The state of managed networks in 2023

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It's not every day that a managed network provider gets to build digital infrastructure from the ground up for a sizeable customer, but earlier this year, Orro announced that it completed just that: a digital infrastructure build for the new Sunshine Private Hospital in Melbourne's west.

In addition to providing network and telephony, Orro will host and manage the hospital's infrastructure in a private cloud and run a security operations centre. The infrastructure will be managed out of Orro’s network operations centre, which will allow for tracking of real-time status of network performance and alerts about hardware health.

The project encompasses the full range of Orro’s capabilities in networking, cloud and security. It is an example of the increasingly intertwined nature of these aspects of MSPs’ offerings.

Technology, services shift continues

In 2022, MSPs told CRN that hybrid working and the resulting cloud and network management performance and security requirements of customers were key drivers of demand for managed network services.

This year, that story continues to evolve, with organisations running more applications in hybrid IT environments.

Network design continues to be important. We asked Interactive’s Andrew Robson about the state of play. “I think we see a lot of focus in the market on network centric design around applications with heavy focus on security. What that really means is there's also a shift in underlying carriage types and technology transitions as we move to more internet-based networks supported by software definition,” Robson commented.

Concepts and technologies such as bandwidth-on-demand remain relevant. “I think there are a number of carriers that are providing bandwidth-on-demand under the banner of software defined networks. And it's going to be increasingly important in the development of internet-based, application-centric design networks,” he said.

Network-as-a-service is “conceptually attractive” but Robson is “not sure that it's been realised yet in the market.”

Change in the carriage market continues to have implications for MSPs, Robson points out.

“I think it's important to stress that as NBN moves from deploying a network to managing a network, there's going to be a restructuring of the carriage market, where it's no longer a race to the bottom in terms of the commoditised carriage pricing – it’s now who can provide the most value in terms of a managed services overlay. There's an increasing view of the value of managed services and the overlay that can provide,” Robson said.

Looking beyond SD-WAN

Michael van Rooyen, CTO, Networks, at Orro, sees a shift in the approach to manage networking.

“SD-WAN was really, really topical for the last couple of years and it's still relevant. But we're seeing…that market's becoming quite competitive, which is great for the consumer particularly, but SD-WAN’s becoming the baseline,” van Rooyen said.

“For me the market's evolving, and particularly in our organisation, going from a typical SD-WAN-as-a-service-type provider to being a really outcome-led managed service provider which covers security, cloud and network, but certainly being really outcome driven”.

“We're also really seeing people moving towards, particular in our instance, moving away from a people delivered service to really a platform-enabled service. So, being able to really integrate new features and services, as opposed to people, to deliver those services and deliver those managed networks,” van Rooyen said.

Like others we interviewed, he noted customers’ increased expectations. “They're just expecting that SD-WAN’s a given, and it's more around ‘how do you integrate, how do you do security, how do you do all those add-ons that are required.”

Network and security integration

MSPs also noted increased integration of managed networking and security.

“We've moved away from really siloed, ‘let's deliver secure connectivity’, to the outcome-led focus of integrated security, integrated reporting.”

Observability remains a buzzword too. Customers want more information about performance and tools to help see it. “Moving from traditional MPLS to internet as the backbone, the ability to observe and report on that is becoming a big driver,” van Rooyen noted.

“So, business outcomes, network performance outcomes and then security outcomes as well.”

Customers are moving away from buying in silos to looking at the end-to-end stack, according to van Rooyen.

This end-to-end network story ties in with SOC services. “[SOC SIEM] is probably one of the largest growing areas. Whilst we have a substantial network managed service, the integration of those and then leading to SOC SIEM services for customers – anywhere from intrusion detection to vulnerability management – are very substantial areas,” van Rooyen said.

The SOCI Act is driving demand for asset visibility under Orro’s managed network security banner, he added. “Orro looks after a couple of large government agencies now for that, because they've identified the need of trying to not build it themselves, but lean on a managed service provider to do exactly that,” he said.

“We've built a couple of platforms over many years across financial institutions all the way through to government enterprise. Definitely demand’s high. It’s probably the one of the most topical conversations we see with customers today.”

The layer down

There are also opportunities a layer below these services, in van Rooyen’s view.

“What we've seen traditionally, over the last couple of years is the hype around SD-WAN, a lot of carrier refreshes due to either aging equipment, carrier contracts expiring, and we've really benefited from that from the traditional MPLS to SD-WAN,” he said.

“However, if we then look at network-as-a-service…what we're really seeing in some of our large customer discussions is what's the next layer down in managed services?”

“So, really managing the access layer, really managing wireless. Those have kind of been untapped areas where the service has been there, but it might not be optimised or not might not be as a real true service. Everyone's really focused on managed routers, managed WAN, historically,” Van Rooyen said.

He talked up Orro’s focus on the “next layer of management”. For example, managing a campus network.

“We've got a quite a large organisation at the moment that runs a very in-sourced campus network. And they've even turned from their traditional model of supporting and paying for that to ‘How do we work with Orro to manage the whole campus as a service, as opposed to ‘Just do the WAN, just do the security and we'll worry about the access layer’.”

“We're seeing a lot of that in managed wireless. And then more importantly, we're also seeing quite a few requests in the space of critical infrastructure. How do we get managed network offerings for critical infrastructure environments?”

“Reducing the reliance on people”

A key takeaway is that customers managed network expectations have increased. MSPs said customers wanted end-to-end services, full stack observability, flexibility and for MSPs to predict network problems.

“Reducing the reliance on people to perform, maintain, manage and leverage tools – AI, automation, etc – is a really big driver we're seeing customers expecting because vendors are doing it,” van Rooyen said.

Interactive’s Andrew Robson is also looking to the future of cloud collaboration. “We also see… the developing opportunity around augmented reality and virtual reality to further enhance these collaboration tools,” he said.

For Robson, further potential AI disruption is also on the cards: “We also see on the horizon the emergence of AI and machine learning as a quantum shift in this space. It's very likely to be a big bang where a radical change happens

Browse by Category

Click the tiles below for the state of play in key managed service categories.

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Watch their comments below about how MSPs can continue to thrive in the year ahead.

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