Network as a Service (NaaS) is one of the most popular new enterprise networking solutions. However, it’s challenging for managed service providers (MSPs) to sell because there are many technical components to consider, financial risk factors, and different methods for building your NaaS practice.
Before we became a software company, SecurEdge used to be an MSP. From 2015-2021, we built our own Network as a Service practice that led to an 80% conversion rate when proposed to potential customers.
Taking the lessons that we learned, we’ve built a guide that will lay out the facts about building your own NaaS practice and how you can best get started.
What Are Your Options to Build a NaaS Practice?
When it comes to establishing a Network as a Service (NaaS) practice, the choices you make can greatly impact your business's success and the satisfaction of your customers.
Two primary options lie before you:
- Resell the NaaS practice of manufacturers or distributors.
- Build your own NaaS practice internally.
Each option has its own merits and challenges.
Option 1: Resell
The first option at your disposal is to resell NaaS solutions provided by the manufacturers or distributors.
Pros:
At first glance, reselling appears to be a simpler and more convenient route, it seems like every vendor is putting their products on subscription. Reselling allows you to offer NaaS solutions without investing in infrastructure or expertise. You can rely on the expertise and support of the manufacturer or distributor, ensuring that your customers receive top-notch service.
Cons:
However, relying solely on reselling means giving up control over your practice and profits. You will have limited customization options, and you may face restrictions when it comes to pricing and packaging the services. Additionally, if the manufacturer or distributor experiences any issues or outages, it will directly affect your customers' experience and satisfaction.
Option 2: Build Internally
The second option is to build your own NaaS practice internally.
Pros:
Building internally gives you complete control over every aspect of your NaaS practice. From infrastructure to pricing and packaging
Many vendors are transitioning their products to subscription models, making it seemingly effortless for MSPs to begin adding NaaS to their list of offerings.
Cons:
By reselling vendor-provided solutions, you will:
Fundamentally alter your profit structure: Much of your margin will flow back to the vendor, as you're essentially reselling their services.
Sever the direct customer relationship you've cultivated over the years: since the vendor has essentially become the service provider in this case.
May not align with the best interests of your customers: They would end up managing several different subscriptions (at least 7, on average).
Option 2: Build Your Own
This option of building your own NaaS practice promises more substantial rewards.
Pros:
Not only do you retain control over your profit margins, but you also gain the benefits of a tailored NaaS practice while preserving your pivotal role in your customer relationships.
However, this path may initially appear daunting to many.
Cons:
Constructing a comprehensive NaaS practice from scratch can be a complex and time-consuming venture. The challenge lies in creating the necessary business infrastructure to deliver this service effectively.
If you’re considering embarking on this journey, we've developed a checklist outlining the 5 key things that you'll need to construct your own NaaS practice.
The 5 Essential Elements for Building Your Own NaaS Practice
Constructing your NaaS practice demands good planning and strategic implementation.
Based on our experience, here are the five things you’ll need to build your own NaaS practice:
1. A Customer Portal:
A dedicated portal is essential, allowing customers to engage in an online experience with you. It’s not beneficial for a customer to log into the management consoles of several different vendors, they need the convenience of YOUR customer console, where they can log in, monitor SLAs, place orders, access support, and settle bills in one place online.
2. A Connected Tech Stack:
In order to power the customer portal, you need a way to connect all your tools together. Currently, many MSPs have systems that don’t talk together because they’re not integrated. Does your CRM talk to your ITSM? Does your ITSM talk to your PSA?
Almost ironically, the tech stack of IT is very fragmented and not digitally connected.
Not to mention that you also need to be connected to your partner programs and the availability of distribution. The integration of various software systems into a seamless digital workflow is imperative for operational efficiency and delivering a superior customer experience.
3. Integrated Finance:
Perhaps the hardest challenge to overcome is finance. If the bulk of your business is already operating on MRR/ARR then you might be better positioned out of the gate.
However, if it’s the opposite scenario then cashflow is going to be an issue when moving to NaaS?
No matter which you fall under, many questions need to be addressed:
- Who will fund each deal?
- How does the funding work?
- Who will perform credit checks?
- Who will carry the liability with the customer?
The solution is XaaS finance, or digitally integrating a financial partner directly into your sales workflow. This allows the bank to be the bank and for you to continue to do what you do best.
4. CPQ Software Built for NaaS:
You need Configure, Price, Quote (CPQ) software that’s specifically built for selling on subscription. Network as a Service has “service” in the name for a reason. You need to be able to quote IT services on a recurring basis.
Unfortunately, most CPQ software can’t quote services so many service providers who are selling services on subscription are using spreadsheets and leveraging them with CPQ software that was built to only quote products.
In which case, you’ll need a CPQ that was built for Network as a Service.
5. Services Capabilities:
Last, but not least, you’ll need the capability to support the entire services lifecycle — from assessment and design services to technical support to renewals.
If you have owned the relationship for 60 months, you’re no longer just configuring a firewall, you need to be able to support it on the back end with software updates or support if something gets broken.
You’ll need to evaluate your current service offerings and identify any gaps you may have in the service lifecycle for your customers to create a comprehensive NaaS practice.
A Simple Solution to Build Your Own NaaS Practice
If you’re considering taking our advice and want to build your own Network as a Service practice, you’re probably looking for the best way to move forward.
When we were an MSP, we also decided to embark on this journey and solve for the challenges ourselves. We ended up creating software called Central Office which is designed as a platform for VARs and MSPs, so you can have everything you need to start building your own NaaS practice.
With Central Office, you can plug your existing tech stack and partner programs to begin selling Network as a Service now.
If this sounds like something your business would be interested in, you can book a demo today here.
Final Thoughts
The strong relationship between MSPs and customers, where services happen, makes NaaS a valuable addition to your offerings.
Embracing NaaS is more than just adapting to a trend—it's a strategic move that ensures you can continue to meet and exceed your customers’ expectations, while also providing advanced network solutions.
By leveraging your existing strengths, fostering client relationships, and capitalizing on growing your recurring revenue with NaaS, you're not only meeting market demands but setting the stage for sustained success.
If this initiative seems like a daunting task, we offer an easy way to move to Network as a Service — Central Office, software built for MSPs to quote NaaS solutions in minutes. Book a demo to see it in action.
