NaaS could offer developers more flexibility but challenges remain

The nascent network-as-a-service (NaaS) model promises more flexibility for developers but still has a long way to go, according to a panel gathered by Liberty Global in London this week.

Ishwar Parulkar, chief technologist for the telecom vertical at Amazon Web Services (AWS), sees NaaS as a way to offer more flexible connectivity to developers. AWS already has experience of offering different models of cloud computing, with users able to choose between pay-as-you-go (PAYG), reserved blocks and cheap contracts, where AWS can take away the computing capacity at a very short notice.

NaaS could also grant developers additional visibility into the network, he said. This point was echoed by Henry Calvert, head of network at the GSMA, who said the telecom industry has been excellent at connecting end users but has struggled to work with developers. Better exposure of network capabilities to improve existing solutions could be one benefit of NaaS, he said.

New innovations like autonomous vehicles and virtual reality will require more interaction between the network and developers, who will be able to choose which network capabilities they need and find the appropriate product, according to Calvert.

The important thing, he explained, is to be able to "get the developers and the enterprise solutions through APIs to use the capabilities of the networks through a standard line."

NaaS is not, however, just about APIs and architecture, in the view of Jim Ryan, Liberty Global's senior vice president and chief strategy officer. It is also about the industry "leaning in" and deciding to elevate the infrastructure.

But there is concern about the likelihood of making NaaS a successful proposition, according to Matt Howett, founder and CEO at Assembly Research, who moderated the session. The telecom industry has in the past failed to execute well when it comes to innovation, he pointed out.

Engaging with developers

5G standards may be an important factor, with the industry adopting interfaces that are used in other industries, said Parulkar. This has allowed networks to be virtualized but also to run in the cloud. He also argued that a similar change is visible in other areas, including cable, where virtualization is also gaining traction.

And thanks to virtualization, products can be developed as software and then run on existing hardware, reckoned Calvert, arguing that standardization has also brought "seismic change." 

What is, however, still missing when it comes to discussions around standardization is a stronger focus on developers. Calvert thinks the industry should try to better understand their needs to be able to create better propositions.

There is also a need for more focus on applications, deciding what a network should be used for before designing it, rather than building from the bottom up, according to Parulkar.

Despite talk about the potential, the conversation made it clear that NaaS is still very immature. The market will be worth between $80 billion and $150 billion by 2030, according to some estimates, said Howett. But when he asked speakers how they would seize the opportunity, some appeared hesitant about embracing those figures.

It is impossible to estimate how much value NaaS may generate before it is available to developers, said Parulkar. The key, he argued, is to "put something in the hands of the developers first and learn from that. And they will tell you what works, what doesn't and what can become a big business."

Outcomes unclear

AWS' experience with APIs may be instructive. Some "are gangbusters in terms of revenue and some of them are not being used at all," said Parulkar, adding it is impossible to know what the outcome will be before the API is released.

Calvert, on the other hand, appeared optimistic, pointing to the large share of GDP flowing through networks as a significant monetization opportunity.

But if the market is to reach that kind of valuation, APIs need to be scalable and they need to be able to solve a problem, said Ryan.

As for possible use cases for APIs, Parulkar referred to the main global video streaming players, which have created algorithms managing network congestion. "But you guys from the telco industry control the network, you can be much more effective, much more efficient, give much tighter control over bandwidth and latency and things like that to this platform," he said.

Another opportunity could be the financial services industry's efforts to tackle scams, said Calvert.