The McKinsey report, Globalization in Transition: The Future of Trade and Value Chains, makes important observations that impact the role and responsibilities of anyone closely involved with cloud computing and network architecture. McKinsey’s thesis is that the flow of services (not goods) and data play an increasingly important role in driving the global economy.
According to McKinsey, over the past decade services have grown more than 60 percent faster than goods, with the IT services, telecom, business services and intellectual property (research and development) segments growing even faster. Some of the growth is the result of goods now being offered as services, as in the of manufacturers introduce leasing, subscriptions and pay-as-you-go business models for their products. Customers no longer buy the goods or products; they simply contract to use the services the products provide.
Services Trade Requires Bandwidth Boosts
As global value chains become more knowledge-intensive, they’ve spawned an increase in cross-border bandwidth usage. Volume 2 of the Global Interconnection Index Report, a market study published by Equinix, projects interconnection bandwidth global growth of 48% CAGR. Efficient planning, implementation and management of these networks and interconnections is critical to the success of global services.
Among the recommendations in the McKinsey report, two are particularly relevant to the planning and operations of networks that support global services trade:
- Flexibility in supporting global services trade.
- Speed to market and proximity to customers for new services.
Inherent in both of these is the need for agile network architectures that allow enterprises to quickly deploy network resources to expand into new geographies, improve performance, enhance security, or reduce operational costs. In the evolution of network architectures, network functions virtualization (NFV) is now giving enterprises the agility to deploy network services on-demand in support of today’s global commerce needs.
Virtual Network Functions Facilitate Agile Network Architectures
Network functions virtualization replaces purpose-built network devices like routers, firewalls and SD-WANs with virtual network functions that run on high-performance servers in on-premises data centers, colocation centers, cloud providers, or at the edge, close to customers and business ecosystem partners. With virtual network functions an enterprise can meet its need for flexibility, resilience and accelerated time to market by:
- Deploying network services in minutes (not hours or weeks) to establish a presence in new markets or expand geographic footprint.
- Supporting application and cloud infrastructure teams with required network services without the need to make major hardware investments.
- Centrally managing virtual network functions, regardless of where they are physically deployed.
- Providing pre-integrated connectivity and close proximity to cloud providers, networks, digital supply chain, to support ultra-low latency routing among data, applications and services that reside in these environments.
The deployment flexibility and speed (on-demand, optimal location within a widely distributed network architecture) of virtual network functions at the edge make them a vital component of any enterprise’s agile network architecture strategy. Several use-case examples illustrate the capabilities and benefits of virtual network functions in facilitating agile networks.
- The vast majority of global enterprises utilize multiple cloud providers with data and applications distributed among providers. With VNF, an enterprise can quickly deploy a new application in an existing cloud environment and in minutes deploy a virtual router to optimize traffic between that application and a database hosted on a different cloud.
- In response to security threats identified via network monitoring, enhance the security of data managed in an on-premises database and accessed via the public internet by deploying a virtual firewall to limit access based on IP addresses.
- A new branch office in a remote location needs to access data and applications across several cloud environments. Deploy SD-WAN at a colocation provider to establish a secure, high-throughput connection between branch and cloud providers.
- Needing to quickly migrate data from one cloud environment to another for the purpose of temporary, but intensive, data analysis, an enterprise deploys a virtual router for rapid data migration, then decommissions the router as soon as the data has been migrated.
In each of these instances, an enterprise deploys the required virtual network functions without any of the delays associated with the procurement and installation of physical network devices or significant capital expenses that would be required to provide physical infrastructure. Virtual network functions are critical components to build and manage an agile network architecture in support of global commerce needs.
Network Edge Facilitates Network Agility for Global Commerce
Equinix, a global provider of data centers and interconnection services, has created a dynamic network automation tool, Network Edge, providing virtual network functions that run on Platform Equinix and are optimized for instant deployment and interconnection of network services.
Network Edge facilitates the deployment and management of agile network architectures that securely and efficiently interconnect everyone across supply chains to support global services trade. Learn how Network Edge allows you to select, deploy and connect virtual network functions at the edge in minutes by registering for a free trial.