Building telco partnerships
In addition to landing noteworthy customer deals, VMware has also been brokering partnership agreements with hardware vendors. It unveiled a five-year partnership with Ericsson to give communications service providers the tools to transform their networks into cloud platforms, using Ericsson applications on VMware vCloud NFV. The deal extends a partnership dating back to 2012.
The companies will collaborate on technology developments and undertake interoperability testing between VMware's vCloud NFV platform and Ericsson's portfolio of virtual network functions (VNFs), billing and charging solutions, and automation and orchestration tools.
VMware launched several other partnerships for its SD-WAN services from VeloCloud, including: tie-ups with ADVA Optical Networking and Telco Systems to deliver SD-WAN on universal customer premises equipment (uCPE); SevOne for infrastructure management; and Plixer for security and network intelligence. VMware also launched a partnership with RingCentral to provide voice quality and user experience.
The company also unveiled a portfolio of new NFV capabilities, including tools to provide service assurance and network insights.
And VMware debuted what it says is its "biggest release ever of NSX," its software platform for networking workloads in the cloud. NSX-T is decoupled from VMware's vSphere; it runs with any virtual machine running on any cloud platform. NSX supports both enterprise workloads and CSPs, as it is the foundation of VMware's vCloud NFV infrastructure platform.
Roz Roseboro, Heavy Reading principal analyst, cloud infrastructure and management, says VMware's telco presence has been building gradually. "People thought they were moving slow, but the market itself is moving slow," she says. "There is still a lot more to be done -- we're still in the early stages."
The market has been moving toward VMware even as VMware has moved to the market, she says. (And thank you, Roz, for not dropping the most overused cliche in business.)
And being part of Dell gives VMware a competitive advantage in that it has access to a full stack of hardware and software, even though the two companies aren't vertically integrated, Roseboro says. The Ericsson partnership is important as well, for similar reasons, giving VMware access to a variety of VNFs that are designed specifically to help run telco networks.
"Disaggregation is nice, but then it all has to be put back together again somehow," Roseboro says. Integration with Dell and Ericsson means the telco operators don't have to mix and match the pieces themselves.
VMware's increasing momentum in the telco cloud runs parallel with increased momentum in the NFV market as a whole, as telcos need to limber up their networks to be 5G-ready. NFV is, after all, one of the key pieces of the 5G Big Picture puzzle.
And, of course, VMware isn't the only company benefiting from that trend. AT&T inked a multi-year eight-figure contract with Mirantis to deploy Kubernetes and OpenStack on its US nationwide 5G network.
And Turkcell, a Turkish service provider with more than 35 million customers, is turning to Red Hat OpenStack to virtualize its network, with Affirmed Networks as the main systems integrator.
VMware's telco ascent has been a long time coming. CEO Pat Gelsinger said telcos are an "enormous opportunity" during his keynote at the company's VMworld customer and partner conference in August -- an unusual statement because the conference is an enterprise crowd and telcos often don't even get a mention at enterprise conferences. He described telcos as a "virgin market" for VMware, adjacent to the enterprise, which has been VMware's strength and which he described as 80% virtualized, compared with telcos' 1%.
But VMware's telco strategy isn't new. In 2016, with Dell on the verge of taking a controlling interest in VMware, Dell CEO and chairman Michael Dell and Gelsinger took the stage to extol NFV as strategic to both companies. And Ayyar talked with Light Reading to lay out the company's NFV strategy -- similar to what it is today -- in an early 2016 interview, after taking leadership of that business for VMware in 2015.
In 2019, that strategy appears to be paying off as the telco cloud starts to become a reality and the list of technology suppliers with significant market influence evolves. Great Power status in the telco world may yet attainable for VMware.
— Mitch Wagner Executive Editor, Light Reading