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2021 Predictions for Network and Infrastructure

One of my favorite things about the end of year is taking the time to reflect on the past year’s successes, failures, challenges and insights… second perhaps to making predictions for next year. For example, “How much will the Dow change over the next year?” is a game I sometimes like to play. The challenge, of course, is that no one has a crystal ball. 2020 is a case in point: who would have predicted a global pandemic or that NYC real estate would see a 30% price reduction? And even though this year is like no other, I am compelled to make some end-of-year predictions as we look ahead to the most anticipated New Year in recent memory.

At last month’s New York Times Deal Book conference, the impact of the global pandemic was a hot topic. Bill Gates (who for years has been outspoken about the likelihood of a global pandemic) and Jamie Dimon both made predictions regarding the future impacts of COVID. Both visionaries pointed to a reduction in office workers by 30%, as more and more virtual workplaces are proving to be effective over the long term. Gates suggested that business travel would decrease by roughly 50%, as many would no longer see this travel as “essential.” Although Dimon thought things would bounce back a bit more than that, it’s clear that working from home is here to stay in a material way.

And so now, for my predictions, here goes:

Prediction 1: Competition for wireless connectivity soars (into low orbit)

In the closing weeks of 2020, a major announcement has occurred in the world of 5G. A major retailer, Walgreens, will deploy 5G as part of a Network as a Service solution with Verizon. Details are not generally available in the public domain, so it is unknown how Walgreens will use 5G in their 9,000 locations.  As we head into 2021, I see wireless connectivity taking center stage as enterprise users and consumers take advantage of the carrier’s continued investment into wireless technology.

In 2021 enterprises will see more competitive wireless service offerings. Cellular providers will capitalize on the Walgreens announcement and push 5G service offerings to market. While enterprise customers may not be ready for 5G, in many cases, they are already using LTE for cellular connectivity. With the availability of SD-WAN, more Enterprise customers will want to route certain traffic over LTE. In response, mobile providers are likely to change service offerings to meet these needs and we could see unlimited data offerings and the proliferation of speed tiered plans versus aggregate volume tiers for enterprise customers.  With the increased backbone capacity and competition, we could see the elimination of throttling which would further accelerate adoption of wireless.

There is one more wireless service that is worth mentioning as an emerging trend for 2021. The next generation of Low Earth Orbit (LEO) satellites will be making its debut, and unlike the first generation (Iridium, GlobalStar, et al), these LEOs have a strong commercial success potential for both consumers and enterprise users. Enterprises have used satellite connectivity for decades, and while speeds were slow, performance was reliable. Additionally, LEOs could help narrow the digital divide which has been highlighted in this pandemic. According to the Wall Street Journal, 30% of school children do not have access to reliable internet at home. If LEOs live up to their promise of offering high speeds, kids in broadband deserts could be the real winners.

It is exciting to see how many connectivity options are now becoming available to enterprise and consumers. With the new service offerings for LTE, 5G and LEO, I think we will see some customers leapfrog wired broadband technologies and go directly to a wireless service.

Prediction 2: Enterprise Cloud Spend will increase by 50%, but transition from the On-Premise model will stall

We have seen significant increases in cloud spend over the last couple of years. But 2021 could represent an even greater explosion in public cloud usage, to the tune of 50%+ increase, in response to COVID, macroeconomic uncertainty, and the myriad of data driven apps that have become ubiquitous in our everyday lives. That said, most companies will have to continue to operate large scale on-prem operations as they cannot write off those investments or walk away from the data center any time soon, no matter how much they might like to. 

Since enterprises will be operating simultaneously on-prem and in the cloud, they will be faced with dual running costs of maintaining the new and old architectures putting more pressure to manage cost and accelerate their transition to the cloud. As a result, I see more enterprise customers grappling with how to deploy a hybrid environment while developing strategies to mitigate increasing costs.

In response to customer’s concerns of overspending, the competitive landscape for data center and cloud services will change. Cloud providers will begin to embrace the hybrid environment and offer new services that allow customers to move workloads between on prem and cloud environments more efficiently. Some providers (e.g. Microsoft) already offer this, but others are likely to follow suit.

Cloud providers will also begin to offer more capabilities to help customers operate in a multi-cloud ecosystem. This means that Enterprise users execute more workloads across Amazon, Azure, GCP, and other cloud providers. With this sort of flexibility being offered to Enterprise customers, competition with heighten and we will see new commercial models and service offerings to help Enterprise users manage costs while balancing requirements across on-prem, hybrid and multi-cloud deployments.

 Prediction 3: Real competition will increase for Microsoft office 365 (finally)

Without a doubt, COVID has accelerated technology transformation. Microsoft’s CEO, Satya Nadella, commented earlier this year that Microsoft saw “two years of digital transformation in two months.” This rapid user base expansion will have long-term and unforeseen repercussions. As a result, I believe that 2021 is the year that will see more competition for Microsoft’s traditional desktop / O365 products, due in no small part to the success of Azure.  As Azure spend starts to outpace spend for O365 – at least for some customers – a new type of bargaining power and commercial strategy begins to emerge. Google has Google Cloud Services and G-suite that satisfy both front and back end needs for Enterprise Customers. 

With the explosion in Zoom adoption, Enterprise users are no longer feeling locked into O365 and Teams to communicate internally.  At the same time, Salesforce is acquiring Slack, which means they are serious about providing an alternative to Microsoft Office. Salesforce’s fanatical focus on its enterprise customers’ experience will make a key difference in creating competition for Microsoft. Further, if a UC application like Zoom gets acquired by Salesforce or Google, the combined offering would be even more compelling. Maybe the Microsoft monopoly will finally be threatened as the industry and players continue to change in unexpected ways.

COVID has been a catalyst for change in IT infrastructure and networking and the changes and trends that began in 2020 will continue to take shape in 2021. Throughout the pandemic we have learned a lot and transformed our everyday lives in adjusting to the changing environment. In closing, I want to once again thank the unsung heroes who build and operate IT infrastructure and provided us all some semblance of social and business continuity during these most difficult of times.

Wishing everyone a happy holiday season and a prosperous and “normal” 2021. See you next year!

Published by

Barry Platzman

Managing Director at Strongbow Consulting Group