NaaS: Key market research findings
- Shift from CAPEX to OPEX model drives market growth
- The AMericasss dominate the market geographically
- Key vendors – Cisco, IBM, Juniper Networks, and VMware
Technavio’s market research analysts predict the global NaaS market to surpass $7 billion by 2020. The market is driven primarily by the shift from capital expenditure (CAPEX) to operational expenditure (OPEX) model. Network-as-a-service (NaaS) provides on-demand network services with pay-per-use pricing model in which clients pay only for the resources used. NaaS offerings provide all the benefits of an on-premise system in a trouble-free environment and enable customers to focus on their core business competencies while saving costs through reduced capital investment on network infrastructure. During 2015, the Americas dominated the global NaaS market by occupying over 49% of the overall market share. The growth of the market in this region can be attributed mainly to the increased adoption of cloud services in sectors such as healthcare, telecom, and banking, financial service, and insurance (BFSI).
The new market research report from Technavio presents a breakdown and analysis of the NaaS segments based on the end-user.
“The increasing adoption of software-defined networking (SDN) is an ongoing trend in the market. SDN is a strong network paradigm designed to cater to overarching issues such as the increasing demand for network speed, scalability, and resilience. In SDN, software such as applications, content, and services, which are stored or executed in data centers interact directly and dynamically with network infrastructure. The increase in the adoption of SDN is expected to trigger a rise in the demand for NaaS in the coming years,” says Amit Sharma, Lead Analyst, ICT, Technavio Research.
During 2015, the IT and telecom sector lead the market with a share of around 25%. The IT and telecom sectors generate massive amounts of customer data, the storage and management of which call for the need of cost-effective cloud-based infrastructure services. These sectors make use of cloud-based solutions to conduct business at minimum costs. This widespread deployment of cloud computing services is driving the adoption of cloud-based networking services that offer end-users on-demand network resources.
The key vendors in the market include Cisco, IBM, Juniper Networks, and VMware. Though the market is in its nascent stage, however, it is expected to grow massively over the next four years. Competition in this market will intensify during the forecast period with the entry of new vendors, innovations in technology, and commercial partnerships. Providers in the market are differentiating themselves by offering self-manageable services, high-security levels through virtual private network (VPN) connections, broad network access, and assist organizations in balancing both service-level objectives and cloud compliance requirements.
A more detailed analysis is available in the Technavio report, Global NaaS Market 2016-2020.
We can customize reports by other regions and specific segments upon request.
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