More than 90% of enterprises are expected to adopt a network-as-a-service (NaaS) by 2030; but the market currently remains stagnant, and vendors have some work to do before enterprise customers are ready to take that leap, according to ABI Research.

Cloud-native enterprises and startups will be the earliest adopters, with small and medium-sized enterprises (SMEs) and multinational corporations lagging due to uncertainties with NaaS, the research firm found. ABI Analyst Reece Hayden said the biggest concern that these enterprises have is the as-a-service billing model.

“Even though it gives you that agility, that flexibility, it’s creating unexpected monthly billing. The enterprises are used to knowing how much they pay per month or per year for their network services,” Hayden told SDxCentral.

For example, if enterprises experience a massive surge in data flows at a particular time, they might see higher end-of-month billing than expected. “[Enterprises] see this massive financial risk attached to network-as-a-service. I would say that's the main issue with it at the moment,” he added

Although Hayden said he would argue there are many reasons why going to a NaaS model is financially beneficial, and many enterprises are taking a "very simplistic view of it in thinking that the high total cost of ownership isn't worth the flexibility."

NaaS Integration Concerns

Hayden noted NaaS implementation is made difficult for enterprises with existing network deployments, such as already having an SD-WAN setup across all sites. Implementing NaaS and trying to either run the network in parallel with SD-WAN or together is still "pretty difficult" unless that NaaS provider has already integrated with the existing network.

There are also concerns of vendor lock-in when transforming all of an organization’s network services into a NaaS model, as they can become dependent on one service provider or vendor. “When you put all your eggs in one basket, especially with the lack of platform standardization and openness that exists at the moment, there's a lot of long-term risk attached to them,” he explained.

A lack of skill sets is slowing NaaS adoption as well, with Hayden pointing out “there's a massive deficiency in cloud expertise, even in massive companies like Google, Amazon, etcetera.”

Enterprises are unable to take on the cost of upskilling and hiring this cloud talent, which is being “ring fenced” by larger players like Amazon Web Services (AWS), who are more willing to pay for the cloud expertise required to run services like NaaS, he said.

Vendor Marketing Realignment for Enterprise Reassurance

ABI expects that over the next seven years the network model will play a prominent role within most enterprise digital transformation strategies across verticals.

"NaaS is a consumption model that fits very nicely with digital transformation. It provides the kind of a building block for the new use cases that are necessary,” Hayden said.

But vendors aren't aligning their marketing with the needs of the enterprise, and as a result enterprises don't understand what vendors are offering or where NaaS fits in with the overall digital transformation mission.

“From their perspective, enterprises are looking at the market and thinking, okay, we've got these network services that we've already deployed, we've got SD-WAN, we've got MPLS ... and it's good enough and it's working for us at the moment. So why dramatically change it until we see some of the issues in the services kind of overhauled?” Hayden added.

To help organizations understand what NaaS is and the operational benefits it will bring, vendors need to first look at market education to realign enterprise perception with reality. This will take vendors acknowledging the financial risks that NaaS brings, but also highlighting why those financial risks might be worth it.

NaaS Partnerships and Operational Support

Enterprises aren't used to running financial operations in cloud services, Hayden pointed out, and vendors selling networks and services should also look to provide support after NaaS products have been sold.

This would include “operations support, so working with [enterprises] to put in place people and operations, how they can try and control those costs, and putting in pricing mechanisms that really reduce the risk of unexpected monthly bills.”

Vendors partnering with systems integrators with deep vertical expertise can give additional reassurance that they know what enterprises are struggling with, and can achieve the return on investment that they're looking for. And partnering with SD-WAN vendors can reduce fears of vendor lock-in.

That said, over the next two to three years, Hayden expects many vendors will look to realign their messaging and implement new pricing support mechanisms. “They'll drive partnerships across the board. And after that period, after about two to three years, you'll see a massive uptake in enterprises deploying that service,” he said.