As people spend less on their networks, we are seeing interesting things happening in the vendor space. We are seeing some vendors pivot away from their original strategy, often a heavy service provider NFV focus, in order to try and kickstart growth. We also see open source consolidation where projects that were considered contenders in the MANO space are merging. This happened with ECOMP and Open-O merging into ONAP, and we are seeing possible signs of even further consolidation with some of the other contenders. We even see vendors that at one time may have tried to grow one of their legacy applications into this space start looking to join these open source efforts. A lot of this is to be expected as the winners and losers in the rush to NFV sort themselves out. The rush has lessened in the recent 6-8 months, and so have the number of viable players.
This isn’t to say that NFV has halted. I think what has happened is many service providers have started thinking more of automation instead of virtualization alone. It is becoming clear that NFV is not a silver bullet that you drop into your network and all of your problems go away. I am not sure that some realized this when a new lab trial was announced every other week and vendors were introducing new solutions constantly, but it is abundantly clear now.
The recent earnings announcement from Cisco indicates this shift. As Tom Nolle recently noted in his blog about the announcement, the benefits aren’t being produced from the vendors that service providers are looking for. Virtualization is growing, yet vendors are pushing old school benefits and trying to sell boxes instead of solutions that enable people to move to cloud-based networking technologies. Customers are looking for things that will generate real ROI to justify the expense, and the less they have to spend to get that the better. Many of you will consider that the most obvious statement in the world, but it seems some are surprised by it…go figure.
A major point to all of the above, and one that is called out in a few of the links I included, is a shift from pure service provider focus to an enterprise strategy. While these types of companies typically don’t have the capital to spend that a large service provider does, their need is just as great…maybe moreso because they DON’T have the same kind of capital to spend on networking.
The big vendors that are focusing on legacy applications, costing millions of dollars, and pushing the old school, box-selling strategy are going to miss out if they aren’t careful. This is just not how you sell to enterprise customers. For example, you won’t convince an enterprise that spending $2-4 million on an OSS system makes any sense at all. In addition, the service providers have moved to a point where they have been there, done that and have seen the fruits of that type of spending. The smart ones are looking for ways to leverage those existing tools in new ways, or putting newer, more nimble, less expensive solutions in place.
We at Itential, see this as a key opportunity out there for vendors AND the potential service provider and enterprise customers. I harp on it a lot, and anybody that has read all of my blogs will likely roll their eyes, but you must pick defined use cases, with defined benefits. You must pick a solution that is going to leverage your current toolsets, and consolidate the capabilities of those tools into a unified set of apps and workflows to enable real automation. It isn’t simple, but it is realistic and is what we base all of our methodologies and products around. There are lots of automation tools, but very few let you truly realize the promise they present in their sales pitches. Vendors need to sell this way, but typically don’t. We think we are the exception.