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IT spending priorities in 2020 shift to network management, UC

The global pandemic has temporarily slowed SD-WAN and campus network spending, but enterprises are still investing in network infrastructure, focusing on network management and UC.

Economic uncertainty surrounding the global coronavirus pandemic has caused most enterprises to tighten their budgets, driving many IT teams to delay or cancel their networking projects for 2020. But IT investment hasn't stopped completely, according to IDC. Instead, enterprises are adjusting their IT spending priorities.

Before the pandemic, enterprises planned to invest in Ethernet switching, wireless LAN and software-defined WAN (SD-WAN) projects. Then came the pandemic, which suddenly increased the remote workforce by 46% and lessened enterprise reliance on campus and branch networks, according to a June IDC survey that queried 250 medium and large-sized U.S. enterprises.

Remote access and connectivity took center stage as enterprises tried to ensure short- and long-term business resiliency and continuity for their employees. Health and safety guidelines forced businesses to adjust their operations, increasing their need for unified communications (UC) tools and network management, said Rohit Mehra, vice president of network infrastructure at IDC, during a recent webinar that discussed the pandemic's effect on enterprise networking investments.

"Since a large number of enterprises will continue to work from home, the sentiment is: 'Let's try to redirect some of our investment into areas where we can better support our employees from an IT investment standpoint,'" Mehra said.

Network management and UC investments are up

While WAN and campus network spending decreased, 40% of IT buyers said they planned to increase network infrastructure spending in 2020, with specific focus on network management and UC, according to IDC. In the network management bucket, network automation, analytics, remote management and visibility have all proven to be crucial for network operation during the pandemic, Mehra said.

DC chart on COVID-19 and networking markets
This chart shows the changes in expected IT spending pre-COVID to June 2020.

Remote network management is essential to monitor UX, VPN connections, and potential network or application issues. With network automation, enterprise IT teams can reduce manual tasks that usually consume valuable time and require people to be in the office, which has become a new adoption driver, according to Brad Casemore, IDC's research vice president of Datacenter Networks.

"The prior value proposition around automation and remote management was about efficiency and cost," Casemore said. "But, now, it relates directly to an existential issue -- how do you keep the lights on and keep the business running when people can't get into buildings?"

As a result, in response to the pandemic, nearly 50% of survey respondents said they planned to increase investment in advanced network automation and remote network management. These planned investments highlight that enterprises recognize the need to pay closer attention to their workers' experience at home, including application availability, network security and network troubleshooting, according to Brandon Butler, senior research analyst of enterprise networks at IDC.

Seeing a flat year-over-year growth could be considered disheartening. But flat in a year with a pandemic of these proportions is still pretty good.
Rohit MehraVice president of network infrastructure, IDC

SD-WAN investments delayed

While certain industries were able to adjust their networking strategies in response to the pandemic, some businesses weren't as lucky. Retailers, sports stadiums and public venues -- verticals that paved the way for SD-WAN adoption -- were forced to close temporarily, which has stymied SD-WAN investments in 2020. Consequently, IDC's projected annual growth rate for SD-WAN dropped from almost 40% to 0.2% as of June.

However, each IDC analyst said they expect SD-WAN growth to accelerate after the pandemic.

"Seeing a flat year-over-year growth could be considered disheartening. But flat in a year with a pandemic of these proportions is still pretty good," Mehra said, adding that SD-WAN still has an impressive compound annual growth rate for the next five years.

Casemore admitted the decline looks dramatic but emphasized the pandemic hasn't eliminated the need for SD-WAN. Although IT teams have deferred -- not canceled -- SD-WAN investments, the growth prospects are still strong, he said.

Meanwhile, SD-WAN vendors have adjusted to the decline in SD-WAN spending by extending VPN concentrators and cloud gateways that enable customers to connect remote workers, Butler said. However, enterprises and vendors still face the challenge of ensuring their networks can adequately support remote workers in the new normal, whether that includes network security, SD-WAN, VPNs, network proxy servers or network management. A large part of how enterprises succeed in the new normal will rely on how they allocate their IT budgets.

"My advice is to have insight into what's happening on your network -- the experience employees are getting on their network -- and then use that data to prioritize investments on what you need to plan future investments," Butler said.

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