A new two-tier market place?

Critical business systems are fast becoming the lifeline of every organisation, growing more dependent on connected resources every day. A recent report predicted that global IP traffic is set to nearly triple by 2021 due to our ‘always on’ mentality both in our personal and professional lives.

The telecoms market has found itself at a strategy crossroad, posed with a simple question with a supposedly simple answer, or is it?

Question - “How do we provide customers with more capacity, at a lower price and continue to be viable?”

Answer - Automate?

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The prominent school of thought and the strategy adopted by large network carriers has been to ‘automate’ and to find efficiencies in operations. Of course the mainstay utility providers answered this particular quandary in their own industries decades ago. Electrical and water operators are an interesting means of comparison while we consider our emerging two tier market trend.

Internet Access can be considered a utility for all consumers and many  businesses. The mentality of utility is rather straightforward, you provide and I consume - few questions are asked. Our water or electricity supply is in the main, unidirectional, and we tend not to ask questions of our providers. Rarely - if ever - do we consider how robust our provider’s own infrastructure is or ask about their upstream supply chain.

So how has the market reacted? - Bandwidth as a Utility Market

We are seeing the emergence of successful automation providers trading bandwidth as a commodity, where value is no longer in the circuits they provide but rather the mechanism to automatically deliver and support these circuits.

Customer requirements for Internet Access and Ethernet Lines has progressed to focus on speed and price. It is possible to add value with a backup service or by having a good customer support team, but essentially the market is driving down cost in favour of homogeny and automation.

Customers of this market no longer expect custom services and are used to deploying software-based solutions across their WAN and LAN environments. This has led to the rise in SD-WAN requirements and the belief that the underlying connectivity is second to the software wrap governing the service.

Problem Solved?

Of course many businesses will find their needs met by a new generation of carrier services fronted by systems and automation (read SD-WAN), but what if it matters where the supply is coming from, or if I need to connect to my datacentre or regional hub in a location off of my utility provider’s network?

Further, what if I don’t see my network as a utility after all? Few businesses differentiate or are contingent on the quality of their water or electricity supply. On the contrary data has become the lifeblood of modern business - forging strategy and providing a basis of trade, be it a service such as video streaming or providing complex data analysis as a service.

Not so simple after all - Big, no, vast data

To put it lightly, data is increasing in volume. From medical records to movies, financial data, and selfies; all of this content needs to be available on-demand and delivered safely and securely. The impact of big data extends to our own daily life. For example, supply chains require information from multiple sources to make real-time business decisions. A fascinating example is grocery retailers. They depend on weather forecasting data to ensure they have stock on the shelves which are appropriate to the climate conditions. Meeting this type of demand requires a laser-like focus on how this data is managed as it is fundamental to day-to-day operations.

We also see the growth of new industries with large real-time content such as iGaming and Video on Demand (VOD). These businesses pose an unmet challenge for carrier operators leading with an SD-WAN strategy. They require high capacity networking, and are expanding in new and emerging territories, which are in old parlance ‘off-net’.

Ubiquity and reach

Traditional utilities are either afforded monopoly market coverage or a regulated framework exists to ensure a consumer’s requirements are satisfied. When we extrapolate out our comparison, the similarities break down. A carrier operator’s own assets and reach can scarcely meet the needs of a business that takes the shape of those I have described above.

The ‘Bandwidth as a Utility’ market compounds this situation further. Let’s suppose that each carrier operator is on the journey towards SD-WAN and automation, but each operator arrives at the destination looking slightly different. Unlike MEF standards (which ensure interoperability between carriers), SD-WAN and orchestration platforms do not have an open and market-wide addressable standard. This means that as carriers double down on this strategy, they are forgoing their trump card of going ‘off-net’ to meet more esoteric requirements.

The addressable market shrinks but the demand does not.

The second tier? - Specialist Network Provider

It must be said that a great many organisations will fall within the mainstream addressable market and will benefit from the reduction in delivery lead times and cost that automation promises.

However, many will not. Should your Network Infrastructure requirements not fall within the parameters of a Utility Market provider then an alternative must surely emerge.

Enter the Specialist Network Provider.

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The specialist market is fundamentally different, with providers having a design-led approach with a clear understanding of specific client requirements. This approach values people over systems where capability and reach cannot be encumbered by capital asset location or system limitations.

At , we made an active decision not to build an operating model for the masses. We are a leader in the Specialist Network Provider space, fulfilling the needs of clients who need greater attention and consideration. The result is that we can provide each client a network solution that meets their exacting business needs, guaranteed by our unique globally standardised SLA.

Should you feel that your Network Infrastructure requirements cannot be met by an off-the-shelf product then please reach out to our dedicated team here at .

12.11.19

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