Network as a Service (NaaS) Market Size By Type (LAN as a Service, WAN as a Service, Bandwidth on Demand (BoD), VPN as a Service, Managed Services), By Enterprise Size (Large Enterprises, SME), By Application (IT & Telecom, BFSI, Manufacturing, Healthcare, Government & Public Sector, Retail), Industry Analysis Report, Regional Outlook, Growth Potential, Competitive Market Share & Forecast, 2019 - 2025

Network as a Service Market Size

Network as a Service Market size in 2018 exceeded USD 5 billion is estimated to grow at a CAGR of over 35% from 2019 to 2025.

The Network as a Service market growth is attributed to the rapid usage of cloud technology as enterprises are increasingly migrating their workloads to the cloud. The rise in the data generated through various digital platforms and the growing trend of workforce mobility have laid immense pressure on enterprise networks. Thus, they are migrating toward the cloud, which will enable them to host a wide range of business applications. Cloud-enabled NaaS platforms help them to deploy applications augmented by several network functions, including virtual routers, service differentiation, and virtual firewalls. Unlike other solutions, which are based on third-party add-on virtual appliances, these platforms are implemented in the cloud infrastructure, reducing network complexity and management costs. Another factor contributing to market growth is an extensive adoption of network virtualization technologies such as Software-defined Networking (SDN) and Network Functions Virtualization (NFV). These technologies provide a platform for Network as a Service and enable enterprises to sell network services to customers virtually, on a subscription basis.
 

Network as a Service Market Analysis

The Bandwidth on Demand (BoD) segment is expected to witness the fastest growth rate of over 30% from 2019 to 2025 due to the massive adoption of business-oriented applications in various sectors such as healthcare, manufacturing, government, and retail. Such applications demand higher levels of connectivity and bandwidth to support business needs. This facilitates the adoption of a NaaS model, which will support the BoD services and allow enterprises to overcome the bandwidth silos and enable bandwidth-intensive applications to meet their needs. For instance, the growing reliance of the healthcare sector on mobile & cloud technology to access the real-time data and support clinical applications is increasing the demand for BoD services. To ensure peak performance, healthcare institutions are availing NaaS offerings to ensure that their systems are up-to-date to avoid any disruption in services.
 

Large enterprises held a major portion of the Network as a Service market share of over 55% in 2018 due to the widespread usage of cloud services such as NaaS and Platform as a Service (PaaS). To manage connectivity among remote enterprise sites and support Bring Your Own Device (BYOD) trend, the large organizations are using virtualization technologies, which enable them to cost-effectively manage their disparate sources. The use of these technologies is expected to accelerate the adoption of Network as a Service as they minimize investment costs and enable enterprises to focus on other business requirements.
 

The IT & telecom vertical held a significant share of around 30% in the Network as a Service market in 2018. The penetration of cloud & networking technologies, which offer customers with on-demand network services and reduce expenditure on IT device procurement and maintenance will fuel the market growth. IT & telecom companies are transforming their legacy enterprise networks using virtualization technologies due to compelling economic benefits. For telecom carriers and network service providers, cloud-enabled virtualization platforms enable faster provisioning of network services and also enable them to meet the challenges related to bandwidth shortage.
 

North America held a dominant share of over 40% in 2018 and is expected to dominate the Network as a Service market by 2025. The penetration of cloud computing, advanced IT infrastructure, and higher concentration of the network virtualization solution vendors are expected to drive the NaaS adoption in the region. The growing demand for high-performance computing infrastructure has increased the need for virtualized computing environments. The technology companies and the telecom service providers are embracing cloud platforms to reduce labor costs. This will foster the deployment of NaaS, eliminating the need to maintain their complex network setup.
 

Network as a Service Market Share

The major networking and telecom companies in the Network as a Service market are offering new services which complement compute as well as bandwidth on demand. The network service providers are focusing on the innovative networking solutions to meet the scalability and flexibility needs of the enterprises. For instance, in November 2016, Orange Business Services, a telecom, IT and network solution provider, launched Easy Go Network to accelerate NaaS for businesses. The Easy Go Network allows enterprises to provide NFVs for branch offices with full digital self-service ordering, customer care, and reporting functions via a user-friendly portal.
 

The market is also witnessing mergers and acquisitions to support the growing demand for cloud-enabled services and virtualization platforms. In February 2018, NEC Corporation, a Japanese multinational provider of information technology services & products, extended its Network as a Service Business and Operational Support solution to TELUS, a Canadian telecommunication company. This deployment of NaaS solution helped the company to enable businesses in virtually building, managing, and optimizing their networks quickly, easily, and cost-effectively through a flexible self-serve platform.
 

The major companies operating in the Network as a Service market are:

• Aerohive
• Akamai
• ALE
• Amazon Web Services
• Aryaka
• AT&T
• Brocade
• Ciena
• Cisco
• Citrix
• Cloudgenix
• Cradlepoint
• IBM
• Level3 Communications
• NEC
• Juniper
• Rackspace
• Verizon
• VMWare
• Talari
• Silver Peak
• Extreme Networks.
   

Industry Background

The operationalization and configuration of routers and other networking devices, such as WAN endpoints and firewalls, become complicated due to the increase in the number of connected endpoints. This increases the demand for a business model under which these responsibilities are handled by a third-party and made available to customers. With the appropriate use of NaaS offering, organizations can enhance the performance of their cloud applications. Large organizations, as well as SMBs, are rapidly deploying these services to reduce the costs related to the procurement of new devices and IT staff training.