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 SDN Research Report 2019

SDN Research Report 2019

Building Trust in Digital Business

Brian Solis

Brian Solis

Analyst, author and speaker

We live and work in an era of what I call “digital Darwinism,” when disruptive technology is rapidly evolving and so are its effects on markets and society. Over the past decade, digital transformation has emerged as the leading push to survive and thrive.

Many experts and pundits claim that “digital transformation” has achieved buzz word status. Surely as a term, it’s overhyped. But make no mistake, digital transformation is critical to business modernisation. What’s truly overpopularised is the idea of “business as usual”.

While the shift to the cloud is among the top investments, there’s a largely unrecognised opportunity in modernising network infrastructure: software-defined networking (SDN). Doing so helps organizations lay the foundation for how information flows within and outside a business. And in a digital economy, information is currency. Vodafone’s research substantiates the importance of SDN technology as a critical enabler (and accelerator) of digital transformation.

The age of tech-enabled trust

Businesses today operate in a time of radical transparency. Trust and transparency are now two critical pillars for modern brands hoping to engage always-on, always-informed, self-interested customers, regardless of industry.

The opportunity with the abundance of data that exists in this era of digital Darwinism is to build trust through personalisation, services, experiences and security, all in real-time. But in today’s world, trust is something you lose. Value and relationships are what you gain by investing in customer and employee experiences. There can be no compromises.
It makes business not only transparent, but human. The irony here is that technology infrastructure is what enables and facilitates this humanity and opens the door to transparency and reciprocity.

A platform for the digital consumer

Going back decades, technology was mostly an enterprise endeavour. Customers and employees had to learn to operate workplace technologies. But with the likes of e-commerce, smartphones, social media and apps, the consumerisation of technology has turned the tables. As a result, global businesses must now emulate the companies and experiences that are changing the game.

If you look at the top initiatives driving digital transformation, the purpose of these technologies becomes clear. The top digital investments are all focused on customer experience (CX) in some way, from infrastructure to every touchpoint shaping the modern customer journey. A journey that is increasingly almost completely digital. With that, information, data and traffic are flooding network systems. Infrastructure is now part of the customer experience too.

Without the investments necessary to ensure real-time flow, customer experiences are either seamless or they’re not. The latter comes at an incredible opportunity cost. Customers don’t care if you’re digitally transforming. They care about themselves. They’re loyal only to those organisations that place them at the centre of everything.


This research demonstrates that the potential of digital transformation is tied to more than just ‘survivability’.

Data-driven empathy

To deliver meaningful customer experiences, you need to understand what they’re doing right now, not what they did weeks or months ago. Data is much more effective when it’s being applied quickly because real-time data is the engine behind real-world personalisation.

As the use of data in this way becomes more pervasive, combining teams of humans and AI-powered machines to scale insights across business groups are paramount. To really understand modern customers and employees takes genuine, human empathy.

In a time when SDN, Robotic Process Automation, AI, machine learning, social media and mobile are changing how people live and work, data and an open mindset have become competitive advantages to attracting and keeping top talent happy and thriving.

This is so much more than an argument for “yet another IT department cost centre”. This research demonstrates that the potential of digital transformation is tied to more than just ‘survivability’. Vodafone presents evidence that software-defined networking is “the cloud” of infrastructure and paves the way for real business performance improvements and, ultimately, growth.

Throughout this report we address the benefits and importance of software-defined networking (SDN) technology.

SDN is an evolution of enterprise network services that dramatically increases speed of deployment, flexibility and control. It allows connections across the business and cloud to be intelligently and dynamically programmed from a centralised location.

Traditional network management relies on integrated hardware and software, built into components like routers and switches, to both manage and move data across the network.

At its heart, SDN technology separates the software that controls where and how data moves across a network from the networking hardware that actually moves the data itself. The control software is then moved to a centralised location. This separation provides crucial advantages including greater security, enhanced visibility and control over the network and the ability to make rapid changes to the network to meet an organisation’s changing requirements.

Applying this network management approach to a wide area network (WAN) produces an SD-WAN. In this use case, SDN technology intelligently manages an organisation’s entire network, across multiple locations and connectivity technologies such as fixed line, broadband internet, 4G and 5G wireless, and more.

By using centralised software to manage the network, it becomes more agile, easier to control and ready to adapt to future connectivity requirements.

The link between data and trust increasingly defines success in 21st century business. To progress in this new, data-driven world, organisations are changing the way they build culture, interact with customers, and operate their business.

business decision-makers from five countries
interviewees from multi-national companies
interviewees from national corporates

The role of the network is fundamental to this change; securing the scalable and intelligent flow of data around the organisation.

We wanted to learn more about the way networks – specifically intelligent, software-defined networks (SDN) – are empowering today’s businesses to drive forward in their transformation journey.

We went to the people who are responsible for the reality of digital transformation every day - specifically 1,891 business decision-makers, from Germany, Italy, South Africa, Spain and the UK.

Six hundred and eight interviewees (from the four European countries listed above) came from national corporates. 1,283 interviewees (from all five countries listed above) came from multi-national companies (MNCs). We have highlighted the South African responses throughout the report to explore the different attitudes of MNCs in a leading, emerging economy.

The results were illuminating. We made three key discoveries about how businesses are changing and the direct impact of those changes on the underlying network.

The effective collection, use and security of data are now core differentiators for enterprises, acting as a barometer of customer trust and a clear indicator of business success

  • Businesses cite data security as their most important challenge, followed by consumer trust and strong customer relationships
  • Data security and privacy are key considerations for customers, just behind price but ahead of vendor reputation
  • Most have invested in new technology to improve data security and made technological changes to become more trustworthy in the eyes of customers, prospects or partners

Physical businesses are rapidly seeking the benefits of moving processes, infrastructure and customer interactions to virtual environments, in response to the need to cut costs and better meet customer expectations

  • To become more operationally flexible, businesses are investing in IoT cloud computing
  • The vast majority are actively trying to transform their business, interacting with customers more frequently using digital methods
  • Cost control and efficiency are viewed as very important to ongoing success

As businesses push more of their processes online and invest heavily in digital infrastructure, they’re taking steps to attract top talent, and training them effectively to make the most of these new tools

  • Staff retention and skills are very important for business success with most businesses actively training employees to work better with new digital technologies
  • To help employees collaborate and work in the manner and location that suits them best, businesses are investing in cloud-based productivity and collaboration tech
  • Businesses are increasingly using automation technologies to rapidly handle volumes of work that are too time consuming for humans

Businesses stand and fall on the strength of their data.

The collection use and security of data has become a key differentiator for enterprises competing in today’s market. While the collection of data is commonplace in business, actually deriving value from that data and using it to inform business decisions is another challenge altogether. Eighty per cent agree that using data to genuinely inform or meet business objectives is a key business challenge. Consequently, intelligent data-led companies are standing out from the crowd.

Of the businesses who participated in our survey:

85 percent
have used data to inform customer interactions
85 percent
have invested in security software to protect their data
66 percent
have invested in business intelligence that uses their data
56 percent
have invested in machine learning or artificial intelligence (which rely on huge volumes of data to run effectively)

It’s clear that the majority of businesses are aware of the huge potential data offers for improvements across the board.

Just under half of those surveyed (41%) think data collection is essential to their long-term business strategy and success, compared to 30% who think the same of cloud computing and 26% who cited AI and machine learning. Thirty-nine per cent also told us they are investing in data security specifically to reduce business costs. When data is the lifeblood of your company, you have to protect it.

Failure to do so can increasingly cost you more than just the trust of your customers. With data sovereignty laws and privacy regulations rolling-out on a national and international scale, the penalties for failing to properly manage and secure data have become prohibitively expensive.

The handling and management of data is indelibly linked to levels of consumer trust. After so many high-profile cases of hacking or data breach, the public is aware of the dangers – and they’re interested to see that the companies they use are dealing with their personal information in the right way. If their expectations aren’t met, they’ll take their money elsewhere.

It’s unsurprising therefore that businesses identify data security as one of the most important challenges they face, alongside trust and strong customer relationships:

73% report that security is their biggest challenge, 67% said trust and reputation, 65% said strong customer relationships

All three are linked.

A solid reputation, which engenders strong customer relationships, is in part built on a good security record. When a business suffers numerous breaches, the public take note. That’s why 89% of surveyed business leaders agree that the use and security of data have become essential components of trust in business today. In fact, almost half (48%) now think data security and privacy is a key consideration for customers, just behind price (49%) but ahead of vendor reputation (43%).

Businesses have acted on this need to guarantee consumer trust, with some consistency:

88 percent
surveyed have invested in new technology to improve data security
88 percent
88% are also actively becoming more transparent and/or accountable when it comes to data collection and its use
88 percent
have also made technological changes to become more trustworthy in the eyes of customers, prospects or partners

How SDN can help

A secure system starts with a secure network. And this is where an SD-WAN can provide an incredible competitive advantage. It is designed from the outset to be application-aware, and therefore gives unprecedented levels of insight, enabling granular management of security policies on an application by application basis.

As well as enabling visibility over the network, SDN technology provides control. Network management is centralised by an SDN controller that maintains a global view of the network. This virtualised network environment makes it easier to update security rules and put up firewalls in rapid-time, so response times are shorter for threats, across all sites, devices and the cloud. Furthermore, this virtualisation provides the crucial visibility necessary to audit data-processes and guarantee their adherence to evolving privacy and sovereignty legislation.

Data is becoming the foundation for business success. You need to look after it – starting with a network that empowers security and visibility across its entire length and breadth. In a competitive environment where businesses can live or die by the strength of their data management, an SD-WAN can provide an invaluable advantage.

Country comparisons

Businesses are moving their processes, infrastructure and customer interactions from physical to virtual environments.

There are huge benefits to doing this: it’s less costly, it significantly reduces the organisation’s carbon footprint in many cases, and it meets changing consumer expectations of service.

of business leaders reported using less total space than two years ago
of organisations communicate and engage with their customers via digital technology more frequently than they did two years ago
of companies surveyed are actively trying to transform their business

Most businesses surveyed believe their future depends on keeping overheads low - 63%  view cost control and efficiency as very important to their success. Moving online also drives serious operational benefits. It allows for a lighter, more local business footprint, where businesses have a greater number of outlets, which are smaller in scale. Almost three quarters (71%) of business leaders reported using less total space than two years ago, while a similar proportion (74%) told us they have more individual locations than two years ago.

This change has been made possible because interactions between customers and businesses increasingly take place online. This shift is now almost total: according to our research, 87% of organisations communicate and engage with their customers via digital technology more frequently than they did two years ago.

However facilitating this interaction, and this new type of smaller business footprint, isn’t easy. It demands the use of emerging technologies like the Internet of Things (IoT), cloud computing, 5G and artificial intelligence (AI). A third (33%) of businesses surveyed have invested in IoT, and 28% have invested in cloud computing, specifically to harness the operational benefits these technologies  will bring.

Almost every single organisation is doing this . According to our research, 81% of companies surveyed are actively trying to transform their business. This is a remarkably high figure, highlighting the ongoing significance of transformation for business success.

Clearly, digitalisation seems to be the path to growth. How, then, do businesses facilitate and guarantee the digital transformation process? This is where reliable, secure and flexible connectivity becomes strategically crucial.

How SDN can help

When adopting new technologies at pace, organisations need a network that can keep up. Flexibly adding or removing bandwidth according to the demands of the business is far easier and quicker when the process is virtualised. If a mission-critical and bandwidth-heavy process, like real-time video editing for example, is moved to the cloud, an SD-WAN can easily add network support where needed, without having to make any physical infrastructure changes.

This is vital because uptime and reliability becomes an essential part of the customer’s brand experience. If your website is slow or fails to load, your customers will quickly move on – the competition is a click away. As organisations move more critical applications online, the total cost of network downtime dramatically rises

An SD-WAN gives organisations the ability to direct different types of traffic via the best connectivity paths, using the network to get the most value and performance possible out of other digital investments. This is what helps businesses adapt at pace, removing bottlenecks and smoothing transformation to drive growth.

As businesses push more of their processes online and invest heavily in digital infrastructure, they’re also taking steps to attract top talent.

After all, no business can get by on tech alone. People are the beating heart of any organisation, and business leaders recognise this – over half (58%) believe staff retention and skills are very important for the success of their company.

Of course, combining bright people with the right technology is the best way to supercharge growth. But the two don’t come together automatically. While technology can unlock the full potential of employees, they must be able to make the most of their new tools with effective training. The clear majority of businesses recognise this, as 87% are training employees to work with new digital technologies already.

It’s also important to address the role that recruitment plays in maintaining a strong workforce. Talent is a renewable resource: for your workforce to thrive, it needs to be continuously refreshed with new people bringing fresh ideas and different perspectives. And this means a business must be attractive to talent, who will have plenty of opportunities elsewhere.

Eighty-two percent % of business leaders surveyed felt corporate values and mission have become more important for attracting top talent. And a further 71% have invested in unified communications platforms that empower employees to create a culture around these corporate values. Clearly, these aspects of the working environment matter when it comes to bringing talent into the organisation – and keeping them there.

Another part of the cultural puzzle is collaboration. Digitalisation is enabling a ‘lifestyle workplace’, where employees can typically choose to work in the way that suits them best. Employers who fail to provide their workers with this freedom will feel the impact on people retention. Eighty percent of businesses surveyed have invested in cloud-based productivity and collaboration technology to help their employees collaborate and work in the manner and location that suits them best.

How SDN can help

As employees collaborate online more regularly, and integrate more tightly with cloud-based technology, an intelligent network is essential for matching capacity to demand. An SD-WAN supports fluctuating levels of traffic, making digital collaboration seamless at the busiest and quietest times of the day. For example, if a business embraces flexible and remote working but wants to ensure their townhalls and meetings have the same resonance with staff, an SD-WAN can make sure these communications are given the appropriate priority on the network.

An SD-WAN is a platform for another vital technology that is enhancing the workplace for the benefit of employees: automation. Robotic Process Automation (RPA), AI, and machine learning are all helping employees work more efficiently, by removing the burden of large volumes of time-consuming tasks. This allows a workforce to focus on the more challenging – and arguably interesting – work, improving overall productivity and creativity.

Our research shows the majority of business leaders agree:

87% think employees are increasingly able to prioritise customer/client work over administrative tasks, further improving productivity. Interestingly, however, a similarly large proportion (83%) also see automation as a tool for high-level work as opposed to menial tasks, saying they are using automation to handle processes that are too complex for humans.

As more processes become automated, however, the availability of the network becomes even more critical. If the business depends on the process, then the business depends on the network.

How SDN can help

SDN technology is essential for meeting the demands of digital businesses and cloud-first organisations. It supports the increased use of automation technologies, freeing up time for employees to prioritise more strategic work.

In this sense, SDN acts as a vital enabling platform for talent to combine with technology – with ongoing business success as the result.

Success in business today means overcoming number of complex challenges. The most pressing of these include preserving data security, maintaining trust and reputation, fostering strong customer relationships, and keeping control of costs.

Business leaders are leaning on digital technologies and infrastructure to keep these plates spinning. Investment in data security, collection, and analysis is understandably high and many plan on making technological and cultural changes in the coming years to keep up with changing customer and employee expectations.

The clear majority are actively trying to transform their business, reducing their unprofitable physical footprint and shifting more and more operations online. This has yielded impressive results: greater operational flexibility, improved productivity and improved customer relations.

But as digital transformation takes a crucial role in securing business success, the role of reliable, secure and flexible connectivity becomes equally important strategically. Security risks must be minimised, and the network cannot fail. In today’s competitive connected world an outage would be disastrous.

When it comes to the challenges listed above, an intelligent SD-WAN is the essential foundation on which digital transformation solutions can be built. It is the crucial infrastructure that underpins IoT, AI, and many other technologies in modern business.

This foundation stops businesses from limiting their ROI and putting a bottleneck on innovation. Without it, business leaders risk losing out to more flexible, scalable and fast-moving competitors.

Without a modern, software-defined network, any businesses pushing towards an innovative, digital future will only move as fast as its slowest part. An SD-WAN supports transformation by providing quick support for data-intensive applications, specific policies for meeting customer expectations, and a centralised view of an entire network as it scales. These capabilities are essential indicators of organisational success. Investment in a platform to support them should be a top priority.