Market Scenario

Global network-as-a-Service Market was valued at US$ 20.8 Bn in 2022 and is projected to reach US$ 465.2 Bn by 2031 at a CAGR of 40.7% during the forecast period 2023–2031. 

The Network-as-a-Service (NaaS) model is a cost-effective outsourcing solution for virtual network services across the internet, offered by service providers on a subscription basis. This approach provides end-users with necessary network hardware and a complete network solution.

The adoption of cloud services among enterprises and the rise of software-defined networks (SDN) are the driving factors behind the growth of the global NaaS market. By embracing cloud platforms, technology companies and telecom service providers can reduce labor costs, allowing enterprises to focus on their core competencies and strategic goals. NaaS offerings can help organizations enhance the performance of their cloud applications, thereby improving the customer experience.

Communication service providers (CSPs) in the global network as a service market can benefit greatly from NaaS, as it presents a new opportunity to offer crucial services to the enterprise segment. NaaS can revolutionize the network and deliver a service that improves the customer experience, leading to higher retention rates, especially as more organizations move to the cloud consumption model.

However, data security and privacy concerns may slow the progression of the NaaS market, as enterprises may be hesitant to share critical business data and statistical information with service providers. Addressing these concerns through effective security measures and privacy policies will be crucial in building trust and confidence among enterprises.

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Market Dynamics 

Drivers

Increasing Adoption of Internet of Things (IoT) Technology

The increasing adoption of Internet of Things (IoT) technology is another driver of the network-as-a-service market. IoT devices generate massive amounts of data that need to be transmitted and processed in real-time, requiring a robust and reliable network infrastructure. Network-as-a-service solutions provide secure and reliable connectivity for IoT devices, enabling enterprises to collect, process, and analyze data in real-time. Additionally, network-as-a-service solutions offer several features, such as edge computing, network slicing, and software-defined networking, that are essential for managing and optimizing IoT networks.

Rapid Expansion of 5G Technology

The emergence of 5G technology is another driver of the network-as-a-service market. 5G technology promises to deliver high-speed internet connectivity, low latency, and high reliability, enabling enterprises to deploy a wide range of new applications and services. Network-as-a-service solutions provide the infrastructure needed to support 5G networks, enabling enterprises to leverage the full potential of 5G technology. Additionally, network-as-a-service solutions offer several features, such as network slicing, edge computing, and quality of service (QoS) management, that are essential for optimizing 5G networks and delivering a seamless user experience. As the adoption of 5G technology continues to grow, the demand for network-as-a-service solutions is expected to increase further.

Challenges

Standardization of Service Level Agreements (SLAs) and Performance Metrics as a Challenge in the Network-as-a-Service Market

One of the main challenges facing the network-as-a-service market is the lack of standardized service level agreements (SLAs) and performance metrics. As network-as-a-service providers offer a range of services and deployment models, it can be challenging for customers to compare and evaluate the performance and reliability of different solutions. This can lead to uncertainty and skepticism among customers, which can hinder the growth of the market. Additionally, the lack of standardized SLAs and performance metrics can also create conflicts between customers and providers, as customers may have different expectations and requirements for their network services. 

To address this challenge, industry stakeholders are working towards developing standardized SLAs and performance metrics that can help customers compare and evaluate different network-as-a-service solutions. Standardized SLAs and performance metrics can also help network-as-a-service providers to demonstrate their value proposition and differentiate themselves from their competitors.

Segmental Analysis 

By Component

The technology services segment dominated the network as a service market in 2022, accounting for around 57.4% of the market share. This segment covers several technology-related services, such as software-defined networking (SDN), network function virtualization (NFV), and managed services. The growth of this segment is projected to remain unharmed due to growing demand for network automation and virtualization.  Apart from this, rising adoption of cloud computing and increasing need for better network management and security is expected to drive market during the forecast period.

By Type

The wide area network (WAN) services segment is expected to have the highest market share until 2027. The WAN technology provides connectivity between geographically dispersed locations, enabling enterprises to share resources and data. The growing demand for WAN services can be attributed to the increasing need for data center consolidation, data backup and disaster recovery, and remote access. However, the enhanced mobile services segment is projected to grow at the fastest CAGR of 45.2% during the forecast period. This growth of the global network as a service market can be attributed to the increasing adoption of smartphones and tablets, which has led to a surge in mobile data traffic. With the rising demand for high-speed mobile services and the emergence of 5G technology, the demand for enhanced mobile services is expected to increase further.

By Service Model

The cloud-based services segment is expected to grow at the fastest CAGR of 43.7% during the forecast period. Cloud-based services provide flexibility, scalability, and cost-effectiveness to enterprises, enabling them to optimize their IT infrastructure and reduce their operational costs. The growing adoption of cloud computing and the increasing need for remote work and collaboration have led to the rising demand for cloud-based services in the global network as a service market. The other service models, such as on-premise and hybrid, are also expected to grow steadily during the forecast period, driven by the increasing need for security and compliance. However, the cloud-based services segment is expected to dominate the market due to its numerous benefits and advantages over traditional service models.

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Regional Analysis 

North America is projected to have the largest hold in the global network-as-a-service market, accounting for around 40% of the market share in 2022. The increasing adoption of cloud computing and the rising demand for network automation and virtualization are driving the growth of the market in the region. In North America, the US majorly contributes to the market growth, owing to the presence of several key players in the market, such as Cisco Systems, AT&T, and Verizon Communications. The US is also one of the early adopters of cloud computing and is home to some of the world's largest cloud service providers, such as Amazon Web Services (AWS), Microsoft Azure, and Google Cloud Platform (GCP).

Moreover, the increasing trend of Bring Your Own Device (BYOD) and from home (WFH) policies in the US and Canada is driving the demand for network-as-a-service solutions, as they provide secure and reliable network connectivity to remote workers. Additionally, the growing demand for high-speed internet connectivity and the emergence of 5G technology are further boosting the growth of the market in North America. The region is expected to continue dominating the network as a service market during the forecast period, driven by the increasing adoption of cloud computing, the rising trend of remote work and collaboration, and the growing demand for secure and reliable network connectivity.

According to the US Federal Communications Commission (FCC), as of 2021, around 19 million Americans still lack access to broadband internet, highlighting the need for reliable and affordable network-as-a-service solutions in the country. The FCC has also launched several initiatives, such as the Connect America Fund (CAF) and the Rural Digital Opportunity Fund (RDOF), to bridge the digital divide and provide broadband access to underserved communities in the US.

Similarly, in Canada, the government has launched several initiatives, such as the Connecting Canadians program and the Universal Broadband Fund, to provide high-speed internet connectivity to rural and remote communities in the country. According to the Canadian Radio-television and Telecommunications Commission (CRTC), as of 2021, around 1.5 million households in Canada still lack access to high-speed internet, emphasizing the need for network-as-a-service solutions that can provide reliable and affordable connectivity to these areas.

List of Key Companies Profiled:

• Aryaka Networks, Inc.
• Ciena Corporation
• Extreme Networks
• Global Cloud Xchange
• Juniper Networks, Inc.
• NEC Corporation
• Silver Peak Systems, Inc.
• SYNNEX Corporation
• Telstra Corporation Limited
• VMware, Inc.
• AT&T Inc.
• Verizon
• Cisco Systems Inc.
• IBM Corporation
• Oracle Corporation
• Other Prominent Players

Segmentation Overview

Following are the different segments of the Global Network-as-a-Service (NaaS) Market: 

By Component:

• Infrastructure services
• Technology services

By Type:

• Wide Area Network Services
• Local Area Network Services
• Wireless as a Service (WaaS)
• Enhanced Mobile Services
• Voice as a Service (VaaS)
• Security as a Service (SaaS)

By Service Model:

• Bandwidth on demand
• Cloud-based services
• Integrated Network Security as a Service
• Virtual Private Network
• Wide-area network

By Enterprise Size:

• Small & Medium Enterprise
• Large Enterprises

By End-user Industry:

• Banking, Financial Services, and Insurance (BFSI)
• Government & Public Sector
• Healthcare
• IT & Telecommunication
• Manufacturing
• Retail & E-commerce
• Others

By Region:

• North America
  • The U.S.
  • Canada
  • Mexico
• Europe
  • The UK
  • Germany
  • France
  • Italy
  • Spain
  • Poland
  • Russia
  • Rest of Europe
• Asia Pacific
  • China
  • India
  • Japan
  • Australia & New Zealand
  • ASEAN
  • Rest of Asia Pacific
• Middle East & Africa (MEA)
  • UAE
  • Saudi Arabia
  • South Africa
  • Rest of MEA
• South America
  • Argentina
  • Brazil
  • Rest of South America