Research Report
Modern networks: How to fast track competitive advantage
An overhaul of enterprise networks is overdue
In brief
- Enterprise digitalization has grown exponentially over the past 15 years, but network capacity has fallen behind other areas of digital investment.
- 87% of enterprises said the growing data demands of their new AI systems have outstripped the current capabilities of networks.
- Current network investments are heavily weighted towards maintenance, and most networks continue to underperform.
- Focusing network budget on modernization can yield greater business resiliency and cost efficiency, creating a ripple effect of innovation.
A modern network seamlessly connects and enables various layers of the digital core, comprising cloud, data and AI, applications and platforms and incorporating other new technologies. The digital core unlocks future innovation, fueling new products, services and experiences to drive total enterprise reinvention.
Rapid enterprise digitalization outpaces network capacity and spend
During the last 15 years, digitalization—as measured by the adoption of digital technologies and growth in data, devices, storage, cloud, compute and connected endpoints—has increased a staggering 162 times. Meanwhile, network capacity has grown only 43 times and innovation spend on network has grown just two-fold. Digitalization is clearly outpacing network capacity and modernization spend. Narrowing the gap will require more investment in network modernization.
This explosion of digitalization combined with the surge in new technologies available to enterprises (and the volume of data generated and used) has put a strain on current networks. Those demands will increase as data continues to grow and generative AI becomes more pervasive.
Network limitations impede Total Enterprise Reinvention
Businesses are aware that current networks are becoming bottlenecks. In our global survey of 1,000 business and IT executives, 87% of respondents said the growing data demands of their new AI systems have outstripped the current capabilities of networks. And about two out of three (64%) surveyed companies face significant risk across all domains due to network deficiencies.
87%
of respondents said that their network capabilities can’t keep up with the growing data demands of the new AI systems.
Modernize your networks to unlock business transformation
Executives acknowledged that a modern network is a pre-requisite to transforming the business, enabling better outcomes for companies’ workforce, customers and partners. Yet, evaluation of maintenance and modernization budgets over the last four years shows that almost half of network budget is still spent on maintenance.
This slow pace of legacy network modernization often leads to a downward spiral of technology debt, limited innovation and escalating costs.
It’s clear something needs to change.
The network of the future must be a modern one—one that is an enabler of future technologies and innovation, not a cost center that confines the enterprise to the present.
84%
of respondents cited increasing customer value, improving productivity and lowering costs as top three business impacts expected from network transformation.
66%
of enterprise executives believe that advanced network capabilities such as AI and analytics-based network, cloud WAN, 5G and edge will create transformational to high impact on their businesses.
83%
of respondents cite higher security standards as a significant characteristic of modern enterprise network.
Three essential steps for network modernization
Our research shows that companies are approaching network transformation differently, and with varying degrees of success. We found that the companies achieving higher business resilience, cost efficiency and innovation are following three imperatives:
Our analysis shows that these advanced network practices are the key to progressing on network maturity and business resiliency. Companies who apply them successfully mitigate risk across all domains.
Adopt modern networks now to clear the way for the future
Enterprises must commit to continuous, dynamic reinvention to thrive in a world driven by volatile macro environment and accelerated innovation enabled by next-gen technologies such as cloud, edge, 5G, data and AI. But how can companies thrive and grow when their network is the choke point? The way forward is clear: Make your network a competitive advantage by modernizing it. Modernizing networks and strengthening the digital core is essential for driving total enterprise reinvention.
Learn how the communications industry is using network-led transformation to grow.