This Industry Viewpoint was contributed by David W Wang
As the new year unfolds, the focus of IT, datacom and telecom seems to be mostly on the wireless and consumer side. After all, the incoming 5G wireless network, OTT applications, and social media are driving the growth and trends. The once hot enterprise market, on the other hand, now seems to be sidelined.
But we all know the enterprise market is not going away (Please note we are talking about large enterprises in this discussion rather than small and medium business (SMB)’s communication needs). It’s true that we may not see much growth and excitement, instead, convergence and economics may guide this sector in 2016. Convergence means large enterprises will do more in consolidating, standardizing, and optimizing its IT and communication assets, resources and capabilities. Economics means these enterprises will want to pay less for more sophisticated services, with the belief that new technologies should enable them to do so.
From the solution perspective, I see cloud computing migration, cloud, datacenter and enterprise sites connectivity, and ecosystem security portfolio will play mainstream in large enterprise communication services in 2016.
The trend of all enterprise IT resources and capabilities moving to the cloud is unstoppable. Even for the term “hybrid cloud” – the combination of private and public cloud, or private domain as primary with the public cloud as the back up, the private part is getting off site and virtual as well. Unless required by law, government or industry regulations, few large enterprises nowadays want to keep their IT operations on site any longer. The virtually centralized hub and spoke model shaped by cloud computing in serving IT and data communications simply performs much better than what the legacy and linear IT architecture can do. In this way, large enterprise can remove a lot of duplicated resources and functions, while make the whole IT operations more agile, effective and productive.
From the cloud service perspective, what are the popular cloud homes the large enterprises moving to? The answer now is quickly narrowing down to just a few: Amazon, Microsoft, Google and IBM. As we know there used to be more wishful players into this game like some major telcos, but as time goes it becomes obvious that there will be few rather than many cloud service providers remaining in the horizon. The reason is simple: enterprise customers want a technically savvy, unified, reliable, scalable, and open stack cloud platform where they don’t get locked in, instead can feel convenient to add, scale, and consolidate IT resources. Clearly AWS and MS Azure are the top winners in this regard. This is kind of like we use web browsers. As many developers may roll out their browsers to the web in the beginning, but by the end of the day, users stick to either Google Chrome or MS Explorer because they need a one-stop surfing platform to do all. Those few vendors who qualify for such extraordinary criteria are the final winners.
For cloud, datacenter and enterprise sites connectivity, such big bandwidth pipes as carrier Ethernet and wavelength services based on fiber optic networks should shine. High capacity connectivity of 10 gigabyte level is becoming plain vanilla in the cloud era. Compared to legacy telecom access services, now all these cloud or datacenter connections become really mission critical backbones to large enterprises, as part of the new enterprise IT ecosystems to enable daily web surfing, email exchange, remote working, data storage and processing needs.
The players for the high bandwidth transport sector are becoming more diversified than before. Incumbent telcos, CLECS, both inland and submarine fiber cable network operators, system integrators, and so on all get involved. Many may become winners because bandwidth connectivity is treated more like commodity in today’s market. Given the same technical level, those who can provision big and fast with low cost base will win the enterprise contracts.
Now with cloud as the IT core play, cyber security becomes more comprehensive and mandatory to large enterprise customers. Critical for enterprises to re-gain the feel of control in the new cloud centric era, the security solutions must be holistic in covering the new IT ecosystem from end to end: firewall for the cloud, forensic management on hacking, data encryption for storage and transport, D-DOS for the network, identity management for the system registration and access, and anti virus and spam for the desktop applications, and so on. Enterprise customers would want one-stop shopping for such security portfolios from a single or couple of vendors, more like taking an outsourcing model.
Hence the cyber security industry will go through quite some consolidations. Eventually a few security giants may dominate the market. We may see top cyber security firms like FireEye, Lancope (now a security niche of Cisco), AlienVault to go stronger and more robust in 2016.
In summary, in 2016 there will be more cloud and security vendor and solution consolidations for enterprises, while the bandwidth connectivity will go more to commodity level with diversified vendors. Again we may not see a lot of revenue growth in the enterprise sector, but many changes and convergences are surely under way.
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Categories: Cloud Computing
· Industry Viewpoint