Exploring the Three CNaaS Variants

This blog post explores the three variants of Campus Network as a Service (NaaS) (Cloud Network as a Service (NaaS) (CNaaS)) to clarify how they address enterprise needs amid market confusion.

Overview of CNaaS Variants

The author highlights that the disconnect in the definition of Cloud Network-as-a-Service (CNaaS) has led to ambiguity in the market. This post aims to define variations of CNaaS and align them with genuine customer demands.

Customer Requirements

Two core requirements are identified as driving the demand for CNaaS. The first is the complexity of Local Area Networks (Local Area Network (LAN)) compounded by a shortage of skilled IT professionals. Enterprises are increasingly shifting their focus towards integrating Artificial Intelligence (AI) solutions and prioritizing strategic projects over maintaining infrastructure.

The second requirement is enterprises' objective to minimize capital expenditures while enhancing IT investment efficiency, often drawn to Operational Expenditure (OpEx) models that allow better alignment with revenue cycles.

Three Types of CNaaS

Each CNaaS variant represents different approaches to meet enterprise IT needs:

Turnkey CNaaS

This model is typically provided by major vendors and is designed for larger enterprises. The pricing structures are often aligned with business performance, such as revenue fluctuations, facilitating better financial planning. HPE's 2021 partnership with Home Depot exemplifies this variant's market presence.

Enabler CNaaS

Enabler CNaaS, typically offered by established Local Area Network (LAN) equipment vendors, involves collaboration with Managed Service Providers (MSPs). This model emphasizes a simplified acquisition process and allows MSPs to bundle services with vendor products, potentially increasing market penetration. It is anticipated that this variant will gain a substantial revenue share from 2026 to 2029.

LAN-as-a-Utility

This model introduces new hardware and software to automate network processes, appealing particularly to small to mid-sized enterprises with limited IT resources. By outsourcing network management under Service Level Agreements (SLAs), these enterprises can avoid high labor costs and they are reportedly finding success through channel partnerships despite being least represented by revenue.

Conclusion

While each CNaaS variant provides a distinct customer experience, all aim to leverage public cloud-managed infrastructure and automation to simplify IT operations. The next installment of this series will investigate the potential success and overall market size of these CNaaS models, building on the thorough understanding of their individual characteristics.