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Network as a Service Market - Growth, Trends, COVID-19 Impact, and Forecasts (2022 - 2027)
The Global Network-as-a-Service market (henceforth referred to as the market studied) was valued at USD 10. 80 billion in 2021 and is expected to reach USD 59. 44 billion by 2027, registering a CAGR of 32.
New York, June 09, 2022 (GLOBE NEWSWIRE) -- Reportlinker.com announces the release of the report "Network as a Service Market - Growth, Trends, COVID-19 Impact, and Forecasts (2022 - 2027)" - https://www.reportlinker.com/p06067790/?utm_source=GNW
67% during the forecast period of 2022-2027.
Key Highlights
One of the primary factors driving the growth of the Network-as-a-Service (Naas) industry includes an increase in the new data center infrastructures around the world. The increased adoption and implementation of the cloud for data storage and the introduction of Big Data analytics, as well as virtualization in the data center for workload mobility, have resulted in inefficient resource utilization, increased availability, and reduced overall costs, as well as high reliability and security for mission-critical business applications.
The market is further influenced by the rising need for subscription (pay per use) business models in network virtualization, cloud computing, software-defined networking (SDN), and the increased use of cloud services by large and small businesses.
Network-as-a-Service (NaaS) offers companies with greater flexibility and performance gains in their network infrastructures. With on-demand purchasing, companies can be more cost-conscious and pay only for the networking services they need. Network-as-a-Service (NaaS) can also enable companies that want greater flexibility in provisioning without having to rearchitect networks or redo contracts from the ground up.
Although the NaaS provides excellent benefits, the specific challenges, like the reliability concerns, may obstruct the market’s growth over the forecast period. Hiring a third-party networking infrastructure vendor to host critical business infrastructure involves the belief that the providers’ business may endure the relationship with them. In case of any failure by the providers to sustain the competition in the market, the enterprises relying upon them may have to replace critical pieces of infrastructure entirely, as it is not possible to conduct business.?
Since the outbreak of COVID-19, the demand for cloud-based solutions has witnessed significant growth, owing to the remote working model being adopted by enterprises. However, various industries, such as retail, manufacturing, BFSI, and others, have witnessed a significant slump in their revenues during 2020. With the growing remote working model, companies are increasing investments in cloud-based analytics and assurance, edge computing, and AI-powered networking technologies. This is expected to boost the NaaS market.
Key Market Trends
Cloud-Based Services Expected to Hold a Significant market Share
As enterprises strive to run their IT infrastructure efficiently, they find ways to operate and manage their networks efficiently. Enterprises are modernizing traditional IT techniques on commodity hardware, such as computing, storage, and networking, to incorporate cloud technologies that enable rapid development and deployment of new network services.
With a growing number of cloud-based applications across enterprises, cloud-based services are becoming increasingly popular. Cloud computing adoption is rising due to increasing investments from small and medium enterprises (SMEs). According to Cisco Systems, the global cloud data center IP traffic was expected to reach 19,509 exabytes by 2021.
The major reasons for migrating to the cloud are scalability, increased effectiveness, faster implementation, mobility, and disaster recovery. Cloud migration is also gaining popularity for its real-time experience, business elements, and accessibility to on-premise data. This technology also aids in setting up and working based on several units in minimal time. Enterprises are adopting Network-as-a-Service (NaaS) solutions to foster seamless cloud migration.
Cloud computing continues to evolve as a vital computing platform for sharing various resources, including infrastructure, software, business processes, and applications. According to the Global Cloud Index by Cisco for the period 2016–2021, 78% of all cloud workflows were expected to be delivered in a SaaS model. It is also anticipated that infrastructure as a service will drop to 21% in 2021 compared to an overwhelming 44% in 2013, while platform as a service is likely to account for 9% of the global cloud market.
Additionally, from a vendor’s perspective, to help service providers meet low latency and high bandwidth requirements, Ericsson upgraded its cloud solution with the launch of Ericsson Edge network virtualization, optimized for the network edge. The newly developed solution is part of the end-to-end managed and orchestrated distributed cloud architecture, making it possible to distribute workloads, optimize the network, and enable new services in the cloud.
Furthermore, VMware’s Telco Automation Cloud was launched to model, onboard, orchestrate, and manage virtual network functions (VNFs), cloud network functions (CNFs), and network services. As part of its “Ready for NFV"program, TAC made NFVs and VNFs more manageable by taking a cloud-first approach to reduce multi-cloud complexities.
North America is Expected to Occupy the Largest Market Share
Inclining toward implementation and acceptance of advanced technology, development in the network automation, the surge in the number of cloud-based services, and other factors are driving the Network as a Service (NaaS) market in the country. Over the next five-plus years, most IT teams will increasingly adopt NaaS as suppliers deliver hybrid offerings that include software, cloud intelligence, and the option for management of on-premises hardware.
Substantial growth in connected and mobile devices is spiking the growth in demand for enhanced network services. Since the United States has always remained at the forefront of technology adoption, the region witnessed the maximum adoption of connected devices. For instance, according to CTA, in 2016, connected device shipments amounted to 621 million units in the United States and reached 791 million shipments in 2021. Storing and managing this huge flow of data through the connected device without operating costs spiraling out of control will be a substantial challenge. This is where cloud-native technologies come to the rescue.
Only with an end-to-end cloud-native core network can an operator take full advantage of agility, scalability, resiliency, and economies of cloud. The quickest way the operator can apply all these capabilities to support the IoT needs of its enterprise customers is through a hosted/third-party environment. Nokia WING, which stands for IoT Network Grid, is a managed service based on a cloud-native core that supports both local-only and large-scale deployments with the same architecture.
The market for NaaS in Canada is growing mainly due to new product roll-outs, acquisitions, mergers, and partnerships, which are shaping the market landscape in North America overall. ? There is a rise in malicious cyber activity targeting information technology (IT) service providers, which is causing a leak of client information. Due to rising network infiltration, Canadian Centre for Cyber Security has been providing guidance to businesses. This has, in turn, led to companies getting very selective while choosing their respective network service providers.
With increasing automation along with connected device deployment, the market demand is expected to increase significantly. Also, the NaaS model benefits small businesses because they can offload day-to-day maintenance of equipment and focus on tasks that they do best, such as customer service.
Competitive Landscape
The Network as a Service Market is highly competitive and consists of several major players. The market appears to be fragmented with the presence of multiple small and large players. The major players with a prominent share in the market are focusing on expanding their customer base across foreign countries. These companies are leveraging on strategic collaborative initiatives to increase their market share and increase their profitability. Some of the major players in the market are AT&T Inc., Verizon Wireless Inc., and Cisco System Inc., among others.
May 2022 - Telstra announced a collaboration with Prysmian Group to build a new state-of-the-art inter capital fiber network in the market. The national fiber network project is a multi-year project that will see Telstra build a new ‘state-of-the-art’ intercity dual fiber path that will add up to 20,000 route kilometers of new fiber-optic terrestrial cable, boosting inter-capital capacity and capacity for regional areas.
December 2021 - Verizon Business partnered with Cisco to enhance the company’s Network as a Service (NaaS) digitization strategy by adding Cisco-managed SD-WAN services, including options for 4G/5G connectivity. With the addition of these new solutions, both the companies can leverage Verizon’s 4G and 5G networks, enabling them to scale and adopt the latest technology and remain agile to meet ever-changing customer demands.
November 2021 - Kyndryl and VMware announced an extension of the companies’ strategic partnership focused on app modernization and multi-cloud services. This expanded collaboration can enable customers to enhance their digital innovation and business transformation with enterprise control. The primary goal of the expanded partnership is to accelerate IT and business reinvention for customers via the combination of VMware solutions and Kyndryl’s design, build, and managed services.
Additional Benefits:
The market estimate (ME) sheet in Excel format
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