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Reality Check

By Tom Nolle, Network World | Jun 12, 2023 8:05 am PDT

About |

Tom Nolle is founder and principal analyst at Andover Intel, a consulting and
analysis firm that looks at evolving technologies and applications first from
the perspective of the buyer.

Opinion


NETWORK SPENDING PRIORITIES FOR SECOND-HALF 2023


ENTERPRISES HOPE TO INVEST IN SECURITY, OPERATIONAL STABILITY, AND BETTER
APPLICATION-DELIVERY PERFORMANCE USING TECHNOLOGIES THAT INCLUDE SD-WAN AND AI.

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ModernLife / Getty Images



OK, it’s not been a great first half for many companies, from end users to
vendors and providers. The good news is that users sort of believe that many of
the economic and political issues that have contributed to the problem have been
at least held at bay.

There’s still uncertainty in the tech world, but it's a bit less than before.
Most of the companies I’ve talked with this year have stayed guardedly
optimistic that things were going to improve. Over the last month, of the nearly
200 companies I’ve emailed with, only 21 were “pessimistic” about the outlook
for their tech spending in the second half.

Lack of pessimism doesn’t translate to optimism, though, and optimism is a bit
non-specific for network and IT planners to build on. What are the user
priorities for tech for the rest of the year? Do they think their budgets will
shift, and if so from what to what? Are they looking to make major changes in
their networks, change their vendors, be more or less open? I thought I knew
some of the answers to these questions, but for some I was wrong.

[ Get regularly scheduled insights by signing up for Network World newsletters.
]

Let’s start with the first question, which is budget patterns. Two thirds of
companies I heard from say they are actually expecting to spend more on
networking in 2023 than they did last year, even though most of them admitted
that their spending has been curtailed. It’s not likely to be a huge increase,
but their expected spending growth roughly matches the historical average of the
last 10 years.



That doesn’t mean they’re not trying to cut costs. The average company on my
list that predicted just over 4% higher spending on networking this year is now
looking for almost exactly the same amount of cost reduction. Spend more, spend
less. Does that seem contradictory? No, what it means is that they want to cut
the cost of sustaining what they have in order to help fund new initiatives, and
that they’re prepared to increase spending to fund the remainder. 

What new initiatives? What cost-cutting? Almost 100% of the users want to reduce
the cost of network services more than the cost of network equipment. While
about a third say they would stretch refreshing of old gear from this year into
next, everyone wants to spend less on network services.



The new initiatives they hope to fund are focused on three specific areas.
First, improved security. Second, improved operational stability and
availability. Third, improved application-delivery performance.

Nominations are open for the 2024 Best Places to Work in IT

One beneficiary of this combination of goals is SD-WAN. About a quarter of
companies on my list had some SD-WAN exposure, but almost all of them adopted it
to extend VPN access to sites they couldn’t justify connecting directly to their
VPNs. A bit over half the companies are now saying they’ll consider SD-WAN to
replace the VPN, where the cost of connection per empowered worker is too high.
This group is roughly equally divided on whether to buy SD-WAN gear themselves,
get it from a managed service provider (MSP), or get it from a network operator
or communications service provider (CSP). The MSP route is most popular when the
target sites are multi-national, and the CSP route when the sites are all
currently on VPNs from one operator. Rolling your own SD-WAN is the choice when
neither of these is true.

Despite the fact that many SD-WAN products/services offer enhanced security,
this feature isn’t highlighted by prospective SD-WAN adopters. Most say that
this is because the focus of SD-WAN consideration is cost management and not
security enhancement. But most also say that vendors/providers of SD-WAN aren’t
pushing them toward considering security as another justification for adoption.
Instead, their security focus is usually another layer.

Security is the area where most users expect to spend more, but at the same time
an area where they believe their spending is most likely to be sub-optimal.
Three-quarters of buyers think they already spend too much on security because
they’ve layered things on without considering the whole picture. You hear terms
like “holistic approach” or “rethinking” a lot in their comments, but at the
same time, less than an eighth of the users expect to redo their security
strategies in any way. They recognize that to undertake any major change is to
risk creating a hole in products or practices that could hurt them badly. They
hope for new features, even at a cost, from current vendors, and that their
current vendors would somehow rationalize the whole security stack and approach.

That stay-the-course view carries on to network equipment overall. While well
over 80% of users say that open technologies like white boxes and open-source
software could “significantly” lower costs, and while about a sixth say they are
“looking at” open-model networking, the number that actually has budgeted for a
change to an open strategy in the second half is in the statistical noise level.
In fact, two companies that had planned to increase their open-model investment
in 2023 say they are now going to stay with their dominant vendor.

That’s another interesting shift in itself. Even among network operators, I’m
seeing a desire not to broaden vendor choices in their networks but to narrow
it. Three companies say they would be “consolidating” vendors for every one
company that says it would be expanding the number they bought from. There is
even a desire among end users to reduce the number of service providers (and, by
the way, cloud providers). They’re talking “more leverage” and “less
integration” instead of “best of breed” or “lock-in”.



What technology has them the most excited? AI is the answer, but even here there
are a bunch of contradictions. Very few companies (maybe one in six) have even
tried to use AI in networking in any way. Nearly all of them say that they
expect their AI use to increase, and yet nearly all also say that AI is
overhyped and that “most vendor AI claims are exaggerated.”

The reasons for the seemingly mindless AI enthusiasm is a simple reversal of an
old saying: “Where there’s hope, there’s life.” AI could (theoretically) reduce
operator errors. It could (hopefully) improve network capacity planning. It
could (presumably) help secure applications and data and spot malefactors. All
these things are recurring problems that seem to defy solution, and AI offers a
hope that a solution might be near at hand. What’s not to love, provisionally of
course.

“Provisionally” means not right now. Users cite only two network AI tools (three
AI tools overall) that they think are really delivering good value today. On
average, they think that AI will mature enough to deliver on some promises by
late in the second half of 2023. If it does, they’re prepared to go off-budget
to get the stuff that proves out.

Overall, network buyers are hopeful for the second half, but they’re also still,
in their hearts, a little afraid. Uncertainty is the enemy of investment, and it
wouldn’t take much to tip things over to the cautious side. Like the users
themselves, I remain (theoretically, hopefully, presumably, provisionally)
confident...for now. It could still be a cold winter.



Next read this:

 * 9 career-boosting Wi-Fi certifications
 * What is MPLS, and why isn't it dead yet?
 * 11 ways to list and sort files on Linux
 * 5 free network-vulnerability scanners
 * How-to measure enterprise Wi-Fi speeds



Related:
 * SD-WAN
 * Security
 * Application Performance Management

Tom Nolle is founder and principal analyst at Andover Intel, a unique consulting
and analysis firm that looks at evolving technologies and applications first
from the perspective of the buyer and the buyers’ needs.

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