Internet economy should embrace NaaS

Context

The last decade has seen the emergence of numerous internet-based tech startups, often referred to as the children of the internet as these unicorns and consumer companies will not exist without the internet.

India’s Expanding User Base and Booming Data Centre Market

• Expanding User Base: The consumer user base is rapidly expanding to access services from e-commerce, mobility, food delivery, home, edutech, finance, insurance, gaming, etc in addition to availing services from the government. 
• Rising India’s Internet Economy: India is most likely to meet its target of $1 trillion by 2030.
  • India has over 850 million active internet users, and the digital economy will contribute about 20% to the GDP by 2026.
• Growth Projections for India’s Data Centre Market: With the rise and expansion of cloud-based services, there has been an increasing investment in data centers.
  • According to an Arizton Advisory and Intelligence research report in 2022, the value of India’s data centre market is expected to increase from $4.35 billion in 2021 to $10.09 billion by 2027 at a compound annual growth rate (CAGR) of 15.07%.

NaaS (network as a service)

• About: NaaS is a cloud-like networking model where network resources are provided to the customer on demand. 
  • Network infrastructure is the basic framework of a network consisting of hardware and software resources that enable communication paths between users.  
• Need of NaaS: With enterprises leveraging cloud services seamlessly and dynamically scaling their operations, there exists a gap in network infrastructure to meet the expectations of this evolving cloud ecosystem.
  • This gap has catalyzed the rise of NaaS (network as a service), offering software automation functionalities and intelligent network infrastructure in a flexible and on-demand manner akin to cloud services.

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Advantages of NaaS

• Flexible Scaling Options: Similar to other “as-a-service” models (like SaaS, platform as a service or PaaS, etc.), NaaS offers networking functionality without the need for the customer to invest in hardware or manage the infrastructure directly. 
  • Through simple subscription and options like pay-as-you-go, organizations can scale their network infrastructure more flexibly and efficiently according to their needs. 
  • Presently, NaaS platforms offer improved network performance at exceptional speeds, delivering consumers a seamless and frictionless browsing experience while ensuring robust security measures.
• Facilitating Instantaneous Connections across Various Network Nodes: It enables instantaneous connections in any combination between two or more public clouds, data centers, internet exchanges, and content delivery networks. 
  • This breaks away from the traditional telco approach of manually stitching each connection across weeks and even months at times. 
• Scalable Networks for Dynamic Traffic Handling: It allows organizations to have scalable networks that can take care of sudden spikes in traffic or eliminate underutilisation.

Challenges with NaaS

• Limitations of Hardware-based NaaS Solution: Currently, NaaS solutions are predominantly reliant on hardware, which comes with inherent limitations in terms of flexibility, agility, and cost-effectiveness. 
  • As businesses increasingly adopt hybrid and multi-cloud environments for enhanced security and control, the integration of a software layer atop the network infrastructure will enable optimal resource utilization.
• Criticality of Network Performance: User satisfaction heavily relies on networks swiftly delivering their data. 
  • If a basic online search lags, a transaction loads slowly, or a video buffers even briefly, it results in user dissatisfaction and a subpar application experience.
  • A mere few seconds of delay, or worse, downtime, can result in significant business losses. 
  • Therefore, a software-defined networking platform providing secure and reliable network infrastructure presents a compelling use case for the banking, financial services, and insurance (BFSI) industry.
• Inertia to Migrate:  As is the case with any innovation, the inertia to change from legacy solutions hinders its adoption. 
  • While network security and bandwidth-on-demand are lucrative features of NaaS, enterprises may be hesitant to migrate. 

Difference between NaaS, IaaS, and SaaS

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