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How The Channel Can Deliver Value Through Innovative Networking

According to Forrester Research, more than 25 per cent of decision-makers within enterprises believe that network design and architecture are key concerns to address before their businesses can become fully cloud-enabled.

The problem for many businesses is that network design and architecture can be challenging, and articulating the value of such projects to other stakeholders can be difficult. At a time when IT projects are expected to show a quick ROI and to have direct customer outcomes, going back to the network and re-architecting one of the foundations of the IT environment can be a difficult project to sell internally.

However, without a modern and transformed network, any attempts to leverage cloud environments - whether public or private - and applications of cloud, such as AI, edge, and IoT, are prone to failure. Such cloud environments would struggle to scale, operate in real-time, and remain resilient to security breaches and outages.

For this reason, enterprises are increasingly looking to their channel partners to design and deliver networks that can support their unique efforts at innovation, scale, and resilience. For Megaport, an Australian SDN Provider, assisting the channel in delivering these solutions to their clients quickly and cost-efficiently has been a major priority in recent years, and the channel program that the company has developed around its products has been specifically tailored to help partners address the challenges that they, and their customers, face in the market.

The channel challenge

Events of the past few years have led to a dramatic re-evaluation of the IT environment for many organisations. KPMG research shows that 67 per cent of organisations accelerated their digital transformation strategy as a result of COVID-19, and a further 63 per cent have increased their budgets for transformation.

As Mirium Hernandez-Kakol, Global Head of Management Consulting at KPMG, said, “the pace and the degree of digital transformation is accelerating in the wake of COVID-19, with ever greater pressure to meet customers wherever they are. This calls for flexible, 'commerce everywhere' business models, and a renewed focus on employee experience and purpose, to drive an enhanced customer experience.”

It’s not just that companies are spending more on transformation than ever, either. They’re also looking to achieve transformation outcomes quickly. McKinsey research shows that transformation has been accelerated by as much as seven years for some businesses.

The challenge is that with that kind of acceleration, the focus often ends up being on the outcomes. When remote work became mandatory, the only concern among organisations in the initial term was keeping their workforces operational. Now that they’ve seen the advantages of the cloud, they’re looking to what applications are enabled by it.

For the channel, being truly successful in delivering these outcomes rests on their ability to be strategic and articulate the importance of building foundations that will support and enable the more demanding, agile, and dynamic applications that can help drive competitive differentiation and disruption.

For many customers, that means that channel partners will need to start the conversation at the network, and what needs to happen with it to allow for seamless, redundant, secure, and low-latency interconnectedness between cloud and edge services.

Saving money at the network

Of course, enterprises remain driven by efficiencies, and the more they scale their operations in the cloud and in delivering digital services, the more data costs become an issue.

While transferring data from an on-premises environment to public clouds (known as ingress, or inbound traffic) is free for both public Internet connections and the cloud service providers, one of the most significant network costs is egress, or outbound data. This refers to the data transfer fees that organisations incur for pulling data out of public clouds, and varies from provider to provider.

With the right network design, these costs can be mitigated. Among the other benefits of transitioning to a direct connection model (for example, better latency and security) APAC customers can save egress fees as high as:

54 per cent on AWS
23 per cent on ExpressRoute
64 per cent on Google Cloud

Consulting with a customer on how to architect and deliver a solution that reduces egress fees is often a useful first step for channel partners towards the digitalisation of the IT environment. It’s a solution that is quick and quite easy to deliver with the right vendor partner, and starts returning value back to the customer instantly. From there, the partner can begin focusing on delivering additional value via the applications that will sit on the network and cloud.

The need to be services-driven

Transformation needs to be an ongoing process – it’s not like the technology solutions of old where you would install them and then manage them until the end-of-life refresh. Truly succeeding with digitalisation means iterating and adopting an agile approach to IT.

For channel partners, this means transitioning to managed services providers. Increasingly, customers look to their partners to deploy solutions that the customer can then be as “hands-off ” with as possible. This places some challenges on the partner, particularly around cash flow as they make that transition towards subscription-based selling themselves – a business funds itself very differently when it’s billing by the month on an ongoing basis than when billing is done by project.

To assist with that transition, the partner needs vendors that have built partner programs designed to support and reward services contracts. Then, to assist with the management of the services, they need to be able to access local support and resources from their vendor partner.

Addressing the challenge of the network

There are five areas with regards to the network where channel partners have the opportunity to build a managed services practice. These are:

Digital innovation means cloud
As noted in a report by BCG, digitalisation can offer many benefits to businesses, across multiple vectors. Time to market for new products and services can be cut by as much as 70 per cent, efficiency boosts mean the costs of procurement can be reduced by as much as 20 per cent, smarter inventory management can free up 15 to 30 per cent of working capital, and sales revenues can be boosted by 10 to 20 per cent.

Digital innovation boosts businesses most significantly in the areas that matter to them, and is, therefore, a key priority that cuts to the very heart of the business.

To succeed with digital innovation, however, a company needs to embrace the cloud. This can mean a transformation project. It certainly requires a robust and reliable network, because the more deeply reliant a business becomes on digital innovation and digitalisation, the greater the cost of downtime becomes.
Security in the cloud has never been more important
As companies raced to embrace the cloud in response to pandemic, lockdowns and the need to work remotely, the security risk profile increased in kind. Research shows that just about every company now experiences cloud data breaches.

Security solutions – particularly zero trust security and identity and access management solutions – are important in addressing this challenge.

VPN’s are a great connectivity option for businesses that are dipping their toe in the water with cloud connectivity. They are quick and easy to set up; however, VPN connectivity utilises the public internet, which can have unpredictable performance and despite being encrypted, can present security concerns. They also become a hassle to manage when multiple VPN’s are in use. There is no question that for critical business applications, having a private connection to the cloud service provider is the better solution.
An optimised network boosts application performance
Forrester research shows that 82 per cent of decision-makers agreed that SD-WAN was a top organisational priority in 2021. The importance of having a properly optimised network is something that business leaders are well aware of.

Interconnection between on-premises, cloud, and edge deployments is becoming more complex, and the demands being placed on these networks is becoming greater. As we see in the example of Animation Research Ltd (see “Megaport in action”, below), the need to be able to operate complex, data-rich applications with minimal latency over the cloud can be extreme, and the only way that can be achieved is through network optimisation.
Redundancy is critical
Downtime is becoming more expensive than ever. Research from ITIC shows that 91 per cent of corporations say that an hour’s downtime will cost them at least $300,000. For 18 per cent of enterprises, downtime is more than $5 million per hour.

There are so many potential causes for downtime across a network. The only solution to this challenge that can work is redundancy. To give you an idea of what this involves, Google recommends at least four VLAN attachments across two metros, with four cloud routers, and global routing enabled with the VPC network. This will deliver a 99.99% availability configuration.

Tools like Megaport’s Virtual Cross Connects (VXCS) can assist with this by allowing users to directly and privately connect relevant Ports to two cloud partner locations, immediately building redundancy into the network.
Then there are the “born in the cloud” customers
Increasingly, there are businesses that want to be able to operate without a physical network at all. These “born in the cloud” customers are often taking this step because they want to reduce the amount that they are directly managing – in other words, they are keen to work with channel partners to access their network as a service.

For these customers, Megaport has invested, made acquisitions, and grown its ability to deliver Network-as-a-Service solutions to customers.

It is these NaaS solutions that are particularly compelling to the Megaport channel, which can make network service provision and management a cornerstone of the interactions with their customers.

Introducing Megaport PartnerVantage

To help partners address the challenges and opportunities above, the Megaport PartnerVantage program is a two-tier program that provides partners with sales and marketing support, as well as commissions and discounts based on their performance and investment into Megaport.

The range of partners that can benefit from PartnerVantage is wide, and includes:

Network Service Providers
Data Centre Operators
Managed Services Providers
Global Systems Integrators
Value Added Resellers
Value Added Distributors.

Megaport has invested in making PartnerVantage easy for the channel. VantageHub is a relationship management hub that allows the partner to manage the entire Megaport business from a single pane of glass view, while VantageTransact is a one-stop transaction portal to order, provision, and manage the customer’s services.

Megaport also provides technical assistance resources and training on-demand with VantageLearn, while sales and marketing resources include co-branded materials, demand generation campaigns, and other highly targeted activities.

Megaport in action

The use of real-time graphics during live sports broadcasts is something that we as an audience take for granted, and indeed has become a contributing factor to the sport being such a compelling experience on TV. One of the leading players in the space, Animation Research Ltd, has provided its Virtual Eye Sports graphics to enhance events as wide-ranging as golf, cricket, F1 and sailing with real-time graphical overlays.

Based in New Zealand, Animation Research Ltd hit a major hurdle as the country went into lockdown – its ability to travel around the world to be on-site for broadcasts was halted. Meanwhile, unreliable connectivity meant that it was going to struggle to deliver the kind of real-time rendering that its broadcast partners needed.

Animation Research Ltd found a solution in Megaport and building a private cloud environment. By connecting to AWS through Megaport, the company was able to scale bandwidth in real-time as it needed to scale up and down, and in doing so it was able to deliver far more reliable and responsive services than it would over the public Internet, far more quickly. Through Megaport, the company was able to accelerate its five-year plan for transformation and eliminate its need to be physically on-site for the broadcasts that it supports.

In a very different sector, retail group, The Warehouse Group, manages six trading brands, 270 stores, an e-commerce presence, and more than 12,000 employees. It was running its own on-premises data centre environment, with 500 virtual machines installed at a centralised location, and another 500 distributed across its stores.

The Warehouse Group knew it needed to explore cloud services to modernise the environment and allow the company to respond rapidly to the changing market. It experimented with VPN connections to a Sydney-based cloud provider over the public Internet, but this introduced high latency and bandwidth limitations.

By turning to Megaport, the company was able to automate the provisioning of new connections, scale the network capacity as needed (particularly important for retailers that have seasonal peaks), and vastly reduce latency, improving service for both internal users and end customers.

For the channel, Megaport is both a platform and foundation for innovation in how they engage with their customers. From being able to underpin a transformation strategy, to forming the bedrock of a digital-first go-to-market, enabling low-latency edge deployments and facilitating AI and automation, channel partners can use Megaport as the basis of a broad and deep engagement with their customers. Megaport’s PartnerVantage program has been designed around that opportunity – it’s not a product to on-sell in itself, but rather the start of a broader conversation and opportunity that will deliver to customers the kinds of tailored solutions that prepare their businesses for future innovation and disruption.