October 2, 2013

Building for the Future: What the New World of Cloud IT Means for the Network

Today, “the cloud” is transforming IT organizations and accelerating business performance by creating new revenue streams, increasing operational efficiency, and improving productivity. Not only are services moving from internal data centers, but companies are also now providing services to employees and customers using cloud platforms. As a result, the majority of IT strategies and investments are around cloud-based initiatives.

As the leader of our IT organization, it’s critical that our company has a comprehensive strategy that brings together all aspects of our internal infrastructure, services and systems. Ours is a unified strategy that looks not only at more efficient services but it also takes into account how we deliver and provide access to those services. The primary delivery platform is our internal network. Our thesis is that you can have all of the best applications and services but if the network is not ready, the end user experience will never match the true value these new services, including cloud-based services, can offer.

So what am I getting at? I believe that many of today’s corporate networks have reached an inflection point. With the increasing adoption of infrastructure-as-a-service, software-as-a-service, and the whole host of emerging on-demand services, traditional corporate networks just cannot keep up. New approaches and strategies are needed.

XO Communications, along with Juniper Networks, recently commissioned Forrester Consulting to survey senior IT decision makers to better understand the adoption of cloud-based services and the ramifications this trend has for today’s enterprise network.

Today, we announced the results of this study, Building for the Future: What the New World of Cloud IT Means for the Network. The study reveals the types of cloud services that organizations are deploying, the expectations IT professional have, the benefits they’ve realized with these deployments and the implications the deployment of cloud-based services have had on their networks. (We will be hosting a live webinar on October 9th with Andre Kindness, a leading IT services analyst at Forrester, where we’ll discuss the results of this new study in more detail.)

I’d like to share with you some of the key findings in this study:

1. Cloud Services Adoption Is Widespread and Business-Critical Apps Are Moving to the Cloud

It’s probably not that surprising that enterprises are moving to the cloud. This is widely known, and the study found that a majority of businesses have embraced at least one cloud service. But, after testing the waters with simple tasks, IT organizations and business organizations are now shifting more advanced, business-critical applications and services from internal data centers to cloud platforms. Specifically, the study found that:

  • More than 75% of enterprises are or are planning to use some type of cloud-based service;
  • 50% more respondents plan on moving revenue-generating B2B e-commerce sites to cloud environments this year compared to last year; and
  • More than 50% of IT decision makers said their organization will be using four or more cloud platforms.

These findings have implications for the network, but I’ll get to those implications after this next point.

2. The True Value of Cloud Services Remains Elusive

While many enterprises are reporting cost savings by moving to cloud platforms, the reality is that very few enterprises have seen values outside of cost savings. A major finding in the study contradicts one of the largest expectations IT professionals have when adopting cloud services: that the cloud provides them with a fast, easy set of IT resources. According to the study, only 20% of IT decision makers said they were very satisfied with this benefit. This is because many aspects of the infrastructure and operations supporting these services are not found in the cloud but in the network, which many enterprises have not refreshed for the new world of Cloud IT.

The study shows that most organizations have given a higher priority to implementing cloud-based services and other IT initiatives over refreshing or upgrading the network. According to the study, IT decision makers have placed a higher priority over the network on five other IT initiatives such as server upgrades, pursuing cloud services, storage refresh, PC refresh, and upgrading security environments.

The findings in the study also reveal some interesting contradictions. Although 88% of IT decision makers believe cloud-based services will have an impact on the network, less than half of them said their organization had upgraded their network in the last three years.

3. A Scalable, Secure and High Performance Network is Necessary for the New World of Cloud IT

In order to improve the value of their cloud services and accommodate the impact of cloud services on the network, the study found that the majority of IT organizations have had to upgrade their company’s networks. Specifically, the study found that:

  • 78% of enterprises had to upgrade one or more aspects of the network
  • 47% of enterprises had to upgrade network bandwidth
  • 46% had to invest in new security services

So, where do we go from here?

I think the lessons above show the obvious. What is clear in the study is that enterprise networks have reached a tipping point with respect to being able to support more business-critical services that reside in the cloud. Traditional network designs simply are not able to provide the performance, security, and flexibility to support the demands driven by the cloud today and into tomorrow. In order to realize the full benefits of cloud-based services, companies will have to examine their networks for readiness, align it with their business and IT strategy, and start to design new network infrastructures to enable a scalable, high-performing, cost-effective and secure cloud services environment.

As the IT leader for our company, I understand our customers’ desire to better understand how to support the demand of cloud and virtualized services as well as mobility, big data and unified communications.  I hope that you will join us on October 9th at 2pm EDT as we discuss the challenges for the network in the new world of Cloud IT.

Stay Connected

Enter your email address below to receive updates each time we publish new content.