Network and Digital Services were Never More Vital

September, 2022

As organizations emerge from the pandemic and adopt flexible hybrid operating models, the reliance on digital technologies has only increased, with mobility at its center point. The cloud, cybersecurity, and network form the foundational pillars to enable organizations to achieve digital transformation, as it requires unfettered access to data across the entire infrastructure.

This Research Byte outlines what organizations must do to manage networks and infrastructure at a rapid pace as they make the changes enacted during the pandemic permanent. It builds on findings from the July 6-7, 2022, Orange Business Services Analyst Event, as well as Avasant Research.

Need to Manage Networks and Infrastructure at a Rapid Pace

Over the past few years, enterprises have changed the way they operate to overcome constraints that emerged during the pandemic. With a new employee behavior paradigm emerging, enterprises are forced to make permanent those changes that they implemented during the pandemic. This includes enabling remote access to critical IT infrastructure, use of collaboration tools, and availability of enterprise data on endpoint devices. This demands a reassessment of their IT infrastructure.

As connectivity becomes the core of everything, it also expands the list of candidate service providers. Specifically, enterprises can look beyond traditional service providers and consider telcos that have forayed into IT infrastructure. With their network roots and expanded capability to manage cloud and infrastructure, telcos can play a pivotal role in defining digital workplace models and enable workplace transformation. This allows enterprises to transition from traditional networks to software-defined networking (SDN) to support the increasing use of cloud and digital services, optimize cloud spending in multi/hybrid cloud environments, and define the security operating model and responsibilities.

One telco playing this role is Orange Business Services, which held its global virtual analyst event on July 6-7, 2022. Christel Heydemann, the recently appointed CEO of Orange, along with Aliette Mousnier-Lompre, who recently took over the reins of Orange Business Services from Helmut Reisinger, stressed their continued push toward developing integration services to build an overall theme of “Creating value through trusted data.”

Since the company announced its Engage 2025 strategy at its 2020 analyst event (see our report – Are TELCOS Ready To Go Head-to-Head With System Integrators), the push toward its IT&IS (IT & Integration Services) segment is even stronger, to the extent that Heydemann aims to transform the rest of the Orange group with its enterprise focus.

Gaurav RB figure - Network and Digital Services were Never More Vital

Figure 1: The percent share of Orange Business Services’ business segments

The sustained IT&IS growth was evident in Q1 2022, constituting a 42% share of Orange’s total enterprise revenue. This is driven by three pillars: cybersecurity, cloud, and digital & data clocking a growth rate of 8%, 18%, and 6% year-over-year, respectively.

Also called out in last year’s analyst event (Security and Cloud Skills Make Telcos an Interesting Choice for IT Services), the narrative around network, cloud, and security remains strong. This is driven by customer demand to enable new ways of collaboration. This involves shifting from an asset-heavy, product-centric business to a data-driven, digital-services business model and transforming the service desk value chain from reactive to real-time.

A Shift from Cloud Being a Destination to a Business Platform

Cloud adoption is growing as enterprises accelerate their digital transformation initiatives. Most organizations have realized that hosting applications in the cloud and leveraging cloud infrastructure are the best ways to sustain the business in the long run. They are leveraging multiple cloud platforms and building upon their areas of strength to solve use cases that emerged from the COVID-19 pandemic.

There has been a gradual shift from the traditional, lift-and-shift migration model to the use of cloud-native architecture for modernization and implementation of automation techniques, reducing time to market. This thought is amplified in our Hybrid Enterprise Cloud Services 2021–2022 RadarView.

Interestingly, Guillaume Renaud, VP, Multicloud Services at Orange Business Services, called out the shift from the cloud being a mere destination to a business platform, maximizing business outcomes and enabling cost optimization. Seeing the rising demand for cloud services, it has doubled its cloud-certified experts since 2020 to more than 1,000. This includes all the major cloud service platforms, including AWS, Azure, and Google Cloud Platform.

Orange Business Services continues to achieve business optimization, transformation, and disruption through its cloud services for its enterprise customers. For instance, it collaborated with Heineken to expand its business model to address the emerging needs of the digital generation or future customers by introducing new ways of enjoying a beer in a sustainable way. One of the things Orange Business Services did was to make the network and security infrastructure agile and move product development to multiple clouds (AWS and Azure environments). This transition increased the throughput of new digital services that Heineken planned to launch by combining cloud compliance and edge connectivity.

Moving from a Reactive to a Proactive Security Posture

As businesses modernize their IT infrastructures, there is an increased interest in the zero-trust security model and deploying or refreshing necessary security controls. All these measures help companies move from a reactive to a proactive security operations center (SOC) by automating the triage process and incident response.

Orange is among a few telcos that have carved out a dedicated cybersecurity business unit as an independent entity, Orange Cyberdefense. It capitalizes on its network knowledge to take proactive measures and monitor threats. It leverages its wide network of 17 SOCs, 13 CyberSOCs, and four scrubbing centers to deliver its services. In fact, it is one of the biggest growth engines for the group, with over EUR 800M revenue, and it aims to become a EUR 1B business by next year.

One of its five service pillars, Detect, constitutes 30% of revenue and is the fastest growing service. The Detect service evolved from mere log detection to network and endpoint detection and has now added XDR (Extended detection and response) capability.

Laurent Celerier, Executive VP, Technology, and Marketing, at Orange Cyberdefense, announced a series of solutions and initiatives at the event, taken in the last 12 months:

  • Introduced a cybersecurity platform dedicated to very small companies, with 1-10 employees.
  • It is developing a Vehicle Security Operation Center (VSOC) that would leverage machine learning (ML) algorithms and will offer a dedicated threat intelligence service to secure connected cars.
  • Developed its Core Fusion Platform to proactively detect and respond to cyber-attacks.

In terms of customer examples, Orange Cyberdefense reduced the application deployment cycle, including security and compliance tests, from 90 days to an hour for a large international airport. By applying DevSecOps methods, for 650 applications and codes offered by different vendors, it integrated and automated all security components into a single platform. This enabled the airport to align with new regulations introduced during the pandemic, with reduced cost, improved agility, and reliability.

Moving to an Intelligent, Adaptable, and Secure Network

The network is suddenly at the front and center of all sustainability discussions. With the pandemic, network services have further gained importance, especially for improving business agility and flexibility. The demand for network management platforms and integrated security has grown. SD-WAN has been especially important in helping enterprises quickly deploy services, often in less than 30 minutes, for remote access and streamlining WAN connectivity, utilizing zero-touch provisioning and centralized control.

With a global reach and the ability to deliver overlay and underlay networks in more than 220 geographies, Orange Business Services offers many SD-WAN services in fully managed, co-managed, and bespoke delivery and operation models. It provides managed services based on major platforms, including Cisco (Viptela and Meraki), VMware (VeleCloud), Aruba/SilverPeak, Versa Networks, and CloudGenix.

It extends multiple security solutions to its customers, leveraging its partners, including Zscalar (ZIA platform, VPN), Fortinet (integrated cybersecurity), Palo Alto Networks (managed firewall, cloud security, SASE), and Check Point (managed firewall, threat extraction).

At the analyst event, Thomas Sourdon, Strategic Marketing and Innovation Director, Connectivity Business Unit, introduced the Telco-Cloud platform, which brings a cloud-native experience to the user with on-demand, automation, and pay-as-you-use features. It also enables access to the latest releases of these technologies. This includes services such as SD-WAN gateways, remote access, WAN opt and observability, security at the edge, and multicloud connectivity.

Earlier this year, a leading global auto manufacturer selected Orange Business Services to deploy SD-WAN with Fortinet across its 3,000 sites in 50 countries. This project’s scope goes beyond WAN and includes end-to-end managed services involving LAN, security services, and cloud connectivity.

Trends Favor Telcos

As we emerge from the pandemic, enterprises need to change how they operate and manage people, processes, and technologies. Many enterprises are trying to optimize their vendor portfolios to focus on sourcing end-to-end IT solutions and services that can optimize costs. Additionally, organizations are aiming to streamline and integrate digital infrastructures to enable business agility and drive user experience.

These trends favor telcos that have built upon their voice and data services to expand to the cloud and infrastructure-managed services, piggybacking on their long-term relationships and network roots.

By Swapnil Bhatnagar, Senior Research Director and Gaurav Dewan, Associate Research Director, Avasant