Leveraging network technologies for productivity and growth

2016 has come to a close and businesses are working on their strategies and targets for the New Year. Part of these considerations includes the optimum allocation of resources to give them the edge over competitors.  From a network infrastructure perspective, achieving this is no mean feat.  In general, enterprises are facing a resource crunch – bandwidth needs are increasing, and while bandwidth costs are broadly coming down, the quality of experience does not match increasing Enterprise needs.

According to a 2016 IT Trends Study by the Society for Information Management’s (SIM), productivity and IT costs reductions are among the top 10 concerns of CIOs worldwide. The same goes for labour-scarce Singapore. Singapore’s labour productivity is growing at a slower rate than it did over the past decade. In a 2016 study, the Deutsche Bank found that Singapore’s productivity has grown by an average of 0.4 per cent every year since 2011 – a figure well under the national target of 2-3 per cent growth per annum.

This happens at a time when increasing numbers of companies are establishing their regional headquarters in Singapore – bringing a need to ensure that data moves seamlessly from one geography to another. Access to data is also critical as companies will increasingly need to integrate information from multiple data sources, and often from third parties. Amid current economic uncertainty, businesses need to get the maximum use from their existing resources and assets while effectively mitigating rising costs.

One route to addressing some of these challenges is in capitalising on the latest advances in wide area network (WAN) technologies, which connect global offices and datacentres with central corporate networks. Legacy WAN technologies rely on expensive, fixed circuits, and proprietary hardware - whereas modern Software-Defined Wide Area Networks (SD-WAN) and Network Function Virtualisation (NFV) can improve performance, increase demand flexibility, and lower costs. They allow enterprises to establish higher-performing and more resilient network infrastructures and data-strategies.

The role of SD-WAN and NFV

Used to connect enterprise networks over large geographic distances, SD-WAN allows businesses to interconnect multiple locations over a public or private cloud infrastructure. The current way of doing things makes it impossible to deploy across multiple locations with the same level of flexibility, scalability and speed On the other hand, SD-WAN enables additional bandwidth at lower cost.

The technology also promises a more cost-effective and simpler way to operate secure, virtualised WAN connectivity between enterprise branches and corporate data centers. This means lower connectivity costs and operating expenditures compared to traditional networking systems, as well as improved visibility and control.

A complementary technology, NFV allows businesses to replace their physical router and proprietary hardware with software-based network applications. The technology grants enterprises the ability to efficiently deploy new applications by provisioning services quickly and effectively. The technology is highly flexible, cost-effective, scalable, automatable and secure. Productivity levels are kept high and operating costs are also kept low as the network is easy to deploy and maintain.

While SD-WAN and NFV are relatively new technologies – both having only made headway in the past three years –their benefits are tested and proven. So much so that the International Data Corporation (IDC) estimates that worldwide SD-WAN revenues will exceed $6 billion in 2020. According to the latest NFV Hardware, Software, and Services Annual Market Report from IHS Markit, the global NFV market is projected to be worth $15.5 billion by 2020. Businesses worldwide are jumping on the SD-WAN and NFV bandwagon, in a bid to keep IT costs low throughout their digital transformation journey.

By successfully adopting SD-WAN and NFV, businesses will be able to strengthen their new data center strategies and network infrastructure to make processes more efficient and cost effective.  This establishes the foundation for enterprises to be flexible, scalable and secure – which are key to any business’ success.