NaaS adoption will thrive despite vendor hype and migration challenges

Network-as-a-service (NaaS) is gaining momentum, providing a subscription-based model that eliminates the need for enterprises to own, build, and maintain their own network infrastructure. 

By replacing conventional hardware-centric VPNs, firewall appliances, load balancers, and MPLS connections, NaaS technology promises adopters the ability to rapidly scale up and down in lockstep with demand while eliminating hardware costs and bolstering network security and service levels.

Why enterprises adopt NaaS

Enterprises are generally attracted to the NaaS model by the potential to consume scalable network services at a predictable cost while shifting spending from capital expenses to operating expenses, said Robert Smallwood, technology vice president at IT service management firm General Dynamics Information Technology (GDIT).

NaaS's key benefits include rapid deployment, on-demand scaling, hands-off modernisation refreshes, and access to the expertise needed to design and maintain today's increasingly complex mesh of interconnecting networks.

NaaS adoption can also help IT leaders bring limited resources into alignment with strategic business goals. "There's considerable power in freeing-up an organisation’s internal IT resources to refocus and prioritise on measuring and meeting business objectives," added John Chambers, director of the network and unified communication solutions team at business consulting firm RSM US.

NaaS's five-year outlook looks promising, Smallwood said. Gartner predicts NaaS will be adopted by 15 per cent of all enterprises by the end of 2024, up from less than one per cent in 2021, he stated. Mordor Intelligence, meanwhile, forecasts a compound annual growth rate (CAGR) for NaaS of 33 per cent between 2021 and 2026.

SD-WAN, SASE, managed Wi-Fi and more

The NaaS umbrella covers a wide range of network services, including remote access, on-demand private L2 or L3 connectivity (including VPN), secure SD-WAN, SASE, security tools, cloud-based managed Wi-Fi, private LTE services, enterprise 5G services, and metro Ethernet services.

Smallwood sees many enterprises taking a methodical approach to NaaS adoption, beginning with easier and more mature use cases, such as remote access and SD-WAN, and then moving to more holistic services.

Leading NaaS vendors include cloud service providers such as Amazon, Microsoft, and Rackspace, as well as traditional communication service providers. Other players include Alkiri, Akamai, Amdoc, Aryaka, Cisco, Megaport, PacketFabric, PaloAlto Networks, and Perimeter 81.

"We see niche vendors continuing to emerge as service gaps are identified," Smallwood noted.

NaaS will continue to grow and mature wherever required network functions can be virtualised and cloud deployed, said Mark Allen, director of network advisory services with technology research and advisory firm ISG.

"The biggest growth opportunities will be driven by abstracting network functions away from costly on-premises equipment requirements to easily consumable services with commercial constructs that flex with demand for a given enterprise," he said.

While many vendors claim to provide NaaS service, some offerings are actually little more than an underlying financing construct as opposed to a true service, Allen said.

"Today, there are many pure-play 'XaaS' solutions for various functions previously reliant on physical hardware on the customer premises," he noted. Security, remote access, and VPN are increasingly being pitched as NaaS services.

Pandemic spurs NaaS adoption

NaaS early adopters tend to be small-to-mid-sized enterprises carrying relatively low levels of technical debt, as well as agile organisations that are willing to assume a certain degree of risk, Allen said.

NaaS is also attracting enterprises struggling with large-scale data flows, such as advertising and e-commerce organisations, plus customers with intense security requirements, including healthcare and financial services enterprises, outlined Alexander Wurm, an analyst with technology research and advisory firm Nucleus Research.

Other early adopters include mature enterprises that fully understand the services they will need for long-term success. 

"These organisations have already adopted other services in an as-a-service model and understand what's required to successfully move to those delivery models," Smallwood said. Still other early adopters are enterprises juggling limited budgets that view NaaS as a pathway to reducing some of their capital expenses.

The pandemic has also played a significant role in spurring NaaS adoption, Chambers said. 

"During the early days of COVID-19 there was a rapid push for users to be able to connect quickly, reliably, and securely from anywhere at any time," he added. "This required many companies to make hardware/software purchases and rapid implementations that accelerated an already noticeable increase in overall network complexity over the last several years."

Unfortunately, many organisations faced serious challenges while trying to keep pace with suddenly essential changes. "Companies that need to quickly scale up or down their network infrastructure capabilities, or those that are on the cusp of major IT infrastructure lifecycle activity, have become prime NaaS-adoption candidates," Chambers said.

It’s easiest for organisations to adopt small-scale NaaS offerings to gain an understanding of how to evaluate potential risk and rewards and determine overall alignment to their company's requirements.

"NaaS providers need to offer different levels of service that allow the enterprise/organisation to pick the degree of NaaS," Smallwood said. "This could include a hardware-only subscription, a managed service, or a full-blown true NaaS where the provider owns, installs, and operates all the equipment."

Enterprises, meanwhile, will need to look past their initial fear of change and perceived loss of control to "recognise the real benefits that NaaS could provide them, especially in this remote work, security-focused, and more cloud-reliant world," Chambers detailed.

As more services are virtualised and packaged for easy use, the NaaS market will continue to grow rapidly, Allen said. "NaaS will benefit from enterprises continuing to adopt hybrid workforce models, particularly in the post-pandemic era," he added.

NaaS migration issues

If approached intelligently, a NaaS migration shouldn't be particularly difficult or time-consuming, according to Allen. 

"The tricky part is the lead-up—getting the house in order before significant technology change can be successful," he said. "This involves auditing the network and adequately segmenting functions for transformation to NaaS while determining what to do with those that are not."

Brownfield deployments tend to be more challenging than greenfield installations, Smallwood observed. 

"For example, in brownfield deployments, there may be compatibility issues where the NaaS vendor's infrastructure isn’t compatible with legacy systems," he said. "Migrating applications and processes may be challenging if those applications and processes are running in on-premises data centres and not in the cloud."

Another potential stumbling block is that the NaaS provider may have only a limited number of the APIs needed to successfully move legacy network services to the NaaS model. "Having multiple vendors providing different parts of the network services can also complicate moving to NaaS," Smallwood said.

In addition, NaaS customers and providers frequently hold divergent viewpoints.

"We often see a chasm between vendor and customer understanding of what's possible and applicable," Allen said. In a complex and evolving marketplace, vendors are stacked at different maturity levels, which colours their definitions and service offerings. He suggested running a Request for Solution (RFS) process to determine an appropriate set of vendors. 

"During the RFS, areas of particular concern should include term commitments, cost, billing structure, and technology utilised," Allen said.

Smallwood recommended testing the NaaS waters with small, clearly identified projects, and moving onto more complex undertakings as experience is gained over time. "We're seeing an increased interest in as-a-service models such as NaaS, but also a bit of confusion as to how to move organisations from legacy IT models to as-a-service models," he noted.

Perhaps the most challenging NaaS candidates are enterprises running critical applications and systems within their on-premises data centres, not inside a public or private cloud. Such organisations may find shifting to NaaS more difficult than those that are already fully enmeshed in the cloud.

For organisations tied to physical data centres, Chambers advised taking a "crawl, walk, run" approach. "For example, a company considering an SD-WAN implementation could choose a NaaS approach for budgeting, implementation, and ongoing management of the SD-WAN platform, as opposed to a legacy CapEx model of adoption and its inherent limitations and risk — namely less scalability and flexibility."

Smallwood believes there will be no turning back from NaaS as adoption continues to grow rapidly over the next several years, but it may require a change in attitudes. 

"Successful adoption of as-a-service models, such as NaaS, are challenged by people with legacy mindsets who are fearful of a lack of control and can’t definitively identify the measurable outcomes they require from the services," he said.