The Post-Pandemic Cloud Consumption Model – Guidance to IT
We’re now three quarters of a year into the pandemic, with some regions beginning to view COVID in the rear-view mirror, while others are in the midst of a second wave. What have enterprises learned, how are they applying 3rd party guidance, and how are they adapting for the future?
As many have reported, over the past two quarters, traditional ‘box’ vendors have seen up to a 15% drop-off in sales of hardware, except for that destined to the cloud / hyperscale providers and SaaS services, both of whom have benefitted handily from the work-from-home and lights-out environment. Investments are shifting to initiatives key to digital and WAN transformation, including collaboration, remote work, and business resiliency. Where is IT cutting costs? They are advised to reevaluate their connectivity needs, reallocate budget to more flexible services, and reduce exposure to long-term contracts and dated architectures. This guidance of course plays directly into a cloud-first approach to the transformed WAN, one that is based on the cloud consumption model.
And, in the same way that the cloud consumption model has proven itself for compute, storage, and other services, the network consumption model is now coming into its own for connectivity. Why? An OPEX vs a CAPEX model removes the cost of stranded assets or being unable to quickly adapt to changes (remember VPN issues last spring?). The cloud model is predicated on agility, flexibility, scalability, and optimized ROI. And, this transition is real.
Gartner predicts that at least 20% of enterprises will leverage an on-demand consumption model for their WAN, up from less than 1% in mid-2020. The pandemic is only helping to accelerate this trend. However, to be effective, a network provider, either telco or MSP, must be capable of implementing the required agility. This includes a services architecture that is based on a flexible foundation, automation via orchestration and a focus on application performance.
As industry analyst Lee Doyle related in a recent blog, a cloud-first SD-WAN architecture must embrace and support unparalleled application delivery, reliability and quality of user experience, security and visibility, micro-segmentation, and of course, connectivity. Where required, vendors will partner with one another to complete the service offer, with security as an example as one vendor may have WAN expertise, and another, edge security. WAN providers partnering with the different cloud platforms are another.
What is this new cloud-centric architecture that IT must embrace? We’ve been talking ‘cloud-first’ for quite a while, but the pandemic has forced many organizations to embrace this strategy. Consider the before and after. Previous to the pandemic, enterprises usually sized their remote access capacity to a max of 10% of their workers, and in most cases, the concentrators connected to an on-prem environment. Depending upon the vertical, a subset of the employees would have remote access, and potentially only to a subset of their applications. Some verticals, including finance, business process outsourcing, healthcare, and government, would highly restrict any form of remote access. The more forward-leaning enterprises had begun transitioning to a cloud-centric remote access architecture and branch handoffs to cloud security gateways. Fast forward to fall of 2020 and the old architecture has been turned on its head.
Enterprises must now size their remote access capability to 50% or more of their employee base, while ensuring that additional applications are made available securely and deliver a great user experience. And, New verticals have joined the game. Using a personal example, city planners in my hometown, my brokers, and my doctors have all learned to embrace remote connectivity. The use of a cloud-first approach for remote access has become the norm vs the exception, and the percentage of traffic remaining in the cloud has grown by leaps and bounds. IT has learned how to flexibly reallocate bandwidth between branches and remote workers, while the security perimeter, depicted by a red dash, has expanded, with its many implications. This is one reason why security is now the leading topic in any WAN transformation discussion. In essence, the traditional branch has been replaced by the virtual office, or branch of one, and the internet has replaced the LAN.
How do these changes relate to what we’ve seen across the Aryaka global backbone? We’ve continued to experience strong growth, on a trajectory to have doubled bandwidth since the beginning of 2020. This is evidence of enterprises considering their managed WAN to be a strategic ‘virtual’ asset, and only partially due to the often-reported growth in collaboration. Given our customer profile, branch and HQ traffic continues to grow, while traffic from remote worker, carried across our backbone, has also seen a noticeable jump.
So, what is our guidance to you? First, a cloud-first approach, based on the network consumption model, overcomes the lack of agility, complexity and hardware costs of the DIY model. Then, select a managed service that also eliminates the complexity and lack of agility if delivered via a telco or MSP that then must work with a technology vendor. Aryaka offers this required simplicity and agility via a tightly integrated service with a single point of contact.