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Heavy Reading Research

Implementing Network-as-a-Service: Beyond Anecdotal

Over the past 12 months in informal discussions with both communications service providers (CSPs) and their vendors, it became clear that NaaS was transitioning from the promising technology column to a strategic imperative technology.

In response, to better understand NaaS market potential, Heavy Reading and Ovum launched a comprehensive research program in September. In order to provide a complete 360 view of overall value proposition, business opportunities, and implementation strategies, CSPs, vendors and enterprises were surveyed.

One of the first key findings of the CSP survey research as noted in the figure below is that my belief based on informal anecdotal discussions that NaaS had made the turn to a foundational technology was largely correct.

For example, when we asked the survey respondents to rank the value of NaaS as a strategic technology, more than a third (34%) assessed NaaS as "extremely important." The largest sample (47%) assessed NaaS as "important." This translates to 81% of the respondents evaluating NaaS as a vital piece of their cloud strategy.

NaaS Strategic Value
Question: How important are NaaS services strategically for your company? (N=99)
(Source: Heavy Reading)
Question: How important are NaaS services strategically for your company? (N=99)
(Source: Heavy Reading)

Beyond connectivity
A second important key finding from the research reinforced the notion that NaaS will enable CSPs to drive new more innovative VAS revenue streams in both existing and in new markets.

For example, as illustrated in the figure below, based on "critical component" and "important component" inputs, while CSPs are focusing on utilizing NaaS to both upsell existing connectivity services, they also recognize NaaS will enable them to move beyond just connectivity and break into new market verticals, launch new digital content services and drive additional consulting and professional services revenue. In order to facilitate entry into these new markets and channels many CSPs are now focusing on implementing a services-based marketplace which provides enterprises with a richer services experience.

NaaS Market Opportunities
Question: How important are the following capabilities to your overall NaaS monetization strategy? (N=98-100)
(Source: Heavy Reading)
Question: How important are the following capabilities to your overall NaaS monetization strategy? (N=98-100)
(Source: Heavy Reading)

Beyond a single domain

As CSPs execute their strategy to break into these new markets, in theory adopting new approaches such as cross-domain orchestration should also become more important as well. As illustrated in the figure below, the research findings reinforce the importance CSPs attribute to cross-domain orchestration for the successful delivery of a broad range of services, including third-party VNF-based network services.

These services include 5G/edge service introduction as well as the ability to sell into other market verticals. The linkage between 5G and cross-domain orchestration is significant since it confirms that NaaS with cross-domain capabilities is one of the key building blocks CSPs will utilize to monetize 5G business services.

Cross-Domain Orchestration Benefits
Question: Do you agree or disagree that CSPs realize the following benefits from cross-domain orchestration? (N=98-100)
(Source: Heavy Reading)
Question: Do you agree or disagree that CSPs realize the following benefits from cross-domain orchestration? (N=98-100)
(Source: Heavy Reading)

In summary, based on these three specific data points, (and other collaborating data points from the research project), it's readily apparent that not only is NaaS strategically relevant technology right now, it will be increasingly important in the near-future as 5G rollouts enter an aggressive growth curve and CSPs adopt cross-domain orchestration to support more and more cloud services.

Stay tuned: We will be sharing more key findings from this comprehensive research project in 2020.

This blog is sponsored by Amdocs.

For more information, see "The Rise of NaaS."

— Jim Hodges, Chief Analyst, Cloud & Security, Heavy Reading

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