Network-as-a-Service: Network for rent

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Network-as-a-Service: Network for rent

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Network-as-a-Service: Network for rent

Subheading text
Network-as-a-Service (NaaS) providers enable companies to scale up without building expensive network infrastructures.
    • Author:
    • Author name
      Quantumrun Foresight
    • November 17, 2022

    Post text

    Network-as-a-Service is a cloud solution that allows enterprises to use networks externally managed by a service provider. The service, like other cloud applications, is subscription-based and customizable. With this service, businesses can jump into distributing their products and services without worrying about supporting network systems.

    Network-as-a-Service context

    Network-as-a-Service (NaaS) allows customers who are unable to or don’t want to set up their networking system to have access to one regardless. The service usually includes some combination of networking resources, maintenance, and applications that are all bundled together and rented out for a limited time. Some examples are Wide Area Network (WAN) connectivity, data center connectivity, bandwidth on demand (BoD), and cybersecurity. Network-as-a-Service sometimes entails delivering a virtual network service by holders of the infrastructure to a third party using an Open Flow protocol. Because of its flexibility and versatility, the global NaaS market is increasing rapidly. 

    The market is expected to have a compound annual growth rate of 40.7 percent from $15 million USD in 2021. This impressive expansion is driven by various factors, such as the telecom industry’s readiness to adopt new technology, the sector’s vital research and development capabilities, and the rising number of cloud-based services. Technology companies and telecom service providers are adopting cloud platforms to decrease costs. In addition, enterprise adoption of cloud solutions enables them to focus on their core strengths and strategic objectives. Furthermore, NaaS can be readily deployed, saving time and money by eliminating the need to maintain a complicated and expensive infrastructure.

    Disruptive impact

    Multiple organizations and small businesses are rapidly adopting NaaS to reduce the expense of acquiring new devices and training information technology (IT) personnel. In particular, SDN (Software Defined Network) solutions are increasingly adopted in enterprise segments due to a growing demand for efficient and flexible networks. Software Defined Network solutions, Network Function Virtualization (NFV), and open-source technologies are anticipated to gain further traction. As a result, cloud solutions providers are using NaaS to expand their customer base, particularly businesses that want greater control over their network infrastructures. 

    ABI Research predicts that by 2030, approximately 90 percent of telecoms firms will have transferred some portion of their international network infrastructure to a NaaS system. This strategy allows the industry to become a market leader in this space. Furthermore, to provide cloud-native services and stay competitive, telcos must virtualize their network infrastructure and heavily invest in automating various processes throughout the service. Additionally, NaaS supports 5G slicing, which plays a significant role in value addition and monetization. (5G slicing enables multiple networks to operate on one physical infrastructure). Moreover, telecom companies would reduce internal fragmentation and improve service continuity by restructuring the business and using models to focus on openness and partnerships across the industry.

    Implications of Network-as-a-Service

    Wider implications of NaaS may include: 

    • An increasing number of NaaS providers aiming to service new companies interested in using cloud solutions, such as startups, fintechs, and small and mid-sized businesses.
    • NaaS supporting various Wireless-as-a-Service (WaaS) offerings, which manages and maintains wireless connectivity, including WiFi. 
    • External or internal IT managers deploying services to outsourced workforces and systems, leading to more cost efficiencies.
    • Increased network stability and support for remote and hybrid work systems, including enhanced cybersecurity.
    • Telcos using the NaaS model to become the ultimate network consultant and provider for enterprises and non-profit organizations like higher education.

    Questions to comment on

    • How might NaaS assist WaaS in connectivity and security efforts? 
    • How else can NaaS support small and mid-sized businesses?

    Insight references

    The following popular and institutional links were referenced for this insight: