The adoption of managed network services by US enterprises is on the rise, with a focus on supporting AI and other cutting-edge technologies in an increasingly complex network environment. According to the 2024 ISG Provider Lens Enterprise Managed Network Services report for the US, the challenges of enterprise networking have multiplied in recent years due to factors such as stricter regulations, heightened security risks, and the shift towards remote and mobile work setups. In response to these challenges, a growing number of companies are turning to managed network services to handle tasks such as security measures, network management, cloud connectivity, and software-defined networking, all without the need for extensive internal expertise.
One notable trend identified in the report is the integration of AI and automation into managed network services. Providers are leveraging AI-based solutions and automation tools to enhance network monitoring, troubleshooting, and optimization processes. This move towards incorporating advanced technologies is seen as crucial in managing the complexities of modern networks and alleviating the mounting pressure on IT departments within organizations.
Dieter Thompson, partner and president of ISG’s Network and Software Advisory business, noted, “The evolution of digital technologies, including AI, has made networks more complex and placed IT organizations under increasing stress. The shift towards outsourced networks reflects a growing need to manage today’s infrastructure while giving enterprises more freedom to evolve.” US enterprises, in particular, have emerged as leaders in network outsourcing, surpassing their counterparts in Europe and Asia Pacific in terms of adoption rates. Many companies initially transitioned to co-managing networks with service providers before fully embracing a managed approach to further simplify operations.
The report emphasizes the role of comprehensive network services in laying a secure foundation for business transformations, enabling organizations to focus on core operations and mitigating risks associated with network updates. This streamlined approach can facilitate the implementation of new technologies like generative AI, enhancing efficiency and innovation within enterprises.
Managed connectivity services are also gaining traction among companies, facilitating the adoption of new connectivity types such as VoIP and direct internet access (DIA) without requiring extensive training for internal staff. The increasing demand for DIA, offering exclusive ISP links for critical applications, underscores the importance of performance and security in network setups. Additionally, the growing need for VoIP services aligns with the rise of remote work setups and the expansion of high-speed broadband and 5G networks.
Looking ahead, Network as a Service (NaaS) is poised to become a key component in managed network services for enterprises, particularly midsize organizations. NaaS enables companies to rent networking services that can seamlessly integrate into existing network infrastructures across multiple regions, providing flexibility and scalability as business requirements evolve. While large enterprises in the US are already exploring NaaS trials, midsize companies are showing heightened interest in this model as a means to access advanced networking capabilities as needed.
Jan Erik Aase, partner and global leader at ISG Provider Lens Research, highlighted the importance of outsourcing as a strategic avenue for US enterprises seeking to adapt to changing networking needs. He stated, “US enterprises need the flexibility to turn on new networking capabilities as their business requirements change. Outsourcing is an increasingly attractive way to achieve this, especially for midsize companies.” Overall, the trend towards managed network services underscores the ongoing evolution of enterprise networking strategies to meet the demands of a rapidly changing technological landscape.