The Network-as-a-Service (NaaS) model aims to disrupt the mainstream connectivity market by providing a cloud-based alternative for the benefit of those organisations who no longer want the bother of managing their own infrastructure. NaaS means they get to outsource the provisioning, deployment and maintenance of their network to a third party, paying for services as they use them like any other utility, writes Guy Matthews.
The unpalatable reality for the conventional communications service provider (CSP) is that all this scalability, flexibility and freedom from hardware constraint invites questions about their future role. It’s still early days for NaaS, but already we’re seeing incipient offers from the likes of Palo Alto Networks, Juniper Networks, Megaport, Cisco, Cloudflare and more than one hyperscaler.
A number of telcos have elected to turn defence into attack by investing to develop a NaaS platform of their own, rather that wait for their lunch to be stolen from them by digital alternatives: “Leading telcos in the NaaS space include Lumen and Verizon in the US, both of which have solid claims,” observes Brian Washburn, the chief analyst for telco B2B at analyst firm Omdia. “Colt in Europe has been a thought leader. There are others that can lay claim to aspects of NaaS.”
Will the real NaaS step forward?
As so often with a technology in its early phases, there are multiple definitions of what constitutes ‘real’ NaaS. In its purest sense, argues Washburn, it is about bringing consumable network services right down to the access level, into the customer premises: “Some NaaS offers can spin up virtual network functions inside the network core, but leave you with a static access network to contend with,” he notes. “Outside the fabric, and you’re on a dirt road.”
There may be greater usefulness in viewing cloud-based networking not simply through the lens of authenticity but in terms of its value to the paying customer. This, argues Washburn, will differ according to whether the needs of the wholesale market are being addressed, or those of the enterprise end user.
“For wholesale partners, what really matters is being able to order through a digital interface or via API and receiving their capacity quickly in an automated way,” he says. “They want to be able to change the contract and pay as they go with maximum flexibility. Enterprises don’t really need any of that, for the most part. They just want a contract where they are not penalised for adding or removing or reconfiguring services. If I want it in two months’ time, have it ready for me on that date. It doesn’t need to be spun up in two hours. Enterprises want services the way they want to consume them instead of being dictated to by a static contract.”
How to get into the NaaS market
Any telco not at present offering some flavour of NaaS needs to realise that the sands of time are running out for unvarnished old school services, warns Matt Swinden, director of digital connectivity with BT Business, operator of a new API-based NaaS platform called Global Fabric.
“We were one of the first to build a global MPLS network back in the day,” he recalls. “A few years ago it became obvious that it was reaching end of life. We needed a new way to provide end-to-end connectivity to our multinational business customers.”
Cloud, he explains, has been the game changer: “Now, as an enterprise, it’s not just about connecting internally but to your increasingly distributed partner ecosystem. We needed a network that was more ubiquitous in terms of its connection points. Now we have an API-first NaaS architecture that allows customers to provision in less than two minutes. It’s akin to an Amazon-like ecommerce experience. Click, in the basket, get a price, pay and it’s then executed. It’s a seamless digital experience on top of infrastructure that is connected at the right places.”
Swinden says the largest uptake of Global Fabric so far has been in the manufacturing, life sciences and financial service sectors, on account of their latency-sensitive traffic. Customers, he says, can opt to handle their own services or pay to have them managed. “They can also take them through one of our partners, a global SI perhaps,” he adds. “Global Fabric’s success depends on the domestic reach of our numerous telco partners around the world.”
“Swinden says the largest uptake of Global Fabric so far has been in the manufacturing, life sciences and financial service sectors, on account of their latency-sensitive traffic”
Indeed for any aspirant NaaS market entrant, partnership is clearly the secret sauce: “We want to provide end to end connectivity, and we can’t do that in isolation,” says Swinden. “We have curated a set of partners globally to maximise reach. There’s a collective need for telcos to work cooperatively to ensure they can provide a differentiated experience. And don’t rule out working with the hyperscalers. We work with Google.”
In a NaaS future where the likes of a Megaport can build a whole automated fabric in Microsoft Azure, perhaps having never owned a scrap of physical infrastructure, what added value does a telco bring? Can a telco ever compete with a hyperscaler on the battleground of automation? Washburn of Omdia says that every telco must push to automate, just as table stakes: “But what they bring that a hyperscaler can’t, their special magic, is that access network capability combined with the ability to deliver it via API,” he says.
Success will also depend on choosing the right markets to approach, for example ones where the ability to dial services up and down is of particular value, markets like retail and hospitality where regular seasonal fluctuation in network needs is commonplace. There are other instances where the flexibility of NaaS is valuable in a limited and specific role, perhaps to provide an express route into Microsoft Azure. Flexing the entire network might be a big ask for those who set great store by knowing exactly what their network costs will be in advance, rather than waiting until they receive the monthly bill.
NaaS success demands that telcos be ever more customer centric, says Washburn: “That means if the buyer wants to consume their services in a particular way, then the telco needs to figure out how to be more flexible to accommodate that.”
The NaaS market is heating up, forecast by independent research organisation Technavio to grow at a CAGR of 24.7% between now and 2029. Telcos need to be in on this opportunity, not least since it is likely to spell the end for service providers still relying on sweating old assets and even older business models. Fewer and fewer customers will be happy to wait six weeks for a connection, and then not have it as a full digital experience.
