Retail’s busiest quarter is also its most exposed
Retail is entering the end-of-year holiday stretch, when every part of the operating model comes under pressure: stores handle heavier traffic, digital channels absorb more volume, fulfillment windows tighten and employees depend on systems working without interruption. The research behind this article points to structural realities that are already familiar across large retail estates, including hundreds or thousands of distributed sites, lean store staffing and limited local IT support when issues arise. Those conditions matter year-round, but peak trading periods amplify them. That timing makes one finding in the data worth a closer look.
In original research conducted by Hanover Research and sponsored by GTT, retail stands apart for a specific reason. At 26%, retailers report the highest rate of running Network as a Service (NaaS) with no managed network services (MNS) layer behind it of any sector in the dataset, well ahead of Financial Services at 6% and Technology at 10%. When viewed alongside the broader findings, retail’s NaaS-only lead looks less like an advantage and more like a potential operational risk the sector is carrying into its busiest trading period.
Why NaaS fits retail, and why most retailers still hedge
The appeal of NaaS to retail is structural. Retail operates across hundreds or thousands of distributed sites, and the model’s fast provisioning, easy scaling and cloud-native integration make it a natural fit for new store openings, pop-up formats and digital commerce workloads. Under those criteria, NaaS delivers exactly what a growing retail estate needs.
There’s a reason most retail organizations still take a combined approach or rely on MNS. Distributed often means a lean IT staff. When something goes wrong at a store location, there is frequently no local IT person available to fix it, which is what makes managed services the operational layer that keeps stores running. In practical terms, the provider’s operations team functions as the store’s IT department. For the 26% running NaaS only, the trade is stark: they get the flexibility benefits of the model, but without managed services in place, reliability is difficult to sustain.
The wider market has settled the either/or question
Across the full sample, the debate between NaaS and MNS is effectively over. Seventy-eight percent of enterprises already run both models and 89% expect to in the near future. Among enterprises planning new deployments over the next 24 months, 57% expect an equal split between NaaS and MNS and another 28% expect to run mostly NaaS with some MNS. Pure plays in either direction are increasingly rare.
The logic behind the combination is that each model solves a problem the other does not. Scalability, technology adoption and business continuity each rank as very or extremely influential NaaS drivers for 90% of organizations using or planning to use it. Among organizations remaining MNS-only, reliability is the top driver at 93% which is a signal that consistency and assurance, not speed, are what MNS is being asked to deliver. The resulting network looks less like a single architecture and more like a portfolio, with each model applied where its strengths matter most.
Taken together, the numbers make retail’s 26% look less like a settled strategy and more like a position the sector is already moving away from. Most retail organizations take a combined approach or rely on MNS, and the white paper describes that choice as one made for good reason.
A store network failure registers as a customer experience failure
Network decisions also have a wider cast than they used to, and the pattern should matter to retail leadership. Technology executives still make the final call: across the enterprises surveyed, the CTO is the primary decision-maker in 27% of organizations, the CIO in 26% and the CISO in 12%. The circle of influence has widened well beyond them. CFOs and COOs are each involved in 36% of network decisions, and while customer experience leaders sit at the table in only 8% of organizations, their influence is among the highest of any stakeholder group at 83%.
That logic maps directly onto retail operations. A network affects how quickly a customer gets served, how smoothly an employee can do their job and how reliably a digital product performs. When any of those breaks down, it shows up immediately as a customer experience problem regardless of whether the root cause sits in the network. For a retailer, that means a connectivity fault at a store is never contained to the IT dashboard; it surfaces at the register, in the aisle and in the basket.
The financial case is a five-year case, with defined limits on volatility
For economic decision makers, the most telling signal is the metric enterprises use to justify NaaS to their boards. Sixty-one percent cite five-year total cost of ownership as the primary justification, well ahead of three-year ROI at 19%, EBIT impact of a CapEx-to-OpEx shift at 11% and payback period at 8%. Enterprises are evaluating NaaS the way they would evaluate any long-term strategic partnership, and that lens extends to the provider and the management layer that sits on top of the platform.
Commitment to a five-year horizon does not mean unlimited tolerance for cost swings along the way. Fifty-six percent of enterprises say they would accept quarterly bill swings of up to 15% in exchange for a 30% reduction in five-year TCO, and another 36% would accept the same trade provided automated FinOps alerting and chargeback mechanisms are in place first. Together, 92% are willing to absorb meaningful short-term volatility for long-term savings. Retail brings its own discipline to that equation: 39% of retail organizations flag cost variances once they reach 6 to 10% of budget, a tighter threshold than Healthcare at 25%, though looser than Financial Services at 61%. The practical implication is that finance is a participant in the network decision, and the controls need to exist before the consumption-based commitment does
“The network decisions you make in the next few years will be harder to reverse than you think.”
Fletcher Keister, Chief Product and Technology Officer, GTT
Four friction points decide whether hybrid delivers
Hybrid adoption settles the strategic question of whether to run both models. It does not make the daily work of running the combination easy. Four friction points show up consistently across the enterprises studied, and the structure of a retail estate, distributed and leanly staffed, gives each one a sharper edge.
- Observability. Seventy-five percent of enterprises say observability has been a barrier to NaaS adoption, and 18% say it has stopped adoption more than once. Without unified visibility across the NaaS and MNS layers, identifying where an outage originated adds time directly onto the outage itself. The same visibility gap carries a second cost: when audit evidence depends on visibility, an organization does not have observability stops being an operational challenge and becomes a potential compliance risk waiting to be exposed.
- Security and compliance. Ninety percent of enterprises require high or very high audit evidence from their network providers, and 94% consider immutable logs, records that cannot be altered after the fact, valuable or extremely valuable. The compliance question has shifted from whether an environment is secure to whether that security can be proven on demand.
- Cost volatility. Enterprises have a defined tolerance of 6 to 15% of budget before variances get flagged and finance gets involved. What they need from providers is the tooling to stay inside it.
- Talent. Thirty-seven percent of enterprises cite the NetOps and SecOps talent gap as the top external trend shaping their next network update cycle, more than any other factor. For retailers already running stores without local IT, that gap compounds every other friction point on this list.
Each of these challenges requires more than a platform decision. It requires a partner that can help close the operational gaps hybrid environments often expose. The white paper devotes a full section to what good looks like across all four areas: unified visibility across NaaS and MNS, audit-ready security controls, financial transparency to keep cost variance within tolerance and the operational expertise to cover what internal teams cannot.
What retail leaders should do next
The findings suggest a practical exercise rather than a philosophical one. Take the four friction points and pressure-test the current store and digital estate against them, then hold the current provider against the white paper’s What Good Looks Like standard. The gaps that surface are the starting point for the next planning cycle. With the busiest trading period of the year approaching, the cost of discovering those gaps in production rather than in planning is at its annual peak.
The full analysis, including country-level findings across the US, UK, France and Germany and sector comparisons spanning retail, financial services, healthcare and manufacturing, is available in How Enterprises Approach NaaS and MNS to Build Resilient, Future-Ready Networks.
Where GTT fits
GTT works with retailers and other multinational enterprises at every stage of network modernization, from mapping current infrastructure against future requirements to operating hybrid NaaS and MNS environments through GTT Envision, the platform that connects, orchestrates and automates enterprise networks. For distributed retail estates running lean IT teams, that combination provides the visibility and operational coverage enterprises now expect from a provider.
Ready to see how your store and digital estate measures up? Download the white paper or talk to a GTT expert today.
Frequently asked questions
What percentage of retailers run NaaS only?
In the 2026 study conducted by Hanover Research and sponsored by GTT, 26% of retail respondents run NaaS only, the highest rate of any sector surveyed and well ahead of Financial Services at 6% and Technology at 10%. The majority of retail organizations still take a combined NaaS and MNS approach.
Why do retailers combine NaaS with managed network services?
Retail operates across hundreds or thousands of distributed sites, where fast provisioning, easy scaling and cloud-native integration make NaaS a natural fit. Those same sites are often leanly staffed, with no local IT on hand when something breaks. Managed services provide the operational layer that keeps stores running reliably.
How do enterprises justify NaaS investment financially?
Sixty-one percent of enterprises cite five-year total cost of ownership as the primary metric for justifying NaaS adoption, well ahead of three-year ROI at 19%. In total, 92% would absorb meaningful short-term cost volatility in exchange for a 30% reduction in five-year TCO.
What are the biggest barriers to running NaaS and MNS together?
The research identifies four consistent friction points: observability gaps, cited by 75% of enterprises as a barrier to NaaS adoption, rising security and compliance demands, cost volatility and a structural talent shortage in NetOps and SecOps, which 37% cite as the top external trend shaping their next network update cycle.
Who decides on network service models in large enterprises?
Technology leadership makes the final call. The CTO is the primary decision-maker in 27% of organizations surveyed, the CIO in 26% and the CISO in 12%. Influence has widened beyond IT, with CFOs and COOs each involved in 36% of decisions and customer experience leaders carrying influence of 83%.
