Network-as-a-service a $75-bn opportunity

Network-as-a-service or NaaS is a cloud service model in which customers rent networking services from cloud providers. NaaS allows customers to operate their own networks without maintaining their own networking infrastructure.

NaaS can replace virtual private networks (VPNs), multiprotocol label switching connections, or other legacy network configurations. It can also replace on-premise networking hardware such as firewall appliances and load balancers. A newer model for routing traffic and applying security policies, NaaS has had a major impact on enterprise networking architecture. A report says Telcos must adapt to avoid being squeezed out of the burgeoning network-as-a-service (NaaS) market.

The major growing factor of network as a service is an increase in investment of advanced technologies. With an increase in innovation in enterprise IT, there is a change in the way organizations manage every aspect of their business. The rise of cloud computing is one of the significant transformations since the internet launch. The proliferation of cloud services continues to be a disruptive force within the IT realm.

According to ABI Research, the NaaS market is primed for growth. It expects that by 2030, nearly 90 percent of global enterprises will have migrated at least 25 percent of their network infrastructure to be consumed within a NaaS model.

The growth is being fuelled by increasing enterprise demand for cloud-native agility, multi-cloud accessibility, and services that can dynamically scale to support digital transformation. This demand, the analyst firm reckons, means the NaaS market could be worth as much as $150 billion by 2030. Telcos, provided they are in a position to capitalise, could snag up to $75 billion of that sum.

According to the research, telcos need to develop vertical-specific sales strategies and adopt a consultative process to help bridge the gap between enterprises’ awareness of NaaS, and their understanding of it.

“To drive short-run sales, suppliers must educate and tailor their sales strategy to focus on first adopters – start-ups and SMEs – and specific verticals. ABI notes that the likes of cloud connectivity providers Megaport and Packet Fabric already offer agile NaaS solutions, while Amazon Web Services (AWS), Google Cloud Platform (GCP), and Microsoft Azure have extensive cloud-focused NaaS offerings and huge reach. Telecom operators remain in the best position to lead the market as long as they recognise their service and innovation limitations, invest and restructure successfully, and focus their messaging appropriately, say experts. However, “if telcos miss this opportunity and drop the ball, interconnection providers and hyperscalers will be waiting and willing to catch it.”