How network startups could win over enterprises

So, what are the areas where enterprises think a network startup could win their business today? That depends on how enterprises view risk and reward.

The space where enterprises today are least satisfied with incumbent vendors is security.

Of the 321 enterprises, 295 said they’d examine a strong security offering from a network startup, by far the highest level of acceptance. But that group stressed the point that “strong” here meant compelling, because enterprises have a very low risk tolerance in the security space, and startups’ business risk is considered very high. A security comment made to me in 2006 holds true today: “We want a vendor who we can sue if they fail to deliver on their promises.” So, while 295 enterprises said they’d explore network startups in the security space, only 23 said they believed it likely that any security-justified startup would pass muster with them.

The SD-WAN space, it turns out, can easily expand into security, and into accommodating new network services, so there’s not much chance for a startup there. Enterprises say they’d need an area where there is more capital equipment budget on the table, and they agree that their budget for network gear is primarily aimed at the data center.

That’s an area where, if you recall, we’ve already had two waves of new-technology promotion that have swept startups into the game—but they failed. There were software-defined networks (SDN) and then white-box switching. The problem with both, from a startup-potential perspective, was the lack of a compelling benefit, a transformational challenge to be met.

We might have one of those now, in AI.