Why Cloud Networks-as-a-Service Are Foundational to Everything-as-a-Service

By Matthew Vulpis, Content Contributor  |  September 21, 2022

Digitalization has changed the business world, creating technological advancements and adoption among enterprises of all industries. A recent trend has seen organizations leverage a variety of devices and applications while also enhancing old versions of technology, notably network technology. Businesses are making it a priority to improve their network technology to enhance their daily processes.

As the IT environment becomes more distributed, networks have become the heart of daily functions for a modern-day enterprise and an important priority. Dated legacy networking technology may become vulnerable and weak if not properly addressed.

Two of the most common changes in network standards brought on by digitalization are the move to cloud networking and the adoption of high-speed private networks, such as 5G and LTE (News - Alert).

Since the inception of cloud networking, the limitations of traditional IT infrastructure are becoming more apparent. Many businesses are struggling to adapt to marketplace changes and new trends as their technological environments are inefficient at sensing and responding to these. Cloud-based services offer a much more scalable and reliable IT infrastructure that is designed to streamline business performance and support development and growth.

The cloud networking market was valued at around $429.5 billion in 2021 and is projected to reach $1 trillion by 2028. The growth comes as no surprise when factoring in the variety of benefits cloud networking can offer.

For example, cloud technology is designed to scale to meet a business’s changing IT requirements. As a company grows, it is inevitable that more storage space and bandwidth will be required to handle increasing traffic to the website. Cloud servers can be deployed automatically to help businesses scale up and down and ensure optimum performance under heavy loads. Cloud technology also improves website speed and minimizes downtime.

The cloud environment has also been shown to significantly increase collaboration between groups and communities who have access to the same files,” said Scott Chasin, Chief Technology Officer of Pax8, one of the world’s largest and fastest growing independent cloud marketplaces. “Cloud technology removes the communication limitations of traditional IT models and makes it much quicker and easier for employees working in different locations to access information and collaborate with team members and key personnel. This helps to streamline processes and increase productivity. As networks become more wireless and, therefore, agile, and network speeds increase, productivity will increase even more.”

As Chasin noted, 5G is expected to greatly change the way businesses work and the way people live because beyond faster speeds, this latest generation technology can handle more connected devices than the existing 4G LTE network, with improvements that will enable a wave of new kinds of tech products. The new network offers high data rates (1-20 Gbit/s), ultra-low latency (1 ms), high security, reliability, and scalability, all of which will help fuel transformative new technologies, not just for consumers but also for businesses, infrastructure, and defense applications.

While 5G networks began rolling out in the United States and around the world in 2018, the recent surge in growth is quickly making 5G common in many industries. The global 5G services market size was valued at $47.3 billion in 2021 and is expected to expand at a compound annual growth rate (CAGR) of 52 percent from 2022 to 2030.

Furthermore, the adoption of private 5G networks is gaining traction around the world as regulators allocate more spectrum to enterprises so they can build and maintain their own 5G networks. The global private 5G network market size is estimated to reach $14.28 billion by 2028, registering a CAGR of 39.7 percent.

“Part of the reason this growth is so immense is that among businesses of all sizes, from small to medium to large global enterprises, private 5G networks are designed with a specific purpose, enabling enterprises to be in control of their destiny in terms of partners, features and connectivity,” Chasin explained. “This helps enterprises venture into low latency use cases such as IoT, AR/VR, and robotics, with complete control over data, security, and networks. We are only now beginning to see the power of enterprise 5G, which complements both edge and cloud computing in ways we are only now beginning to imagine.”

As for LTE, the network technology may precede 5G, but LTE has become a popular cellular technology because of the increasing usage of 4G smartphones and other smart devices. 4G/LTE technology also offers businesses an always-on, cost-effective solution for a primary, backup, or hybrid network connectivity solution.

“There is no need to wait for 5G,” Chasin said. “4G/LTE technology can offer benefits relating to connectivity, flexibility, scalability, and affordability today, which is especially essential for SMBs. When combined with cloud-first applications, like Microsoft (News - Alert) Teams, for example, fast, secure, reliable, and much more flexible Networking-as-a-Service options make spinning up and scaling networks as easy as spinning up a VM. This allows even the smallest businesses to compete with their much larger competitors. Today organizations can run their entire communications and computing environments with all the benefits of OpEx vs. CapEx financial models.”

Currently, 67 percent of businesses already using 4G/LTE in the United States report increased productivity across their departments, with sales, customer services, and other externally focused departments citing the most benefit.

The global LTE and LTE advanced market is anticipated to be valued at $10 billion by the end of 2022 and is estimated to surpass $87.6 billion by the end of 2032, exhibiting growth at 32.5 percent CAGR. As for LTE, the global private LTE market was valued at $3.78 billion in 2020 but is projected to reach $10.64 billion by 2027.

Cloud computing alone can offer a strong, reliable network for any business, but when combined with 5G or LTE technology, enterprises can gain access to real-time applications and seamless communication.

“This is why enterprises today are increasingly searching for partners or network solutions that provide them with these benefits. For many, this search leads them to a cloud marketplace,” Chasin said.

A cloud marketplace is a type of application marketplace synonymous with a SaaS marketplace. At a cloud marketplace, customers can go to an online storefront to find, purchase, and manage cloud-based applications. These can offer varying degrees of functionality, from simple listings where customers can compare SaaS (News - Alert) products and be referred to a vendor to complete their purchases to a full digital commerce experience that allows customers to buy and immediately provision software.

The concept of cloud marketplaces is still relatively new but is already attracting an abundance of vendors and customers. According to Gartner (News - Alert), enterprise customers of all sizes buy over half of their services from cloud marketplaces, making them a cornerstone of a successful go-to-market strategy for providers looking to sell SaaS.

The rapid growth can be attributed not only to the advantages to both buyer and seller that these marketplaces offer but also because of the sheer volume of options marketplaces provide, once again for both vendors and customers. For example, on the cloud marketplace of Pax8, there are more than a dozen network vendors, including  AT&T (News - Alert) Business, Broad Sky Networks, and Cox Communications.

The right networking solution can help an enterprise grow and evolve, allowing staff to share information effortlessly, increasing productivity and efficiency, as well as enabling cost-effectiveness, storage efficiency, flexibility, and data security. Upgrading to cloud networking, leveraging private LTE or 5G, or any combination of these technologies is crucial for any business that wants to stay competitive amidst the digital age. Cloud marketplaces offer a viable place where enterprises can fight for the right partner, or solution, for their unique situation.

Edited by Erik Linask
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