How the pandemic has impacted communication service providers across different vertical markets
The COVID-19 pandemic has had a lasting impact on countries around the world and, even with the successful vaccination roll out, regions are still moving in and out of lockdowns. Containment measures have, as you would expect, caused a substantial drop in business activity across Europe, especially in contact-intensive sectors. Economic growth is expected to pick up throughout 2021 as vaccines become more widely distributed. However, communication service providers have seen a significant surge in demand because of the pandemic. Overnight they saw demand spike as organizations moved to a distributed workforce.
With many businesses now committing to a more hybrid working model, communication service providers will continue to experience high demand for the foreseeable future, which presents a unique set of challenges.
To understand the true scale of demand and examine how COVID-19 has impacted communication service providers, A10 Networks conducted research that analyses the challenges and issues that senior IT professionals in communication service providers are facing, and how they are adapting to a post-pandemic world. Over 1,200 senior professionals took part in the research from five different countries and across seven different vertical market sectors including financial services, education, healthcare, government, ecommerce and retail, utilities, and gaming.
Examining the responses across these different vertical markets here is what we found:
Gaming and retail and ecommerce see significant spikes in demand for data and network bandwidth
Without a doubt COVID-19 had a significant impact and almost universally (99 percent) the 1,200+ respondents experienced an increase in demand for data and network bandwidth from their customers and subscribers. This was clearly due to the rapid switch to remote working and the continued lockdowns across countries and regions, which have continued throughout the first half of 2021.
Interestingly, communication service providers with gaming customers witnessed the highest increase in demand, perhaps as citizens found themselves with more time on their hands working from home or furloughed. This was followed by government sector respondents and then ecommerce and retail. To this point, gaming and ecommerce and retail saw significant spikes in the increase in demand for data and network bandwidth in the over 75 percent and up to 100 percent category with 13 percent and 11.5 percent respectively.
As you can imagine, this increase in demand has affected communication service providers in several ways. The top-three consequences of the surge were: more than half stated that they had to scale up infrastructure across their entire network; half again had to scale up in specific high-demand locations; and just under half invested more heavily in security technologies.
Education sector customers have witnessed unprecedented demand as a result of home schooling
Clearly, the rapid surge in demand owing to COVID-19, meant that communication service providers had to quickly expand their capabilities. As organizations have moved to a remote set up, the attack surface has also expanded and intensified. This meant that respondents had to invest heavily in security technologies to protect their networks. Likewise, demand has come from multiple different locations. Previously customers/subscribers were more likely to be in offices together. Now, workforces are geographically dispersed, creating broader and heavier spikes in multiple locations.
Here, we found that respondents with customers in the education sector were the most likely have to scale up their infrastructure to meet specific high-demand locations, as schools closed, and children moved to home learning.
When we asked whether COVID-19 had accelerated network transition to a more distributed network (edge) and how much of the total network traffic has this impacted, interestingly, respondents serving the healthcare and utilities sector witnessed above average acceleration: 66 percent and 67 percent respectively, in the "by over 25-50 percent" category. Respondents serving the gaming sector were highest (38 percent) in the “by over 50-75 percent” category.
Healthcare invests in security technologies
The increase in traffic has significantly changed capital investment plans for communication service providers in multiple ways. More than half of the respondents plan to increase their investment in security. No doubt this is due to the escalating attacks witnessed on organizations with remote workforces.
Providers serving the healthcare sector were most likely to be investing in security. However, communication service providers with customers in the government and education sectors were pausing investment plans.
Changing customer relationships and requirements
In terms of how this has changed relationships with customers, over half of communication service providers have seen an increase in demand for online platforms such as customer service portals from their customers. Interestingly, half of respondents claimed that customers are more concerned about business continuity and resilience than before the pandemic, and 44 percent of respondents said that customers have increased their expectations around security from network service providers.
Unsurprisingly, respondents serving the financial services sector were most likely to say their customers have concerns around security, with more than half stating this was the case.
Gaming sector foresees a hybrid workforce
Most respondents surveyed don’t think the work environment will snap back to how it was before the COVID-19 pandemic. In fact, more than two-thirds (67 percent) believe their customers will continue to operate with employees working from home in some form. Therefore, a significant proportion believe that many of their customers will look to reorganize their working practices whereby remote working becomes a permanent feature.
Respondents serving the financial services market were most likely to think that the work environment would snap back to how it was before, with 40 percent believing this to be the case. Interestingly, those respondents servicing the gaming industry thought that this sector was most likely to see a hybrid approach to work with three-quarters (75 percent) stating this will be the case. This was followed by respondents serving the government sector where 71 percent thought the same.
Cybersecurity training programs are a priority for education and healthcare
In terms of the security challenges enterprise customers/subscribers are facing, the education (62 percent) and healthcare (61 percent) sector respondents were more likely than other sectors to say that their customers need to revise their employee cybersecurity training programs. The financial services sector ranked highest in terms of ensuring that BYOD policies were more robust. Additionally, when we asked about the highest priority security investments for 2021-2022, ecommerce and retail (51.5 percent) were the most focused on the upgrading of firewalls and other security appliances.
When it comes to 5G, just under one-third of respondents stated that maintaining a quality service and avoiding service outages were top security challenges. Clearly, for ecommerce and retail respondents, ensuring uptime is critical, and 35 percent said that maintaining a quality service and avoiding service outages were key challenges. These were also top security challenges for utility companies. Over a quarter of gaming companies saw the unpredictable subscriber usage and the changing patterns on the network as their top security challenges as 5G becomes more widely available.
Altogether, the impact of COVID-19 on communication service providers has been enormous. Although there have been variations across different vertical sectors, there is a general recognition that resilience and security must be priorities as businesses adjust to a future of hybrid work environments.
Stephen Dallas is AVP of EMEA, A10 Networks