Many Firms Deploying Network as a Service May Miss its Full Potential: ISG Study

Key Terms

network as a service technical

Network as a service is a subscription-based offering where companies rent managed networking functions—such as connectivity, routing, security and performance monitoring—delivered over the internet instead of buying and running physical hardware themselves. It matters to investors because it creates predictable recurring revenue for providers and lets customers shift big upfront technology costs into pay-as-you-go expenses, much like renting electricity instead of building a power plant, which can boost scalability and profit visibility.

naas technical

NaaS (Network-as-a-Service) is a cloud-based model that lets businesses rent networking functions — such as connecting sites, directing internet traffic, and applying security controls — on a subscription basis instead of buying and managing physical equipment. Investors watch NaaS because it turns large, unpredictable hardware sales into steady recurring revenue and often higher margins, making cash flow more predictable and growth easier to value, much like a subscription service replacing one-time purchases.

hyperscalers technical

Hyperscalers are large technology companies that operate massive computing networks and data centers to provide cloud services, data storage, and online infrastructure at an enormous scale. They are essential to the digital economy because they enable businesses and organizations to handle vast amounts of data and run complex applications efficiently. For investors, hyperscalers represent powerful engines of growth and innovation in the technology sector.

latency technical

Latency is the time delay between when information or an instruction is created and when it is received, processed, or acted on by a market system or data feed. For investors, that delay can alter the price you receive, cause missed trading opportunities, or increase execution risk — like sending a text to buy an item and the seller acting a few seconds later after the price has changed.

See more from StockTitan in Google Search and AI answers. Adds StockTitan as a preferred source · opens Google

Add on Google Not now

New ISG research says companies should integrate different forms of NaaS for automation, efficiency and risk management

STAMFORD, Conn.--(BUSINESS WIRE)-- Most enterprises are exploring or adopting network as a service (NaaS) to support AI initiatives, simplify network management and reduce costs, but a new research report from global AI-centered technology research and advisory firm Information Services Group (ISG) (Nasdaq: III), finds many may fail to capture its full value because they do not understand the range of NaaS options available.

The ISG Market Lens™ 2026 Network as a Service Report, published today, draws on survey data and adoption patterns observed in ISG advisory engagements that show NaaS is becoming a common part of enterprise IT modernization initiatives. A survey conducted in April 2026, covering primarily large enterprises in the Americas and Europe, found that 60 percent had either broadly or partially adopted NaaS and 31 percent were conducting pilots or evaluations. Cloud migration, increasing use of SaaS and internal mandates for digital transformation were common reasons for NaaS adoption.

While organizations have traditionally purchased wide-area connectivity as a carrier service, NaaS allows them to also consume functions such as network provisioning and management as part of a bundle of services. ISG’s survey shows most enterprises see NaaS as a fundamental architectural shift that is the future of networking, but do not fully understand the differences among NaaS offerings from hyperscalers and network transport providers and how they target different parts of the enterprise technology stack.

“Carrier NaaS transport providers can help enterprises avoid vendor lock-in, enable workload migrations and provide connectivity at the edge, while hyperscaler and cloud providers can provide the infrastructure for the apps and AI workloads,” said Leon Platts, partner and president, ISG Network and Software. “To maximize the value of NaaS and minimize risk, companies should explore an integrated approach.”

Hyperscalers, traditionally the dominant providers of NaaS, offer it in conjunction with cloud hosting of workloads. This allows organizations to avoid capital expenses but can lead to vendor lock-in if they rely solely on the cloud provider for NaaS. Carriers, which specialize in connecting workloads, offer NaaS that can automatically reconfigure networks to optimize for factors such as cost, bandwidth or latency, preventing clients from being locked into a particular provider’s infrastructure.

Most respondents to the survey prefer to share control and co-management of the network in close cooperation with NaaS providers. Nearly 90 percent have moderate to high confidence in network operations automation with some human oversight. Just over half were open to eventually taking over more control of the network from the provider as long as risks were well managed.

Operational staff tend to view NaaS as an inevitable evolution and a likely boon to agility and flexibility, but many business leaders are skeptical, the research shows. Though 18 percent of C-level executives are excited about opportunities with NaaS, 42 percent are interested but mostly unconvinced. Enterprises are most likely to adopt NaaS for greenfield sites, business expansion and SaaS and other cloud-based workloads, with large majorities considering those use cases suitable for NaaS. Fewer are comfortable with trusting highly regulated environments such as legal and healthcare to such services.

Enterprises see integration complexity, security and cost uncertainty as the biggest challenges in the transition to NaaS. They want providers to deliver better customer support, more flexible contracts with transparent pricing and higher reliability through features such as AI-driven predictive operations.

“NaaS is becoming part of the modernization portfolio of enterprises pursuing cloud-first, AI-driven operations,” said Alex Bakker, ISG distinguished analyst and co-author of the report. “While companies see it as a strategic enabler of growth, they expect simpler migration, proven security and clear long-term costs as they continue to expand NaaS adoption.”

Additional information on the ISG Market Lens Network as a Service report is available here.

About ISG

ISG (Nasdaq: III), is a global AI-centered technology research and advisory firm. A trusted partner to more than 900 clients, including 75 of the world’s top 100 enterprises, ISG is a long-time leader in technology and business services that is now at the forefront of leveraging AI to help organizations achieve operational excellence and faster growth. The firm, founded in 2006, is known for its proprietary market data and research, in-depth knowledge and governance of provider ecosystems, and the expertise of its 1,500 professionals worldwide working together to help clients maximize the value of their technology investments.

View source version on businesswire.com: https://www.businesswire.com/news/home/20260604054951/en/

Press Contacts:

Laura Hupprich, ISG
+1 203-517-3132
laura.hupprich@isg-one.com

Erik Arvidson, Matter Communications for ISG
+1 978-518-4542
isg@matternow.com

Source: Information Services Group, Inc.