How operators benefit from NaaS

Network as a Service (NaaS) is increasingly popular for providing third-party network infrastructure and services to enterprises, including WAN connectivity, data center connectivity, and on-demand bandwidth.

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According to a recent report from MarketandMarkets, the global NaaS market is expected to grow from $1.33 billion in 2016 to $9.65 billion in 2021, at a compound annual growth rate (CAGR) of 48.4%. This part of the market has been taken seriously by mainstream operators, including regional and global telecom operators such as AT&T, Telefonica and Verizon, as well as countless Internet service providers and niche markets, all hoping to meet the price-conscious needs of enterprise users for high-quality flexible services. MPLS-based private networks have become the backbone of enterprise WANs and are currently being impacted by broadband. With the adoption of cloud computing and the rise of the Internet, the growth of enterprise business volume has made MPLS a rigid and expensive technology that operators cannot rely on to dominate. The software-defined wide area network (SD-WAN) model is making NaaS more popular, allowing service providers to redesign their infrastructure and sell various hybrid WAN products to enterprise users.

Three major driving forces of NaaS

In short, the three main factors driving operators to adopt NaaS are: broadband, cloud computing, and price. Broadband has been around for a long time as a common way to connect to the Internet, but its unpredictable performance characteristics and lack of service level agreements (SLAs) have made it considered a basic way to transport enterprise business programs. In recent years, high-speed broadband has reached a certain maturity and reliability within an affordable price range. NaaS solutions that incorporate broadband connectivity provide a legitimate way to transport most critical enterprise applications over the WAN, while replacing traditional MPLS links. In the past 20 years, operators have tailored high-speed private networks for enterprise users, and MPLS has dominated the market by providing reliable SLA binding and segmented connections. More recently, the rise of cloud computing has shifted the enterprise connection model from primary data centers to the cloud and the Internet, and operators have scrambled to meet the needs of connecting to cloud-based SaaS applications such as Microsoft Office 365, Salesforce.com and Google applications, and IaaS business needs such as Amazon Web Services (AWS) and Microsoft Azure. Traditional NaaS solutions meet these cloud computing needs by providing specially customized cloud interconnects in the MPLS core. New innovative NaaS solutions can leverage technologies such as SD-WAN to seamlessly integrate broadband and cellular transport with direct or regional Internet breakouts for SaaS cloud applications. For IaaS, NaaS solutions extend the SD-WAN architecture directly to the IaaS public cloud. As in most cases, price is a big issue. NaaS solutions strike a balance between strict SLA MPLS services and high-bandwidth broadband Internet. NaaS solutions supported by SD-WAN can greatly improve the overall user experience, often at a fraction of the original cost. Mainly by combining different connection methods and using application-aware traffic engineering strategies to guide traffic to follow SLA-compliant paths.

Independent transmission value-added service

Traditionally, operators have tied features and services to the underlying link technology used to connect user sites, with the three main choices being MPLS, Internet, and point-to-point links. When operators embrace SD-WAN and offer hybrid network services, they can decouple features and services from specific underlying links. MPLS, Internet, point-to-point, and even 4G LTE and satellite connections can be abstracted, allowing operators to provide relevant features regardless of which links are used to transport the actual application traffic.

New revenue streams

To create a more effective settlement structure, operators need to better understand the end-to-end, endpoint-to-data center, and endpoint-to-cloud application application status. SD-WAN solutions can provide this visibility, enabling operators to create tiered services relative to performance and uptime SLAs. By deeply understanding application performance characteristics and bandwidth usage, operators can improve their existing capacity planning practices. This can better implement network/technology upgrades, such as switching from a single MPLS circuit to a hybrid WAN or multiple broadband routes supported by 4G cellular connections, which is beneficial to operators and users.

New features supported

Traditional network architecture relies on individually configured and operated CPE devices (mainly routers), which poses huge support function challenges for operators. NaaS solutions using SD-WAN technology can provide operators with a more efficient operating model. This is because SD-WAN can be viewed as a system rather than a collection of individually operating elements. This approach simplifies overall operations, and it can better understand application traffic, performance bottlenecks, link and equipment failures, and deterioration of network conditions. The SD-WAN architecture is also able to provide tools to perform full network and device-level troubleshooting, and can be configured to take automated actions to fix outages and performance failures. NaaS represents a major shift for operators, requiring them to gain the ability to manage independent transmission services. SD-WAN plays an increasingly important role in this transformation.