AT&T's announcement today that it is using Metaswitch's Perimeta Session Border Controller in its software-centric network is not a surprise -- Metaswitch was announced as part of AT&T's Domain 2.0 initiative in 2013 -- but it is significant on a few fronts. (See AT&T Adds Brocade, Ciena, Cisco to Its SDN, NFV Program.)
First, it is one of the rare occasions when a large telecom operator actually announces a specific vendor and use of its products -- those tend to stay under wraps these days. Second, it's an indication that Metaswitch Networks , a company that has been aggressive in virtualizing its products and moving toward an open source approach, is one of the "disruptors" among AT&T Inc. (NYSE: T)'s vendor list, which executives such as Andre Fuetsch have openly discussed. Finally, the news is continuing evidence that SBCs are an early target of virtualization. (See AT&T Seeks Help on Culture Change Issues and Metaswitch Goes Virtual With Its SBC.)
Metaswitch CEO John Lazar confirms as much in an interview with Light Reading, adding that his company is also working with the teams of AT&T employees who are being organized into startup-type groups to create things like its Network on Demand service through Agile and DevOps processes. It's all part of AT&T's aggressive move to the New IP and its announced plans to virtualize 75% of its network by 2020. (See SDN Powers AT&T's Rapid On-Demand Expansion and AT&T Brings SDN-Based Ethernet Service to 100 Markets.)
"AT&T is looking at a way to make their whole business model more flexible, and on that level they need to introduce a new breed of suppliers. Our view on that is that there is a big opportunity for network software providers like us," Lazar says. "They are talking about some of their vendors being disruptors and that is certainly how we are viewed within AT&T."
In this specific case, Metaswitch was the first telecom vendor to publicly demonstrate a cloud-based SBC, one that was software-based and carrier-grade, in terms of performance and resilience. That factors into AT&T's plans in the near term as it interconnects its LTE networks with other networks for voice and messaging services, and looks to drive costs down and innovation forward in doing so, Lazar says.
"The fact we have a virtual network function that is fit for purpose, ready for action, is a helpful thing," he says. Key to success there is an SBC designed specifically for the cloud and therefore able to scale up to the volume of calls needed, and prove resilient, and able to handle intense packet flows to stay up and running in the face of signaling storms or distributed denial of service attacks.
As significantly, Lazar says, Metaswitch is working with AT&T in a different way. Its software engineers, who are "well-steeped" in things such as Agile development methods and DevOps, as well as the use of open source, are proving valuable resources for AT&T. "Those are all qualities AT&T is welcoming from its disruptive vendors," he notes.
The "disruptive vendor" trend suggests a new business model is evolving, as vendors move from selling hardware with residual software sales to selling software using subscription or licensing models, or "pay as you grow" packages, along with joint development in the open source realm, the Metaswitch CEO says.
"We are having to be very open and flexible about how we do that, but we welcome that because we think it is a crucial part of the industry transformation that we are seeing," Lazar says. "That is one of the reasons you have seen open source announcements from us, with Project Clearwater and more recently with Project Calico, because we recognize people are working in a different way now." (See Metaswitch Makes Major Virtual Network Move and Metaswitch Unveils Clearwater Core.)
Metaswitch is seeing the number of SBC hardware units it is selling tail off significantly in the last couple of quarters while the software sessions it sells have gone up significantly, an indication that SBCs are "the tip of the spear," where virtualized network functions are concerned. Perimeta is already in use at BT Group plc (NYSE: BT; London: BTA), Tiscali International Network , TDS Telecom and other operators. (See Tiscali Intros NFV With Metaswitch, BT Uses Metaswitch's Virtual SBC and TDS Selects Metaswitch SBCs.)
— Carol Wilson, Editor-at-Large, Light Reading