"A great majority of organizations today in Asia-Pacific live not just in a single cloud, but what we call a multicloud world. This means they are adopting various public clouds in combination with their private one - a strategy that has paid dividends and helped companies accelerate growth and digital transformation. While the trend will continue, it’s important organizations think about how they are optimizing for this new reality and rethinking their security and networking frameworks to avoid very common challenges, such as lack of interoperability in the environment, deficient security, or unexpected increase in costs. Cisco’s approach is to help companies optimize and successfully deploy their multicloud strategies – through simplification of management, artificial intelligence, big data and analytics, and policy. This ensures interoperability across the multicloud environment, visibility over all of the data, traffic, costs, consumption, and even threats - wherever they are. No other IT company makes it possible for organizations to operate in a multicloud world – with speed, agility and security – like Cisco does." – Courtney Dodds
Courtney Dodds – Managing Director, Data Center and Cloud, Cisco Asia-Pacific, Japan and China
Cloud figures highly on nearly all countries' agendas, whatever their stage of development: more than 80% of respondents in India, Australia and Vietnam chose it as a technology that was transforming - or would transform - their company. It was the most important technology to respondents in Japan and Indonesia. Vietnam, the Philippines, South Korea and Singapore listed it second. Only in China does it lag in 5th, but this was partly due to those in the public sector, only a third of whom said that cloud technologies were being adopted - roughly half the overall figure across all countries and sectors. It's not surprising that the cloud looms so large across the region: according to Cisco’s data, annual global cloud traffic will reach 19.5 zettabyte (ZB) by the end of 2021, up from 6.0 ZB per year in 2016. Global cloud IP traffic will account for 95% of total data center traffic by 2021. Cloud is definitely the technology which is seeing most adoption. The same is true when it comes to industry: only financial services and the public sector, understandably, listed cybersecurity as further ahead in terms of adoption. But still some are holding off. Why? A mix of factors, but the market variations are interesting: In Vietnam and Thailand most of those that haven't adopted it cite budget constraints, while the majority of counterparts in Australia and Singapore say they are unsure of the implications and impact on the business. Notable is the growing investment in software-defined wide-area-networking, or SD-WAN. SD-WAN technology allows network managers to be more flexible in planning their network needs and lower their operating costs by making use of broadband internet capabilities - a key component of cloud technology. Cisco’s survey found that a majority of countries were more likely to be upgrading their SD-WAN routing than their traditional routing technology. This was also true when asked about their upgrading plans for the near future: in Indonesia, all respondents said they planned to, while in South Korea and Singapore, none said they were planning to upgrade their traditional routing equipment. This interest in SD-WAN suggests that companies are optimizing for cloud, particularly in retail, manufacturing and financial services. A recent survey of 850 companies across five industries by Frost and Sullivan bears this out: a third of them had either already deployed an SD-WAN solution or have a deployment underway, while another 61% will deploy SD-WAN in the next 12-24 months.1 IDC last month released a report projecting the SD-WAN market to grow 40.4% per annum, to be worth $4.5 billion by 2022.2
1 Frost & Sullivan Global Survey Reveals Enterprises Deploying SD-WAN Plan to Replace Branch Routers, Aug 22, 2018 2SD-WAN Infrastructure Market Poised to Reach $4.5 Billion in 2022, Aug 8, 2018
5G is still being tested and its specifications have yet to be agreed upon, but a significant minority of executives are already watching it closely. While only a third of Indonesian IT executives, for example, chose it as a technology shaping, or likely to shape, their companies' future, more than half of those put as one of the top two technologies.
The telecommunication body drawing up standards for 5G, the 3rd Generation Partnership Project (3GPP), is expected to have them ready for commercial deployment next year. The initial plan is for the network to deliver substantial performance improvements compared to LTE, including theoretical speeds 100 times faster than 4G, response time (latency) a 1/5 of 4G, and 100 times more connections per base station. The hope is that these capabilities will push new data-heavy mobile technologies, such as augmented reality, autonomous vehicles and industrial IoT, into the mainstream.
China, South Korea and Japan are considered leaders in 5G, and for the most part the Cisco survey reflected that: nearly half of Chinese IT executives said it would shape their company's future, while the number was 59% in Korea. (Only 22% of Japanese executives said so.) In a recent report Frost and Sullivan said that while South Korea and Japan will likely be the first to commercialize 5G - Japan was home to some of the earliest 5G trials in the world, China will dominate the early commercialization stage, partly because of its size, and partly because of government support.
However, by 2022, the report said, India will be hot on their heels. And the Cisco survey suggests that pockets of Southeast Asia clearly consider 5G to be something they too should be watching more closely. More than half (57%) of Vietnamese IT executives in the manufacturing sector counted 5G as among the technologies likely to shape their future - the lowest compared to other technologies, but still higher than their counterparts elsewhere save South Korea, one of the pioneers of 5G. And two thirds of executives in Thailand who chose it as one of their top shaping technologies joined their counterparts in Indonesia as prioritizing it.
The numbers may be small, but 5G is already in decision makers' plans beyond the shores of the big three. In a report on the mobile market in Asia released in June the GSMA listed the Philippines alongside South Korea and Australia as aiming to be the first country in the world to launch 5G services. The Cisco survey found that half of public sector IT managers in Indonesia counted 5G as a shaping technology, far higher than their counterparts in any other country. The Cisco survey did not ask respondents whether 5G technologies were already being adopted, because standards have not been agreed, but there is evidence money is already being spent: Indonesia is running trials for the 5G network during the Asian Games in August.
For Indonesia, the opportunities are clear: it is on the cusp of becoming world's third largest smartphone market this year - behind China and India, according to the GSMA's June report. By 2025, the GSMA predicts, Indonesia will have among the highest smartphone adoption rates in the world, at just under 90% of total connections.
A shortage of skills is a concern for IT leaders overall: 41% said that was the reason why they were not able to adopt the relevant technologies for digital transformation. The problem is particularly acute in artificial intelligence, a crucial technology whose usefulness has been revived with the help of big data, the cloud, and raw processing power. When companies were asked how far down the track they were in adopting each particular technology, AI came last for each country.
For all those executives who said they hadn’t adopted AI, all industries numbered a shortage of adequately skilled staff in their top two reasons. The public sector, financial services and manufacturing listed it first. The shortage is particularly acute in India, Thailand, Japan and Australia, where IT executives listed it first. (See Figure 1)
Figure 1
This is not a purely Asia-Pacific problem. A recent survey of LinkedIn profiles and other sources found about 22,000 profiles related to AI, with only 3,000 of those open for new opportunities.3 The report acknowledged this woefully under-reported the likely number of AI experts, especially in China, where the government is working with the private sector to boost the number of workers skilled in AI, and Japan, long a center of AI, but largely inwardly focused. Everywhere resources are being assigned: Research by O’Reilly found that a majority of respondents (75%) to their survey about AI said their company was using some form of in-house or external training program to make up for the shortfall of expertise. Almost half (49%) of respondents said that their company offered “in-house on-the-job training,” while 35% said their company used either formal training from a third party or from individual training consultants or contractors.4
3 Global AI Talent Report 2018, Jfgagne.ai, Feb 2018 4 How Companies are Putting AI to Work Through Deep Learning, O’Reilly, 2018
Asked when they planned to roll out automation, 83% of IT executives (See Figure 2) said it would be in a year or less – only cybersecurity comes close (6%). This is a trend that was already visible last year: The International Federation of Robotics reported that shipments of robots rose 31% last year, to 387,000, from a year earlier. This is particularly true in Asia Pacific: shipments rose 37%, against about 20% in other regions, confirming the region's dominance.
Figure 2
"Modernization of IT infrastructure in enterprise is still overall a hard process, often leaving many companies discouraged to make the necessary changes to keep pace with the demands of a digital world. But organizations have reached an inflection point, and a transition to a more intelligent and automated IT infrastructure is in order, so that they are able to address the digital demands more rapidly in face of the be the growing number of cyber threats, users, devices and things.
For sure, 15 years ago we didn’t think today we would be able to do everything from our phones, automatically, with a click of a button. Today, the same is thought of enterprise – not possible. But change is in motion, and Cisco has been innovating dramatically in recent years to be able to make the foundational aspects of every single company – their networks, clouds (private and public), security - much simpler to not just upgrade, but also manage, consume and protect. This way, we are able to help companies shift their focus from IT management to the realization of new value, new innovation and new business models." – Vish Iyer
Vish lyer – Vice President of Architectures, Cisco Asia-Pacific, Japan and China
One concern: organizations that are upgrading (90%) aren’t upgrading all the core parts of their IT infrastructure. Of those who had upgraded their infrastructure in the past three years, 30% said they hadn’t upgraded their network, data center or cybersecurity, the three components surveyed for this report. Given the trend in the survey to cite budget constraints when deciding not to adopt even standard technologies (for example, Vietnam (59%), Korea (47%) and Singapore (56%) were more likely to cite budget constraints than other reasons for not adopting cloud technologies), this suggests that organizations are having to make hard decisions about core components when upgrading their infrastructure. The result: their infrastructure may not be sufficient to manage the next generation of technologies at the core of this survey. Across all technologies respondents were as likely to say that their current infrastructure was not capable of supporting those technologies, as they were other reasons — a shortage of skilled staff, budgets, uncertainly about the implications for their business of these technologies. Indeed, in some cases it was the main reason given: In China, for example, nearly half (49%) cited it as a reason for not adopting artificial intelligence, one of the key technologies earmarked by the Chinese government in its long term plan — and cited by Chinese respondents to the survey as a key shaping technology, behind only IoT and big data. Vietnamese managers, too, said their current IT infrastructure was not capable of supporting new cybersecurity technologies, raising worrying questions about their ability to counter threats and fulfil their ambitious cybersecurity plans (see separate entry.)
On a positive note, those that did upgrade their networks said they were most likely to have been driven by new technology requirements (70%), which suggests companies are taking seriously the network demands of new technologies.
