As-a-service models gain momentum
“As-a-service” (aaS) models continue gaining momentum throughout the technology stack. They certainly aren’t a new way to consume technology. SaaS (software-as-a-service) began over two decades ago with the launch of WebEx in 1995 and Salesforce.com followed in 1999. Cisco jumped all in on SaaS ourselves, acquiring WebEx back in 2007. It was 11 years after the Webex SaaS model to AWS launching its first-generation IaaS (infrastructure-as-a-service), EC2 in 2006, with Google Cloud and Azure following closely in 2008 and 2010. It seems that each model builds on the proven success of its predecessor. And now this past decade is filled with all kinds of vendors moving full throttle to bring their solutions to market as-a-service.
Most recently our CEO Chuck Robbins announced last August that if something in our portfolio can be delivered as-a-service, we will offer it. The goal is to add flexibility and choice for how our customers want to consume our technology in addition to the usual ways of purchasing it. The recent announcements of our Cisco+ offerings continue to generate lots of buzz along with some usual questions and confusion on what exactly the term ‘as-a-service’ means. This is common territory, by the way, when myriad vendors and analysts attempt to stake their claims and exert their influence in nascent markets.
The difference between Network as a Service (NaaS) and a managed service
One of the questions I frequently get is “Sure, I know what aaS is…that’s just the same as a managed service, right?” While there are similarities, they are not the same. And I believe over these next few years the contrast will become even more distinct. Recently I caught up with Joe Clarke, one of Cisco’s distinguished engineers in Customer Experience. He pointed out that one of the biggest differences is the level of control that the customer has over their network.
In a traditional managed services model, the customer describes their specific needs (endpoints, locations, bandwidth, applications etc.). Then the managed service provider deploys, configures, and monitors their bespoke network infrastructure to meet the customer’s specific needs. The result is a more customized approach.
By contrast, in a network as a service (NaaS) model, the customer has direct access to ordering the NaaS vendor’s standardized service offering and can identify the required offered service level. While the NaaS itself offers a well-defined set of easy to order and deploy basic services, a NaaS solution provider, such as a systems integrator, can offer a more tailored NaaS-based “managed service” by layering on additional capabilities and services. By working together with the customer’s IT team, the solution provider can optimize the NaaS so that it is in close alignment with the organization’s specific technical and business needs, without having to build it from scratch.
Another way that as-a-service is different has to do with the nature of the relationship between the partner and the customer. In a traditional managed services model, the solution partner works closely with the IT team to continuously monitor the network and ensure it’s operating as intended. However, this relationship may be more transactional than that of an as-a-service partner. Joe explains that in a NaaS model “the partner is in some ways in a tighter interlock with the customer such that they feel truly part of your broader team.” I think when we net this out, this is where trust in your as-a-service partner will likely be the most important factor in choosing a NaaS solution. Time will tell if it’s even more weighty than the vendor who has the best of breed technologies.
Not a lease and much more than an OpEx model
An additional area of confusion has to do with the financial model for how as-a-service technologies are consumed. For example, some people think that NaaS is just an operating expense model to pay for networking services like a lease. If this were the case, Cisco could have staked our claim to fame for NaaS a long time ago by calling our leasing/capital financing NaaS. It is true though that NaaS does allow organizations to move to an OpEx model. However, in this new IDC InfoBrief about as-a-service, notice that only a small percentage responded that moving from CapEx to OpEx was the main challenge they are trying to solve by moving to a NaaS-based model.
Why NaaS is attractive for some organizations
So, what are the main reasons for moving to as-a-service? In a recent IDC survey, 25% responded that aligning IT resources and usage and better optimizing and using their IT infrastructure (22%) were the main challenges they are trying to solve. But can an as-a-service model achieve this kind of alignment, optimization, and efficiency? Just look again at the success of the cloud providers and the growth of their data center footprints over this past decade. Their success highlights the fact that the automation, simplicity, and efficiency they bring to market are rewarded with customers’ willingness to extend their trust and delegate more of their data center needs.
In short, it’s about focusing on the outcomes and experiences the network needs to deliver, rather than the technological and operational aspects of the network infrastructure. In addition to a more predictable total cost of ownership, an advanced NaaS service promises many benefits in comparison to do-it-yourself consumption models.
Complimentary InfoBrief from IDC
To learn more about as-a-service and what to look for in a network-as-a-service model, read IDC’s research in this InfoBrief: “As-a-Service” Models Accelerate the Shift from Infrastructure Management to Business Outcomes.
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