Dell’Oro Group Examines Transformation of LAN Models with CNaaS

This article explores the emerging trends in Campus Network as a Service (Cloud Network as a Service (NaaS) (CNaaS)) as detailed in the latest entry of a blog series by the Dell’Oro Group. It aims to provide IT leaders with insights into the evolving landscape of Local Area Network (LAN) technology through subscription models.

CNaaS Overview

Cloud Network-as-a-Service (CNaaS) is an evolving concept in the enterprise networking space, yet it remains insufficiently defined, leading to market confusion. The blog clarifies this notion by outlining characteristics common across CNaaS offers, which are typically outcome-oriented, elastic, priced as operational expenditures, and maintenance-free.

Historical Context

The article draws parallels between the early years of Netflix and the current stage of CNaaS. Initially focused on Dependency Vulnerability Database (DVD) rentals, Netflix transitioned over years to streaming services, which ultimately reshaped the entertainment industry. This history is used to forecast potential growth for CNaaS as it matures.

Market Potential

A significant section discusses how CNaaS offerings could potentially account for more than 10% of the Public Cloud-Managed LAN market by 2029. The analysis indicates that while CNaaS offers are primarily derived from the operational flexibility of the Public Cloud, they may differ in revenue recognition methods from conventional vendors.

Growth Opportunities

Several pathways to market expansion for CNaaS are identified. These include enhanced enterprise spending on AI Operations (AIOps) software, simplification of Managed Service Provider workflows, and vertical-specific solutions that incorporate higher-order applications. Each of these aspects presents different avenues for revenue growth within the LAN sector.

Strategic Recommendations

Recommendations for CNaaS vendors include aligning sales strategies with the subscription model and focusing on subscription renewals to mitigate customer churn. Effective execution of these strategies is emphasized as crucial for long-term success.

Conclusion

The blog concludes with an optimistic outlook for CNaaS, underscoring the expected growth and broadening relevance within the enterprise networking framework. Overall, the content offers a timely summary of market dynamics and emerging trends that will aid IT decision-makers in strategic planning.