The network-as-a-service (NaaS) sector represents a massive opportunity for service providers, and telcos are positioned to dominate. They will only do so, however, if they make proper investments and otherwise prepare, according to a network-as-a-service forecast from ABI Research.
ABI’s take is that the focus is shifting from underlying infrastructure to the services that sit atop that layer and serve enterprises. Customers will expect “scalable solutions that offer cloud-native agility, multi-cloud accessibility” that can “dynamically fluctuate to support digital transformation.”
This is a generational shift. ABI says that the market could reach more than $150 billion by 2030 and that telcos could realize revenues of more than $75 billion.
“Telcos must seize the opportunity to dominate the NaaS market, as revenue generated from connectivity provision will continue to decline,” Reece Hayden, a Distributed & Edge Computing Analyst at ABI Research, said in a press release. However, their investment strategy, business, operational, and ‘go-to-market’ models are not ready to deliver a competitive NaaS solution. The market is immature and highly fragmented, but telco market revenue will exceed US$75 billion by 2030 if they act now and transform technology, culture, and structure to better align with the requirements of the NaaS market.”
To realize these revenues telcos must:
- Virtualize their network infrastructure to deliver cloud-native services and invest heavily to integrate automation at all levels, including 5G network slicing;
- Restructure business and operating models to most effectively take advantage of this new reality;
- Develop a problem-solving culture and realign their ‘go-to-market’ strategies to better position themselves.
Competition comes from interconnection providers such as Megaport and Packet Fabric and from infrastructure providers such as Google Cloud Platform, Amazon Web Services and Azure.
ABI expects the transition to be swift. The firm says that by 2030 almost 90% of enterprises will have migrated at least 25% of their global networks to the NaaS model.