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How Is the Network-as-a-Service Business Expected to Grow?

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What is NaaS?

Network-as-a-Service (or NaaS) follows a business model where network services are delivered virtually over the Internet. This service is provided by companies on a monthly subscription or pay-per-use basis. This is beneficial for companies, as they can reduce their capital investment on network infrastructure as well as the employee expenditure required to manage these private networks.

US-based (SPY) companies that provide NaaS—including Cisco (CSCO), IBM (IBM), VMware (VMW), and Juniper (JNPR)—are also known as managed service providers (or MSPs). Driven by an increased focus on reducing operating expenses, companies are now looking to employ Network-as-a-Service on a regular basis.

NaaS shifts the risk of operating and maintaining infrastructure, updates, and backups from enterprises to MSPs. This not only reduces expenses and saves costs, but it also allows companies to focus on their core competencies.

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NaaS business likely to grow to ~$50.8 billion by 2020

According to research firm MarketsandMarkets, managed network services are “undertaken by companies to discover and fix networking problems before they affect the network in any harmful manner leading to downtime, managed network services can be deployed in various models, supplemental or as a complete replacement of an organization’s in-house entity.”

MarketsandMarkets expects the NaaS market to grow from ~$30.7 billion in 2014 to ~$50.8 billion in 2019.

The next article will look at the trends impacting NaaS companies.

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