Cloud-managed networking means that a company's switches, Wi-Fi access points and branch routers are all set up and watched from one dashboard on the internet, run by the equipment maker. The equipment stays in the company's offices, but the software that manages it runs in the maker's cloud. The company pays for that software every year, as a subscription.
In the older way, a network engineer connected to each switch or access point separately and typed in its settings by hand. That is manageable for one office. It is not manageable for 300 shops in different towns with no engineer in any of them.
Take, for example, a chain of 35 eye clinics across Karnataka, run from a head office in Mangaluru. The chain opens a new clinic in Hubballi. The head office orders one switch and three Wi-Fi access points, and the supplier ships them straight to the clinic. A clinic employee plugs them in. Each device connects to the internet and contacts the maker's cloud. The cloud recognises each device by its serial number and finds that it belongs to the eye clinic chain. It then sends the device the chain's standard settings: the Wi-Fi names and passwords, a separate network for the eye-testing machines, and the security rules. Within about 20 minutes, the clinic's network is working. Nobody from IT has travelled to Hubballi. This is called zero-touch provisioning.
From then on, the dashboard shows all 35 clinics on one screen. The IT team in Mangaluru can see that the Hubballi access point has 40 devices connected, or that the Mysuru switch went offline at 2:10 p.m. They can change the Wi-Fi password at every clinic with one change.
How do organisations pay for networking? There are three common ways. In the first, the company buys the equipment, sets up each device by hand and pays once. In the second, it buys the equipment, manages it from the cloud dashboard, and pays every year for the management software. In the third, it rents everything, the equipment, the software and the management, for one monthly or yearly bill. This is called network as a service. The second and third ways are both cloud-managed networking. They turn a large one-time purchase into a regular bill, much as SaaS (software as a service) did for business software.
The same dashboards also manage enterprise switches and the SD-WAN devices in branch offices.
One limit follows from the design. If a clinic's internet link goes down, its network keeps running inside the clinic, but the IT team cannot see it or change its settings until the link comes back.