How NaaS Delivers Financial Benefits for CFOs
In today’s fast-paced digital landscape, organizations are under pressure to keep their IT infrastructure up-to-date while managing costs and maximizing operational efficiency. For many, the traditional model of investing in expensive hardware with long lifecycles is becoming increasingly unsustainable. Networking as a Service (NaaS) offers a new approach, shifting the financial model from capital expenditures (CapEx) to operational expenditures (OpEx) while providing flexibility and predictability that CFOs and IT leaders need.
In this article, we’ll explore the financial benefits of NaaS from the perspective of CFOs, highlighting real-world examples and insights from industry experts. Specifically, we’ll focus on HPE Aruba’s NaaS offerings, as discussed by Kelley Monasterio, Director of Sales at Laketec, Anne McClelland, President at AMM Services, and Keith Blain, Program Manager at Laketec.
CapEx vs. OpEx: The Budget Shift Explained
One of the most significant advantages of NaaS is its ability to shift IT spending from CapEx to OpEx. Traditionally, organizations have had to make large, upfront investments in networking hardware that would last for several years. However, with technology evolving rapidly, this model is often inefficient, leading to outdated infrastructure that no longer meets an organization’s needs.
With NaaS, organizations can adopt a subscription-based model that allows them to spread costs over time. “It’s not just the hardware and software as a service,” says McClelland, “but it’s also the people, the actual folks that are going to, in effect, join your team and become additional team members through the provision of a managed service provider.” This means that CFOs and IT leaders can work together to ensure that NaaS aligns with their budgetary goals while also benefiting from predictable, utility-like cash flows.
McClelland further explains how this shift allows for better financial planning: “It makes it very predictable for CFOs when they come to budget process time for the new fiscal year.” The OpEx model offers stability and flexibility, enabling companies to adapt to new technologies without large upfront costs.
Real-World Case Study: Financial Justification of NaaS
To illustrate the financial impact of NaaS, Keith Blain shared a real-world example of a higher education institution that was facing challenges with their aging networking infrastructure. The institution had been using traditional CapEx models for years, but their equipment was outdated, and they were struggling to find the capital necessary for a full technology refresh.
Blain explains, “When we sat with them, we helped them build out that traditional long-term configuration… In this particular case, it was wired and wireless with a total investment sell price to them of $1.15 million.” However, by introducing the concept of NaaS, Laketec was able to reduce the overall cost significantly.
By shifting from an eight-year technology refresh cycle to a five-year model and adopting NaaS, the institution’s total cost dropped from $1.15 million to $826,000 – a reduction of over $325,000. This was a roughly 28% reduction in capital costs, allowing the organization to redirect their savings toward other critical projects. “This was music to their ears,” says Blain, as the institution was not only able to save money but also benefit from faster technology adoption and ongoing service support.
This real-world example underscores the financial viability of NaaS for organizations facing budget constraints and aging infrastructure. By adopting a shorter refresh cycle and leveraging NaaS, organizations can save capital, improve their infrastructure, and free up resources for other initiatives.
Beyond Cost: Operational and Strategic Benefits
While the financial benefits of NaaS are clear, the operational advantages are just as compelling. NaaS allows organizations to be more agile, providing the ability to scale and upgrade their technology without interrupting day-to-day operations.
McClelland points out that NaaS also alleviates pressure on IT departments, especially those with limited staff: “They can’t physically afford to roll their own even though they think that’s the most cost-effective route. They don’t have the head count. They don’t have the skills on staff.” With NaaS, organizations gain access to external resources that can help manage and optimize their networking infrastructure, allowing internal IT teams to focus on strategic projects rather than routine maintenance.
This operational flexibility is crucial for organizations that want to stay competitive in a rapidly changing technological landscape. NaaS enables IT teams to focus on higher-value initiatives while relying on external experts to handle day-to-day network management and support.
Sustainability and Security: A Value Proposition for CFOs
In addition to the financial and operational benefits, NaaS also supports sustainability initiatives, which are becoming increasingly important for CFOs and senior leadership. As organizations transition to NaaS, they can decommission old, inefficient technology, reducing both their carbon footprint and energy consumption.
Blain explains that HPE Aruba’s NaaS offerings include built-in asset disposition services: “HPE Aruba, in their NaaS program, actually has disposition services built into that, so you as the client don’t have to worry about, are these things going to landfills? What’s going on? What do I do with security protocols wrapped around disposal of a technical asset?”
In addition to reducing e-waste, NaaS helps organizations meet their Environmental, Social, and Governance (ESG) goals by using energy-efficient technologies that comply with sustainability standards. “It extends your organization’s capabilities in that area,” says McClelland, further highlighting how NaaS aligns with broader corporate responsibility initiatives.
Dispelling the Leasing Myth: Why NaaS is Not Just a Lease
A common misconception about NaaS is that it’s simply another form of leasing. However, as Blain explains, NaaS is far more than a traditional lease. “NAS is the farthest thing from a lease,” he says, emphasizing that while leasing is purely a financial mechanism for acquiring hardware, NaaS is a full-service subscription model that includes hardware, software, and ongoing support.
Blain points out that leasing typically comes with high interest rates—around 13-14%—and does not include the flexibility or service benefits that NaaS provides. In contrast, NaaS offers a much lower effective interest rate (less than 4%) and includes a comprehensive service package that helps organizations optimize their technology investments.
By adopting NaaS, organizations can avoid the pitfalls of traditional leasing while gaining the flexibility and support they need to stay ahead of the technology curve.
Conclusion: NaaS as a Strategic Financial Investment
For CFOs and IT leaders, Networking as a Service (NaaS) offers a compelling financial and operational solution. By shifting from CapEx to OpEx, organizations can manage predictable, utility-like cash flows while benefiting from ongoing service and support. As demonstrated in the case study, NaaS can lead to significant cost savings, improved agility, and enhanced sustainability, making it an attractive option for organizations of all sizes.
NaaS is more than just a financial tool—it’s a strategic investment that helps organizations stay competitive in an ever-changing technological landscape. By partnering with trusted providers like Laketec and HPE Aruba, CFOs and IT leaders can ensure that their networking infrastructure supports both their financial goals and long-term business success.
Ready to streamline your IT operations with NaaS? Contact Laketec today to learn how our tailored NaaS solutions can support your business.
