Enterprises have started embracing more and more cutting-edge technology solutions to enhance their business efficiency in today’s hyperconnected world. While the level of technology adoption among enterprises has been rising sharply during the past few years, the ongoing Covid-19 pandemic has proved to be a catalyst and has accelerated the speed of enterprises’ digital transformation. The crisis has prompted all kinds of enterprises to resort to collaboration tools and remote working solutions to ensure business continuity. Further, the shift towards the work-from-home model, coupled with the need to enable employees to stay connected, has led to the increased adoption of digital workspace solutions, including unified collaboration technologies, virtual office solutions, cloud services and videoconferencing tools. Considering the plethora of opportunities that the new normal has opened up in the enterprise connectivity space, stakeholders in the information and communication technology (ICT) domain are scaling up efforts to make the most of these new growth prospects.
Key drivers
At present, a few key factors are propelling the adoption of enterprise connectivity solutions. These factors are helping remove barriers to adoption, making it simpler and allowing more powerful solutions to be made available to a wide range of customers. Some of these factors are given below.
Simpler deployment methods
The deployment of enterprise connectivity solutions has become much simpler today than been about five to six years ago, owing to rapid advancements in technology. Today, most deployments are either self-managed or require minimal intervention and allow enterprises to access communication and collaboration tools without adding much complexity to their operations.
Cloud solutions to the rescue
As more and more enterprises are moving towards the cloud to enable remote access to data, business collaboration is becoming much easier. Cloud adoption is reshaping the enterprise connectivity space and making it easy to scale communication and collaboration tools within the enterprise. Further, cloud does away with the need for adopting and managing connectivity solutions at various locations and shifts costs from a capex-based model to a purely opex-based model. This makes it easier for enterprises to manage costs, while scaling up and down new services.
Increasing availability of global SIP solutions
A key challenge faced by global enterprises is in rolling out high quality, reliable end-to-end connectivity services to a large and varied workforce around the world. Further, the presence of different voice and data networks as well as vendors in each country makes the roll-out extremely complex, fragmented and expensive. However, the availability of global session initiation protocol (SIP) solutions, which help link enterprises with the world through a global internet protocol (IP) network offered by one supplier, makes the enterprise network simpler and easier to manage. Global SIP solutions offer scalability, reliability and flexibility to enterprises so that they can support multi-site and multinational connectivity deployments. Further, they enable enterprises to efficiently connect various locations through solutions, which offer consistent quality of service and experience across the world.
Rising collaborations in the connectivity space
The rising number of partnerships across the enterprise connectivity value chain under which different companies are coming together to offer their specialised solutions is helping build a dynamic package of connectivity solutions. This makes it easier for enterprises to adopt and deploy a package of solutions.
Possibility of meeting enterprises’ customised needs
Another major factor responsible for the rising adoption of enterprise connectivity solutions is the increased range of companies offering customised solutions according to various enterprises’ needs. Since customised solutions allow enterprises to choose according to their needs, they are more flexible and cost effective.
Impact of Covid-19
Initially, the onset of the Covid-19 pandemic led Indian enterprises to contain costs, defer all capital expenditure on non-critical ICT spending and hold off their long-term digital transformation initiatives until at least the next year. An analysis by GlobalData revealed that ICT spending in India is estimated to register a 7.2 per cent year-on-year decline and reach $102 billion in 2020, as against the initial estimated growth of 6.7 per cent before the Covid-19 outbreak. According to the analysis, ICT spending across all infrastructure segments – hardware, services and software – is projected to fall in India in 2020. However, public cloud was one of the few segments that was set to witness growth over 2019 as enterprises in the country continued investing in cloud storage options that offer strong business continuity from an operational perspective.
Another segment that is projected to witness growth is the market for enterprise social networking and collaboration platforms, which is estimated to grow by 17.5 per cent in 2020, owing to the increased demand for collaboration tools by enterprises. Among various sectors, ICT spending across travel and leisure, transport and logistics, and manufacturing is projected to bear the maximum brunt of the Covid-19 impact in 2020. The banking, financial services and insurance (BFSI) sector, which accounted for 13.5 per cent of the overall ICT spend in 2019, will also witness a 6.4 per cent decline in the ICT spend in 2020.
Post-Covid scenario
Despite a significant impact of the outbreak on the overall ICT spending, GlobalData predicts that the Covid-19 pandemic will ultimately create new opportunities for ICT vendors by providing them with use cases in the fields of artificial intelligence, analytics and automation. Further, collaborative applications, application platforms, security software, system and service management software, and content workflow and management applications are expected to witness a heightened demand in the post-Covid era.
In fact, GlobalData expects the enterprise networking market in India to post a compound annual growth rate of 5.2 per cent in terms of market value between 2019 and 2024. While the market value is expected to drop from $8.42 billion in 2019 to $8.35 billion in 2020, owing to the disruption in business operations, the growth will bounce back beginning 2021. As business activity slowly returns to normalcy and enterprises accelerate their digital transformation efforts to emerge stronger after the crisis and prepare themselves for any such disruptions in the future, their spending on ICT infrastructure, including networking, is expected to recover soon.
According to GlobalData, networking services will remain the largest and fastest growing market segment by value in the country throughout the forecast period. Growth in the networking services segment over the forecast period will be led by the fibre-to-the-home and fibre-to-the-building (FTTH/FTTB) services category. The rise in enterprise demand for high speed broadband services and increasing availability of optical fibre-based broadband connectivity will support growth in FTTH/FTTB services.
As per GlobalData, while both large as well as small-and-medium enterprises (SMEs) would be equally keen on making strategic enterprise networking investments, the latter, given their limited resources and manpower to handle a robust network infrastructure, will turn out to be the highest spenders on networking services in India.
Among various enterprise segments, the BFSI sector will comprise the largest market for enterprise networking in India between 2019 and 2024. The need to have a robust network infrastructure for enabling digital services, handling increased data flows and safeguarding huge volumes of customer data against cyberattacks will drive enterprises in the BFSI sector to modernise their IT networks and increase spending on new network solutions and services.
Evolving managed services model
The managed services model is considered as a core component of the enterprise connectivity space. A managed service provider bears the responsibility for functionality of an enterprise’s IT services and infrastructure, enabling it to focus on its core competencies. Thus, under the managed model, the managed service provider (MSP) takes on, runs and transforms an organisation’s business operations and processes to increase its productivity and operational efficiency.
With time, the scope and nature of the managed services model has evolved significantly. From initially offering traditional managed network or application services, MSPs have now transitioned to providing managed videoconferencing, managed security and managed cloud services, among other things.
The rising number of cyberattacks has forced enterprises to adopt a “security first” strategy. Considering this, MSPs have started undertaking efforts to secure the service infrastructure of their clients and defend and recover from any cyberattack. Further, growth in multi-cloud environments, wherein enterprises heavily rely on one cloud while using the other sporadically, has opened up new opportunities for MSPs. They can avail of this opportunity by offering consumption-based pricing models. Moreover, rising automation in IT environments can enable MSPs to decrease workloads with every contract. In this regard, MSPs can gain a competitive advantage by including automation solutions in their key offerings.
Telcos jumping on to the bandwagon
At a time when the conventional mobility business is not generating enough revenues for telcos, the enterprise connectivity space has emerged as a new growth avenue. All major telecom service providers in the country have been actively looking to tap opportunities in this space.
Among operators, Vodafone Idea has announced its plans of transforming from a telco into a “techco” and has partnered with several companies to build a dynamic portfolio of products and services for enterprises. Further, the operator’s enterprise arm, Vi Business recently partnered with cybersecurity solutions provider Fortinet to launch managed security services for enterprise customers providing features such as end-to-end managed services, basic and advanced security features, and real-time monitoring and management. In the internet of things (IoT) space, Vi is in advanced talks with automobile majors to connect the entire engineering chain by leveraging its 4G network. Moreover, Vi is working with players such as JCB, Maruti Suzuki, Tata Motors, Mahindra and Hyundai in India for connected car technology. The operator is also currently conducting trials of narrowband IoT in India and has stated that the technology is most suited for industrial IoT use cases. In the cloud space, Vi has entered into strategic partnerships with co-location, internet-as-a-service (IaaS) providers and software-as-a-service (SaaS) providers. Further, it is co-creating differentiated offerings with partners such as Google, Microsoft, Amazon Web Services (AWS) and CtrlS and currently operates 88 Edge computing centres in the country.
Bharti Airtel too has been actively forging ties with global vendors to scale up its offerings for enterprise customers. The operator has launched a security intelligence centre with an investment of Rs 1 billion and has entered into partnerships with Cisco, Vmware, Radware and Forcepoint to offer advanced cybersecurity solutions to enterprise customers. Recently, the operator marked its entry into the fast growing cloud communications market with the launch of Airtel IQ. Airtel IQ, a cloud-based omnichannel communications platform, enables enterprises to deepen engagement with customers through timely and secure communication. Airtel also signed a multi-year strategic collaboration agreement with AWS to offer a comprehensive set of cloud solutions to enterprise customers.
SMEs present another lucrative revenue-generating opportunity for telcos. All three private telcos have been exploring opportunities in this segment. Bharti Airtel has been offering voice, data and videoconferencing solutions to SMEs and caters to over 500,000 SMEs across the country. Further, the operator has recently entered into partnerships with Cisco and Google Cloud to offer advanced connectivity solutions to SMEs.
Vodafone Idea too has been offering tailor-made solutions to a diverse range of SMEs. The operator’s key offerings include communications solutions, managed IoT connectivity, SuperIoT, analytics, Wi-Fi, conferencing, field force automation and cloud telephony.
Following suit, Reliance Jio has also announced plans of foraying into the SME market through curated offerings, which would enable small enterprises to access technology at highly affordable rates. These offerings will include enterprise-grade voice and data services, videoconferencing, security solutions, marketing and sales solutions and many more productivity tools. Further, the company’s JioFiber services will offer a combination of fixed line connectivity and cloud applications, in partnership with Microsoft’s Azure cloud services.
Outlook and opportunities
Net, net, the enterprise connectivity space has been beaming with opportunities, especially after the Covid-19 pandemic. In this scenario, it is imperative for stakeholders in the ICT domain to make the most of these upcoming opportunities and focus on building innovative solutions that are effective in meeting the growing demand in the post-Covid era. Moreover, as the country is getting ready to jump on to the 5G bandwagon, telcos as well as IT service providers should brace themselves for the ongoing technological disruption and devise solutions that can enable Indian enterprises to gain a competitive edge in the world.
