enterprise lan: management and outsourCing in the Current business landsCape

With the current and upcoming digitalization of networks, enterprises need to re-evaluate their current approach to LAN operation and management. The situation will differ from company to company, largely depending on the nature of the enterprise network and the size of the company. Heterogeneity or high distribution of a network, disposable capital, security or regulatory requirements as well as demands of business-critical business units are main infl uencers on a make or buy decision. Furthermore experts for LAN management are few and enterprises have to keep this in mind when assessing their innovation capabilities. Upcoming tools and technologies that offer more automation and enable inter-nal staff to “do more with less” will additionally have a major impact on the make or buy decision of business customers.

introduction

Local area networks are the very framework that supports the ongoing business of a company. Thus, its design, availability, performance, resiliency and scalability are all crucial to business health, so much so that any downtime in the LAN or any of its components is assessed by the severity of its impact on the profitability and loss of a company. For ICT-based businesses, the LAN is its backbone. Without it, digital businesses would not be able to deliver to their customers. In the era of digitalization, the LAN becomes even more crucial as the data and voice traffic that passes through the network becomes the lifeblood of an entire organization. In response, Forrester1 states that 83 percent of company decision-makers for enterprise network and tele-com spending have already responded to local performance challenges with network hardware and software upgrades as part of private cloud initiatives, but organizations must also address challenges introduced by integrating various external resources.

current enterprise netWorks are coMpleX and often Heterogeneous

long provisioning tiMes and HigH coMpleXity of enterprise netWorksEnterprise LAN are inherently complex and this complexity increases depending on how large, geographically distributed and mission critical the business operations are of a company. Thus, provisioning and network transfor mations often take some time because a lot of careful network planning is involved to ensure that the enterprise LAN is capable of supporting the present and future needs of the respective company.

Provisioning typically involves network designs that are often customized and are a result of site surveys and lengthy assess-ments. This also requires significant support from Professional Services since campus LAN often involves integration with other services like WAN, IP telephony, security, network optimization, etc. Deployment of wired and wireless LAN components also requires significant onsite work (setup, wiring, installation, configuration, activation), which becomes longer and more expensive with distributed networks. In greenfield deployments, provisioning lead time takes about two to three months, but this timeframe becomes even longer when network transformation is involved (brownfield) such as for a company that wants to do a tech refresh, expand its existing network (e.g. with WLAN) or migrate to a cloud-managed or software-defined network.

network transforma-tion extends timeframes for lan upgrades

aktuellesituation

1:1 migration

design-optimierung tk-infra-struktur

enterprises upgraded sw and hw

for higher lan performance

83%

EntErprisE LAn: ManageMent and outsourcing in the current business landscape

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Multi-vendor environMents and disjunct lan and Wlan ManageMent We also find that enterprise LAN is more often composed of heterogeneous networks with multi-vendor environments. This is an even more likely scenario for enterprises that are multinational corporations forged through mergers and acquisitions. M&As often bring inherited networks whose design and infrastructure are usually different from the acquiring company.

As most LAN vendor solutions are closed systems, then multi-vendor environments will require either managing different systems or implementing an IT service management overlay that is network-agnostic, but requires additional IT expense. Furthermore, wired and wireless LAN typically have separate management interfaces. Traditionally, it has not been possible to manage both LAN and WLAN without an additional management layer like Cisco Prime, HPE/Aruba AirWave, SolarWinds, etc. Also, LAN typically has more configuration possibilities, whereas WLAN traditionally needs WLAN controllers and additional software licenses to enable more advanced features and configuration options.

HigH it costs to Manage tHe enterprise netWorkManaging a campus LAN for a large enterprise company requires significant expense to maintain an IT team that will run the network. This implies that a company must hire the right people with the right technical competencies and certifications and be able to retain them for continuity. This is challenging in and of itself because of a highly competitive IT job market where employee attrition is high.

cHallenges in lan ManageMent

In this landscape, the typical day-to-day challenges in managing an enterprise LAN consist of:

asset ManageMentLAN network components need to be regularly inventoried: Where are they placed and whether they are active/inactive as well as audits and assessment of device lifecycle, vendor, model, licenses and software and firmware upgrades. This also includes managing network upgrades or tech refresh to ensure continuous operation of the enterprise LAN.

service availabilityNetwork needs proactive monitoring to reduce downtimes through remote fault isolation, diagnosis and repair. This also involves ensuring the resiliency and redundancy of the network for continuous service operation.

cHange and configuration ManageMentChanges on the network such as port activation/deactivation, VLAN setup, VLAN tagging, spanning tree, SSID configuration, etc. are made on a day-to-day basis and need to be performed properly. capacity planning and ManageMentThe network has to handle the daily business operations and transactions of a company. To ensure that regular analysis of network performance, traffic monitoring, CPU utilization, reported events and needs to be done. Critical to this also is the ability to test and forecast the capacity of the network for present and future demands and be able to scale up and down as necessary.

lan securityRegular security patches and layers are in place ensure the corporate network‘s integrity to prevent data breaches. This includes monitoring and managing parallel security solutions such as firewalls for threat protection, network access management and endpoint security.

visibility and reportingNetwork managers need to have a comprehensive overview of the network at a glance and need visibility of the different network components and their performance from a dashboard. This will also involve preparing regular reports on network operation, performance and security for companies that require such for internal and external audit and service reviews.

Gartner2 adds two challenges for enterprises in the digitalization era: Enterprises seeking more agile network solutions continue to be hampered by manual processes and cultural resistance and enterprises moving applications to public cloud services frequently struggle with application performance issues.

Companies need to have adequate skills and people

to be Considered: manual proCesses, Culture, appliCation performanCe

enterprise lan: ManageMent and outsourcing in tHe current business landscape

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Make or buy – tHe situation

The day-to-day challenges of keeping the enterprise LAN up-to-speed has given rise to different approaches. At present, a significant share of large enterprises manage their own networks for reasons such as cost, control, security or regulation. However, there are companies that have or are starting to shift to co-managed service models where they outsource a part of the daily management of the network to a service provider (e.g. maintenance only, maintenance and management only, management only, etc). A third category would be companies that do not have their own IT teams or else, they are reducing their IT expenses in order to concentrate on their core business. These companies fully outsource the provisioning, management and maintenance of their enterprise LAN to managed service providers.

A fully managed service not only reduces the inhouse costs of a company, but it also reduces for the company the complexity of managing multiple platforms of a combined network and keeping them up-to-date. The more distributed the network, the bigger the challenge. This applies often to international companies. For multinational corporations, this streamlines the task of managing a widely distributed network of branch offices and saves on maintenance costs by capitalizing on the geo footprint of global managed service providers. Other companies with 24x7 operations or time-critical businesses outsource the management of their network to service providers. This is to ensure continuous network availability through service level agreements since service providers typically have direct access to vendor supply chains or warehouses to quickly facilitate service restoration. In line with this use case, another reason for fully managed networks is to have end-to-end SLA for all network components from the WAN to the LAN.

Some experts are pegging fully managed networks to be between 20% to 30% of total enterprise networks and these are mainly large enterprise customers. Medium-sized enterprises that do not have distributed branch networks tend to work with local system houses to provision and maintain their networks with an SLA or manage it to some degree (reactive monitoring) such as in co-managed models.

Another option that currently presents itself to business customers would be SD-LAN (software-defined LAN). SD-LAN offers the possibility to 1) reduce provisioning lead times through zero-touch provisioning, auto-discovery and auto-configuration, 2) centralize network management through a single orchestration platform that unifies the management of

both the wired and wireless LAN, 3) enable network visibility and capacity planning through network inventory as well as deep dive

performance reporting, 4) strengthen network security through role-based authentication and access management and 5) shorten repair times through self-healing and self-optimizing networks.

Some enterprise network experts hail SD-LAN as a „customer-enabler“, which will make it possible for companies to self-manage their networks (DIY networks) using a single orchestration platform, thereby simplifying the day-to-day management of the enterprise LAN. The emergence of this technology is expected to have an impact on the make or buy decision-making journey of enterprise customers as they look for long term solutions to address network challenges while seeking to protect their investments.

reasons for inhouse management: Cost, Control, seCurity, regulation

outsourCing reduCes lan management Complexity with end-to-end slas

aktuellesituation

1:1 migration

design-optimierung tk-infra-struktur

fully managed networks by

external providers

20-30%

EntErprisE LAn: ManageMent and outsourcing in the current business landscape

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inHouse or outsourced: decision criteria

With the possibility of different service models available to enterprise customers and the potential benefits that SD-LAN offers, the question that remains is whether to outsource or to self-manage the network. To answer this, we think that the customer needs to do some reality checks to properly weigh which option is more viable for the company in the long term. The questions below are exchanged also with various industry experts from both the vendor and service provider side. They may also apply to the decision to have fully managed services in general, whether it be in a traditional setup or in an SDN environment.

is tHe coMpany’s netWork HoMogeneous or Heterogeneous WitH Multi-vendor environMents? This is a crucial first question to ask because current SD-LAN offers are not yet able to support multi-vendor environments. Thus, unless the company is willing to do a complete transition to homogenize the network, there may be more cost and time that will be entailed than expected that outsourcing the network may in fact be a better option.

is tHe coMpany ready to Handle tHe liquidity iMplication of investing on tHe netWork infrastructure and sWitcH froM an opeX spending to a capeX Model? Under a fully managed service, the network infrastructure cost is typically distributed across the contract period of three or five years and is added into the monthly recurring management cost of the network, thus giving companies other financing options to consider.

does tHe coMpany Have tHe rigHt nuMber of people WitH tHe appropriate skills and certifications to establisH tHe netWork and Manage it froM day-to-day? As mentioned earlier, retaining the right people is challenging in a highly competitive job market. Thus, will the cost implication of hiring new IT staff, training them, keeping them up-to-date on certifications and retaining them offer more cost-savings to the customer than outsourcing the network? Does the company’s people have enough experience in managing network transformations and overseeing the project to the end? Under a fully managed service, managed service providers (MSPs) can assign experts such as Technical Engineers, Project Managers or Solutions Architects to provide consult, oversee the transformation project and offer problem-solving skills to any issues that might arise during the project, while being engaged only within a limited time frame.

does tHe coMpany Have a HigHly distributed netWork? Multinational companies with branch offices in many countries will mean multiple sites to manage and most likely high travel costs to address network issues onsite that cannot be done from remote. MSPs are able to streamline the cost here through their international business units or through vast network of local system house partners to provide on-site support when necessary within the service level agreement.

does tHe coMpany Have any security or regulatory requireMents? This is a legal question that has an implication on the network management. While MSPs and platform solutions use to have adequate security in place, some company may prefer to manage the network themselves if their security policies require that they have control of their entire network. On the other hand, complex security requirements might indeed call for the need to have security experts come in and manage the network and security components.

does tHe coMpany Have a 24/7 operation or Have Mission critical units?This is another crucial question to ask because such businesses will require 24 / 7 support and proactive monitoring in order to ensure that the network is available and is running continuously. This will also mean that the company should have enough devices on stock in order to replace defective devices within a short turnaround time that will not affect the network availability of any business unit. The question that this entails thus is if the company can support 24/7 operations and the consequent overhead and staffing costs that it will need.

Finally, in an era of highly dynamic and agile networks, enterprises should consider their innovation capabilities – are they staffed to keep up with the current technological evolution and business demands?

EntErprisE LAn: ManageMent and outsourcing in the current business landscape

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CONTACT

T-Systems International GmbH Wilfried MeerWilfried.Meer@t-systems.com

conclusion and outlook

Moving forward, we do not think it will be a simple shift from managed to unmanaged networks, especially among large enterprise customers. A significant share of large enterprise customers is already managing their own networks so we think it will be more of a shift from traditional LAN and WLAN networks to an SDN environment. In such cases, large enterprise customers may need Professional Services from a service provider to offer migration support during the transformation period. Another possibility is that as these type of large enterprise customers transition to an SDN environment, one arrange-ment is to have a co-managed service with an MSP, wherein the latter handles the provisioning, management and mainte-nance of the network, but the customer has self-administration possibilities.

On the other hand, we think some large enterprise customers that have already outsourced their networks under a fully managed service will not necessarily shift from managed to unmanaged networks largely because of the sheer complexity of transitioning the management of the entire system and infrastructure and managing the assets afterwards. This is espe-cially the case for customers that are also getting services from the same provider such as WAN, security, optimization and IP telephony. As these enterprise communication services are all integrated, transitioning from managed to unmanaged may prove to be more counterproductive and expensive for the company.

Various literature from vendors cite the cost-savings that can be derived from SD-LAN in the long term and this has been one of the most compelling reasons why some companies are considering to self-manage their enterprise networks. SD-LAN is even more interesting for enterprises, because it paves the way to automation. Gartner3 assumes that by 2021, productized network automation tools will be utilized by 45 percent of organizations, up from less than 10 percent today. The reason is the anticipated increase in demand for greater network agility and process maturity. Thus, networks in general and enterprise LANs in particular need more simplicity which can be achieved through automation using software-defined networking and APIs.

Overall, we think that transitioning to an SDN environment is not as simple as it sounds. Transforming the network with a solution like SD-LAN will require significant IT spending on the infrastructure, platform and IT staff. This means, the more complex transition phase will most likely offset whatever cost-savings SD-LAN was projected to bring once the new platform is fully implemented. At the end of the day, customers need to think about their service level expectations side by side cost considerations in deciding whether to self-manage their networks or outsource them to a provider.

Corporations that intend to outsource will find a reliable and experienced partner in T-Systems offerings a comprehensive and enterprise-grade service portfolio.

PUBLISHED BY

T-Systems International GmbH Hahnstraße 43d60528 Frankfurt am Main Germany

http://www.t-systems.com

1 Adapt your Network Strategy to Thrive in a Shifting Ecosystem, Forrester, Sophia I. Vargas and Andre Kindness, 2017 2 Predicts 2018: Enterprise Network Infrastructure and Services, Gartner, Bjarne Munch et al., 20183 2018 Strategic Roadmap for Networking, Gartner, Neil Rickard, Andrew Lerner, 2018