more in cloud-based and AI-powered networking technologies as
business recovery plans take shape. That's according to a global
survey of 2,400 IT decision-makers (ITDMs) commissioned by Aruba, a Hewlett
Packard Enterprise company.
Read
the full report: https://www.arubanetworks.com/assets/eo/Hybrid-Workplace-Report.pdf
As
IT leaders respond to the challenges associated with enabling a highly
distributed workforce and the emergence of the hybrid workplace - with people
needing to move seamlessly between working on campus, at home and on the road -
they are looking to evolve their network infrastructure and shift away from
CapEx investments towards solutions consumed ‘as a service'. The average
proportion of IT services consumed via subscription will accelerate by 38% in
the next two years, from 34% of the total today to 46% in 2022, and the share
of organizations that consume a majority (over 50%) of their IT solutions ‘as a
service' will increase by approximately 72% in that time.
"With
the emergence of the hybrid workplace, IT leaders are being asked to deliver a
delicate balance between flexibility, security and affordability at the edge,"
said Partha Narasimhan, CTO and HPE Senior Fellow for Aruba, a Hewlett Packard
Enterprise company. "Every part of the workplace needs to evolve: the campus
must be embedded with technology to support social distancing and contactless
experiences, and the home office must offer enterprise-level connectivity,
security and support. It's increasingly clear that, to support these new needs
in a financially challenging environment, IT decision-makers are attracted to
the reduced risk and cost advantages offered by a subscription model."
The
report, which surveyed ITDMs in over 20 countries and eight key industries,
looked at how they have responded to IT and business demands in the wake of
COVID-19, what investment decisions are being made as a result, and the
consumption models now being considered. A number of key findings stood out:
Impact of COVID-19 has Significant
Implications
ITDMs
report that the impact of COVID-19 has been significant both on their employees
and short-term network investments:
- 22% describing the impact on their employees as
‘significant' (widespread furlough or layoffs), while 52% considered it
‘moderate' (temporary reductions in some functions), and 19% ‘low' (very
few jobs impacted).
- ITDMs in India (57%) and Brazil (34%) were most likely
to cite a significant impact on their employees, while those in Hong Kong
(12%) and Mexico (10%) reported the least, highlighting a massive swing in
experiences between regions.
- 77% said that investments in networking projects had
been postponed or delayed since the onset of COVID-19, and 28% indicated
that projects had been cancelled altogether.
- Project cancellations were highest in Sweden (59%) and
lowest in Italy (11%), showing there are also significant disparities
between countries within the same region, while 37% of ITDMs in education
and 35% in hotels and hospitality globally said they have had to cancel
network investments.
The Future is Bright: Investing for
Emerging Needs
By
contrast, future plans are aggressive, with the vast majority of ITDMs planning
to maintain or increase their networking investments in light of COVID-19, as
they work to support the new needs of employees and customers.
- An astounding 38% globally will increase their
investment in cloud-based networking, with 45% maintaining the same level
and 15% scaling back. The APAC region was the global leader with 45%
stating increased investment in cloud-based networking, rising to 59%
among ITDMs in India. With cloud solutions allowing for remote network
management at large scale, these capabilities are particularly enticing
for IT teams when being on-premises is not possible or challenging.
- ITDMs are also seeking improved tools for network
monitoring and insight, with 34% globally planning to increase their
investment in analytics and assurance, 48% indicating that they will
maintain their level of investment and 15% reducing it. This allows IT organizations
to troubleshoot and fine-tune the network more efficiently, as demands on
it are augmented by a distributed workforce.
- There is also an emphasis on innovative technologies
that simplify the lives of IT teams by automating repetitive tasks. We found
35% of ITDMs globally are planning to increase their investment in
AI-based networking technologies, with the APAC region leading the charge
at 44% (including 60% of ITDMs in India and 54% in Hong Kong).
Adoption of New Consumption Models
is Accelerating
As
ITDMs shape their investment plans, they are looking at alternative modes of
consumption to achieve the best balance of value and flexibility.
- 55% globally say they will explore new subscription
models for hardware and/or software, 53% managed services for turnkey
hardware/software and 30% financial leasing - all as a result of the
impact of COVID-19. This reflects the increased need for more financially
flexible models in a challenging environment.
- Networking subscription models are more popular in APAC
(61%) than in the Americas (52%) or EMEA (50%), and at a country level the
highest demands are in Turkey (73%), India (70%) and China (65%).
- The industries most likely to be considering the
subscription model are hotels/hospitality (66%), technology and telecom
(58%) and education (57%). The impact of COVID-19 on IT behavior has made
the desire for flexibility and predictability in spending, while reducing
risk from initial capital costs, greater than before.
- In stark contrast, just 8% globally plan to continue
with only CapEx investments, though the proportion is higher in the
Netherlands (20%), US (17%), Spain (16%) and France (15%). Across
industries, 15% in retail, distribution and transport will continue to
focus solely on CapEx investments, versus just 5% in IT, tech, education
and telecoms, and 2% in hotels and hospitality.
"With
the needs of customers and employees having changed so comprehensively in
recent months, it's no surprise to see IT leaders seeking more flexible
solutions," says Narasimhan. "They are having to adapt fast and ensure that
more complex, distributed networks can securely support the experiences users
demand. The need for agility and flexibility in network management is now
greater than ever."
While
the pandemic has clearly negatively impacted ongoing projects, this research
suggests it will also catalyze medium-term investment into advancing networking
technologies, and a shift to more flexible models of consumption that limit
up-front capital demands. Trends that were already taking hold will now
accelerate, including the move to the Edge and the adoption of cloud-based and
AI-driven intelligent networks.