ISG Provider Lens® Enterprise Managed Network Services - Managed Network Services Evolution - Europe 2025

Business success depends on effectively overseeing advanced network provisioning and operations

The managed network services (MNS) market has historically encountered resistance from many European enterprises that preferred to rely on large in-house IT and data operations teams. This reluctance stemmed from a long-standing tradition of internal ownership and control over mission-critical network infrastructure. For many years, organizations across various industries, including manufacturing, finance, energy, healthcare, logistics and government institutions, have maintained their own data centers, private WAN connections and on-premises networking resources. While early MNS offerings were relatively narrow in scope, primarily focused on wired connectivity and basic network maintenance, the market has since undergone a profound transformation.

Today’s MNS landscape encompasses a broad spectrum of AI-assisted and AI-driven capabilities across complex ICT environments, from centralized data centers to WAN, branch offices and network edge environments. MNS solutions now support multiple delivery models - wired, wireless and satellite connectivity - to accommodate the increasing demands of hybrid network architectures and global operations. They address both the operational layer and strategic functions such as network orchestration, security, multicloud connectivity and software-defined networking (SDN). This evolution is particularly critical in Europe, where enterprises operate in an environment of heightened security expectations, stringent data sovereignty rules and rigorous compliance obligations.

Modern ICT infrastructures are no longer static; they are dynamic, distributed and constantly evolving. MNS providers now deliver services that extend from underlay management of the physical infrastructure through overlay services, which involve sophisticated virtualized network functions, AI-driven analytics and intelligent automation. In today’s threat-heavy environment, enterprises are expected to maintain strong security postures, minimize downtime, comply with multiple regulatory regimes and support increasingly mobile and cloud-centric workforces. MNS has therefore emerged as a cornerstone of these efforts, providing technical solutions and delivering strategic value.

The rise of MNS in the context of hybrid work and AI acceleration

The past few years have seen dramatic shifts in how enterprises and public sector organizations operate. Hybrid work, remote access and distributed teams have become standard, creating new complexities for IT and network teams. Concurrently, digital transformation initiatives and rapid innovation in AI-powered infrastructure have intensified the need for sophisticated network management strategies.

Enterprises must now ensure that employees can securely and reliably connect to business applications and services from virtually anywhere. Modern network environments must support a mix of legacy infrastructure, cloud workloads, IoT devices and edge computing platforms. Simultaneously, cyber threats are becoming more advanced and persistent, making continuous monitoring, rapid incident response and proactive defense essential.

This evolving landscape has created fertile ground for MNS, network-as-a-service (NaaS) and specialized providers. Instead of building, owning and managing complex infrastructures internally, enterprises are increasingly turning to external providers with advanced expertise, automation capabilities and specialized staffing. The adoption of AI and generative AI (GenAI) further accelerates this shift by enabling network operators to automate routine tasks, enhance predictive analytics and improve incident detection and response times. These technologies reduce operational burdens for enterprises, allowing MNS providers to offer more efficient, scalable and secure services.

Enterprise network challenges in Europe

As of 2025, the key factors shaping enterprise networks in Europe closely mirror global trends but are strongly influenced by region-specific regulatory, technological and operational realities. Modern enterprises face a wide range of network challenges, including:

• Network heterogeneity: Organizations must integrate core, cloud and edge networks across fixed and mobile, wired, wireless and satellite links, as well as public and private domains. This involves managing multiple layers of technology and ensuring interoperability between systems from different vendors.

• Performance and reliability: Business continuity depends on high stability and uptime. With hybrid workforces, critical applications must perform consistently whether accessed from headquarters, branch offices or home networks.

• Cost efficiency: Organizations must balance operational budgets with growing infrastructure complexity, ensuring they maintain secure and efficient operations without excessive capital expenditure.

• Regulatory compliance: European enterprises face strict privacy and security obligations, including laws and frameworks such as the GDPR, the California Consumer Privacy Act (CCPA) for global operations and the Health Insurance Portability and Accountability Act (HIPAA) in specific sectors. Compliance requires sophisticated data handling, auditing and reporting capabilities.

• Technology refresh cycles: The pace of technological change continues to accelerate, requiring frequent upgrades and modernization of network infrastructures.

• Mobility and cloud integration: With growing reliance on public and private clouds, organizations must enable secure cloud adoption, support mobile and remote workforces and integrate private 5G networks and low earth orbit (LEO) satellite connectivity to reach distributed sites.

• IoT management: The proliferation of IoT devices introduces security, monitoring and management challenges, as well as the need for scalable and resilient connectivity.

• Skills gap: Recruiting, training and retaining skilled staff capable of managing advanced technologies has become increasingly difficult.

• Provider complexity: Many enterprises rely on multiple service providers for connectivity, security, cloud and application delivery, creating challenges in coordination and integration.

These challenges are especially pronounced in industries where uptime, security and regulatory compliance are non-negotiable. For example, financial services firms must ensure both transactional integrity and compliance with cross-border data transfer rules; healthcare organizations must guarantee patient data confidentiality while enabling telehealth solutions; manufacturing enterprises must support connected production environments with minimal downtime.

MNS solutions and business focus areas

MNS providers have structured their offerings to address the aforementioned challenges systematically. Three major business focus areas have emerged:

1. MNS evolution and end-to-end network services

Modern MNS offerings are far more sophisticated than traditional managed connectivity services. Providers now deliver comprehensive solutions covering the entire network lifecycle, from provisioning and operations to monitoring, security and strategic advisory. Key elements include:

• Provisioning, operations and monitoring: MNS providers ensure continuous network performance and security through proactive monitoring, rapid incident response and predictive analytics powered by AI and automation.

• Security frameworks: Advanced security capabilities include next-generation firewalls, regular security audits, integrity checks, and intrusion detection and prevention systems (IDS/IPS). Providers integrate security into the network fabric, creating resilient and compliant infrastructures.

• Upgrades and expertise: Providers bring deep technical expertise and continuously enhance network capabilities through regular upgrades, best-practice implementations and proactive maintenance.

• Flexible engagement models: Enterprises can choose between full estate acquisition, where the MNS provider takes responsibility for the entire network, and phased upgrades targeting specific domains (for example, LAN, WAN, cloud, security).

• Consulting and advisory: Beyond operations, providers offer strategic guidance to align network evolution with broader business goals, digital transformation initiatives and organizational change management.

2. Managed enterprise connectivity solutions (DIA, VoIP and VPN)

While many organizations are shifting toward cloud-first or cloud-only models, a significant proportion still rely on hybrid or traditional architectures. For these enterprises, core managed connectivity services remain crucial. MNS providers deliver:

• Private and virtual networking: Enterprises benefit from secure and customizable connectivity through dedicated internet access (DIA), VPN and voice over IP (VoIP) services.

• Remote access and device management: Providers enable distributed workforce operations through secure access solutions, device management platforms and robust authentication mechanisms.

• Design and implementation: Providers design and build tailored network architectures optimized for performance, security and scalability.

• Configuration and monitoring: Continuous oversight ensures optimal network settings, minimizes downtime and maintains service quality.

• Bandwidth and UX: Adequate bandwidth allocation and performance optimization ensure strong UX, which is critical for employee productivity and customer engagement.

3. Network as a Service (NaaS)

NaaS represents one of the fastestgrowing segments of the MNS market. This consumption-first model enables enterprises to access advanced networking capabilities without owning physical infrastructure or committing to long-term capital expenditures. It offers:

• On-demand connectivity: This includes flexible, scalable connectivity options that can be deployed rapidly to meet evolving business requirements.

• Usage-based pricing: Enterprises pay primarily for consumed resources, improving cost control and predictability.

• Expert-led management: Day-to-day network operations are handled by specialized teams, freeing internal IT resources to focus on strategic initiatives.

• Cybersecurity and assurance: NaaS offerings integrate cybersecurity, SOC (security operations center) services and cyber defense mechanisms to protect against evolving threats.

• Multicloud integration: Providers offer seamless coordination between multiple clouds, core networks and edge environments to enable agile and efficient application delivery.

MNS as an enabler of European enterprise competitiveness

The increasing relevance of MNS in Europe cannot be overstated. As ICT environments grow more complex and cyber threats intensify, the ability to rely on managed services for critical infrastructure becomes a strategic differentiator. MNS providers enable enterprises to:

• Maintain high network performance and reliability without continuously expanding internal teams

• Leverage advanced technologies, such as AIdriven analytics, SDN, zero-trust security and automation, without the need for extensive capital investment or specialized in-house expertise

• Ensure regulatory compliance and data sovereignty through well-defined processes and certified infrastructures that meet European legal standards

• Adapt rapidly to changing market conditions, such as scaling up operations during expansion phases or integrating new branch locations seamlessly into existing networks

• Focus on core business goals, product innovation and customer engagement while delegating the complex, resourceintensive aspects of network management to trusted partners

Moreover, MNS aligns well with emerging enterprise strategies around sustainability and energy efficiency. Managed service providers often optimize network resources through virtualization, dynamic capacity management and energy-efficient hardware, helping organizations reduce their carbon footprint.

Future outlook for MNS in Europe

The MNS market in Europe is poised for significant expansion between 2025 and 2030. Several factors driving this trajectory include:

• AI and GenAI integration: AI will increasingly automate network configuration, anomaly detection, threat response and performance optimization, further enhancing service efficiency and reliability.

• 5G and satellite connectivity growth: The expansion of private 5G networks and the growing role of LEO satellites will drive demand for flexible, secure and scalable connectivity solutions.

• Regulatory developments: Continued emphasis on data sovereignty and cybersecurity will increase the need for compliant and well-managed infrastructures.

• IoT and edge computing: As edge deployments expand across industries, such as manufacturing, logistics, healthcare and energy, MNS providers will play a central role in orchestrating and securing these distributed environments.

• Workforce and skills strategies: With persistent IT skills shortages, enterprises will increasingly depend on external providers to fill critical gaps and access specialized expertise.

The MNS market has evolved from a niche offering into a strategic enabler of digital transformation. Once resisted by many European enterprises that preferred inhouse IT operations, MNS has now become indispensable in supporting hybrid work, ensuring security and compliance, and enabling agility in fast-changing markets.

By combining legacy support with nextgeneration network technologies, MNS providers deliver high-performance, resilient and secure infrastructures that underpin modern enterprise operations. As digital infrastructures continue to evolve and cyber threats become increasingly sophisticated, the role of MNS will only increase in both operational importance and strategic value.

Ultimately, enterprises that leverage MNS effectively will be better positioned to innovate, scale and compete in an increasingly connected and regulated global economy.

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