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Solving Internet Exchange Traffic Barriers Brought on by Digital Transformation

Ben Gonyea, VP, Global Product Management & Product Development
June 4, 2020

Digital transformation can mean a lot of different things, depending on the person. Still, it is generally associated with an unprecedented rate of innovation, increasingly sophisticated analytics, and a wave of new technologies, such as artificial intelligence. It’s completely remaking how businesses deliver value to customers. According to McKinsey, digital transformation is driving demand for more than $13 trillion global GDP increase by 2030.

At its core, digital transformation is about leveraging new technologies with a hyper-focus on the customer experience. New analytics initiatives help pave the way for customer insights, and new media formats mean more opportunities for engagement. Plus, artificial intelligence is likely to pave the way for automation on an unprecedented scale.

Network management may not get the same amount of attention as self-driving cars or AI, but it lays the foundation for everything that digital transformation encompasses. In fact, according to IDC Futurescape Worldwide Transformation Predictions 2019, the prioritized investment in digital infrastructure will be $5.9 trillion by 2021.

The bad news is that interconnecting network traffic flows lags behind many others when preparing for what’s next. The good news? This onset of change is forcing a re-architecture of IT towards a decentralized infrastructure. There are steps IT leaders can take to effectively rewire their networks and catch up.

Digital Transformation: What’s Next for the Network?

The rapid rate of advancement has a lot of implications for industries ranging from aerospace to entertainment and everything in between. While the impact will affect many functional areas throughout an organization, one of the largest is how their networks are designed and managed. By 2025, IDC predicts that 49% of the world’s data will be stored in public cloud environments as opposed to traditional data centers.

Whether it comes from growth in consumer cloud storage or video streaming services, organizations shift more of their software into the cloud. This represents a dramatic evolution in how and where data is stored. This in turn means that organizations hoping to achieve digital transformation will need to consider their networks with a focus on optimizing traffic with many different types of data coming from various sources. That has been one of the more challenging areas of digital transformation to address. Not to mention, the onset of data gravity barriers brought on by this constant explosion of new data, causes unfavorable complexities and network performance issues.

By 2025, IDC predicts that 49% of the world’s data will be stored in public cloud environments as opposed to traditional data centers.

The existing enterprise networks are not designed for today’s interactive workload behaviors. While network administrators must manage disparate traffic flows from multiple sources, improve performance by controlling costs, and extend reach to meet the ever-growing demands of new audiences, enterprises are forced to adopt a new network architecture to manage this change. New IT architecture strategies must address workload distribution across clouds, data centers, and other on-premises edge locations.

Help Your Network Catch Up to Digital Transformation

Research firm IDC highlighted the gap between network transformation and digital transformation in a 2017 white paper. Despite considerable advancements in flexibility, scalability and overall sophistication in IT resources like processing power and storage, IDC suggested that the network had yet to catch up.

“To a large extent, over the past five years, compute and datacenter infrastructure has taken the lead in adopting faster, more agile and automated approaches to supporting digital transformation with private, public, and hybrid cloud strategies,” IDC stated. “In many cases, network transformation has been left behind, leaving it as a vulnerability and constraint to many organizations’ digital initiatives. At the same time, deploying a digital-ready network will probably prove to be the most critical element for an organization’s successful digital transformation.”

As more businesses offer customer-facing applications, leverage cloud services for both internal and external stakeholders, the variety and amount of network traffic is going to increase. The enterprise network is not designed to accommodate third party cloud connected infrastructure.

Regardless of which specific elements of digital transformation you consider, the network sits at the core of these changes. As more businesses offer customer-facing applications, leverage cloud services for both internal and external stakeholders, the variety and amount of network traffic is going to increase. The enterprise network is not designed to accommodate third party cloud connected infrastructure.

Network Transformation: The Challenges

Latency is one of the first signs that the network hasn’t caught up to the other areas of digital transformation. Whether looking at op-ed pieces from nearly a decade ago, or research from last year, cloud network latency continues to be an issue for businesses. Part of the challenge here is that network latency can be impacted not just by the cloud providers’ networks but by the design and performance of our network as well.

For example, if you’re sending data between different cloud environments, the efficiency will vary based on the hosting location of these environments. Solving challenges associated with latency is even more complex now that organizations typically use five cloud environments on average. Furthermore, digital transformation is increasing the addition of new IT networked locations. According to 451 research’s The Infrastructure Imperative, by 2022, IT leaders expect to deploy between 6 to 20 new geographic business locations in support of digital business.

Another key issue with managing networks in an increasingly diversified system is ensuring compliance and security. Network configuration can be challenging even in single-cloud environments using multiple VMs with different access and firewall rules.

However, the task becomes even more complex when considering multiple VMs in multiple cloud environments. Without decentralized management of these configurations, it is far more likely for errors to slip through the cracks, leading to problems like far too few restrictions on traffic or misconfigured logging and traffic monitoring.

With the growing momentum behind digital transformation, now is the time to start taking steps toward improving day-to-day operations and planning for the future. It’s time to start thinking about a decentralized architecture and new processes for reviewing network configurations and addressing any errors, identifying opportunities to automate configuration deployment and optimizing network management while monitoring as much as possible.

Network Admins at the Core of Digital Transformation

While the challenges outlined above are critical, they also present an opportunity for the professionals who manage networks to carve their own roles in the digital transformation trend by making key optimizations for scalability, global coverage and performance.

IDC’s research shows that rethinking the network is about more than technology buzzwords—it can actually save organizations a lot of money — as much as $38,000 per 100 users per year, and this estimate doesn’t account for the value created by better performing business applications and an improved customer experience across all channels used for engagement.

by 2022, IT leaders expect to deploy between 6 to 20 new geographic business locations in support of digital business.

Faced with increasing network costs, user experience issues, and networks that aren’t architected to scale, IT leaders must adapt decentralized architecture strategies to implement new business points of presence, optimize network segment/topology, and establish mutli-cloud connectivity and oversight.

Digital Realty created Network Hub not only to make network administrators’ lives easier, but to enable the full potential of network transformation. By interconnecting network traffic flows, organizations can scale their networks more effectively and at lower management costs. Some of Network Hub’s other key features include:

  • Secure colocation for security and telemetry footprint (expandable)
  • Private, direct interconnection to clouds, carriers and partners
  • Global access to operational environment via portal/APIs
  • Streamlined contracting vehicle for multi-site deployments
  • Cabinet installation and remote hands services
  • Industry Standard Compliance
  • Discounted Pricing for starter kit configuration

Network Hub is a solution fit for a world where complexity is commonplace and the demands on business networks are greater than they’ve ever been before. Most importantly, it is designed to enhance the work that you already do, by streamlining global management, reducing latency and cost effectively increasing per-employee bandwidth.

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