October 2025 - Dell'Oro Group

Part 2 of a 3-Part CNaaS Blog Series:

Focusing on Enterprise Needs, the Three CNaaS Variants Become More Than Solutions Looking for a Problem

Campus NaaS is poorly defined in the industry, leading to market confusion. In this series of blogs, Siân Morgan explores the differences and similarities of the offers on the market and proposes a set of definitions to help enterprises and vendors speak the same language.

The first danger sign came when Henry Ford named the Edsel, Ford Motor Company’s ambitious new car concept, after his son. The idea for a premium mid-market car was laden with high expectations, and after ten years and $250 million spent planning, the Edsel was launched with fanfare in September 1957. Three months later, sales plummeted. Ford had projected it would sell 200,000 Edsel cars a year. Instead, 118,287 were sold over the three years the Edsel was in production. Ford had misunderstood what customers wanted.

In the first blog of this series, we defined the technological characteristics of CNaaS, but bearing in mind the Edsel backfire, it is important to address the way CNaaS fulfills real customer needs.

All of these offers are focused on two common customer requirements:

1. The increasing complexity of Local Area Networks, coupled with a lack of skilled IT resources.

This requirement has been amplified by the recent wave of AI innovation. Most enterprises are focused on developing an AI roadmap, and many would prefer to reallocate resources from maintaining the LAN to higher-value projects.

1. Enterprises’ desire to reduce capital expenditures while prioritizing IT investments.

Typical CNaaS offers include hardware financing that allows LAN hardware, software and services to be bundled into one recurring fee. Some enterprises may find the opex price structure alluring because it helps with cost allocation, better matches the company’s revenue streams, or fits better with funding cycles. However, companies that are measured or restricted by financial covenants based on their EBITDA, or entities that are prevented from committing to multi-year contracts, will prefer to purchase their LAN equipment outright. To cater to these enterprises, some CNaaS vendors have structured their pricing to appear as capital leases on enterprises’ books. Other CNaaS vendors have the option of a capex acquisition model.

The three CNaaS variants address enterprises IT requirements in different ways

To match the multitude of CNaaS options, vendors have approached the service from different angles. Among the offers available, it is possible to classify them into three categories, based on the vendors’ business objectives outlined in Figure 1.

Turnkey CNaaS—Led by Large Vendors

- Who offers it: Large, incumbent vendors with broad portfolios are well-placed to offer this type of “high-touch” offer, targeting large enterprises directly and without the support of an MSP.

- How it works: These offers can be financed by the vendors such that service price is aligned with an enterprise’s business model. For instance, a vendor could blend and distribute the service price to fluctuate in step with the enterprise’s cyclical revenue. The price could also be structured to match the geographic distribution of an enterprise’s revenue centers.

- Market example: HPE brought the Turnkey CNaaS variant to the market’s attention when it announced its deal with Home Depot in 2021.

- Market impact: This type of offer has a more traditional delivery model than the other two CNaaS categories. Turnkey CNaaS was responsible for virtually all of CNaaS revenue in 2020 and was the largest category of CNaaS revenue in 2024.

Enabler CNaaS—Scaling Through MSPs

- Who offers it: Enabler CNaaS is typically offered by incumbent LAN equipment vendors that maintain deep channel relationships with MSPs. Unlike Turnkey CNaaS, the vendor keeps the vendor–MSP partnership intact. Exceptionally, Shasta Cloud is a startup in this category. Shasta leverages TIP’s OpenLAN initiative and requires a service provider or partner to label and deliver the offer to customers.

- How it works: The innovation lies in the business model. Vendors develop tools to simplify acquisition and may finance the hardware. This helps the MSPs to bundle professional services with vendor hardware and software, creating a more attractive package for enterprises. Even without explicit support from vendors, MSPs can build their own version of CNaaS, which we label “MSP-Led”. This approach often involves in-house development from an MSP.

- Market examples: This category of CNaaS is made up mainly of incumbent LAN equipment vendors leveraging existing MSP relationships.

- Market impact: We expect Enabler CNaaS to comprise most of CNaaS revenue from 2026 to 2029. MSPs are established globally and have the capability of scaling up the sales of these solutions to mid-to-large enterprises quickly, once they commit to selling opex-structured offers.

LAN-as-a-Utility— A New Model for Campus Networks

- Who offers it: Whereas the innovation of Turnkey and Enabler CNaaS offers is centered on the business model and acquisition process, LAN-as-a-Utility vendors have developed entirely new hardware and software designed to automate network delivery and operations.

- How it works: Initially, most LAN-as-a-Utility offers were acquired by enterprises directly from vendors, and purchased based on a standard, outcome-oriented price per area or number of connected devices. Because LAN-as-a-Utility offers are designed to automate the day-to-day monitoring of enterprise network equipment, they risk reducing business opportunities for MSPs. However, MSPs are also valuable routes to market for LAN-as-a-Utility vendors. For this reason, there has been a gradual shift in the relationship between the LAN-as-a-Utility vendors and channel partners, with the vendors allowing the partners to take on more of the initial design and site surveys, as well as ongoing network monitoring.

As the LAN-as-a-Utility vendors have become more established, their approach to pricing has also evolved. As the vendors encountered a diverse set of enterprises with different needs, they began presenting a more nuanced pricing approach, with custom pricing depending on location, space and enterprise requirements.

- Market examples: Each of the four most active vendors in this category includes different components in their offers; however, all are involved in developing in-house software and in monitoring the networks on an ongoing basis.

- Market impact: LAN-as-a-Utility vendors are challenging the established IT equipment industry. These offers resonate best with small-to-mid sized enterprises that have very small, or non-existent, IT teams. By outsourcing the network and its monitoring with the protection of an outcome-oriented SLA (Service Level Agreement), these enterprises can obtain a high-quality network without the associated labor costs and without large outlays of capital. LAN-as-a-Utility CNaaS vendors now report that a significant number of their deals are arriving via channel partners. However, it will take time for these newcomers to build a channel presence as large as the incumbent vendors. Although this variant of CNaaS has the smallest share of revenue out of the three variants, it also has the most impressive growth rate.

Turnkey, Enabler and LAN-as-a-Utility CNaaS are all different offers, leading to a variety of customer experiences. However, they are all delivered with public cloud-managed equipment, and with automation as a central feature. The CNaaS construct represents three different ways to address enterprises’ need for IT simplification.

Which of the three is likely to be more successful? How big is the overall market? These questions will be addressed in the final blog of this three-part series.

Dell’Oro Group Tracks CNaaS Trends, Market Dynamics and Revenue Forecasts in the Advanced Research Report: CNaaS and Public Cloud-Managed LAN

Part 1 of a 3-Part CNaaS Blog Series:

What to Expect when Signing up for NaaS in the Campus LAN

Campus NaaS is poorly defined in the industry, leading to market confusion. In this series of blogs, Siân Morgan explores the differences and similarities of the offers on the market and proposes a set of definitions to help enterprises and vendors speak the same language.

In 1999, lack of common definitions among industry participants had catastrophic implications to space exploration. The Mars Climate Orbiter, an interplanetary weather satellite designed to study the Martian climate, was caught in a fundamental miscommunication. While the team that developed the software calculating the thruster impulse was using pound-force seconds, the team that developed the software to calculate the craft’s trajectory interpreted the data as newton-seconds. Every adjustment of the spacecraft’s trajectory was off by 4.45. When the Orbiter reached Mars, it was 105 miles closer to the surface than expected, and in all likelihood, the $125 million craft was burned to smithereens.

While there may be similar challenges in understanding the different aaS or “as a service” offers available for LAN connectivity, the misunderstandings will be less explosive. Vendors such as Extreme, HPE, Join Digital, Meter, Nile, RUCKUS, and Shasta Cloud have aaS offers for the LAN that differ considerably, but we can start to make sense of the landscape by focusing on the common thread: a service model inspired by cloud computing. Figure 1 depicts the fundamental service and implementation characteristics of a cloud-computing-inspired offer.

Whereas terms like IaaS and SaaS have been around long enough for industry participants to understand the broad scope of the offer, when describing a layer-2 network used to connect PCs, mobile phones, printers, smart blinds, sensors, and the myriad other IoT devices within an enterprise’s campus, using the term NaaS usually leaves more questions than answers.

Appending a “C” to the acronym (CNaaS or Campus Network-as-a-Service) designates that the service pertains to campus connectivity, meaning connectivity within an enterprise or branch office. Figure 2 depicts where CNaaS lies within the network, as compared to the more traditional NaaS, IaaS, PaaS, or SaaS offers.

CNaaS Characteristics

Unlike a cloud-computing offer such as SaaS, campus networks require a large amount of equipment to be installed on-site and dedicated to a physical space. Radio frequency waves and cables are subject to the laws of physics, and WLAN APs can only be shared between enterprises if the physical office space is also shared. This limits two of the cloud-inspired implementation characteristics: most of the hardware cannot be shared, nor can it be centralized. CNaaS vendors have thus turned to other approaches to simulate aaS characteristics.

Among the CNaaS offers on the market, the cloud-computing characteristics have been instantiated as follows:

Outcome Oriented

An outcome-oriented service is priced based on an expected result, rather than on the number of ports, APs, or other technology deployed. For example, some CNaaS vendors, for instance Meter and Nile, offer service based on a combination of the number of devices, the floor space, and/or a series of user-experience metrics.

By purchasing a service based on an outcome, customers are effectively transferring responsibility for the underlying technology design to the provider of the service. Some vendors provide service credits to enterprises whose networks did not meet agreed-upon service level metrics. For enterprises with complex networks, the advantage of outsourcing the network design comes with an additional complexity of capturing the SLA in a contract.

Elastic

Since the maximum capacity of a LAN is determined by the hardware installed onsite, it is impossible to deliver a CNaaS offer that provides unlimited capacity for expansion. Some vendors, for example Extreme, provide rebates to enterprises to turn off ports or APs during quiet periods of the year. However, in this case, the hardware remains in place and unused and the cost to deliver the service is not altered significantly.

CNaaS offers, such as HPE’s Turnkey CNaaS, can also simulate elasticity by blending the price of the solution for a multi-site organization, allocating the bill for the service according to the network size at different sites. For example, if an enterprise has two branches, and Branch A has twice as many network users as Branch B, Branch A would pay two-thirds of the enterprise’s CNaaS bill. This distribution allows for better cost allocation within the organization.

Related: Campus NaaS growth is surging. AIOps is reshaping enterprise networks, boosting software over hardware, and fueling recurring fees

Opex Price Structure

By centralizing and sharing computing resources, traditional aaS providers allocate abstracted portions of technology to each customer and charge the customer based on how much capacity it uses. Because of the limited ability to centralize and share the infrastructure of a campus network, this approach cannot be used with CNaaS offers.

To deliver an opex price structure, some CNaaS providers retain ownership of the hardware, with the consequence of a growing balance sheet. Other providers make use of a third-party financing company. Large vendors, such as HPE, can rely on established financing divisions to back the service. In any of these situations, financing adds to the service cost. In addition, most CNaaS offers come with a prescribed contract duration to ensure the vendor covers its upfront investment. In the few cases that offers do not come with a set contract length, one of the parties involved is assuming the risk of early termination.

Maintenance-free

Traditional cloud-computing services make use of centralized computing resources that are housed and maintained by the supplier, thus relieving the customer of installing, maintaining, and refreshing servers. The large amount of on-site hardware required for the LAN makes this maintenance-free characteristic difficult to implement, and CNaaS vendors have circumvented this with two different approaches.

First, many vendors partner with MSPs to deliver lifecycle services as part of the bundled recurring CNaaS fee. This is the case with RUCKUS and Extreme’s CNaaS offers that are delivered with the companies’ channel partners. Lifecycle services go beyond the 24×7 hardware support that is usually bundled with an equipment’s license. They may include network design, installation, and ongoing monitoring, while allowing an enterprise to apply and manage its own network policies and some local configurations.

In the second approach, CNaaS offers include 24×7 equipment monitoring by the vendor (such as Nile or Meter), as opposed to by the MSP. Monitoring is performed from a centralized location, using as much automation as possible to reduce costs. The degree of customer visibility and control over the network is a challenge for CNaaS vendors. Whereas some enterprises may wish for more of both, the cost of developing additional features to enable enterprise control undermines the maintenance-free concept.

In truly opex-structured, outcome-oriented, maintenance-free offers, hardware replacements are also included as part of the service. For instance, the CNaaS vendor would upgrade a network from Wi-Fi 6 to 6E and to Wi-Fi 7 at no additional charge to the enterprise. The events that trigger such a hardware upgrade are not always clearly laid out, highlighting the contractual complexity of this approach.

Enterprises considering an aaS construct for their LAN service should decide how important each of these cloud-inspired characteristics is to them and insist that their prospective service providers clearly define how each is to be delivered. As I will explore in my next blog, service providers may use the same terms, but the services vary depending on the providers’ business objectives.

Dell’Oro Group Tracks CNaaS Trends, Market Dynamics and Revenue Forecasts in the Advanced Research Report: CNaaS and Public Cloud-Managed LAN

Spoiler alert: it is not hype. But before we answer the question definitively, let’s define T-Mobile’s “Edge Control” just recently announced October 20, 2025. At Dell’Oro Group, we would call it an MNO-provided Private Network (MPN) as shown.

Multi-Access Edge Computing (MEC) nodes are distributed across enterprise campuses, housing the User Plane Function (UPF) of the 5G Core, as well as the servers for data storage and computing specific to the enterprise. The Control Plane, however, remains on the MNO’s property at a regional data center. This design is referred to as Private MEC. The illustration also shows Public MEC, which can be geographically dispersed MEC nodes to address use cases requiring low latency and broad geographic coverage beyond the limits of an enterprise campus.

Why compare to China? Well, Chinese MNOs have been using a similar network architecture since launching their 5G Standalone (SA) networks in 2020. By the end of 2024 the MNOs in China had implemented 55,000 MNO-provided Private Networks. Based on their success in China, we expect T-Mobile will achieve proportional success in the U.S. market.

In addition, the vendors supplying MEC infrastructure equipment and application solutions should enjoy similar success as reported in our Mobile Core Network (MCN) and MEC Report – 2Q25.

From NVIDIA’s 800Vdc power architecture to the open Deschutes CDU standard, this year’s OCP Summit highlighted breakthroughs across the full spectrum of power, cooling, and rack technologies shaping AI data centers.

The Open Compute Project (OCP), founded in 2011 to promote open, efficient data center design, has become the leading forum shaping AI‑era infrastructure. Now a focal point for next‑generation discussions on power, cooling, and rack and server architecture, its annual Global Summit was held last week in San Jose, Calif., drawing more than 10,000 participants. The non‑profit’s reach continues to expand through new subprojects that broaden its scope across data center systems. The clearest signal of its growing influence came with the announcement that NVIDIA would join its board—a move underscoring how even the industry’s pace‑setter sees value in aligning more closely with the organization.

Among the most pivotal technological developments, NVIDIA provided deeper detail on its 800Vdc power distribution architecture for data centers, adding substance to a disruptive concept first hinted at in a May blog post. This triggered a wave of announcements from power and component suppliers: Vertiv previewed new products expected next year; Eaton introduced a new reference design; Flex expanded its AI infrastructure platform; Schneider Electric unveiled an 800Vdc sidecar rack; ABB announced new DC power products leveraging its solid‑state expertise; Legrand deepened its focus on OCP‑based power and rack solutions; and Texas Instruments introduced new power management chips.

Comparison between current (top) and proposed 800 Vdc power architecture (bottom) in May 2025 (Source: NVIDIA blog)

Comparison between current and proposed 800 Vdc power architectures in October 2025 (Source: NVIDIA blog)

After years of liquid cooling dominating headlines as the defining innovation in data center design, power distribution has now taken center stage. Roadmaps point to accelerated compute racks exceeding 500 kW per cabinet, introducing new challenges for delivering power efficiently to AI clusters. NVIDIA’s proposed solution marks a decisive break from conventional 415/480 V AC layouts, moving toward a higher-voltage DC (800 Vdc) bus spanning the whitespace and fed directly from a single step‑down switchgear integrated with a solid‑state transformer connected to utility and microgrid systems.

This transition represents a major architectural shift, though it will unfold gradually. Hybrid deployments bridging existing AC systems with 800 Vdc designs are expected to dominate in the coming years. These transitional architectures will rely on familiar 415/480 Vac power distribution feeding whitespace sidecar units, which will step up and rectify voltage to 800 Vdc, in order to supply adjacent high‑performance racks.

Despite speculation that UPS systems, PDUs, power shelves, and BBUs may become obsolete, these interim designs will continue to sustain demand for such equipment for the foreseeable future. Until 2027, when Rubin Ultra chips are expected to reach the market, greater clarity around the end‑state architecture should emerge, and collaboration across the ecosystem will bring novel solutions to market. Significant progress is expected in the design and scalable manufacturing of solid‑state transformers (SSTs), DC breakers, on‑chip power conversion and other solutions enabling purpose‑built AI factories to fully capitalize on the efficiency of these new architectures.

Many of these technologies are already under development. ABB’s DC circuit breaker portfolio, while rooted in industrial applications, provides a solid foundation but must evolve to meet the needs of a new customer segment, alongside its solid‑state MV UPS offering. Vertiv and Schneider Electric—industry heavyweights whose announcements offered only high‑level previews of future solutions—are accelerating product development to address these evolving requirements and still have ample time to do so. Eaton stood out as one of the few vendors demonstrating a functional power sidecar unit at OCP, showcasing tangible progress in this emerging architecture and reinforcing its position through expertise in SSTs gained from the acquisition of Resilient Power.

While suppliers are expected to adapt swiftly to new demands, regulatory bodies responsible for guiding the design and safe operation of power solutions, such as the NFPA, often move at a slower pace than the market. Codes and standards will need to evolve accordingly, and uncertainty in this area could become a key obstacle to the broader adoption of cutting-edge higher-voltage designs.

Although power has dominated recent discussions, liquid cooling sessions remained highly popular at OCP. I even found myself standing in a packed room for what I assumed would be a niche discussion on turbidity and electrical conductivity measurements in glycol fluids. Yet, the most significant development in this area was the introduction of the open‑standard Deschutes CDU. With the new specification expected to attract additional entrants to the market, our preliminary research—initially counting just over 40 CDU manufacturers—has quickly become outdated, with over 50 companies now in our mapping. However, new entrants continue facing the same challenges: while a CDU may appear to be just pipes, pumps, and filters, the true differentiation lies in system design expertise and intelligent controls—capabilities that remain difficult to replicate.

CDUs following Deschutes design showcased at OCP by Boyd and Envicool (Source: Dell’Oro Group) — CDUs following Deschutes design showcased at OCP Global Summit’25 by Boyd and Envicool (Source: Dell’Oro Group)

These trends underscore OCP’s growing role as the launchpad for the next generation of data center design, bringing breakthrough technologies to the forefront. This year’s discussions—from higher-voltage DC power to open liquid cooling—are shaping the blueprint for the next generation of AI factories. These architectures point toward a new model for hyperscale infrastructure, the result of collaboration among hyperscalers themselves, chipmakers, infrastructure specialists, and system integrators. Much remains in flux, with further developments expected leading into SC25 and NVIDIA GTC 2026. Stay tuned, and connect with us at Dell’Oro Group to explore our latest research or discuss these trends defining the data center of the future.

After two consecutive years of declining telecom equipment investments, the pendulum is beginning to shift. Preliminary findings indicate that aggregate worldwide telecom equipment revenues across the six programs tracked by Dell’Oro Group—Broadband Access, Microwave & Optical Transport, Mobile Core Network (MCN), Radio Access Network (RAN), and Service Provider Router & Switch—increased by 4% year over year (Y/Y) in 1H25. The improved market conditions were driven by several factors, including easier year-over-year comparisons, inventory stabilization, and favorable currency movements.

Market conditions improved markedly outside of China, with revenues increasing 8% Y/Y in the first half. The recovery was broad-based across all telecom programs; however, it is worth noting that MCN, Optical Transport, and SP Router & Switch led the gains.

Global supplier rankings remained largely unchanged, though revenue shares shifted modestly as Huawei continued to gain ground, while Ericsson and Nokia saw slight declines compared with 2024 levels.

The short-term outlook has been revised slightly upward. The analyst team now expects global telecom equipment revenues across the six programs to grow 2% to 3% in 2025, compared with a flat outlook in the 2024 update.

Contact Us

Part 2 of a 3-Part CNaaS Blog Series:

Focusing on Enterprise Needs, the Three CNaaS Variants Become More Than Solutions Looking for a Problem

Campus NaaS is poorly defined in the industry, leading to market confusion. In this series of blogs, Siân Morgan explores the differences and similarities of the offers on the market and proposes a set of definitions to help enterprises and vendors speak the same language.

Turnkey CNaaS—Led by Large Vendors

Enabler CNaaS—Scaling Through MSPs

LAN-as-a-Utility— A New Model for Campus Networks

Part 1 of a 3-Part CNaaS Blog Series:

What to Expect when Signing up for NaaS in the Campus LAN

Campus NaaS is poorly defined in the industry, leading to market confusion. In this series of blogs, Siân Morgan explores the differences and similarities of the offers on the market and proposes a set of definitions to help enterprises and vendors speak the same language.

CNaaS Characteristics

Outcome Oriented

Elastic

Opex Price Structure

Maintenance-free

From NVIDIA’s 800Vdc power architecture to the open Deschutes CDU standard, this year’s OCP Summit highlighted breakthroughs across the full spectrum of power, cooling, and rack technologies shaping AI data centers.