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IDC: Covid-19 hits SD-WAN, data center gear; enterprise impact varies

News Analysis
Jul 10, 20203 mins
Data CenterNetworking

IDC: We have seen two years of IT digital transformation in 2 months

Credit: Stephen Lawson/IDGNS

While the previously hot SD-WAN market has slowed and IT budgets overall are under pressure, the COVID-19 pandemic has created demand for other network capabilities such as improved network-management and collaboration tools, according to IDC.

The virus has caused recessionary economy that has forced enterprises across the globe to rapidly and dramatically shift their operations, according to Rohit Mehra, vice president, Network Infrastructure at IDC. “The reality of that is we have seen two years of IT digital transformation in two months,” Mehra told the online audience of an IDC webinar about the impact of the pandemic on enterprise networking.

Citing the June results of an IDC survey of 250 large- to medium-size companies, Rohit said 40% of them expect to spend more year-over-year on network infrastructure equipment. That’s 9% higher that respondents reported in March, Mehra said.

What has changed however is what they will be spending money on: network management and collaboration software mostly, IDC found. 

Almost half of respondents – 48% – reported they will increase investment in advanced automation platforms to reduce the manual management of the network. In addition, 46% said they were increasing spending on managing remote network operations. Also, 43% said they would increase investments in the use of cloud-based management platforms.

Closely related was the increased investment in analytics and other tools to increase visibility into applications, users and devices on the network, Mehra stated.“The need for analytics visibility and intelligent net ops have come to the fore,” he said.

On the collaboration side, IDC expects the need for disaster recovery, business continuity, and remote-worker communication tools will as work-fromhome mandates continues. Survey respondents said they expect nearly 30% of their workforces will be working from home in 2021 vs about 6% pre-COVID.

With so many remote workers application availability is becoming an issue, said Brandon Butler, senior research analyst, Enterprise Networks at IDC. Butler said 84% of remote users lose access to applications at least once a week, and 11% said it happens daily. 

While that’s obviously a problem, survey respondents listed security as the top challenge with remote tech support, slow broadband to the home and a lack of remote management of home devices as other challenges. 

“Seventy percent of the organizations we talked to said less than 50% of those remote users were using a VPN for security,” Butler said.  “We’ve seen vendors respond to this – for example SD-WAN vendors extend VPN concentrators for security to handle remote users – but the key takeaway is that the challenge of work-from-home employees isn’t going away, and network-based security is going to be a challenge the foreseeable future.”

What COVID-19 has meant for traditional networking elements such as Ethernet switches and wireless LAN gear is that year-over-year revenue for switches is down 3.6% and for WLAN it’s down 2.3%. 

Perhaps the most startling number is in the SD-WAN arena which has seen its yearly growth rate – which was nearly 40% through about March, fall to less than 1% in June. But that drop is understandable under the circumstances, said Brad Casemore, research vice president, Datacenter Networks at IDC.

“This been a period of retrenchment for many and we expect to get back rapid growth in 2021,” Casemore said. “All of the requirements – secure access to the cloud and cloud access optimization are still there and will continue to grow.”

What has happened, IDC analysts contend, is that many large-scale enterprise network projects have been delayed or cancelled. For example, on the WAN side, 38% of IDC respondents said they had delayed WAN upgrades, and 14% had cancelled altogether. And 37% said they had postponed campus-network changes, with 15% saying those changes were cancelled.