Key Market Overview:
Network as a service market is estimated to reach over USD 63.54 Billion by 2030 from a value of USD 12.42 Billion in 2022, growing at a CAGR of 22.64% from 2023 to 2030.
Network-as-a-Service (NaaS) is a cloud-based service model that provides businesses with access to network resources and infrastructure through a third-party provider. NaaS is a subscription-based service that allows businesses to outsource the management of the network infrastructure, including the hardware, software, and maintenance of networking equipment, to a third-party provider. NaaS providers offer a range of network services, including bandwidth, routing, switching, security, and other networking functions. The services are accessed and managed by businesses through a centralized web-based portal, which provides a single interface for managing and monitoring network performance.
NaaS offers extended and flexible services to the organizations such as Bandwidth on Demand (BoD), Wide Area Networking (WAN) and Virtual Private Networks (VPN), content monitoring and filtering, and other applications fueling the growth of the market. Network-as-a-Service (NaaS) provides a secure and resilient network infrastructure for disaster recovery purposes in the IT sector. By relying on a third-party provider to manage the network infrastructure, businesses ensure that the critical applications and data will remain accessible, even in the event of a disaster, such as a natural calamity or a cyberattack. For instance, in November 2021, a Cisco survey of IT professionals found that NaaS is increasingly being seen as a way to avoid future COVID-like disruptions, simplify IT and help IT teams create more value for the companies.
Network as a service Report Coverage:
Network as a service Market Dynamics:
|Report Attributes||Report Details|
|Market Size in 2030 (USD Billion)||63.54 Billion|
|CAGR (2022-2030)||22.64 %|
|By Type||WANaaS and LANaaS|
|By Enterprise Size||Large and Small & Medium|
|By Application||Virtualized Private Networks (VPN), Wide Area Networks (WAN), Cloud & SaaS Connectivity, Bandwidth On Demand, UCaaS/Video Conferencing, and Others|
|By End-User||BFSI, Retail, IT & Telecommunication, Manufacturing, Media & Entertainment, Education, Healthcare, Government, and Others|
|By Geography||Asia-Pacific [China, Southeast Asia, India, Japan, Korea, Western Asia] |
Europe [Germany, UK, France, Italy, Russia, Spain, Netherlands, Turkey]
North America [United States, Canada, Mexico]
Middle East & Africa [GCC, North Africa, South Africa]
South America [Brazil, Argentina, Columbia, Chile, Peru]
|Key Players||Cisco Systems, Juniper Networks, IBM Corporation, VMware, Inc., AT&T Inc., Verizon Communications Inc., Microsoft Corporation, NEC Corporation, Hewlett Packard Enterprise (HPE), Ciena Corporation|
The increasing adoption of cloud technology is the key driver behind the growth of Network-as-a-Service (NaaS) as cloud technology offers businesses the ability to scale the IT infrastructure up or down quickly and easily. NaaS provides businesses with a similar level of scalability for the network infrastructure, allowing businesses to easily adjust bandwidth and add or remove network services. Cloud providers have expertise in network security and provide advanced security features, such as firewalls, intrusion detection, and prevention systems, to protect against network attacks and data breaches. Moreover, NaaS allows businesses to benefit from such security features without having to invest in expensive security hardware and software which in turn drives the growth of the market. For instance, in March 2021, SDx Networks partnered with Masergy to officially launch Australia\'s next generation of ICT Managed Service Providers by offering cloud networking in Australia, New Zealand, and Asia Pacific.
The Network-as-a-Service (NaaS) market is subjected to various stringent government laws and regulations that hinder the growth of the market. The vendors failure to comply with certain standards and laws leads to major financial loss and business risks to the client. For instance, data protection laws, such as the General Data Protection Regulation (GDPR) in the European Union and the California Consumer Privacy Act (CCPA) in the United States, regulate how businesses collect, use, and store personal data. The laws impact the design and operation of NaaS solutions, particularly concerning data privacy, data access, and data retention, and take strict actions against NaaS providers in an attempt to break the law.
The increasing adoption of 5G technology is expected to create several future opportunities for Network-as-a-Service (NaaS) providers. 5G technology provides faster and more reliable connectivity compared to previous generations of wireless technology. The connectivity is projected to offer more sophisticated and bandwidth-intensive services, such as real-time video and voice communications, without sacrificing quality. Also, 5G technology is designed to support new use cases, such as the Internet of Things (IoT) and edge computing. NaaS providers leverage the use of such cases to offer new services and solutions to the customers, such as real-time data analytics and machine learning. For instance, in February 2023, the cybersecurity imperative released India\'s 5G vision with several facets of 5G providing built-in security - superior 256-bit encryption, cloud, and software-based infrastructure enabling better monitoring and threat detection.
Network as a Service Market Segmentation:
The type segment is bifurcated into Wide Area Network as a Service (WANaaS) and Local Area Network as a Service (LANaaS). The WANaaS segment dominates the market as more organizations have expanded the operations across multiple locations, and there is a greater demand for wide-area networking services to connect geographically dispersed sites. WANaaS provides a centralized platform to manage and connect the sites, making WANaaS a more attractive option for businesses with a dispersed footprint. Also, WANaaS providers offer service level agreements (SLAs) that guarantee high levels of performance and availability. The guarantee is important for businesses that require reliable and high-performing networks to support the operations. For instance, in February 2021, Verizon Business announced a strategic partnership with Cisco, with the addition of three new SD-WAN, managed services offerings. The expansion seeks to provide enterprise businesses with an extensive global footprint, access to new solutions and capabilities, as well as a management and policy administration model to support the desired business outcomes.
The Local Area Network as a Service (LANaaS) is anticipated to register the fastest CAGR in the future due to the rise of edge computing, which involves processing data at the network edge rather than in centralized data centers, has led to a greater demand for localized network infrastructure. LANaaS provide businesses with the necessary networking capabilities at the edge, making LANaaS a more attractive option for companies pursuing edge computing strategies. For instance, in February 2022, Parallel Technologies, Inc. stated that LAN infrastructure and cloud computing solutions give a boost to retailers. LAN infrastructure also allows retailers to reduce spending associated with software and hardware development, maintenance, and staffing and deliver products and services at speed while monitoring data performance in real-time.
By Enterprise Size:
The enterprise size is segmented into large and small & medium enterprises. The large enterprise segment dominates and holds the maximum market share as large organizations have complex networking needs, with multiple sites, large numbers of users, and high bandwidth requirements. NaaS provides large enterprises with a range of networking services, including WANaaS and LANaaS, to help large organizations manage the network infrastructure more efficiently and cost-effectively. Large enterprises also have more resources and expertise in-house to manage the network infrastructure, hence becoming a good fit for more complex NaaS solutions. Large enterprises often apply strategic partnerships and acquisitions to strengthen the position in the market which in turn fuels market growth. For instance, in June 2021, Cisco completed the acquisition of Kenna Security to help customers identify threats faster, improve collaboration between security and IT teams and reduce the attack surface.
Small and medium enterprises (SMEs) are expected to register the fastest compound annual growth rate (CAGR) over the next few years. NaaS providers offer SMEs a range of managed network services, such as network monitoring, security, and optimization, to improve network performance and reduce operational costs. The growing demand for managed services is expected to drive the growth of NaaS solutions among SMEs during the forecast period. Also, NaaS provides SMEs with a scalable network infrastructure that will grow and adapt as the business needs change, without requiring significant capital expenditures. Scalability helps SMEs to stay competitive and respond to changing market conditions.
The application segment is classified into Virtualized Private Networks (VPN), Wide Area Networks (WAN), Cloud & SaaS Connectivity, Bandwidth on Demand (BOD), UCaaS/Video Conferencing, and others. Cloud & SaaS connectivity dominates the market as NaaS is used in businesses to provide a more secure and reliable connection than using the public internet. NaaS is also used to improve network performance and reduce latency for SaaS applications, which is especially important for real-time applications like video conferencing and voice-over IP (VoIP). For instance, according to 2022, IDG cloud computing survey, a majority of IT decision-makers (60%) believe that the adoption of cloud capabilities has contributed to the sustainable growth of the organizations.
The Bandwidth on Demand (BoD) segment is anticipated to witness a CAGR during the forecast period, as businesses need to quickly increase the network bandwidth in the event of a disaster to ensure that critical applications and services continue to function. With NaaS and bandwidth on demand, businesses quickly provision additional bandwidth to support disaster recovery efforts. For instance, in September 2022, TeleGeography found that the global internet bandwidth increased by 28% in 2022 and almost reached the threshold of 1Pbps, specifically measuring at 997Tbps. Geographically, Africa recorded the highest CAGR between 2018 and 2022 in international internet bandwidth, at 44%, while Asia followed with a CAGR of 35% for the same period.
The end-user segment is categorized into BFSI, retail, IT & telecommunication, manufacturing, media & entertainment, education, healthcare, government, and others. IT & telecommunication dominates the market as NaaS allows businesses to create virtualized networks that are customized to meet specific needs, particularly for the IT sector which requires multiple virtualized networks to support different applications and services. NaaS enables businesses to implement software-defined networking (SDN) to automate network configuration and provisioning, which significantly reduces the time and cost associated with manual network management. For instance, in November 2022, Verizon Business and Wipro partnered to accelerate network transformation with a Network-as-a-Service offering. The partnership will enable Wipro to transition customers from legacy cycles of deploying hardware, applications, and services to an automated, self-healing, and highly secure network service environment.
The BFSI segment is projected to register the fastest CAGR during the forecast period as the BFSI sector requires robust security measures to protect sensitive financial data and ensure compliance with industry regulations. NaaS providers offer a range of security and compliance services, such as firewalls, intrusion detection and prevention, and data encryption. NaaS also help businesses to stay compliant with industry regulations and data privacy laws, which is crucial for maintaining customer trust and avoiding costly penalties. For instance, in October 2022, ICICI Bank announced the launch of four Digital Banking Units (DBUs) to offer banking services to its customers digitally. The DBU also provides a digital interactive screen where customers can interact with a chatbot to find product offers and mandatory notices.
North America dominates the market and generates maximum revenue due to the early adoption of cloud computing technology, which has paved the way for the adoption of NaaS. The region has a mature cloud infrastructure, and many businesses have already transitioned to cloud-based services, making easier for organizations to adopt NaaS. North America is home to many innovation hubs, including Silicon Valley in California, which has a strong concentration of technology companies and startups. The hubs foster an environment of innovation and collaboration, which leads to the development of new networking technologies and services, such as NaaS. Also, the presence of key players with focus on applying strategic partnerships fuels market growth. For instance, in September 2021, Extreme Networks, Inc. completed the acquisition of Infovistas Ipanema SD-WAN to expand Extremes market-leading ExtremeCloud portfolio, offering new cloud-managed SD-WAN and security software solutions required to power the Infinite Enterprise.
Asia-Pacific is projected to register the highest CAGR during the forecast period as governments and businesses in the Asia-Pacific region are investing heavily in IT infrastructure, including high-speed internet connectivity and advanced networking technologies. The infrastructure enables the development and deployment of NaaS solutions, making easier for businesses to adopt the services. For instance, according to the hybrid workplace report 2020, 45% of APAC enterprises plan to increase the investment in cloud-based networking which in turn propels the growth of the NaaS market.
Network as a Service Market Competitive Landscape:
The Network as a Service Market is highly competitive, with several players vying for market share. The key competitive strategies include delivering a high-quality user experience, providing reliable and secure wireless connectivity, leveraging network infrastructure, investing in new technologies, and driving innovation in the market. Crucial players are:-
• Cisco Systems
• Juniper Networks
• IBM Corporation
• VMware, Inc.
• AT&T Inc.
• Verizon Communications Inc.
• Microsoft Corporation
• NEC Corporation
• Hewlett Packard Enterprise (HPE)
• Ciena Corporation
• In April 2022, Tata Communications further strengthens IZO Internet WAN for global enterprises. With dependable network services offering access to more than 150+ geographies, IZO Internet WAN offers high-quality Internet services and consistent network experiences over various service options including broadband Internet.
• In December 2020, Verizon Business announced the deployment of its Network-as-a-Service (NaaS) offering, an all-encompassing network solution, to more than 9,000 Walgreens and Duane Reade retail locations across the U.S.