Cisco scored a triple this week, announcing NFV deals with Deutsche Telekom, Telstra and Telecom Italia for managed services.
The three companies are using the flexibility of NFV to target customers that have been hard to reach until now: small to mid-sized businesses (SMBs).
Until now, service providers have mostly had to limit the managed services market to large enterprise customers, because of the high cost of setting up and configuring services. Service providers have achieved only 1% to 2% penetration of SMBs for managed services, says Doug Webster, VP service provider marketing for Cisco Systems Inc. (Nasdaq: CSCO).
NFV allows service providers to move more quickly and at less cost, thereby making it practical to serve smaller customers, Webster says.
That's all pretty standard talk for SDN and NFV, but Webster says there's a difference with the deals Cisco is announcing this week at Mobile World Congress with Deutsche Telekom AG (NYSE: DT), Telstra Corp. Ltd. (ASX: TLS; NZK: TLS) and Telecom Italia (TIM) .
"Lots of people are talking about it, but what we are announcing with these services is that there are large service providers that are actively deploying it now," Webster says.
DT is launching cloud VPN services in three European countries targeting SMBs, through subsidiaries in Croatia, Hungary and Slovakia. The services will provide a self-service online portal, to give customers a simple way to select, subscribe to and activate various business services, including VPN, firewall, web security and a range of applications that they can roll out and pay for on a monthly subscription basis, Webster says.
Telstra is extending a partnership with Cisco to develop ready-to-consume services that can be deployed via a self-service portal to bridge public and private clouds.
Telecom Italia is working with Cisco on cloud-managed services using Cisco's Meraki. That will allow Telecom Italia to quickly deploy a CPE device to enable wireless and, once that's done, they can layer additional services on top of the device.
All three service providers need to work across both the virtual and physical infrastructure.
The services use Cisco's VNFs, as well as its UCS commodity server hardware, and Network Services Orchestrator from Tail-f, which works across a multivendor environment.
Tail-f was also a winner in an announcement made by Equinix Inc. (Nasdaq: EQIX) Monday at MWC. Tail-f is a key component of its Equinix Programmable Network, which enables the service provider to offer flexible connectivity between cloud providers, network operators and enterprises. (See Equinix Unveils SDN Engine for Cloud.)
In other NFV action this week, HP said it won a deal from Telefónica SA (NYSE: TEF) to provide NFV infrastructure for the Spanish service provider's network makeover, which Telefónica calls Unica. (See Telefónica Taps HP for Unica NFV.)
The Telecom Italia project is reminiscent of another initiative by an Italian service provider: NGI SpA is designing and deploying its own SDN appliance to bring fixed wireless Internet to rural, mountainous terrain. As with the Telecom Italia deal, NGI SpA is using commodity appliance and software at the edge of the network in place of traditional, more expensive, more powerful proprietary hardware. (See Italian SP Deploys Homemade SDN Appliance.)