Network Expansion vs. Economic Uncertainty

Economic jitters may have gripped the broader economy heading into the new year, but the networking industry looks to be in pretty good shape. Connectivity has become such a vital element in society that it’s hard to imagine a dramatic pullback in deployments and upgrades, even if we are on the cusp of a recession.

According to Global Market Insights, the enterprise networking market will top $90 billion by 2024, driven primarily by the necessity of a smooth-running Internet of Things. After all, some of these connected devices, like autonomous cars and medical gear, will require real-time, uninterrupted access to data and data processing centers, or lives could be put at risk. This means the IoT must be far more rugged and resistant to latency and bottlenecks than the traditional Internet.

Adding more fuel to the networking fire is the process of digital transformation that many organizations view as a life-or-death struggle heading into the new decade. A recent assessment by Verizon pointed out that the real-time enterprise will require all manner of networking capabilities, such as software-defined functionality, 4G, and intelligent security, telematics and other systems. In this world, network performance is crucial to deliver the kinds of customer experiences that differentiate winners and losers, since only a strong network foundation can support the innovative platforms and service models that keep users engaged.

On a fundamental basis, however, networking is driven by bandwidth and throughput, so it stands to reason that increased data loads and real-time connectivity require an upgrade over traditional copper infrastructure. Cisco apparently has this same thought in mind, as evidenced by the recent purchase of silicon photonics developer Luxtera. The company is to be folded into Cisco’s existing optics business, where devices like the 100G QSFP and OptoPHY transceiver will supplement Cisco’s 100 and 400 GbE solutions.

The trickiest part about implementing all of these new networking technologies is doing it quickly without blowing the budget. In some cases this won’t be a problem, because the new solutions represent a significant cost reduction even as they increase performance levels. A case in point is SD-WAN, which can cut the cost of SIP trunking in half, says No Jiitter’s Sorell Slaymaker. To achieve this, however, you’ll need to adopt a number of design criteria, such as NSP independence, service agnosticism and wholesale access, not to mention commodity hardware and zero-touch automation. But in the end, this should make the enterprise more cloud-like and will reduce single-vendor dependency for wide area services.

It doesn’t appear that 2019 will be a breakthrough year for any of these technologies. Most industry watchers seem to think we will have another year or two of foundational infrastructure change before the IoT and other network-dependent initiatives take off in the early 2020s.

This does not mean that what happens in the coming year is unimportant, however. In fact, this is probably the most crucial phase of the transformation, because it lays the groundwork for everything that is to follow.

If we get this wrong, we could be in for a decade of headaches trying to get the new digital economy to work properly, recession or no recession.

Arthur Cole is a freelance journalist with more than 25 years’ experience covering Enterprise IT, telecommunications and other hi-tech industries. 

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