HP Acquiring ConteXtream for Carrier SDN

HP said Tuesday it plans to acquire Comcast- and Verizon-backed SDN vendor ConteXtream, to accelerate open standard networking for service providers and boost HP's strategic investment in NFV.

ConteXtream provides an "OpenDaylight-based, carrier-grade SDN fabric for NFV," writes Saar Gillai, SVP and GM of NFV for HP Inc. (NYSE: HPQ), in a blog post announcing the deal. ConteXtream's solutions help service providers create a more flexible and programmable network using SDN and NFV.

HP and ConteXtream have signed the acquisition agreement, and HP expects the deal to close in its current third fiscal quarter, which ends July 31.

ConteXtream doesn't make a lot of noise, but it has marketplace traction. Its solution is already deployed among Tier-1 carriers and MSOs in more than 50 cities with more than 50 million subscribers, including Comcast Corp. (Nasdaq: CMCSA, CMCSK) and Telenor Group (Nasdaq: TELN).

The seven-year-old privately held company, headquartered in Mountain View, Calif., pioneered SDN, with fabrics in production since 2008. Its software uses a distributed controller and virtual switches for federated control, balancing loads on physical and virtual network equipment. The fabric is able to identify and steer traffic to specific subsets of network functions or services needed to support each subscriber flow.

Leading investors include Comcast and Verizon Communications Inc. (NYSE: VZ), as well as Benhamou Global Ventures, Gemini Israel Fund , Norwest Venture Partners and Sofinnova Ventures.

In a quick interview Tuesday, Gillai noted that ConteXtream's production-ready OpenDaylight controller was a key element attracting HP, which is a Platinum member of the OpenDaylight Project but isn't yet shipping its own ODL controller.

ConteXtream launched its ODL-based SDN fabric for NFV in December. (See ConteXtream Launches OpenDaylight-Based SDN Fabric for NFV.)

The acquisition makes sense as SDN and NFV, often mistaken for each other, are complementary rather than equivalent. SDN adds programmability and vendor independence to the entire network and uses standardized APIs to control the network programmatically and automatically, rather than using arcane command line interfaces to configure each separate devices individually and manually.

APIs also allow SDN software to run on any standardized hardware from any vendor, and vice-versa -- standard hardware can run standardized SDN software from any vendor. That allows carriers to interchange and upgrade hardware and software independently of each other, and reduces vendor lock-in.

NFV does the same thing but for individual network functions such as firewalls, load balancers and VPNs, replacing dedicated appliances with standardized hardware and software.

HP has bet big on NFV, with an entire business unit devoted to the technology. In March, the vendor announced Telefónica SA (NYSE: TEF) had tapped HP's OpenNFV to provide NFV services for its Unica infrastructure. Telefónica looked to HP because it can integrate IT and carrier networks, and provide services and system integration services as well as products, Gillai told Light Reading at the time of the announcement. (See Telefónica Taps HP for Unica NFV.)

HP launched its NFV Director 2.0 product, designed to help network operators control their physical and virtual functions using a single multi-vendor management tool, in December. (See HP's NFV Director Merges Physical, Virtual.)

And it launched a turnkey NFV solution offering server, software and optional services for service providers looking to reduce the hassle of NFV early this month. (See HP Launches NFV-in-a-Box.)

Want to know more about SDN and NFV? They will be a few of the many topics covered at Light Reading's second Big Telecom Event on June 9-10 in Chicago. Get yourself registered today or get left behind!

ConeXtream will become part of HP's Communications Solutions Business, and ConteXtream CEO, Chairman and Co-Founder Nachman Shelef will continue to lead the business within HP, reporting to Gillai.

The acquisition is designed to help HP help service providers keep up with "exploding network traffic on the infrastructure and declining margins," as well as "compete with over-the-top (OTT) players who can be more agile, flexible and able to roll out revenue-generating services much faster," Gillai says in his blog post. "One of the ways CSPs can gain the agility required to compete is to move networking functions from monolithic, proprietary appliances to open, cloud-based architectures."

NFV moves carriers away from dedicated machines providing services such as firewall, caching, optimization and filtering, on "inflexible hardware" to a "resource pool with automated, self-service mechanisms," Gillai says. NFV moves these functions into the cloud rather than "each function [running] on specialized and dedicated hardware."

— Mitch Wagner, , West Coast Bureau Chief, Light Reading. Got a tip about SDN or NFV? Send it to [email protected].