Legacy enterprise connectivity—with long lead times, high upfront costs, and a lack of cloud integration—is not a good match for digital transformation. Enter Network-as-a-Service (NaaS), which is a cloud-delivered, usage-based network consumption model that lets users access network capabilities, services, and applications without owning them. NaaS architecture provides network flexibility, reduces time-to-value for network service deployment, optimizes cloud connectivity, lowers financial barriers to adoption, and increases network control.
Market Overview
Legacy enterprise connectivity—with long lead times, high upfront costs, and a lack of cloud integration—is not a good match for digital transformation. Enter Network-as-a-Service (NaaS), which is a cloud-delivered, usage-based network consumption model that lets users access network capabilities, services, and applications without owning them. NaaS architecture provides network flexibility, reduces time-to-value for network service deployment, optimizes cloud connectivity, lowers financial barriers to adoption, and increases network control.
So far, adoption rates for NaaS are underwhelming due to pricing risk, solution immaturity, brownfield network compatibility, and lack of awareness. In this Research Highlight, we point out four key recommendations to help Communication Service Providers (CSPs) kick the NaaS market into high gear.
“As CSPs look to monetize their underlying networks, NaaS provides a suitable platform that should not be ignored.” – Reece Hayden, Analyst at ABI Research
Key Decision Items
Focus on Incremental Enterprise NaaS Adoption
Enterprises are still skeptical of adopting NaaS. Companies don’t want to adopt NaaS across the entirety of their network. CSPs should focus on specific use cases like hybrid cloud connectivity and back-office redundancy networks to ease enterprises into this new networking consumption model. These lower-risk deployments can convey the value of NaaS to enterprise customers and drive wider adoption across the enterprise later.
Develop and Distribute Educational Resources for Enterprise Stakeholders
At the moment, NaaS is a pretty big question mark for enterprises. They’re not entirely sure how the architecture works or why they need it. Thus far, CSPs have been ineffective at expressing the value proposition of NaaS from a business, operational, and technological point of view. To remedy this lack of knowledge surrounding NaaS, CSPs need to do a better job of educating enterprise stakeholders on the Return on Investment (ROI) benefits of NaaS and why the solution makes financial/operational sense.
Language should be simplified. Generally, messaging should center around how NaaS solves enterprise networking pain points and how ROI will develop post-deployment. Moreover, make it clear why an Operational Expenditure (OPEX) model is optimal.
Ensure Pricing Clarity with Safety Nets
Among enterprises, especially Multi-National Corporations (MNCs), the biggest worry regarding NaaS is pricing uncertainty. Enterprises are concerned about the fluctuating nature of OPEX. They don’t want to end up with an unexpectedly high bill one month that could decimate operational budgets.
Getting around this issue will necessitate that CSPs lean on innovative pricing strategies. Further, they must find ways to incorporate “safety nets” into the pricing plan to assure enterprises that they won’t end up with massive, one-off networking bills. One proposed solution could be for CSPs to warn NaaS users when costs reach a pre-determined limit.
Promote Openness and Integration with Existing Legacy Network Services
The value of open Application Programming Interfaces (APIs) cannot be understated. From a NaaS perspective, open APIs would be the key to greater interoperability and serve as an entry point to deploy network services. Its implementation would mean third-party developers could integrate network services, and for CSPs, it would ensure that historically siloed services can be embedded deep into the NaaS platform.
Besides providing persistent connectivity across regions, open APIs enable companies to bring their existing network services into their NaaS platform architecture. This is far more attainable than having to tear down an existing network and having to start anew. To put it simply, greater openness would encourage more enterprises to get on board with NaaS deployment, as it removes some major barriers.
CSPs investing in open APIs will be hugely significant for enterprise NaaS adoption, as they will enable the following:
- Complete visibility, orchestration, and management over all network services from a single control platform, independent of the application vendor
- Greater exposure to network services to improve end-user customizability
- Increase available network services to enterprises
- Lower barriers to adoption and enable integration with existing network services
- Enable automation across the NaaS framework
- Enable integration with internal Operational Support System (OSS)/Business Support System (BSS) solutions to improve network service management capabilities and enhance monitoring
Dig Deeper for the Full Picture
To learn more about NaaS commercial drivers/constraints, vertical challenges, go-to-market strategies, and where CSPs should focus their efforts, download ABI Research’s Enterprise Opportunities in Network-as-a-Service Adoption research report.
Not ready for the report yet? Check out our following Research Highlights:
This content is part of the company’s Distributed & Edge Computing Research Service.
