Security & Enterprise Networks Archives

The signals are confusing. AI boom, global trade war, supply shortages, competitors merging––it takes focus and lots of analysis to cut through the upheaval in the Local Area Networking market and predict the future trends. Luckily, we have decades of historical data and some finely tuned models to enable us to make these top three predictions for the enterprise networking market in 2026.

1. Wi-Fi 7 will dominate enterprise wireless connectivity

For some enterprises, the pristine 6 GHz band will be too alluring to resist. Other organizations will be nearing the end of their WLAN equipment’s lifecycle and, seeing a growing number of Wi-Fi 7- capable devices in their ecosystem, will want to future-proof the network. Yet others may be in the midst of a massive digital transformation project, needing the best quality WLAN to carry steady streams of data feeding their digital operations.

Whereas private 5G deployments will also grow, we expect enterprise adoption of private cellular to remain constrained to a niche, high-end portion of the market. Only especially difficult radio conditions, or very tight security and performance requirements, will justify the additional cost and complexity of private cellular. We don’t expect much cannibalization of private cellular gobbling up the WLAN market either. Enterprises that choose private cellular for their operations are focusing on new use cases and will continue to deploy WLAN as well.

There’s no doubt: enterprise-class Wi-Fi 7 will become mainstream in 2026. With no second, enhanced version (like Wi-Fi 5 Wave 2, or Wi-Fi 6E) to dilute the take up, we expect the Wi-Fi 7 adoption curve to become steeper than it was for any other enterprise WLAN technology.

2. The AIOps business case will prove itself in

AI FOMO is rampant. Enterprises see so much potential with AI, but there are associated risks, and it can be difficult to extract tangible benefits. However, many enterprises have already witnessed dramatic results from using Machine Learning to ease the burden of IT Operations; including shorter deployment times, a dramatic drop in the number of trouble tickets, and faster time to problem resolution. Layering in AI capabilities makes LAN management applications easier to use and more accessible across an organization.

AIOps platforms are available from most of the major enterprise IT vendors. AI and Machine Learning capabilities often have license fees that are recurring in nature, driving up enterprises’ LAN equipment costs. This premium may have dissuaded enterprises from adopting AIOps in the past.

However, over the past few years, vendors have added features and increased the value of those licenses, including 24×7 support bundled into the recurring fee. Now, by paying the equivalent of a fraction of a network engineer’s salary in license fees, a mid-sized enterprise can reduce hours spent on operations and level-one support in order to allocate more of their valuable networking experts’ time to AI projects.

Every enterprise’s business case will be different, but with networking expertise in high demand, we predict that in 2026, the labor savings will outweigh the additional license costs for the majority of mid-to-large sized enterprises.

3. 2026 Local Area Networking market will beat $30 B––but still not surpass 2023

The pandemic may seem far away, but the ripple effects are still being felt. After surviving the supply constraints of 2021 and 2022, vendors unleashed a tsunami of WLAN APs and campus switches into the market in 2023, making it the top grossing year of all time for LAN equipment revenue. Following the high volume of shipments, enterprises took time to work through the excess inventory, causing double-digit revenue declines for vendors in 2024. In 2025, the demand-driven market returned, but so has the specter of supply constraints. The AI buildout has caused a shortage of semiconductor components, the most immediate being memory.

The high WLAN and campus switch prices of 2022 and 2023 began to erode in early 2025, but in 4Q25, LAN equipment vendors raised prices to compensate for escalating component costs. Higher prices can dampen demand; however, the need to replace ageing infrastructure will be a counterweight. Enterprises must invest in their LANs in order to modernize their operations, and an upgrade to Wi-Fi 7 requires more switching power and higher bandwidth ports. Weighing the puts and takes, we believe the market will continue to grow in 2026, with vendors applying what they learned during the last supply crunch to avoid the worst in this one. The 2026 market will be well into the $30 B range, but we will need to wait one more year for revenues to beat the highs of 2023. Tune back in at the end of 2026 for more on that prediction.

Over the past several years, we have watched security spend migrate from hardware appliances toward cloud-delivered and subscription models. In this blog, I outline three predictions for 2026 that describe how that pattern solidifies into a durable template: security budgets increasingly split between cloud-delivered security services at the edge and an AI-infused, centralized SecOps layer that looks a lot like “next-gen SIEM.”

On the edge, SASE/Security Service Edge (Secure Access Service Edge/SSE) and cloud Web Application Firewalls (WAFs) become the default way to protect users and applications. In the middle, distributed cloud networking quietly supplies the connective tissue. At the center, next-generation Security Information and Event Management (SIEM) platforms fuse SIEM, Security Orchestration, Automation, and Response (SOAR), Extended Detection and Response (XDR), observability, and Cloud-Native Application Protection Platform (CNAPP)-style cloud visibility into a single, service-delivered control surface.

Prediction 1 – Edge security spend consolidates around SASE/SSE and cloud WAF

From a budget perspective, the branch and user edge is already moving decisively toward as-a-service delivery. SASE, particularly the SSE half of that equation, has been growing at a solid double-digit rate, while legacy access routing and on-premises secure web gateways have been shrinking. WAF has also emerged as one of the most dynamic parts of the network security landscape as more applications and APIs are exposed directly to the Internet.

Put simply, enterprises are standardizing around two cloud-delivered edge controls:

SASE/SSE for user and branch access, combining secure web gateway, CASB, ZTNA, and firewall-as-a-service capabilities delivered through globally distributed points of presence.
Cloud WAF for Internet-facing web and API traffic as part of secure application delivery platforms.

The immediate drivers are familiar: hybrid work, SaaS adoption, and a steady shift away from private WAN circuits and appliance-based security toward Internet-centric architectures. However, there is also a deeper architectural undertow. Underneath SSE and cloud WAF, distributed cloud networking and early WAN-as-a-service offerings are emerging to connect branches, clouds, and security service edges over a programmable fabric rather than static routers.

In 2026, we expect security and networking teams to budget less for discrete “boxes” at the branch and more for recurring spend on SASE/SSE, WAF, and the underlying cloud connectivity. Physical access routers and appliance SWGs will continue to shrink as a share of branch networking and security spend, reinforcing that the edge is now a service, not a rack of gear.

Prediction 2 – “Next‑gen SIEM” becomes the gravitational center of SecOps

If SASE/ SSE and WAF are where packets are inspected, next-gen SIEM is where evidence is assembled and acted upon. We use “next‑gen SIEM” here as a SecOps solution construct, not a product SKU. In this view, a next-gen SIEM is a SecOps solution that combines:

Classic SIEM for log and event aggregation.
SOAR or extended orchestration, automation, and response (XOAR) for workflow and playbook automation.
XDR for cross‑control point detection and response.
Observability and digital experience monitoring (DEM) for performance and user‑experience telemetry.
CNAPP for configuration, identity, and cloud workload context.

A reflection of enterprises’ pivot in this direction is the recent explosive growth of the CNAPP market. In our analysis, the CNAPP market grew nearly 40% in 2024. Cloud-native security tool consolidation, end-to-end coverage, and DevSecOps integration are the core buying drivers.

Architecturally, next-gen SIEMS are a response to the collision of two worlds:

Traditional SecOps built around monolithic apps, north-south traffic, and data center-centric logging.
Modern app environments built on containers, microservices, and hybrid cloud

In 2026, we expect more RFPs to converge on this next-gen SIEM pattern. Buyers will look for a single SaaS platform that can ingest logs, telemetry, and cloud data; power AI-assisted investigations; and orchestrate responses across SASE/SSE, WAF, endpoint, and on-premises and cloud controls.

Prediction 3 – Security budgeting finishes its shift from capex to opex

The common thread between cloud-delivered edge controls and next-gen SIEM is not just architecture—it is the commercial model. Both are overwhelmingly sold as subscription services.

Across SASE, CNAPP, and broader network security, vendors are leaning into subscription licensing because it lets them monetize more features, deliver updates continuously, and smooth revenue over time. Our forecasts assume a continued shift from perpetual licenses and hardware-heavy deals toward SaaS and virtual consumption, with subscription models explicitly called out as a structural assumption for both network security and distributed cloud networking.

For CIOs and CISOs, this shows up in the budget spreadsheet as:

Smaller, more targeted hardware refresh projects.
Growing multi-year SaaS commitments for SASE/SSE, WAF, CNAPP, and next-gen SIEM.
Increased financial scrutiny of overlapping subscriptions, driving consolidation toward integrated platforms (for example, single-vendor SASE or a single primary analytics plane for SecOps).

We believe 2026 is the year this shift becomes the default assumption rather than a trend to watch. New initiatives will start life in opex, and capex-heavy proposals will increasingly be the exception that must be justified.

Net‑net for 2026

Security budgets will increasingly organize around two SaaS pillars—cloud-delivered security at the edge (SASE/SSE and WAF) and a centralized, AI-infused next-gen SIEM that absorbs CNAPP and traditional SecOps functions. Everything else, from distributed cloud networking to legacy appliances, will be evaluated on how well it supports or can be subsumed into those two spend templates.

Part 3 of a 3-Part CNaaS Blog Series:

We should look at history to predict seismic shifts in the IT equipment industry.

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 1998, when Netflix shipped its first DVD (Beetlejuice), not many foresaw the impact that the company would have on the entertainment industry. It took nine years for Netflix to shift from DVD rental to streaming, and another 18 years for streaming to eclipse broadcast and cable TV viewing combined, in 2025. In September, KPop Demon Hunters became Nextflix’s most watched title, with 325 million views in the first 91 days.

The cloud delivery model transformed television and has the potential to transform the LAN equipment industry (although ideally without any soul-sucking demons).

CNaaS has already outpaced Netflix’s nine-year runway. Some of the LAN-as-a-Utility vendors began developing hardware in stealth mode in 2015, and the first CNaaS revenue was recognized in 2018. In 2021, HPE brought the concept of a cloud-inspired LAN offer to mainstream when it announced its deal with Home Depot. Figure 1 shows a few of the key milestones in the short history of CNaaS.

Like the streaming market was in 2014, CNaaS is still a relatively new concept, and most enterprises can be forgiven for struggling to visualize how the offer may change their business.

In the first blog of this series, I introduced the characteristics that appear in cloud-inspired offers, including “as-a-Service” offers for LAN connectivity, which we label as CNaaS or Campus Network as a Service. To different degrees, CNaaS offers are outcome-oriented, elastic, priced as opex, and maintenance-free. In the second blog, I explained that the CNaaS offers can be classified into three categories:

- Turnkey CNaaS, which are bespoke offers to large enterprises,
- Enabler CNaaS for which vendors deliver enhancements to MSPs to expand the service providers’ addressable market, and
- LAN-as-a-Utility CNaaS, for which vendors have developed LAN hardware to automate many operational tasks and to allow the vendors to provide ongoing network monitoring for enterprises.

There is another dimension by which available CNaaS offers vary: by scope of technology. CNaaS vendors include a mix of technologies such as LAN, WAN, data center connectivity, private cellular, firewalls, ZTNA, as well as higher-order applications, such as workflow management and software for smart-building management.

Can the CNaaS opportunity be quantified?

To quantify the opportunity for CNaaS vendors, we first reduce the service to a “core offering,” that is, the common elements present in every vendor’s service: Wireless LAN and Campus Switching. This allows market growth of the core to be baselined and tracked as it evolves. However, it will not represent the total opportunity for a vendor who includes other technologies such as firewalls, ZTNA, or an ISP marketplace, not to mention the professional services that can be bundled with the offers.

Next, this core CNaaS market must be defined in relation to other existing markets. We consider whether its trajectory will be independent, or whether it will evolve as a subset of a larger market, subject to the same prevailing trends as its parent. All of the CNaaS on the market are constructed with Public Cloud-managed LAN technology, and so we consider CNaaS to be a subset of the Public Cloud-managed LAN market. (Public Cloud-managed LAN is made up of LAN offers with management or control applications that are hosted in the cloud facilities of the vendor or a third party). Analyzing the manner in which the Public Cloud-managed LAN market grew and became widely adopted can provide valuable insights into the CNaaS trajectory.

Although it is a subset of the Public Cloud-managed LAN market, CNaaS has one very important difference: the way in which revenue is recognized by vendors. Whereas Public Cloud-managed LAN vendors, such as Cisco, HPE, and CommScope already recognize a material amount of recurring software revenue, nearly all of their hardware revenue is recognized in the quarter in which it is shipped.

CNaaS offers reduce the revenue recognized in the early years of a contract; as vendors sell more CNaaS, the revenue for past shipments accumulates. Figure 2 compares the theoretical revenue profile of a vendor selling CNaaS with the revenue profile of the same equipment sold as capex. This principle is captured by the “fish model” proposed by Thomas Lah in his blog.

Finally, to quantify the CNaaS opportunity, we must consider whether it is accretive to the total market: will it result in an expansion of overall spending on LAN equipment, or is it a competitive tool to win share of existing market revenues?

I have identified three accretive opportunities related to CNaaS:

- The CNaaS opportunity is expected to increase enterprise spending on AIOps software features designed to simplify and automate network operations. This will shift spending from human resources, growing overall LAN-related software revenue.
- Simplification of the MSP workflow delivered by Enabler CNaaS will result in an expansion of MSP revenue from a broader segment of enterprises.
- Vertical-specific CNaaS solutions blending different technologies and higher order applications (such as smart buildings, private wireless/WLAN networks, or the digitization of manufacturing) will drive new use cases and expand enterprise IT spending.

The CNaaS opportunity can be sized by considering the factors described above, alongside an analysis of shipment data, historical trends, and interviews with vendors, enterprises, and channel partners. The conclusion of this analysis is that a shift in LAN delivery model can take several years, but the opportunity it brings is alluring. Increased margins, a deeper, ongoing relationship with customers, and the future stability of a higher total contract value will drive vendors to develop rich CNaaS offers. The commoditization of connectivity and the increasing complexity of networks will drive adoption by enterprises. I predict that in 2029, a mere 11 years after the offer became commercially available, it will represent over 10% of the Public Cloud-Managed LAN market.

With the broadest access to MSPs as a channel of delivery, we expect Enabler CNaaS to remain the largest category. LAN-as-a-Utility CNaaS will remain the fastest growing variant, with the growth driven by new entrants gaining scale.

In his explanation of the “fish model”, Thomas Lah laid out two critical steps for SaaS companies wanting to “swallow the fish”, and these recommendations also ring true for CNaaS vendors. First, make sure to align sales compensation to the subscription model, without inflating incentives and associated costs. Second, focus on ensuring a high rate of subscription renewals. As Netflix is well aware, customer churn determines whether a recurring revenue business succeeds or fails.

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

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

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1. Wi-Fi 7 will dominate enterprise wireless connectivity

2. The AIOps business case will prove itself in

3. 2026 Local Area Networking market will beat $30 B––but still not surpass 2023

Prediction 1 – Edge security spend consolidates around SASE/SSE and cloud WAF

Prediction 2 – “Next‑gen SIEM” becomes the gravitational center of SecOps

Prediction 3 – Security budgeting finishes its shift from capex to opex

Net‑net for 2026

Part 3 of a 3-Part CNaaS Blog Series:

We should look at history to predict seismic shifts in the IT equipment industry.

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.

Can the CNaaS opportunity be quantified?

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