Network-as-a-service could be worth $75bn to telcos but the clock is ticking

Telcos must adapt to avoid being squeezed out of the burgeoning network-as-a-service (NaaS) market, claims a new report.Telcos must adapt to avoid being squeezed out of the burgeoning network-as-a-service (NaaS) market, claims a new report. According to ABI Research, the NaaS market is primed for growth. It expects that by 2030, nearly 90 percent of global enterprises will have migrated at least 25 percent of their network infrastructure to be consumed within a NaaS model. The growth is being fuelled by increasing enterprise demand for cloud-native agility, multi-cloud accessibility, and services that can dynamically scale to support digital transformation. This demand, the analyst firm reckons, means the NaaS market could be worth as much as $150 billion by 2030. Telcos, provided they are in a position to capitalise, could snag up to $75 billion of that sum. “Telcos must seize the opportunity to dominate the NaaS market, as revenue generated from connectivity provision will continue to decline. However, their investment strategy, business, operational, and ‘go-to-market’ models are not ready to deliver a competitive NaaS solution,” said Reece Hayden, distributed and edge computing analyst at ABI Research, in a statement on Tuesday. “The market is immature and highly fragmented, but telco market revenue will exceed $75 billion by 2030 if they act now and transform technology, culture, and structure to better align with the requirements of the NaaS market.” When Hayden refers to technology, he means telcos should virtualise their network infrastructure to offer cloud-native services. They should also focus investments on network automation, and roll out value-added services like 5G slice-as-a-service, for example. In terms of culture, ABI said telcos need to develop vertical-specific sales strategies and adopt a consultative process to help bridge the gap between enterprises’ awareness of NaaS, and their understanding of it. “To drive short-run sales, suppliers must educate and tailor their sales strategy to focus on first adopters – start-ups and SMEs – and specific verticals,” Hayden said. Finally when it comes to structure, ABI recommends telcos reduce internal fragmentation, focus on cross-business service continuity, and establish strong partnerships across the industry. “Although it seems like an expensive and risky uphill battle, developing NaaS will be crucial to the long-term upside,” Hayden said. And if telcos don’t get their collective act together, interconnection providers and hyperscalers will be only too happy to fill the void. ABI notes that the likes of cloud connectivity providers Megaport and Packet Fabric already offer agile NaaS solutions, while Amazon Web Services (AWS), Google Cloud Platform (GCP), and Microsoft Azure have extensive cloud-focused NaaS offerings and huge reach. “Telecom operators remain in the best position to lead the market as long as they recognise their service and innovation limitations, invest and restructure successfully, and focus their messaging appropriately,” Hayden said. However, “if telcos miss this opportunity and drop the ball, interconnection providers and hyperscalers will be waiting and willing to catch it.”   Get the latest news straight to your inbox. Register for the Telecoms.com newsletter here. Your email address will not be published. Required fields are marked * Comment Name * Email * Website Save my name, email, and website in this browser for the next time I comment. This site uses Akismet to reduce spam. Learn how your comment data is processed. Do you agree public funding should be used to support mobile operators to more broadly deploy Open RAN? Groundhog Day as yet another European connected car club emerges. This one is called Punxsutawney Phil, and if it s hhttps://t.co/qbUe39TOzL 06 July 2022 @ 12:12:07 UTC UK signs landmark data sharing agreement with South Korea. A new 'data adequacy agreement' between the UK and South hhttps://t.co/FXQXafRevw 06 July 2022 @ 11:10:56 UTC Exposure makes sense of complex and interconnecting technologies in and around CSP networks and their IT systems- e hhttps://t.co/SQIX9b9uI6 06 July 2022 @ 09:00:31 UTC