As COVID-19 forced companies to adopt remote working, communication providers found their worlds turned upside down. Employees realised that their broadband and telephony were fine for home use but not good for day-to-day business use. The result was increased pressure on communication providers, fixed, mobile and virtual, to provide a better service.
How much of an impact did it have on communication providers? To find out, A10 Networks asked Opinion Matters to survey 1,251 senior IT professionals from communication providers in UK, France, Germany, Middle East and India. The result is the A10 International Communications Service Providers Insights 2021 (registration required). It shows a significant impact on services, a need to scale-up infrastructure and serious impacts on traffic demand.
Adrian Taylor, Regional Vice President at A10 Networks, said: “The switch to working from home caused an unprecedented shift in customer needs and a fundamental change in both geographic and temporal use patterns, as home workers adapted working hours to combine jobs with home-schooling and caring duties.
“At the same time, it represented a rapid expansion of the attack surface, leaving providers battling on two fronts: how to meet demand, and how to scale-up safely. Our research shows UK providers had a dual focus on scale and security, which is set to continue as they make strategic adjustments to the evolving landscape, accelerating their transition to a more distributed network.”
Some highlights from the survey
The survey findings point to a need for communication providers to increase investment in their networks and products. It also shows how much work from home disrupted their business models, forcing them to quickly scale-up and scale-out solutions.
- 99% of respondents experienced an increase in demand as a result of COVID-19. 12% saw an increase in demand of over 75%, driven by gaming (13%), utilities (12%) and eCommerce and retail (11.5%). A further 48% saw an increase in demand of 50-75%.
- 55% scaled up infrastructure across the network while 54% scaled up in specific high-demand locations.
- 45% redistributed network capacity to accommodate changes in traffic demand. This would have been less of a problem for mobile operators, as they often traffic shape during rush hours to cover major traffic corridors. With home-schooling and people working at home, these changes would have stressed many residential networks leaving high-capacity business networks unscathed.
- 99% said the pandemic accelerated their transition to a more distributed network. It will be interesting to see if this results in long-term change, especially in rural areas where networks are often patchy.
Communication providers changing their investment decisions
Given the pressure on networks, it might seem that all communication providers increased investment in their networks. In reality, that wasn’t the case.
- 50% decided to reduce investment in their own network and instead shift spending to public cloud providers. The survey states: “This increased investment in public cloud providers is likely due to heightened demand as organisations look to restructure their businesses and continue to work remotely following the pandemic.” It also calls out smaller providers as the most likely to take advantage of the public cloud.
- 49% decided to pause their investment plans. This is driven by smaller providers looking at their business models to decide what the long-term future is for their services. Many may well join those who shifted spending to the public cloud.
- 47% are increasing the investment in their network.
- 21% are shifting investment to residential (suburban) locations. It would be helpful to know if this is just the major dormitory towns around major cities or how far out this investment will go. It would also have been useful to know what sort of investment this is. Is it copper, FTTC, FTTH or mobile?
Customer demand increased spending on security
Throughout the last year, security incidents soared. Attacks increased in frequency and ferocity. From ransomware to phishing and DDoS, users and providers were targeted by organised criminal gangs. The survey shows that this has had an impact on both customer demand and providers investment.
- 52% of providers increase their investment in security. One driver here was those servicing healthcare (60%) who increased their spending on security tools and staff. A section in the report looks at the additional capabilities and technologies that providers plan to add in 2021-2022 to protect networks.
- 47% invested more heavily in security technologies.
- 32% increased headcount to deal with requirements.
- 52% say customers are now more concerned about business continuity and resilience. For those looking to start using the public cloud, it will provide them with the ability to offer better services in this area.
- 44% say customer expectations about security from network service providers has risen. What isn’t clear is how much extra demand for outsourced security the providers are seeing from customers.
- 48% say upgrading firewalls and other security appliances to combat new threats is their highest priority security investment to 2022.
- 45% say DDoS mitigation across network infrastructure is a top priority, while 43% are prioritising DDoS protection as a service for enterprise customers.
Working from home an ongoing challenge for providers
There is no question that hybrid working is here to stay and not just for the near-term. What is interesting is the conflicting view across providers as to what hybrid working will look like.
- 67% say customers will continue to operate with employees working from home in some shape or form.
- 28% believe that up to 25% of the workforce will continue to work from home.
- 27% say that up to 50% of the workforce will work remotely.
- 5% believe that somewhere between 50% and 100% of the workforce will work remotely.
- Of interest, 33% say that the work environment will snap back to how it was before COVID-19.
Enterprise Times: What does this mean?
While the pandemic has disrupted every business, communication providers have been hit hard. They are the glue that allows people to work at home and, as such, have come under significant pressure from infrastructure to investment. As this report shows, there are many conflicting views across the various providers regarding where to invest, what to invest in, what customers want and what the future will look like.
The question now is, how will they respond? The report gives some insight into that, but the lack of a qualitative follow-up or access to the raw numbers masks some of that insight. For example, how do mobile operators see the future compared to fixed line? How many providers are looking at an increased managed services business, and what are the pressures in building that out? For those reducing investment, what are their expectations for long-term survival?
We may only know some of that as we go through 2021-2022 and look for signs of a shake-out in the communication provider market.