image credit: Pexels

What Is NaaS, and How Does It Work? Definition, Advantages, Challenges, and Examples

May 18, 2023


Network-as-a-Service (NaaS) platforms allow organizations to rent network infrastructures, reducing the time and expense of implementing this in-house. Enterprises benefit from this technology, as it enables quicker, more reliable, and secure performance, offering remote access and predictable expense forecasting through subscription models.

However, there are several challenges enterprises must prepare for, including migrating legacy systems, having limited or no control over network sources, and relying on a single vendor. 

This article will uncover what the NaaS model is, the market size and the advantages and challenges enterprises must consider. In addition, we will explore three case studies of how organizations are adopting these models and the outcomes it has helped them achieve. 

What Is NaaS, and How Does It Work?

Network-as-a-Service (NaaS) is a service model where large organizations outsource their network infrastructure to cloud vendors instead of building their own. This model allows enterprises to take advantage of the accessibility and capabilities of networks without having to invest in the hardware, maintenance, and expertise required to build in-house infrastructure. NaaS vendors offer these services through cloud computing software, allowing organizations to maintain network technology without hardware. Businesses only require a stable internet connection to run this technology.

Solutions, such as virtual private networks (VPNs), and multiprotocol label switching (MPLS), require more manual work and are not as agile as NaaS. As a result, NaaS technology is more suitable for enterprises with high-level network infrastructure and large volumes of data. These platforms also offer network security, so organizations do not have to configure on-premise security, such as firewalls. 

Research Proves Enterprises Are Rapidly Adopting NaaS

The adoption of the Network-as-a-Service (NaaS) model has significantly increased globally, from $11.5 billion in 2022 to $14.6 billion in 2023, according to a report by GlobalNewsWire. This market will increase to $70 billion by 2030 at a compound annual growth rate (CAGR) of 26.7%. 

Large enterprises dominate this market, accounting for 55% of its global revenue. North America leads the way in NaaS adoption, with a 42% market share. Cloud and Software-as-a-Service (SaaS) connectivity are the most common applications of this model, and the IT and telecom industries leverage NaaS technology the most.

In addition, the increasing use of mobile devices and IoT technology is driving the growth of NaaS. Moreover, globalization and network connectivity in different regions represent another key factor driving this market. NaaS enables organizations to expand their global infrastructure to support remote operations.

A third factor driving the expansion of the NaaS market is digital transformation and the demand for an agile work structure. As businesses adopt new technologies, they seek solutions to scale with their growth and ever-changing needs, and NaaS is a sound solution to meet these requirements.

Another pivotal aspect fueling NaaS is the demand for improved network performance. Many enterprises implement remote operations and require optimized network infrastructure to perform these activities. Solutions such as NaaS are ideal, as they ensure reliable connectivity and increased efficiency.

The NaaS market is rapidly expanding, with large enterprises leveraging these solutions the most. Based on the source cited above, this sector will continue to grow in the following years, with digital transformation and an increase in mobile and IoT technology fueling this industry. 

What Are the Advantages of NaaS for Organizations?

NaaS platforms offer several benefits for enterprises, including reduced expenses by eliminating or minimizing hardware. In addition, organizations can leverage automated reports and reduced network downtimes to optimize performance and productivity, as well as remote access for network monitoring. Here is an overview of these advantages and how they fuel enterprise operations. 

Reduced Expenses

One of the most significant benefits of NaaS models is that organizations can predict and reduce their network expenses. Businesses do not have to pay for maintenance as this solution does not require hardware. Additionally, outsourcing network infrastructure is also much more affordable than developing and configuring it. 

NaaS providers and vendors can help optimize your network performance through their knowledge and experience. Most of these vendors charge companies on a subscription model, making it easier to predict and manage operational costs. 

Optimized Performance and Productivity

NaaS aims to help enterprises optimize productivity and performance, leading to quicker and more secure data transfers. NaaS can minimize network errors and downtime and enable IT teams to complete daily tasks more efficiently.

In addition, expert NaaS platforms provide organizations with weekly and monthly reporting and analytics to monitor performance. These reports shed light on network anomalies, helping enterprises to identify and optimize weaknesses.

Remote Access 

Remote network accessibility and monitoring are imperative for enterprises. With NaaS, IT developers can access the network remotely, using an internet connection and their credentials.  This eliminates the need to maintain physical hardware and allows developers to implement network changes remotely and collaborate with teams. 

What Challenges Do Enterprises Adopting NaaS Face?

In contrast to the benefits of NaaS platforms, there are many challenges organizations face when implementing this technology. First, it is difficult to migrate NaaS technology to legacy systems, and enterprises must adopt cloud solutions. Additionally, businesses must rely on a single NaaS vendor and businesses have limited control over and access to network sources. Here is an overview of these challenges and how they impact enterprises. 

Migrating to Legacy Systems

An estimated 55% of organizations still maintain their applications on-premises, and may find it challenging to integrate NaaS platforms with these legacy systems. Although many vendors can make this process easier, organizations must migrate to cloud computing solutions to maximize the benefits of NaaS models. 

Reliance on a Single Vendor

Choosing a NaaS vendor is a strategic decision for organizations, as migrating their infrastructure to another vendor later on may prove challenging. However, relying on one provider also has its drawbacks—if the service provider’s infrastructure is of poor quality or fails, this will impact the enterprise’s network. Similarly, if the vendor raises their prices or does not make timely updates to their platforms, this can put the organization at a disadvantage. 

Limited Control Over Network Sources 

NaaS vendors have complete control over network sources and infrastructure, and businesses will find it challenging to troubleshoot network abnormalities without relying on the vendor. Although top-rated NaaS providers are responsive, enterprises may still find themselves limited by the lack of control over network data and sources. Fortunately, many vendors provide co-managed solutions to address this concern. 

Enterprises in Various Industries Are Leveraging NaaS

Many enterprises have gained significant outcomes from NaaS adoption. Here are three businesses that have successfully integrated NaaS technology into their operations.  

Technology Sector: Signpost 

Signpost specializes in cloud-computing CRM and marketing automation solutions for professionals in the home services industry (plumbers, electricians, contractors, etc.). When the COVID-19 pandemic began, the company found most of its workforce was working remotely and on-premises networking equipment had reached its end of life. Responding to these changes, Signpost integrated NaaS to manage their network infrastructure and data management remotely.

Credited to NaaS, Signpost achieved the following:

  • Within 24 hours, Signposts’ workforce was fully remote with NaaS powering 81 data centers across New York, Chicago, and Dallas. 
  • Each employee had a dedicated internet connection within 24 hours.
  • They reduced hardware maintenance costs by $50 to $60,000. 

Transportation: Eurasia Tunnel

Eurasia Tunnel is an underwater twin-deck tunnel connecting two continents through NaaS-powered network infrastructure for automated technology that maintains healthy traffic flow. With over 2,000 Internet of Things (IoT) devices and an increased load of traffic using these tunnels, developers had to find an improved solution to ensure safe continuous tunnel activity. Manual detection and meditation did not suffice for the complexity of a network infrastructure of this magnitude. 

To respond to these challenges, Eurasia Tunnel adopted NaaS, which helped them achieve the following outcomes:

  • The C2 activity stopped through DNS security.
  • The company achieved nearly 100% in security alerts and an increase in investigation speed.
  • The next-generation firewall (NGFW) instantly solved web-based and common file threats.
  • All the IoT devices were detected within 48 hours.

Pharma: Zuellig Pharma

Zuellig Pharma is one of Asia’s largest healthcare service groups, aiming to increase healthcare accessibility. With over 320,000 medical facilities in their chain, Zuellig Pharma had to adopt digital transformation, which required a reliable and custom-designed technology infrastructure. In addition, through data fluidity, the organization wanted to reduce its overall expenses and solve its latency challenges. 

Zuelling Pharma found the solution in NaaS technology, which helped them accomplish the following:

  • They reduced latency for real-time analytics by 75%.
  • The cut-over timings for Azure migration were reduced by 30%.
  • The extract, transform, and load (ETL) workloads were optimized, making them 150% more efficient. 

Based on these case studies, NaaS solutions can help enterprises achieve various network infrastructure goals—most commonly efficiency, optimized performance and connectivity, and remote access. Like the organizations above, enterprises can tailor NaaS to address their specific requirements and pain points.   

In Closing

NaaS is a service model that enables large enterprises to rent network infrastructure on a subscription basis, with optimized performance and automation. This model also offers reduced costs as businesses do not have to maintain hardware, and can leverage remote access to monitor performance. While there are many challenges to overcome, including migrating legacy systems, relying on a single vendor for network infrastructure, and having limited to no control over sources, NaaS is proven to work for enterprises in various industries.