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SD-WAN consumption to change as NaaS market matures
NaaS is a cloud model that could provide a compelling way for enterprises to consume SD-WAN and other network services. Despite its potential, though, growth projections are slow.
Enterprise networks have traditionally adapted to reflect changing business needs. Take software-defined WAN, for example. SD-WAN emerged in the early 2010s to improve application performance at a lower cost compared to MPLS. SD-WAN only became more important following the COVID-19 pandemic when enterprises needed to connect a mix of office and remote workers to company resources.
The next big shift for enterprise networks is the move from individual offerings, like SD-WAN, to a more comprehensive consumption model called network as a service (NaaS). NaaS is a subscription-based cloud model in which enterprises essentially rent network infrastructure components, such as hardware, software and management tools, from a provider.
According to "2023 State of Network Edge Survey" -- sponsored by Graphiant and conducted by Eleven Research -- enterprises are looking to move from SD-WAN to NaaS to support the evolving needs of the network edge. While SD-WAN enables enterprises to manage WAN performance more efficiently, it can't always handle modern network needs in terms of agility, scalability and cost, according to the survey. Of the 200 network architects and administrators surveyed, almost 90% said they're interested in implementing NaaS.
The introduction of NaaS, however, doesn't mean enterprises will stop using SD-WAN. Most NaaS offerings include managed SD-WAN services, so SD-WAN isn't going away. What could change, though, is how enterprises consume SD-WAN. Rather than manage a DIY SD-WAN architecture, enterprises might prefer to deploy a single NaaS platform that offers managed SD-WAN along with other network services.
Network edge needs require new services
Efficient enterprise connectivity is one of the most important goals companies have, Graphiant found. Respondents reported they want connectivity between all enterprise resources, to external organizations and with their public clouds. And these goals are more important to enterprises now than they were three years ago.
While this connectivity among all resources is vital, respondents said they often find it difficult to enable it in their networks. It's typically complex to manage increased scale, address security and privacy concerns, and guarantee agility. To address the challenges of the ever-changing network edge, most respondents said their enterprise had adopted as-a-service cloud computing models, such as SaaS, storage as a service (STaaS) and compute as a service.
An overwhelming 97% of respondents said they used SaaS, while 81% and 61% used STaaS and compute as a service, respectively. The as-a-service concept has made its way to the network, with around 62% saying they were somewhat likely to use NaaS and another 26% saying they were extremely likely to use it.
Will NaaS replace SD-WAN?
SD-WAN won't disappear with NaaS. Many NaaS offerings include managed SD-WAN as a feature of the platform. Enterprises typically prefer managed SD-WAN services over DIY, so organizations that want a more comprehensive package might opt to consume SD-WAN through NaaS instead. But, while many enterprises are interested in NaaS, the transition isn't happening quickly.
In January 2023, ABI Research reported over 90% of enterprises will consume at least a quarter of network services via NaaS by 2030. Much of this transition will happen over the next seven years, but adoption is currently slow. SMBs and larger enterprises are apprehensive to deploy NaaS because they're skeptical of higher costs and management challenges. However, ABI Research said NaaS is likely to play a key role in enterprises' digital transformation strategies and should become a top priority for organizations.
In the meantime, many enterprises have implemented Secure Access Service Edge (SASE), which is a framework that converges SD-WAN with other networking and security services. The market continues to increase, even with the new demands of the network edge.
In December 2022, Gartner ranked SASE as the top trend to most affect infrastructure and operations in 2023. The firm also predicted global SASE end-user spending will rise to $9.2 billion in 2023, up 39% from 2022. Gartner analyst Jeffrey Hewitt credited the increase in SASE adoption rates to the network edge and cloud computing.
SD-WAN and NaaS to coexist in the future
Enterprises are beginning to embrace NaaS, according to Graphiant's survey, but projections indicate that the technology is still nascent. Meanwhile, SD-WAN continues to be a popular WAN connectivity option, despite its challenges. As NaaS becomes more established, it could offer a popular alternative consumption model for SD-WAN and other services offered as features within the platform.
