Network Services Ignite IT Modernization in Asia Pacific

Enterprises in Asia Pacific, embracing AI and other advanced technologies, are embarking on network transformations with service providers as the need for faster, more secure and more flexible networks grows, according to a new research report published today by Information Services Group (ISG) (Nasdaq: III), a leading global technology research and advisory firm.

The 2024 ISG Provider Lens Enterprise Managed Network Services report for Asia Pacific finds that companies in the region are quickly adopting new technologies to replace legacy infrastructure. As their networks expand to reach distributed workforces and more locations, amid rising maintenance costs and constrained budgets, enterprises are seeking the least expensive network and security solutions that can meet their growing needs.

“The adoption of new technologies, including AI, adds layers of complexity to already overworked systems and further accelerates the need for network transformation,” said Dieter Thompson, partner and president, Global Network Services, at ISG. “Providers are helping enterprises in Asia Pacific build next-generation networks with service intelligence, visibility and automation.”

Modern networks are becoming central to business in the region, the report says. Many companies are seeking comprehensive engagements with service providers that incorporate network transformation. Through software-defined networks and observability tools, these transformations provide application-centric intelligence that can help organizations achieve their business objectives.

A growing number of enterprises in Asia Pacific are exploring network as a service (NaaS) offerings for on-demand connectivity across multiple network types, ISG says. NaaS allows companies to rent cloud-based networking services, paying per use. It can reduce complexity for enterprises with networks that span multiple WANs, access networks, clouds and vendors. NaaS is the smallest but the fastest-growing segment of the enterprise network services market in the region.

Increased internet access in Asia Pacific is driving moderate growth in direct internet access (DIA) services, which give enterprises an exclusive ISP link for applications that require high performance and security, the report says. Among other managed enterprise connectivity solutions, demand for VPN services is steady and VoIP is in decline.

ISG expects contracting for managed network services to gain momentum in Asia Pacific in 2025. Falling interest rates and rising interest in broad digital transformation engagements are expected to generate growth, particularly among companies in retail, manufacturing, transportation, energy and the banking, financial services and insurance sector.