The NaaS Market in Real Numbers

Start here, because most network-as-a-service business plans get their first number wrong. They open by citing the software-as-a-service market — roughly $399 billion — and claim it as the addressable opportunity. NaaS is not SaaS. It is a market somewhere between $21 billion and $37 billion in 2025, depending on whose definition you accept. Quoting the SaaS figure is the fastest way to have a credit officer stop reading your market section.

Here is what the research firms actually publish for 2025. Technavio (2025) puts the market at $21.3 billion with a 24.7% CAGR through 2029. GM Insights (2025) lands at $33.05 billion. Mordor Intelligence (2025) is highest at $36.8 billion, growing 28.3% through 2030. Precedence Research (2025) projects the market reaching $230.10 billion by 2034 on a 28.95% CAGR, and Future Market Insights (2025) models 28.9% through 2035.

Why the estimates disagree — and why it matters to your plan

A 73% spread between reputable firms measuring the same year looks like sloppiness. It is not. It is a scope argument, and understanding it is the difference between a market section that survives due diligence and one that gets discounted to zero.

The narrow definitions count only consumption-based on-premises networking: the LAN and wireless LAN inside a building, delivered as a subscription with the provider owning the kit. That is the Nile, Meter and HPE GreenLake for Aruba Networking universe. The broad definitions add everything that can plausibly be called network delivered as a service — SD-WAN, multicloud connectivity fabric, and telco-delivered managed WAN. That sweeps in Megaport, Aryaka, Lumen and Verizon, and the number roughly doubles.

The practical instruction: pick the definition that matches what you sell, state it in one sentence in your market section, and size your serviceable market from the bottom up rather than taking a percentage of the global figure. A lender does not believe you will capture 0.01% of $36.8 billion. A lender does believe you can light up eleven campuses in Greater Manchester at £108,000 each, because you can name them.

The adoption curve is earlier than the headlines suggest

Growth rates in the high twenties are real, but read the base carefully. Gartner's enterprise networking roadmap, summarised by Network to Code (2025), projects that 15% of enterprises will adopt on-premises NaaS by 2028, up from under 2% in 2023. That is a seven-fold increase, and it is also a reminder that 85% of enterprises still will not have adopted it by 2028.

Two conclusions follow, and both belong in your plan. First, you are selling into a category most buyers have not bought before, so your sales cycle includes an education phase and your CAC assumptions should reflect it. Second, the growth is genuine enough that a well-run regional provider does not need category dominance to build a solid business — a 15% penetration ceiling across a defined territory is a large number of sites.

The UK follows the same pattern with a lag. Demand concentrates where multi-site organisations with lean internal IT sit — London, Manchester, Birmingham, and the university towns — and independent schools and multi-academy trusts have been unusually early adopters because NaaS converts an unpredictable capital replacement cycle into a flat annual line the finance director can actually budget.

Three NaaS Models — Which One Are You?

"Network as a service" covers three businesses with different balance sheets, different customers and different funding requirements. Plans get rejected because the founder describes one model and forecasts another. Decide which of these you are before you write a word.

The agent/reseller model deserves more respect than founders usually give it. It is unglamorous, but it is the only one of the three that a first-time founder can start without a hardware facility, and it produces revenue that funds the move into asset ownership later. Several of the strongest regional NaaS businesses we have written plans for began as Aruba or Meraki resellers and converted to asset-owning NaaS once they had 30-plus sites of operating history to show an asset financier.

Notice what the incumbent comparison tells you about positioning. Cisco Meraki is cloud-managed networking but it is not NaaS: the customer buys the hardware as capital expenditure, then pays annual licences to keep the dashboard alive — per device, on minimum terms of 1, 3, 5, 7 or 10 years, with co-termination standard so renewals align. The customer owns the hardware, but it is effectively inert without an active licence. Meter's pitch is the direct inversion: one monthly subscription covering hardware, software, installation, monitoring, support and lifecycle refresh, with Meter owning the equipment. Your plan should be explicit about which side of that line you sit on, because it determines your balance sheet.

What It Actually Costs to Launch

Plan for $85,000 to $450,000 (£67,000 to £355,000) to reach a defensible position with your first handful of sites live. If you have seen lower numbers on other pages — $27,000 at the bottom end is a figure that circulates widely — they are almost always generic software-startup ranges pasted onto a NaaS heading. They omit the line that defines this business.

The hardware float is the business model

In software, you build once and sell many times; the marginal cost of customer two is near zero. In NaaS, customer two needs their own access points, their own switches, their own gateways, and their own installation crew. You buy all of it, up front, before you invoice anything. Then you recover it across a 36 to 60 month subscription.

That is not a footnote to the cost model. It is the cost model, and it is the reason NaaS companies fail while growing rather than while shrinking. Every new contract makes the P&L look better and the bank balance look worse.

Line-by-line breakdown

• First-customer hardware float: $30K–$180K (£24K–£142K) — access points, switches, gateways, cabling and installation labour for your first sites. Spent before month-one revenue.
• Network engineering hires: $25K–$110K (£20K–£87K) — one or two CCNP or CCIE-level engineers, part-year. You cannot outsource the thing you are selling.
• SOC 2 Type II, first year all-in: $30K–$60K (£24K–£47K) — readiness, remediation, the observation window, fieldwork and the compliance automation platform. Secureframe (2025) puts the audit fee alone at roughly $7K–$50K; the all-in number is what you budget.
• NOC, monitoring and RMM stack: $8K–$40K (£6K–£32K) — cloud management licences, alerting, ticketing, remote access.
• Cyber liability and errors & omissions insurance: $4K–$22K (£3K–£17K) — year one. Enterprise contracts will specify minimum cover, so read the MSA before you quote.
• Legal: $5K–$25K (£4K–£20K) — master services agreement, SLA schedules with real credits attached, data processing agreement templates, entity formation.
• Regulatory registration: $3K–$18K (£2K–£14K) — international Section 214 filing if you carry traffic across borders, Ofcom or CRTC registration, Universal Service Fund contribution setup.
• Sales and marketing to first five logos: $6K–$35K (£5K–£28K) — this category is longer and more expensive than founders expect, because you are selling a purchasing model the buyer has not used before.

One structural note that saves founders real money: the hardware float and everything else should be funded from different places. Hardware is a tangible, identifiable, resaleable asset with a serial number, which makes it financeable against itself at rates and terms that unsecured lending will never match. Bundling it into a single undifferentiated ask is the most common self-inflicted wound in NaaS fundraising, and we cover exactly how to unbundle it in the client story below.

SBA, Asset Finance & the NaaS Funding Stack

Most NaaS founders reach for one instrument and get turned down. The businesses that get funded stack three, because the three cost categories have genuinely different risk profiles and lenders price them accordingly.

The US route: SBA 7(a) and what the data says

The SBA 7(a) programme is the workhorse. In FY2024 the SBA approved 70,242 7(a) loans totalling $31.1 billion — the highest loan count in over fifteen years — at an average loan size of $443,097, according to SBA loan program performance data and Crestmont Capital's analysis (2025). The Federal Reserve's Small Business Credit Survey puts the approval rate at SBA-participating banks at roughly 67%.

That average loan size is the useful number here. $443,097 sits almost exactly on top of the upper end of a NaaS launch budget, which means a 7(a) is a properly-sized instrument for this business rather than a stretch.

Get your NAICS code right — it changes your eligibility

SBA size standards are set per NAICS code, and NaaS providers straddle three. Choosing carelessly can put you outside the standard or misrepresent your business to the lender.

• NAICS 517911 — Telecommunications Resellers: where most pure-play NaaS resellers genuinely belong if you resell connectivity. See HigherGov's 517911 profile.
• NAICS 541513 — Computer Facilities Management Services: size standard is $37 million in average annual receipts. This is usually the right code for an asset-owning NaaS provider that manages the customer's network but does not resell transit. See NAICS.com.
• NAICS 517311 — Wired Telecommunications Carriers: size standard is 1,500 employees. Only correct if you are genuinely operating carrier facilities.

The receipts-based standard on 541513 matters more than it looks. A $37 million ceiling is generous for a young provider, but NaaS revenue is contracted and recurring, so it compounds predictably — model the year you cross it rather than discovering it.

The UK route

In the UK, Start Up Loans provide up to £25,000 per director at 6% fixed, unsecured, with free mentoring attached. Multiple directors can each take one, which is how a two-founder NaaS business assembles £50,000 of unsecured launch capital. That covers engineering, compliance and legal — but deliberately not the hardware.

Hardware goes to asset finance. Switches, access points and gateways are exactly what an asset financier wants: identifiable, serial-numbered, resaleable, and matched to a contracted revenue stream with a known term. Financing them against themselves rather than against your unsecured covenant is the single most consequential structural decision in a NaaS funding plan.

The three-layer stack

• Layer 1 — Unsecured (Start Up Loan, SBA 7(a), founder capital): people, compliance, legal, early sales. The costs that leave no asset behind.
• Layer 2 — Asset finance or equipment leasing: the hardware float, secured on the hardware, term-matched to the customer contract. Never fund a 60-month asset with 12-month money.
• Layer 3 — Invoice or contract finance (later): once you have 20-plus contracts with payment history, the contracted revenue itself becomes borrowable and the growth stops eating cash.

A plan that presents this as one number gets assessed at the risk of its worst component. A plan that separates the layers gets each one assessed on its own merits, and the blended cost of capital falls sharply. Our bespoke business plan service builds the hardware capital schedule and the layered funding structure as separate, lender-ready tabs.

Pricing, Contribution & the Cash Trough

Three pricing shapes are live in the NaaS market right now, and each produces a different forecast.

Per square foot

Meter prices at $0.15 per square foot per month, on contracts between $250,000 and $10 million annually, targeting education, manufacturing and professional services. It is the cleanest model to forecast because floor area is knowable before you win the deal — you can size a pipeline from a property database rather than from a guess about headcount.

Per user, per month

MSP benchmarks give the ceiling. Pharallax MSP revenue benchmarks (2025) and Medha Cloud's managed services statistics (2025) report $185 per user per month for MSPs serving SMB clients under 500 employees, rising to $310 per user per month for mid-market and enterprise. Those are full-stack MSP figures covering endpoints, security and helpdesk. A network-only NaaS scope lands well below them — typically $25 to $45 per user per month — and quoting the full-stack benchmark for a network-only service is a fast way to build a forecast you can never hit.

Per device

The vendor-native model. HPE Aruba Central licenses per device class — access point, switch or gateway — on Foundation or Advanced tiers with fixed terms of 1, 3, 5, 7 and 10 years. Cisco Meraki is per-device subscription on the same term ladder, with co-termination standard. If you are reselling, this is your cost base, and your margin is whatever you can add on top.

What the margin actually looks like

Managed services margin benchmarks are the right comparator. Average MSP gross margin reached 52% in 2025, up from 48% in 2022, with the top quartile clearing 60% and average EBITDA margin at 18.4%, up from 14.7% in 2022. Recurring revenue now makes up 74% of total MSP revenue, up from 62% in 2020, and the median MSP runs $2.8 million of ARR while the top quartile exceeds $12 million.

Asset-owning NaaS runs below those gross-margin figures once hardware amortisation is charged properly — 35% to 55% contribution is the honest range. The compensation is that after the asset is repaid, the same contract's contribution jumps, and renewal revenue on already-amortised hardware is the most profitable revenue in the business. Your five-year model should show that step change. Most do not, which is why most NaaS plans undersell their year-four economics while overselling year one.

Worked example: a 60,000 sq ft campus

Take a three-floor professional services campus of 60,000 square feet, priced at Meter's published $0.15 per square foot per month on a 60-month term.

Read the twenty-fifth month again. This contract is profitable in the accounts from month one and cash-negative for more than two years. That is not a bad deal — 35% over five years on a contracted revenue stream is a good deal. It is a deal with a specific financing requirement, and if you do not name it, your lender will find it and assume you did not know.

Now scale it, because this is where NaaS founders get hurt. Sign four of these campuses in one quarter and you need $540,000 of hardware in the ground before you have collected $36,000 in subscriptions. Your sales team just had its best quarter ever and your company is closer to insolvency than it was in January. Growth is the risk event.

This is why the cumulative cash curve, not the P&L, is the centrepiece of a credible NaaS plan. Model the trough month, model its depth, and show the facility that covers it with headroom. A lender is not funding your profit. A lender is funding your trough.

Where Regulation Bites: US, UK & Canada

The question that decides your regulatory exposure is narrow: do you carry or resell traffic? Manage the customer's LAN while they buy their own internet circuit, and you are largely outside telecom regulation. Put connectivity on your own invoice, and you are a telecommunications provider in every jurisdiction below, whether or not you think of yourself as one.

United States

• Domestic Section 214 — blanket authority. Since 1999 the FCC has automatically authorised, with no application or formal process, all common carriers providing domestic interstate telecommunications service. Cost: nothing. This is the good news, and it is why US NaaS entry is easier than founders fear.
• International Section 214 authorization. Required if you offer service between the US and international destinations — landline, wireless, VoIP or calling card — as a common carrier offering to the public on standardised terms. Budget $3K–$18K all-in with counsel; timeline runs weeks to months and extends if referred to Team Telecom. See the FCC's International Section 214 page.
• Universal Service Fund contributions plus rate and term transparency. Once authorised, you contribute a percentage of revenue and must keep the FCC updated on any change to your application. Model USF as a line item, not a rounding error.
• Watch the 2026 rulemaking. In May 2026 the FCC proposed requiring international Section 214 holders to file renewal applications every ten years, and to refer applicants to Team Telecom where the applicant uses a foreign-owned managed network service provider. If any part of your NOC is offshore, that proposal is aimed at you — see Davis Wright Tremaine's analysis (2026).
• SOC 2 Type II. Not statutory, but commercially decisive — enterprise and education buyers gate on it. First Type II takes 6–12 months, or 4–6 if your security posture is already strong. Start it before you need it.

United Kingdom

There is no licence to apply for. That is the trap. The UK runs a general authorisation regime, which means the obligations attach automatically the moment you start providing an electronic communications network or service — no one sends you a form, and no one tells you that you are now regulated.

• General Conditions of Entitlement. The conditions every provider of electronic communications networks and services must meet. They are grouped by function — network security, consumer protection, emergency services, universal service, accessibility, transparency, interconnection — rather than by provider type, so you must read the Scope section at the start of each condition to establish which apply to you. See Ofcom's General Conditions.
• Telecommunications (Security) Act 2021. Since October 2022, Ofcom has held duties and powers under the Communications Act 2003 as amended, covering the security of public electronic communications networks and services. Public telecoms providers must take appropriate and proportionate measures to identify and reduce the risk of security compromises, prepare for them occurring, and act afterwards to prevent and remedy damage. Compliance is an ongoing operational requirement, not a one-time registration. See the Act's explanatory notes.
• Companies House and HMRC. Incorporation (£50, 24 hours), corporation tax registration, VAT registration once turnover exceeds £90,000.
• Cyber Essentials. Not mandatory, but effectively required to sell into UK public sector, schools and most enterprise procurement.

Canada

Canada is stricter than either, and it is where founders expanding north get caught. Under Telecom Regulatory Policy CRTC 2017-11 (17 January 2017), all telecommunications service providers must register with the CRTC.

• Resellers must register before receiving service — with both the Canadian carrier and the Commission. A reseller is anyone who is not a Canadian Carrier but offers Internet access, local exchange, VoIP, wireless voice, interexchange or payphone services.
• Flow-down obligations are contractual. Your service contracts must require any downstream reseller to register with the CRTC before receiving service from you.
• Penalties cut both ways. The CRTC can impose administrative monetary penalties on a company that offers service without registering — and on a company that resells to an unregistered company. Your customer's compliance failure becomes your liability.
• Ongoing obligations: accessibility, privacy and confidentiality of customer information, customer transfers, Internet traffic management practices, Wireless Code compliance for wireless services, service cancellation, and unsolicited telecommunications rules.
• Narrow exemptions exist — service offered without explicit charge, service offered temporarily to people on your premises, or service that does not allow autonomous two-way voice or autonomous Internet access. Being exempt from registration does not exempt you from consumer-protection obligations.

A practical structuring point that belongs in your plan: staying deliberately out of the carrier perimeter is a legitimate strategy. Manage the LAN, let the customer contract their own transit, and you avoid Section 214, USF contribution, most of the General Conditions and CRTC registration in one decision. It costs you the connectivity margin. For most first-time NaaS founders that is a trade worth making for the first two years, and it is worth stating explicitly as a choice rather than leaving a reader to wonder whether you knew.

NaaS Terms Your Plan Must Use Correctly

Investors in this category are often ex-operators. Using these terms loosely is a credibility tell that costs you more than a weak slide would.

• NaaS (network as a service): a subscription in which the provider owns and operates the network — hardware, software, monitoring, support and refresh — billed as recurring fee rather than capital purchase. The asset ownership is the definitional part. If the customer owns the kit, it is not NaaS, however cloud-managed it is.
• Hardware float: capital you spend on a customer's equipment before you invoice them, recovered over the contract term. Not a standard accounting term — but it is the number NaaS lenders ask about first, so name it explicitly.
• Cash trough: the deepest point of your cumulative cash curve, and its month. In NaaS the trough deepens as you win business. The facility you need is sized on the trough, not on the annual loss.
• SD-WAN (software-defined wide area network): software-managed routing across multiple transit links. Frequently sold as NaaS, and the main reason broad market estimates run so much higher than narrow ones.
• NOC (network operations centre): the monitoring and response function. Whether it is yours, outsourced, or offshore is a cost decision, a service-quality decision, and — under the FCC's 2026 MNSP proposal — potentially a regulatory one.
• Co-termination: aligning every device subscription in an organisation to one expiry date. Standard practice at Cisco Meraki. It simplifies renewal for the customer and creates a single, predictable displacement window for you — the date a competitor's whole estate comes up for grabs at once.
• Lifecycle refresh: replacing hardware at end of life within the same subscription, at no extra charge. It is a core NaaS promise and a real cost. Model it around month 48 to 60 or your renewal margin is fiction.
• ARR (annual recurring revenue): contracted annualised subscription revenue. Median MSP ARR is $2.8 million; the top quartile exceeds $12 million. Do not include hardware pass-through or one-off install fees in it — a diligence team will strip them out and re-rate you.
• Contribution margin: revenue less delivery cost less hardware amortisation. The number that matters. A NaaS "gross margin" quoted before hardware amortisation is not wrong so much as meaningless.

Five Mistakes That Sink NaaS Plans

1. Borrowing the SaaS market size

The single most common error, and the one this page opened with. NaaS is $21B–$37B. SaaS is roughly $399B. A reader who spots the swap does not just correct the number — they discount every other figure you have presented, because you have shown them you will use a big number that flatters you without checking whether it describes your business.

2. Modelling NaaS cash like SaaS cash

In SaaS, revenue precedes most cost, so growth is self-funding. In NaaS, you buy the switches first. Take a SaaS template, change the header, and your funding requirement will be understated by six figures. The template will not warn you, because the template does not know what you sell.

3. Quoting margin before hardware amortisation

It produces a beautiful month-one gross margin and hides a 25-month cash hole. Every experienced reader in this category knows to ask "is that before or after the kit?" — and the ones who do not ask will find it in the cash flow anyway. Answer it before they ask.

4. Assuming you are unregulated because you are "just software"

You are not just software; you are running physical infrastructure and possibly carrying traffic. Resell connectivity and you are inside FCC Section 214 and USF contribution, Ofcom's General Conditions and the Telecommunications (Security) Act 2021, or CRTC registration with flow-down liability for your customers' compliance. None of these send you a warning letter first.

5. Selling multi-year lock-in without pricing the objection

The published drawbacks of NaaS are not secrets — buyers read them before they meet you. TechTarget's analysis lists the four that come up in every deal: vendor lock-in with expensive contract termination fees on multi-year commitments; dependence on the provider for security and performance; incompatibility with legacy hardware and applications that may be integral to the business; and the fact that shifting from capex to opex accumulates, so predictable costs are pleasant but over time total more than owning.

That last one is the hardest, because it is true. The answer is not to deny it. It is to price what the customer buys with the difference: no refresh cycle to budget, no capital committee, no stranded assets, no in-house network team to hire in a market where you cannot hire one. Write those four objections into your plan with your answer beside each. If your sales forecast assumes a conversion rate, the objection handling is the assumption underneath it — and a reader who sees you have anticipated the objections will believe the forecast that rests on them.

Sample Business Plan Preview

Preview the structure and financial outputs a buyer receives. These mockups are generated from the same assumptions used throughout this page — including the hardware schedule and the cash trough that a generic template will not model for you.

What's in the Template

Every Avvale business plan template includes these sections, pre-structured for your industry:

• Executive Summary — Your business at a glance, written to hook investors in 60 seconds
• Company Overview — Legal structure, ownership, location, and founding story
• Industry Analysis — Market size, growth trends, and regulatory requirements
• Customer Analysis — Target demographics, pain points, and spending patterns
• Competitor Analysis — Local competitive mapping and your differentiation strategy
• Marketing Plan — Channels, messaging, and customer acquisition strategy
• Operations Plan — Day-to-day workflows, staffing structure, and key milestones
• Management Team — Founder bios, advisory board, and key hires planned

The optional Financial Forecast add-on (included in our $300/£250 and $1,000/£800 packages) provides a 5-year Excel model with income statement, cash flow, balance sheet, break-even analysis, and startup capital requirements. For NaaS specifically, we extend it with a hardware capital schedule tied to your site pipeline, contract-level contribution modelling that amortises equipment across the committed term, and the cumulative cash curve with its trough month called out — the three tabs a NaaS lender turns to first.

If you want the underlying research done for you rather than the structure alone, market research and content covers the market sizing, competitor mapping and narrative. You can also start from our free business plan template hub, compare against the software as a service business plan template if you are still deciding which model you are building, look at the managed service provider business plan template if you are starting from the reseller side, or talk to a business plan writer directly.

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