Can Network-as-a-Service (NaaS) Be What You Want it to Be?

Can NaaS be what you want it to be?

Tony:

Hello, today is Thursday, February 20th, 2025.  I’m Tony Mangino from TC2 and this is Staying Connected. 

On today’s podcast I’m joined by Ben Fox, one of TC2’s Managing Directors, and we’re going to have a discussion about Network-as-a-Service, or NaaS.

So, Ben – NaaS gets talked about a lot, with suppliers seeming to be constantly presenting their NaaS propositions, and analysts getting excited about it, but it always seems rather nebulous as to what NaaS really is.  Do you think you can shed some light on that?

Ben:

Hi Tony.  I’m certainly going to try.  But I’m going to start by reinforcing your point that it never really seems to be clear what NaaS actually is.  And that’s because NaaS is not a standard industry product – it’s a term that a wide range of suppliers attach to products, propositions or even just specific commercial constructs, that (to a lesser or greater degree) are purported to offer network services on a utility model.

To further illustrate that point, let me share some quotes from providers describing NaaS on their websites:

• I’ll start with our old friends at Verizon – “Verizon’s Network as a Service Solution is a digital first, integrated solution connecting your users to applications and data across cloud, data centres, corporate offices, suppliers and remote workers around the globe, enabling you to serve your customers faster.” That really doesn’t say anything at all…
• “Why NTT for Network as a Service? With the agility to quickly adapt to business demands, our networking capabilities can complement your existing infrastructure services and technologies to sharpen your competitive edge.” Again, doesn’t really say anything but a bundle of marketing fluff…
• And the analysts also aren’t immune from using similar platitudes – here’s what IDC says – “As enterprises consider new network investments and evolving connectivity strategies, IDC predicts that enterprise NaaS models will continue to be a pivotal way to transform enterprise network deployments and operations.”

Tony:

I agree that those descriptions don’t really help.  Are there any that do help?

Ben:

Well funnily enough, the definition of NaaS that I find most accurate is from, of all sources, Wikipedia, and states the following:

“”Network-as-a-Service” (NaaS) is often used alongside other marketing terms such as cloud computing. It is related to terms like Infrastructure as a Service (IaaS), Platform as a Service (PaaS), Software as a Service (SaaS), and Software-Defined Networking (SDN).”

Tony:

So, I think your point is that NaaS is really a marketing term…

Ben:

That’s exactly right.  It’s an over-used marketing term that gets attached to a wide range of networking supplier propositions. 

And that happens because customers love the concept of as-a-service, so suppliers jump on that and append the words “as-a-service” to whatever product they happen to sell.  And in the case of network suppliers, that results in the marketing term Network-as-a-Service.

Tony:

Ok – so perhaps we should talk about why customers love the concept of as-a-service.  What do customers expect NaaS to be?

Ben:

Good idea.  I think there are a few attributes that customers associate with as-a-service models:

• Buying technology as a utility – being able to turn it on and off, and increase and decrease the capacity/power/bandwidth what have you, and add/remove features and capabilities, all at will.
• A corresponding pricing model that only charges you for what you use, and perhaps only when you use it.
• Everything is covered – it’s effectively plug and play – all the hardware, software and services to support it and keep it running are all included.

My favourite analogy for as-a-service is the running water coming into your home – I can turn it on and off whenever I need; I have a water meter than measures how much I use and I’m charged accordingly, and if a pipe bursts in the street the water company comes and fixes it. 

Tony:

Are there any networking products that are truly as-a-service?

Ben:

I would say that cloud networking services that the cloud hyperscalers offer on their as-a-service platforms are truly as-a-service, but that only represents a small fraction of a typical enterprise’s network infrastructure.

There are also various Unified-Communications-as-a-Service and Contact-Center-as-a-Service propositions out there that are cloud based.  And also, SD-WAN technology pricing models are largely subscription based and essentially as-a-service.  But the licencing models for those services tend to be based on multi-year commitments and often pre-paid, so really don’t allow you to turn the services on and off as you need.

Tony:

But what about something that turns my circuits and on-premise network infrastructure into as-a-service?

Ben:

Well I think that’s where it all falls apart.  Network circuits and hardware present inherent challenges to translate to an as-a-service model.

For instance, circuits are typically charged monthly, but they still have one-year commitments (at least).  Plus, physical access limitations typically prevent much in terms of dynamic bandwidth adjustments.  Circuits really aren’t sold on an as-you-use it basis.

And as far as the equipment goes, networking equipment OEMs are accustomed to up-front purchases, even on software and subscriptions, not a usage-based charging model.

However, that doesn’t mean that suppliers don’t try and create a commercial pricing construct that looks a bit like NaaS.  One example is HPE’s Greenlake for Networking Service Packs, which seek to convert CaPex to OpEx and bundle in optional managed services.  But even then, there is a significant lock-in period so that the cost of the deployed equipment can be recouped.  It’s not a true as-a-service utility. 

Tony:

So, is true NaaS destined to always be unreachable?

Ben:

Good question, and I think since we’ve established that NaaS is such a nebulous term, I’m going to provide an equally nebulous answer, which is that I think NaaS has to be treated as a philosophy as much as a product or proposition.  It’s the concept of buying a bundle of network services and products that someone else is assembling into the specific networking infrastructure and connectivity that you need, and for which you negotiate an entirely bespoke pricing and commercial model.

And the systems integrators and the carriers will absolutely do that for you if that’s what you want, and will provide you with that custom bundle of network hardware, software, circuits and associated managed services.  But you can’t expect that it’s going to be sold to you as a utility that you can simply turn on and off as you want.

Tony:

Good answer, I think, but either way, it sounds like a custom bundle like that would be complicated to negotiate?

Ben:

Yes – definitely.  Whenever multiple components, with different underlying pricing and commercial constructs, are baked into a pricing model that seems simple on the outside, there is almost always a huge amount of complexity on the inside.  And often what happens in such models is that the component with the least flexibility and most onerous terms, ends up being the lowest common denominator, and the entire custom NaaS bundle becomes less flexible than if the underlying products and services had been purchased in a more traditional manner.  Which is the exact opposite of what customers desire and seek from NaaS.  So, I suppose it’s important to be careful what you wish for!

Tony:

Thanks very much, Ben.  Great discussion.  And if you would like to learn more about NaaS, or if you’d like to discuss other ICT needs with Ben or me, or any of our LB3 and TC2 colleagues, please give us a call or shoot us an email. You can also stay current by subscribing to Staying Connected, checking out our websites, and following us on LinkedIn.