Looking ahead: Nascent NaaS industry needs strong service provider buy-in

As enterprises adopt cloud services and the workforce becomes more distributed, organizations need a simplified approach to managing their wide-area networks (WAN), business applications, security and multicloud access. Essentially, they need a network overhaul with less upfront infrastructure cost and more management support from service providers and vendors.

In response, vendors and service providers first invested in developing software-defined wide area networks (SD-WAN), and later secure access service edge (SASE) and secure service edge (SSE) frameworks. As WAN management evolves, Light Reading takes a look at the rise of network-as-a-service (NaaS) and what the future holds for these platforms.   

From SD-WAN to SASE

The SASE framework, coined by analyst firm Gartner in 2019, converges security and networking. Gartner defines single-vendor SASE as providing "multiple converged-network and security-as-a-service capabilities, such as software-defined WAN (SD-WAN), secure web gateway, cloud access security broker, network firewalling and zero trust network access."

In addition, Gartner said SASE includes a "cloud-centric architecture" and supports on-premise locations and remote workers in accessing Internet security, private applications and cloud services.

Related:NaaS startup Nile securely segments guest Wi-Fi

In a recent survey by analyst group Futuriom, 98% of respondents attributed hybrid work to the increased demand for SASE and zero-trust network access (ZTNA). In addition, 92% of those surveyed agreed that ZTNA is a crucial component of SASE. Respondents included 194 enterprise networking and security executives.

While service providers and SASE vendors wasted no time jumping on the SASE bandwagon – suddenly every SD-WAN vendor is now a SASE supplier – many enterprises were scratching their heads, struggling to learn yet another telecom acronym and understand how it would impact network operations.

"I think more folks have been exposed to [SASE] but I think there's even more ambiguity about what it actually is at this point," MetTel CTO Ed Fox told Light Reading in 2021. "It's partly our problem in the industry as well as what customers deem it as; we all share in creating the gray area there. I do see more customers asking about it and there's a lot more information out there, but once again, the information we're all putting out there is pretty diverse."

SASE standards

To clear some of the confusion around SASE, industry organization MEF developed its first SASE standard and zero trust framework in 2022. In the fall of 2023, MEF launched a SASE certification program together with test programs from CyberRatings.

Related:NaaS startup Graphiant grabs $62M in funding

The certification will provide customers with greater transparency into their investments in cybersecurity and SASE services, according to Vikram Phatak, CEO of CyberRatings.org. "A robust testing and certification program is essential to provide customers with visibility into what they're buying," he said in a statement.

NaaS standards

MEF also set its sights on supporting service providers' efforts to develop, market and deploy NaaS platforms. In October, the group published a NaaS Industry Blueprint designed to help enterprises select the right NaaS platform for their business.

MEF defines NaaS platforms as "on-demand connectivity, application assurance, cybersecurity, and multi-cloud-based services across a standards-based automated ecosystem."

NaaS adoption accelerates

Just as SASE absorbed SD-WAN and added more networking and security capabilities, NaaS is emerging as an even more comprehensive network management platform for enterprises.

NaaS provides the capability to bring together connectivity, application assurance, security and multicloud access in an automated way – a combination likely to pique the interest of any enterprise IT team. Plus, NaaS reduces the need for large upfront capex investments in networking and security software and hardware.

"NaaS is a cloud-enabled, usage-based consumption model that allows users to acquire and orchestrate network capabilities without owning, building, or maintaining their own infrastructure," said IDC analyst Brandon Butler, according to Network World.

Over the next five years, the largest NaaS revenue opportunity is expected to be in North America, and campus NaaS could reach global revenue of $609 million by 2027, according to analysts at Dell'Oro Group.

Startups go all-in on NaaS

NaaS startups are also having their day in the sun. In October, Nile launched a new secure network traffic service that segments enterprises' guest traffic from the internal network. The startup has raised $300 million in funding thus far.

Meanwhile, Graphiant's total funding hit $96 million in March 2023. Founder and CEO Khalid Raza said industry interest in the NaaS startup's network edge service "has been much faster than what we saw with MPLS at Cisco or SD-WAN with Viptela. Graphiant has hit a nerve." Raza said Graphiant's private NaaS platform combines the best features of MPLS and SD-WAN and can be deploying via x86 white boxes.

Service providers are also making moves to provide NaaS managed services for enterprise customers. In July, Lumen Technologies launched Internet On-Demand as the first service in its Lumen NaaS platform, which will eventually include security and edge services such as SASE and distributed denial of service (DDoS) protection.

In May 2022, media company Bertelsmann chose Verizon's NaaS platform for its operations in the Americas and for subsidiaries in the Asia-Pacific region and in Europe, the Middle East and Africa.

NaaS growing pains

Despite forecasted meteoric revenue growth, NaaS has some growing pains to overcome.

Light Reading's Tereza Krasova reported on a recent panel discussion about how developers can best approach crafting NaaS platforms. "It is impossible to estimate how much value NaaS may generate before it is available to developers, said Ishwar Parulkar, chief technologist for the telecom vertical at Amazon Web Services (AWS). 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'."

In a recent report, Omdia Principal Analyst Adeline Phua explained that for NaaS to take off, service providers need to demonstrate they have the "credibility and capability to offer Naas." Omdia is a sister company of Light Reading.

Phua advises service providers to design their NaaS strategy with the following in mind: customers' needs; the provider's current operations and business support systems (OSS/BSS) and network infrastructure; vendor partnerships; and investment in on-demand bandwidth services.

The year ahead is likely to be an exciting one for NaaS, but service providers have their work cut out for them in developing customized NaaS platforms for enterprises.

"The industry is still in its infancy, where each network service provider's NaaS portfolio is highly differentiated today," said Phua. "Given the complexity of shifting architectures, this will still be the case in the short to medium term."