Aug 10, 2017

The CIO’s Digital Transformation Starts With Transforming Network Operations


This article is directed to you, CIO of an organization that made digital transformation your key initiative. My message to you is: you need to ensure your network infrastructure operations are transformed as a critical part of — and to support — this digital transformation. The technology to enable this transformation — namely an intent-based Self-Operating Network™ — is available TODAY, and the time to start is NOW.

Consider this:

Your network is a critical asset of your digital transformation initiative. Whether it involves IoT, big data, or machine learning, these technologies will only work — and you will only be able to compete — at the speed of your network. If it takes you 6 months to spin up your network, realize that organizations that have invested in operating their networks properly will spin theirs up in a few minutes. If you experience a significant outage, your entire business will suffer, and your competitor who was able to avoid the outage, or fix it quickly through the proper operational model, will take full advantage of your mishap.

It makes no sense to have a digital transformation strategy that automates large portions of the business while the very foundation of that transformation, the network, is run manually. Let’s go over some data to illustrate the urgency of ensuring network operations are transformed as part of your digital transformation.

Networks have been operated in essentially the same way since 1995. That is 22 years ago — the year Intel Pentium Pro was released! Today, 85% of networking teams still use arcane commands to configure each device in your network manually.

As a result, you spend $3-$5 on average for every $1 of CapEx. If you’re a traditional enterprise with legacy systems, you spend a lot more — in some cases, an order of magnitude more!

On average, 80% of those resources are spent on manual operations — wasted I would say, because anything you could automate, but that you haven’t automated is effectively wasted.

So on average, 80% of approximately $4 is wasted. That is $3.20 for every dollar of CapEx. Some organizations waste a lot more.

Gartner estimates by deploying available Intent-Based Networking Systems, you can improve your network agility by 50% to 90%. Assuming an average 70% improvement, and applying it to the average $3.20 waste, that’s a value creation of $2.24 for every $1 of CapEx.

This means that by implementing proper network automation, enterprises can, on average, recoup more than $2 for every $1 that they spend on CapEx!! Think about it. And if you’re a traditional enterprise then you are likely to recoup an order of magnitude more!

It doesn’t end there — in fact it gets a lot worse. Until this point, this analysis has only focused on CapEx, and did not consider the opportunity cost of lack of automation. Here are a few examples:

  • The cost to your reputation from having an outage; for a company in the S&P 500, this can amount to tens if not 100s of millions of dollars per outage instance;
  • The revenue you are likely to lose from having an outage; on average $1M per minute or outage — and in some cases a lot more;
  • The amount of deferred revenue from taking your organization many months to stand up and provision a network required to deploy a new business service or implement a new initiative;
  • The amount of deferred revenue from taking weeks to make a change to the network that is required to support a new business service;
  • The lack of competitiveness from your organization’s inability to provision the infrastructure necessary for critical business initiatives;
  • The opportunity cost associated with the inability of the staff to improve their skills in a manner that’s beneficial to the business.

These costs are harder to measure generally, as they are specific to every business. However, they are massive and are a lot higher than OpEx Costs. In these areas, 50%-90% improvements are game-changing. And given that technology that enables autonomous operations of the network is now available to all organizations, those that don’t leverage those technologies will be unable to compete. If you don’t automate, you will be at a significant competitive disadvantage because others have, and more will.

In a newly released report, Gartner emphatically points out that “Digital business initiatives will struggle unless CIOs and business leaders change the way they think about networking.” Gartner states that “by 2022, the percentage of enterprises that deem networking core to their digital initiative success will increase to over 75%”, up from 25% today. In fact, Gartner believes — and we agree — that enterprises should consider networking to be a profit center rather than a cost center. In fact for the first time since the early 2000s, Gartner urges CIOs to make “Networking a critical strategic infrastructure resource for enabling digital business.”

Your digital initiatives are critical to the bottom line of your company and an intent-based, Self-Operating Network is fundamental to getting you there. The technology is available TODAY. The time to start is NOW.

Our mission at Apstra is to enable you to make your network the most critical part of your infrastructure.  We look forward to hearing from you.

Mansour Karam

President, Founder