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Networking 101: Understanding Networking as a Service

by Michael Sumastre
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The latest on-demand network service, NaaS can help enterprises reduce network infrastructure costs and increase productivity across their networks. 

With more than 4 billion people connected to the internet and a possible $6.5 trillion e-commerce value by 2022, connectivity for enterprises is no longer a mere option — it is a must. 

And yet, connecting a business to the rest of the world can come at a high price. One report shared that the national average spending for a hardwired PC network could reach up to $6,000. An on-premise server could mean shelling out nearly $1,500. These figures still don’t account for other operating expenses, like labor, maintenance, and upgrade. 

Most companies rely on network service providers, but they are often at the mercy of caps on bandwidth and, sometimes, unpredictable uptime and downtime. How can enterprises make the most of the available networking solutions without spending a lot of money and compromising their productivity? How can they make their setup more scalable, reliable, and flexible?

Enter network as a service (NaaS).

What Is NaaS?

NaaS shares a similar business model to software-as-a-service (SaaS), platform-as-a-service (PaaS), and infrastructure-as-a-service (IaaS):

  • It is an on-demand network service that is subscription-based. It means users, especially enterprises, are not bound by lock-in contracts. They can also customize their bundles according to their needs and budgets.
  • It is a cloud service. When a company subscribes to a plan or offer, network service providers create a virtual network for the client. 
  • The services or products offered can widely vary. Some of the most popular ones include virtual private networks (VPNs), mobile network virtualization, bandwidth on demand, network security and monitoring, SD-WAN, and static or dynamic routing. 

How did NaaS come about? 

There’s no detailed origin or story of its evolution. But there’s a good chance that it is an offshoot of the development of SaaS. The concept of SaaS isn’t new, contrary to what most people believe. In fact, history suggests that it precedes the internet that most know these days. It might have begun sometime in the 1960s

During this time, enterprises used a system known as time sharing. The setup included monitors and keyboards with no CPUs (called dumb terminals) and a mini computer or mainframe that helped centralize the data and functioned as the CPU of all terminals. 

Over time, the power of computers became popular, and then technology caught up. PCs shrank in size and became more affordable. These changes then allowed companies to install a more manageable network in the workplace. 

By 1983, the internet was born. The wireless connectivity helped develop standards in the way components within a network communicate. Most of all, they linked the world. More than 10 years after, Compaq introduced the word “cloud.” The idea involved being able to store, organize, process, and retrieve information over the internet (or the cloud) so the client can access it anytime, anywhere. As the technology evolved, it then allowed tech developers to use it as leverage, delivering a much-needed platform. 

Benefits and Challenges of NaaS

Compared to other “aaS” models, NaaS is still in its infancy. However, many businesses are already implementing it because of its wide range of benefits:

1. Lower operating and infrastructure costs 

With NaaS, companies can significantly reduce spending  on a network infrastructure. Even better, they can take advantage of the high-quality hardware and software of their providers. 

Labor is one of the major IT expenses. The average salary of an IT administrator in the United States, for example, is around $65,000. This doesn’t include how much you’ll likely spend on further training and hiring of more staff.

Maintenance is another major cost. Upgrades usually don’t come cheap. NaaS can either reduce or eliminate these types of spending. 

2. Less downtime 

A downtime, even one that lasts for only a few minutes, can be extremely costly for a business. Gartner revealed that a company could stand to lose over $5,000 for every 60 seconds of an IT outage. For large corporations, it could even reach at least $100,000. 

Downtime also hurts employee productivity. The 2015 IHS Markit research claimed that a lack of access to the network or the iInternet could result in a whopping 78% decrease in worker productivity, which translates to at least $700 billion in total losses. 

Two of the major advantages of NaaS are flexibility and scalability:

  • Customers can choose the services based on their needs at any given moment. Network service providers can use their expertise to help these clients choose. 
  • The provisions of the service-level agreements (SLAs) can also change more quickly. In other words, companies worry less about capped bandwidth.

3. Great equalizer against big corporations

In 2020, Forbes shared that 1 in every 5 small- to medium-scale businesses do not invest in cybersecurity. The others may be underspending. Two of their biggest barriers are cost and complexity of the process. 

NaaS can change all that. Subscription plans are not only affordable but also flexible and scalable. SMBs would only have to pay for what they use. They could expand or downgrade their plans depending on their needs. They can now maximize the same tech that used to be only available to big multinational corporations. 

Despite the massive benefits of NaaS, it still faces some challenges and hiccups. Those who are apprehensive have the following concerns:

  • Security risks – While cloud cybersecurity is improving, hackers are also quick to adjust and exploit the system. The cloud setup might only worsen the odds of a data breach.
  • Privacy – A data breach would lead to invasion of privacy. It’s also possible that network service providers themselves can access the same information without consent. If the entire network is already vulnerable, a company’s data may also be exposed to other businesses, including their competitors.

The Future of NaaS

NaaS won’t exist without problems, but at least it’s outlook looks bright. According to Research and Markets, its global market value could achieve a compound annual growth rate of almost 40% until 2023. By the end of the forecast period, the revenue could be as high as $21.7 billion

The reasons are simple: technology will become even better. Network service providers will find ways to improve the system and the manner of delivery. Service options will expand, and cloud computing will be more secure than it does today. 

From a broader perspective, the workplace of tomorrow will be vastly different with NaaS. The work-from-home setup will be more efficient than ever. 

This article was originally published on Monday Feb 15th 2021