VMware Sets Sail as a Telco Cloud 'Great Power'

Mitch Wagner
News Analysis
Mitch Wagner, Executive Editor, Light Reading
3/12/2019



US President Theodore Roosevelt transformed the US from a regional power whose dominance ended in the Americas, to a Great Power, able to project its will anywhere in the world. He built up the US Navy from a few obsolete ships to one of the greatest in the world.

As a victory lap late in Roosevelt's administration, he sent the so-called "Great White Fleet," the US's armada of brand-new, state-of-the-art battleships, on a 14-month tour of the great nations of the world. It was a peaceful mission of goodwill -- but of course it also sent a message: that the US could project military power anywhere in the world, and should be feared and respected by every nation, everywhere.

Observers in Palo Alto, Calif., should be looking for signs of white ships setting sail from VMware headquarters. The data center and network software company has been spending years building an arsenal of software as it aims to become a global power in the telco market. And now it's emerged on the world stage, with a series of customer wins and product announcements during the past three weeks that send very clear signals to the comms networking ecosystem.

In particular, VMware is focused on the telco cloud, helping carriers transform production networks by freeing network functions from specialized purpose-built devices, and instead letting those functions run anywhere on a shared pool of hardware, software and networking infrastructure. It's the same technology model that enabled VMware to win the enterprise data center market with server virtualization.

VMware's telco strategy fits with its overall cloud strategy, according to Shekar Ayyar, VMware executive vice president and general manager of the telco NFV group. "The vision around VMware is connecting any application to any cloud, accessible on any device," Ayyar said during an interview conducted during the recent Mobile World Congress 2019 show in Barcelona.

The flagship Connecticut, one of a set of commemorative postcards of ships of Theodore Roosevelt's Great White Fleet.
The flagship Connecticut, one of a set of commemorative postcards of ships of Theodore Roosevelt's Great White Fleet.


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Ayyar, along with Gabriele Di Piazza, VMware VP products and solutions, Telco NFV, has driven the slow build of VMware's telco strategy during the past three years.

The cloud can be divided into four categories, or pools, notes Ayyar.

First is the private cloud, which operates largely in private data centers.

Public cloud is the second pool. People thinking about the public cloud generally think of Amazon Web Services, Google Cloud and Microsoft Azure. Those companies don't use much VMware technology. But the public cloud also comprises many smaller cloud providers, of whom 4,000 use VMware as their operating foundation. And now VMware is striking partnerships with AWS, IBM and other mega-clouds, to extend the private cloud to those platforms, says Ayyar.

And the private cloud market is evolving to hybrid cloud, a mix of public and private, he adds.

The third pool is telecom, which has traditionally not used the cloud for its production networks, instead relying on purpose-built hardware from traditional technology suppliers such as Ciena, Cisco, Ericsson, Huawei, Nokia and more, notes Ayyar.

Telcos are cloudifying – finally
But that's changing. "Now, with NFV, telcos are starting on a journey where more and more operators are asking why they shouldn't do things the way large cloud operators and private clouds have done," says Ayyar, "which is running a common foundation for infrastructure, rather than siloed, purpose-built hardware for every network function." Additionally, in this model, functions are defined in software in virtual machines and operate on a common infrastructure foundation.

"That's the definition of a cloud: Large pools of capacity you can access anytime and anywhere you want. Increasingly, NFV is used as a foundation for the operator to run the network as a cloud, using it for the mission-critical network," Ayyar suggests.

Three years ago, VMWare had no network footprint in the telco cloud: Now the company has more than 100 operational deployments in 70 operators, he says.

And the fourth pool is the edge, where the enterprise, pubic cloud and telecom meet.

VMware hit several big milestones in its telco NFV strategy in a series of announcements from February 21–27, at and immediately before Mobile World Congress in Barcelona. Unlike Theodore Roosevelt, VMware didn't use a bully pulpit to get its messages out; it published a half-dozen press releases that weren't obviously related to each other and, like most late February public announcements in the comms market, didn't get a lot of attention during the mayhem and noise of MWC. But the accomplishments were there -- hidden in plain sight -- and they show a company emerging as a Great Power in telco cloud.

These include customer agreements with AT&T and Vodafone. AT&T said late last month that it is integrating VMware SD-WAN by VeloCloud onto its 5G network, providing enterprises with a toolkit to control priority of traffic appropriately across multiple network infrastructures. The integration will extend network intelligence beyond the application layer to the cellular layer, allowing network operators to choose among VPN, wired Internet and cellular networks where appropriate for traffic priorities.

Also late last month, Vodafone announced it is expanding its VMware telco cloud infrastructure, now deployed in 15 countries at more than 50 sites, carrying subscriber traffic on more than 300 core network functions. The VMware partnership is part of Vodafone's strategy to build a network cloud infrastructure for current 4G services and 5G readiness.

Next page: Partnering all over the place



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.)

Competitive advantage
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 shared its MWC19 show floor presence with Dell Technologies.
VMware shared its MWC19 show floor presence with Dell Technologies.

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 Visit my LinkedIn profileFollow me on TwitterJoin my Facebook GroupRead my blog: Things Mitch Wagner Saw Executive Editor, Light Reading

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