Why the future of business growth needs network innovation

June 18, 2019

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It all started with cat videos. But now, videos (and ultra HD videos in the near future), along with the exponential rise of cloud applications, mobility, gaming and more are driving  5 times more IP traffic growth according to Telstra.  What does this mean for business and how can network innovation meet the needs of tomorrow?

It’s not just more traffic, but also more devices are generating traffic at the same time. Just like roads at rush hour – networks need to handle higher peaks than ever before. For instance, in Australia, peak hour Internet traffic is anticipated to increase almost five times by 2022 and expected to reach 71 Tbps according to Cisco [1].  How can you ensure your business operations and application performance are not compromised?

What's behind the growth?

With the proliferation of smart phones, 4k Ultra HD smart TVs and IoT devices like SmartHome, users are changing their media consumption habits. HD video traffic is expected to grow from under one third in 2017 up to over a half of all IP traffic by 2022. [2]

With the rise of over the top video streaming services such as Netflix and YouTube, users are watching more videos than ever. Moreover, videos are of higher quality. According to Cisco, 4K can use up to three times as much data as standard video, whilst the new 8k Ultra HD could use up to 6.5 gigabytes per hour.

For business, the growth of the cloud, particularly cloud-based collaboration applications such as Microsoft Office 365, video conferencing and Google Apps is a dominant factor, said Craig Mulhearn, Technology Advisor at Telstra.  

“Historically, in your data centre, you'd have servers running Microsoft Office Suite, but over time, it's moved to the cloud," he said.

 “While administrative services and financial systems are still running in the data centre, many more applications are today run remotely”.

Up to 40% of enterprises are expected to directly connect their MPLS (Multiprotocol Label Switching) network to at least one cloud by 2020 (Gartner, Cloud Adoption Is Driving Hybrid WAN Architectures 2017).

Another is the use of video at work, particularly as virtual and augmented reality become more prevalent in the near future. Telstra’s prediction is “up to 70% of mobile traffic will be video by 2021”.

“People are looking to do more video calling," Mulhearn said. “That, in itself, has a tenfold impact on the amount of bandwidth you might use for a video call versus what you might use for a voice call." he said. “If you look at the impact on that within Telstra, a reasonable-quality video call is between 500 Kbps and 1 Mbps, versus voice, which uses less than 100 Kbps. Video is a large driver."

What does this mean to businesses?

There are a few implications.

Businesses could continue investing in scaling up infrastructure in order to cope with the bandwidth demands and meet ever-rising end user experience expectations.  

A lot of a business’ operations are also digitised, which just means always-on reliability and resiliency are critical. According to CloudScale, an internet outage can cost a business more than $8,580 per hour of unplanned downtime. 

Thirdly, if disruptions do occur, businesses expect resolution more quickly and with greater agility than ever before, a real challenge as networks grow more complex and take as long as 18-24 months to deploy configuration changes or perform upgrades.

Times, they are a-changin’ – and networks need to as well.

How we meet those challenges

As part of Network Evolution 2020, we’re transforming our network for the future to increase resiliency and deliver next-gen transformational capabilities.  Over 5 years (FY15-FY19), our total mobile network investment is around $8 billion. Our efforts have seen us reducing the number of network incidents by 40% since 2016, and reducing key resiliency risks by 25%.

More importantly, we’re implementing new network technologies to make it simpler, faster, and easier for our customers to get their business ready for the future.

diagram showing the difference between traditional and next generation networks

Let’s look at two key developments:

1. Software Defined Networking (SDN)

SDN allows a whole new level of flexibility and scalability when it comes to managing your network. It allows automated provisioning and tuning of network traffic flow, which means there’s increased resilience. Using SDN based automation techniques, traffic and path patching that previously would take hours could take seconds and bandwidth upgrades that would previously take weeks could take minutes.

The power of SDN  comes alive with a platform like Telstra’s Programmable Network – a centralised management platform with secure overlay that makes it easy to automate network and cloud connectivity in near real-time. Our approach has been to focus on use cases that are end-to-end, like connecting virtual private networks to cloud platforms. Which means your network is as flexible and scalable as you need it to be.

2. Network as a Service (NaaS) 

NaaS lets us consider the network (just like many other business technologies) as a configurable and reusable service. NaaS is an architecture incorporating a set of structures, approaches, definitions and environments that specify consistent patterns for product and service design, fulfilment, inventory, assurance and usage management.

The key goals of NaaS are to provide a consistent service exposure whilst abstracting network complexity; making it easier, faster and more secure for partners / customers to connect and leverage our network. The result is that while setting up a network would traditionally take 13–19 months, with NaaS it could take as little as 4–6 months through reusability and configurability.

What's next for business?

The demands on networks (and our customers’ businesses) will continue to increase exponentially. There’s a need to not just continuously invest in adding bandwidth or implementing the latest in network technologies, but to also persist in creating whole new ways of approaching network innovation (like what we are doing with NaaS) so that businesses can continue to meet the challenges of a digitalised future.