(and the emergence of Networks as a Service)

…despite your enormous intellect, are you ever frustrated by your dependence on people to carry out your actions? Not in the slightest bit. I enjoy working with people

If you remember this quote, then you’re old like me (but wise). If you do not, then you must watch (or re-watch) 2001: A Space Odyssey – one of the first great Sci-Fi movies. Since then, the HAL 9000 computer has become synonymous with Artificial Intelligence (AI).

Last week, KodaCloud was the first company to announce an AI-powered Wi-Fi as a Cloud Service with a low monthly subscription. This is a big change, and the start of what’s to come – Network as a Service (our very own Odyssey). The AI system captures key performance indicators and tweaks configurations according to hundreds of pre-set rules. With the proactive, machine-learning artificial intelligence, you can set the parameters to look for issues with devices, connectivity and propagation. All the things that it would take a dedicated IT person to handle to keep the system running, we do with pre-defined policy settings. Based on what AI finds, the system sets new settings and applies new policies based on learning, and shares the local information with the global network. Local learning benefits the global network.

What’s new and unique is that the service, sold via Managed Services Partners and also direct to enterprise customers, is that it’s the first of its kind:

  • No need to buy Wi-Fi equipment (for partners or the customer)
  • Free cloud-based software updates and hardware refresh
  • 24/7 proactive network management system which actively troubleshoots and solves Wi-Fi network issues with patented machine learning and AI

Enterprise research shows that the monthly costs of managing a Wi-Fi network is $27-30 per AP (IT, service fee and/or troubleshooting). With KodaCloud, there is no upfront cost for equipment, software licensing or network management fees. There’s just one simple monthly payment that provides a reliable Wi-Fi network as a service — with proactive network monitoring that’s powered by machine learning and AI. And yes, the fee per AP is less than the aforementioned research. Now put that into context as you contemplate the cost of buying and managing Access Points over 3-4 years, versus free refresh and upgrades from a service partner. Yes, it’s a no brainer!

However, the $12 Billion Wi-Fi equipment market will not stand by idly, and let the as-a-service companies erode away high-profit margin equipment sales. Incumbent vendors will continue to make announcements about “Cloud Wi-Fi”, enticing customers to buy and manage Wi-Fi. This makes good sense for many enterprises. However, if you are one of the 27 million small and medium enterprises, or medium and small hotels, then take notice. Recent research shows that over 60% of SMB want Wi-Fi as a service. MSPs take notice. This means that over 16 million businesses would entertain Wi-Fi as a service (for a fee only). If you do the math, that’s a potential 16 million in recurring revenue every month, at $25 per AP/month or a $24 Billion addressable services opportunity in the USA alone. If you want the revenue breakdown, contact me.

The transition from Capex to Opex has been going on for a while. It started with Software as a Service (SaaS), and the move to Network as a Service is a quiet revolution that’s underway. The great majority of enterprises want managed services. Most enterprises have Gig Ethernet connectivity, which means you can put services further and further away from the actual physical network using the cloud with the benefit of low latency access. With the cloud, you can have one enterprise with 20-30 or more locations, and benefit from one network view to them all.

SaaS has been under way for some time, and it is a multi-billion-dollar industry. Networks are becoming a service. More and more network services are being pushed out from the cloud. Whether it is small cells or Wi-Fi, you need a physical presence with access points or maybe a small controller in some cases, but everything else can sit back in the cloud. NaaS + SaaS becomes a $100 Billion services industry in a short time (firewall, compliance, UC, etc.).

KodaCloud partners with managed service providers (MSPs), IT outsourcers, resellers and technology resellers to provide small and medium size enterprise customers. When one of our partners makes a sale, we ship the equipment directly to the customer. They do not have to keep an inventory. That’s a big margin plus for the MSP. With us, they stand to make 50-80% margins and recurring revenues every month. This is going well, and we just signed our 100th managed services partner in just a few months.

We’re proud of the big accomplishments by a very small team, in a very short time. As a new member, KodaCloud was recognized by the MSP Alliance with a “Best Cloud Solution” Award at the October MSPWorld event. And, this week we received the good news that Wi-Fi Now has recognized KodaCloud by shortlisting us for the “Best New Startup” award at its upcoming event in London. It’s been a great month for KodaCloud, and we appreciate all the help and support from our partners and customers.

Just like HAL 9000, we enjoy working with people. AI + people can make a difference.

Learn more about KodaCloud or contact us direct to schedule a partner discussion, and let’s disrupt Status Quo together.

Cheers,
Ronny Haraldsvik
SVP/CMO, KodaCloud
@haraldsvik

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