By: Sherifa Hady, Vice President Channel, Europe Middle East & Africa at Aruba, a Hewlett Packard Enterprise company
COVID-19 triggered a surge in interest in as-a-Service adoption across the IT industry. Unprecedented uncertainties and disruptions meant that companies came to value the versatility and flexibility of their technology solutions more than ever. Enterprises and SMBs alike saw their IT needs evolve rapidly, with most forced to digitally transform at a pace beyond their capabilities. As they turned to external support to cope with increased IT complexities and cybersecurity challenges, reliance on the channel grew.
Indeed, while it is still a small share of their business for most, recent research from Canalys shows that channel partners are starting to wake up to the opportunities that as-a-Service is creating. Over one in two (58%) channel companies forecast growth in ITaaS revenue this year, and almost a third predict it to be double-digit.
Included within this shift is a rising interest in Network-as-a-Service (NaaS), which we define as when an organization has over 50% of its network rollout, operations and life cycle management delivered by a third party on a subscription basis. The appetite for NaaS is rising, with our own research showing that it is now being discussed in 86% of EMEA companies. Recognition of the channel’s part to play in its uptake is also clear – with IT resellers showing up strongly in respondents’ expectations of who to purchase NaaS from.
With all market indicators suggesting that mass adoption is imminent, channel partners must prepare themselves to capitalize on this heightened customer interest. So if this is you, how do you go about it?
Understanding the key drivers and barriers to adoption
First of all, it’s important to understand exactly what is driving the broader industry’s appetite for NaaS. Our research revealed that 75% of respondents agree that having the flexibility to scale their company’s network based on business needs is at the heart of their interest. That’s in addition to its time and cost saving benefits – 57% believe NaaS will free up IT team time for innovation and strategic initiatives, while 76% expect it could reduce operations costs.
On top of these benefits, the rapid move towards public cloud is also helping transform customer purchasing behaviour, with greater acceptance of as-a-Service and pay-per-use consumption models. Customers are also attracted by the promise of being able to manage cashflow and mitigate financial risks through Opex IT investments instead of capital expenditure.
Of course, as with any rising technology trend, barriers to adoption among both customers and partners remain. Our survey found that one of the largest roadblocks to NaaS adoption for customers was a lack of understanding. Despite universal familiarity with the term, only 2 in 5 of the technology leaders we spoke to claimed to fully understand what it means. The consequence of this was evident in the perception of NaaS as a solution – with only 11% seeing it as an established and viable option for businesses today.
From a partner perspective, an emphasis from some vendors on “referral” models also raises concerns: the general sentiment is often that as management workloads for partners lessen with as-a-Service, revenue will be taken away by vendors and reliance on the channel will diminish.
Another issue sometimes raised by partners relates to the true flexibility of offers. Due to the fast-evolving market the ability to flex up, but not down, is a common customer complaint – customers are seeking the option to do both so that is what you must provide.
Addressing customer confusion and your own finance fears
Armed with an understanding of the attraction to NaaS alongside an insight into potential concerns, you can use this knowledge to address customer confusion.
This starts by working with vendors to close the education gap. In fact, channel partners now play an increasingly core role in articulating IT benefits and delivering technical consulting. Here, vendor partner strategies and programs, such as Aruba’s MSP program, can ensure that you get the information you need to become trusted advisors to your customers on NaaS. For example, Aruba offers access to network design templates and best practices, plus sample SOWs for our partners.
In terms of your own finance fears, offering a NaaS service can become a long-term source of profitability if handled correctly. The current challenge for many of you is around finding and offering services that encourage customers to partner for longer. Not only do offering flexible payment models increase the potential for you to generate recurring income, but NaaS also opens up additional opportunities for you to layer on your own value-added services on top.
Providing the perfect package
Once you have educated customers on the benefits of NaaS and addressed any financial concerns of your own, you can turn your attention towards creating the right type of NaaS offering for you and your customers.
Here, you must do your research. Regarding some of the other barriers identified, not all offerings are only capable of upscaling the network or minimizing the role of management for channel partners. One of Aruba’s NaaS offerings, HPE GreenLake for Aruba networking, which includes a suite of eight standardized NaaS solutions, gives partners four primary models for delivery: a partner assessment and design model with standardized and modular service packs that can be configured by partners in 3-5 year subscription models; a fulfilment model that gives the partner the ability to sell the service but have Aruba fulfil it; a model for the customer to contract service levels with a partner, and finally a model where the Aruba team together with partners provide monthly billing and day one services for the customer. Our solutions also give end-customers the ability to flex the network up and flex down.
Fortunately, we’re seeing a range of NaaS packages being introduced across the industry, giving you more choice of what you want to offer as-a-Service, how you want to go to market and how much management you want to take on. A NaaS package won’t look the same for everyone. Differentiation will be key to successful sales, so you should look to build offers around your own specialist vertical knowledge and experience.
Clearly, the appetite for NaaS isn’t going anywhere and channel companies cannot afford to lose out on this opportunity. In order to leverage the customer shift towards subscription-based models, you must prepare by understanding both the benefits and barriers to adoption, then doing your research to help you develop the best packages for your business and customers.