CommunicationServiceProvidersCommunication service providers (CSPs) have made large strides over the last few years as they look to leverage their underlying infrastructure to climb the digital value chain by delivering cloud-enabled integrated network services.

This paradigm, “network-as-a-service” (NaaS), is a more flexible way for enterprises to consume critical and non-critical network services. It enables enterprises to consume cloud-delivered services on demand and in real time without owning, building, maintaining, and in some cases, even deploying their infrastructure on premises.

Global technology intelligence firm ABI Research forecasts that by 2030 over 90% of enterprises will consume at least 25% of their network services in this new usage-based consumption model.

“Deploying networks ‘as-a-service’ will become a cornerstone of any successful enterprise digital transformation. It provides greater time-to-value for new sites or use cases, optimizes cloud strategies, and increases networking control by abstracting hardware and providing centralized management. This brings massive financial and operational efficiency opportunities and moving forward will have a value proposition that resonates strongly across nearly every major enterprise vertical,” states Reece Hayden, Distributed and Edge Compute Analyst at ABI Research.

Over the next seven years, NaaS will play a prominent role within most enterprise digital transformation strategies across multiple verticals and sizes. “But not all enterprises will adopt this consumption model in the short term. Cloud-native enterprises and startups will be the earliest adopters, with SMEs and MNCs lagging,” explains Hayden. “These adoption discrepancies result from different internal structures and value drivers. For example, a start-up will prize quick time-to-value and low barriers to entry (which NaaS offers). At the same time, MNCs may focus more on security and on-premises physical infrastructure.”

Long-term expectations for NaaS adoption seem reasonable, but currently, the market remains stagnant, with enterprise adoption highly constrained to certain software-defined networking services (e.g., SD-WAN). Hayden argues that “this market nascency is a result of enterprise skepticism, confusion, and risk aversion.” He highlights that “although enterprises can see the operational value NaaS could bring, they worry about the potentially higher total cost of ownership (TCO), day-to-day management challenges, and risk of significant fluctuations in monthly bills. This leaves a massive challenge for CSPs.”

Accelerating NaaS adoption should be a top priority for CSPs as it offers a clear avenue towards network monetization through “over-the-top” service delivery. “CSPs must first invest heavily in their NaaS solution looking to integrate automation and drive platform openness,” Hayden recommends. “On top of this, they must look to develop a partnership ecosystem comprised of systems integrators and network service partners.” These initial steps will lower the barrier to deployment, especially for MNCs weighed down by legacy contracts and large brownfield deployments and introduce a ‘trusted channel partner’ that can help ease the path to deployment.

“But more needs to be done beyond platform investment,” says Hayden. “CSPs must look to work with enterprises to ease nerves through education and innovative pricing support strategies that help mitigate some of the financial risk involved in this new consumption model.” Many of the leaders in the NaaS market are already focusing heavily on FinOps and looking to deploy pricing controls that will play a pivotal step in accelerating enterprise NaaS adoption.

Enterprises of all shapes and sizes can derive enormous financial and operational value from NaaS deployment as a cornerstone of their digital transformation strategy. But taking the plunge into this new and very different consumption model can be scary, especially given current global macroeconomic conditions and a long list of brownfield network service contracts. “CSPs must implement effective strategies to support enterprise adoption if they wish to gain access to this huge monetization opportunity. One of the largest areas that CSPs should focus on is education – it is highly likely that if enterprises understand the true benefits and costs of NaaS deployment, the perception will be more positive and adoption rates will be higher,” Hayden concludes. (Source: ABI Research)

By MediaBUZZ