Enterprises are starting to think “much more strategically” about how to support remote and hybrid workers, with as-a-service network models beginning to take over the market, IDC Analyst Brandon Butler told SDxCentral. Organizations are increasingly looking to extend enterprise-class networks to remote and hybrid workers, a concept IDC calls “the branch of one.” IDC reported that 69% of global respondents to a recent survey are planning to invest in network transformation over the next 12 months, highlighting network-as-a-service (NaaS) as a challenger to legacy network models that necessitate substantial upfront capital.
“I would say in the early days there were a lot of what I would call band-aid solutions in terms of, well, maybe I’m just going to spin up some more VPN capacity to be able to support my remote and hybrid workers,” Butler told SDxCentral. IDC conducted a web survey of technology-buying decision makers in 402 medium to large organizations (with 500+ employees), across 13 countries in North America, Europe, and Asia/Pacific, and in nine industries to understand the role of Network as a Service in their network strategy. Here is what they found:
As organizations leverage the value of their networks to jumpstart digital transformation, the Network as a Service market is expected to grow rapidly, at a similar rate as the SD WAN market, which is forecast at a 41% compound annual growth rate from 2019 to 2024.
- The most important Network as a Service capabilities are a hybrid network and SD WAN [1.].
- Real-time, high-bandwidth capabilities are needed for the future network.
- Many enterprises outsource network services, mainly ongoing managed network services, preventative management, and network design.
- Virtualizing, automating, and modernizing the network as well as dealing with security threats are top priorities in a pandemic and post-pandemic world. Specifically – adding virtualized network and security services as well as cloud security are top of the list of things to upgrade.The majority of enterprises plan a network transformation in the next two years. Skills shortages, stakeholder buy-in, and legacy infrastructure hold back progress. The cost of doing nothing can be significant.
Note 1. According to Reasarch@Markets, the global SD-WAN market is projected to grow from USD 3.4 billion in 2022 to USD 13.7 billion by 2027, at a Compound Annual Growth Rate (CAGR) of 31.9% during the forecast period.
In 2022, companies like Verizon and Aruba worked to bolster their NaaS offerings. The global NaaS market generated $11.2 billion in revenues in 2021, and is estimated to reach $72.2 billion in revenue by 2031, according to a report from Allied Market Research.
NaaS replaces legacy network architecture like hardware-based VPNs and MPLS connections or on-premises networking appliances like firewalls and load balancers. Enterprises use NaaS to operate and control a network without needing to purchase, own, or maintain network infrastructure.
Butler said these as-a-service models are “really helping organizations sort of transform how they’re thinking about their relationships with their vendors. Things like as-a-service models, they certainly take into account a sort of consumption model and having more subscriptions, and operating expenses versus capital expenses.”
NaaS models also bring in other benefits, like “being able to be faster or to be able to spin up services or spin down services, that sort of elasticity of them.”
The ability to add and remove features more dynamically, and manage networks from the cloud is another “tenant” that Butler said is key to as-a-service models.
“I always like to say that it’s it’s important to think about what the business needs from the IT department,” he added.
“That’s, I think, the best place to start in terms of what sort of business problems is your broader organization looking to solve and what goals does your organization have,” Butler said. “And then I think that can help determine what sort of technology solutions are the right fit to help meet those business goals.”