Outsourcing specialized management functions helps companies ensure network security, connectivity, smooth upgrades, ISG Provider Lens report says
“U.S. enterprises need the flexibility to turn on new networking capabilities as their business requirements change”
The 2024 ISG Provider Lens™ Enterprise Managed Network Services report for the U.S. finds that enterprise networking has become more challenging in recent years with increasing regulation, security risks and remote and mobile work. A growing number of companies rely on managed network services, which can provide security, network management, cloud connectivity, software-defined networking and other functions with less need for internal expertise.
Providers of managed network services are integrating AI and automation into their solutions to help manage increasingly complex networks, the report notes. AI-based solutions and automation tools are being used to enhance network monitoring, troubleshooting and optimization.
“The rapid evolution of digital technologies, including AI, has made networks more complex and placed IT organizations under increasing stress,” said Dieter Thompson, partner and president of ISG’s Network and Software Advisory business. “The shift toward outsourced networks reflects a growing need to manage today’s infrastructure while giving enterprises more freedom to evolve.”
U.S. enterprises have been at the leading edge of network outsourcing, with a higher adoption rate than in Europe or Asia Pacific, ISG says. Many companies began a few years ago by starting to co-manage networks with service providers, but most have since migrated to a fully managed approach that eliminates even more complexity and effort.
Comprehensive suites of network services form a secure foundation for business transformations while allowing organizations to focus on their core operations and reducing the risks associated with network updates, the report says. This can help enterprises streamline implementations of new technologies such as generative AI.
With managed connectivity services, companies are adding new types of connectivity, including VoIP and direct internet access (DIA), without having to train their own staff, the report says. There is rising demand for DIA, which gives enterprises a direct, exclusive ISP link for applications in which performance and security are critical, such as high-volume data transactions. The need for VoIP is also growing, as more work becomes remote and high-speed broadband and 5G networks become available in more places.
Network as a Service (NaaS) may represent the next step in managed network services for enterprises, especially midsize organizations, ISG says. It lets companies rent networking services that can be easily integrated into current commercial network deployments across multiple regions. Clients use and pay for the services as needed. Most large enterprises in the U.S. are conducting trials of NaaS, but interest is even higher among midsize companies.
“U.S. enterprises need the flexibility to turn on new networking capabilities as their business requirements change,” said Jan Erik Aase, partner and global leader, ISG Provider Lens Research. “Outsourcing is an increasingly attractive way to achieve this, especially for midsize companies.”
