It’s Not Price that is Driving Transformation

    by Jeffrey Singman, SVP Sales and Marketing, Kandy Communications

    I have been blessed spending most of my 25+ year career at Fortune 500 and startup companies that were the pioneers in creating new experiences from the massive changes in communications technology as well as media and software technologies.  Early in my career, working at NBC, I was responsible for worldwide production system networks.  These were built on buttoned up expensive pipes – the best you could buy and really the only option for any Fortune 500 companies of the day that had to support mission critical voice, video and enterprise applications.  If we wanted to do a remote event, like the Olympics, we literally planned years in advance and spent months bring up facilities and new services.  Those links were up months ahead so they could be tested, stressed and retested.  You planned everything out, including purchasing spare capacity and redundant capacity.  If you suddenly needed more capacity or less…too bad…it was too late for that.

    These events taught me something else, results matter more than costs. Now, I’m not saying we didn’t have budget pressure and look for ways to cut costs but at the end of the day we were judged on the quality of the broadcast.  If we lost a news remote, NFL game or an Olympic broadcast because we got a “great deal” on bandwidth….we would be telling our story on the sidewalk. No one was going to risk the NBC brand or their own job to save a few dollars on a risky private network and certainly not the public Internet – that was out of the question.

    Fast forward to today. The public Internet is so good that I literally take trips with the people next to me streaming sports on a phone, in an airplane.  We can now stream high-definition quality video over the Internet, with resiliency and performance never seen before. Yes, streaming services have been available for many years, but the tipping point was 18-24 months ago, when you finally could stream Netflix, Hulu or other streaming video services with no loading, buffering or errors consistently, right into your living room onto an 80” TV and you cannot tell it’s being streamed or from your cable STB.  And lets face it, the quality of the public Internet has been steadily rising for years and you can’t beat the price. 

    So if the Internet is so good and such a great value, for years – why do we still have millions of private MPLS links out there and why are we only now finally seeing SD-WAN as a viable option as a foundational network component or as an augmentation to private networks e.g. MPLS.  I think it’s because price alone has never been enough of a motivator for the C-levels.  So, what did give them the confidence to overcome any real or perceived gap in SD-WAN security and quality?  I think the answer is AGILITY.    

    SD-WAN gives IT staff the ability to turn-up a site or a service in minutes. In my old job that would have meant dropping a reporter in country and being ready to broadcast in an hour and not having to set up a satellite network link.  For the CIO of a retail chain it can mean relocating a damaged store in days.  It can mean dynamically expanding capacity for seasonal businesses or rapidly reducing costs if business declines.  Compare all of that to the 30, 60 or more days it takes to add or move an MPLS link.  Compare it to the staff time and planning that doesn’t have to be invested. 

    The SDN architecture decouples the network control and forwarding functions, enabling the network control to become directly programmable and the underlying infrastructure to be abstracted for applications and network services. As an example, SDN can allow IT managers to allocate bandwidth to a global town hall meeting in minutes, without having to set up and maintain a separate corporate communications infrastructure. The SD-WAN has given IT managers a way to deliver more impact and solve more problems that can add more revenue or preserve more revenue.  That’s what counts.  Now combine that with the security, quality and lower cost of today’s public Internet…Game Over.

    I appreciate the SD-WAN shift because I see the same thing in my current role in Kandy Business.  I think that most cloud services, including UCaaS are winning as much because of agility and elasticity as price.  For years the cloud “pitch” was lower cost but I don’t think that’s really what has driven enterprise adoption.  The real reason is because IT managers don’t wants to invest the time it takes to plan out the purchase and deployment of a PBX or contact center, nor do they want to have to worry about how big a box to buy.  Enterprises, particularly multi-site enterprises, see how the cloud’s agility lets them react to market changes, respond to disasters and scale to meet seasonal requirements.  And of course it leverages the same secure SD WAN connection that is running the rest of the IT environment – so communications can be operational anywhere public Internet is available…which is essentially anywhere…

    We read (and feel) how the pace of change continues to accelerate.  In my mind that’s the real driver for cloud adoption and the larger push for digital transformation.  IT managers have to adopt tools that help them keep up.  Early in my IT career we managed to reduce risk but today I think the bigger risk for IT managers is falling behind the pace of change in the rest of their organization, of not being able to act, or react.  The need for speed is ultimately the most powerful driver for digital transformation and cloud services. Stay tuned for my next few blog posts where I’ll further discuss some of the other key trends I’m seeing.