Cloud Services

Metaswitch: Telcos Must Get Soft to Survive

NEW ORLEANS — Metaswitch Forum 2014 — Telecom service providers need to think of themselves as software companies and behave accordingly, Metaswitch CEO John Lazar told his company's invited audience of service providers here this morning.

A few minutes later, Lazar began to sketch out a few details of how Metaswitch Networks intends to help its customers move forward to a cloud-based, software-centric, all-IP future at the pace they themselves set. But more on that later, as the news trickles out here.

Moving to a software-centric approach is important for getting new services to market more quickly and thus addressing the revenue crunch telcos face today, Lazar noted. Those aren't new themes for the Metaswitch crowd, which includes many smaller telcos who have watched their voice revenues erode and pressure to support greater bandwidth for data increase exponentially without any real revenues attached.

Some of those listening may have been more intrigued by what Lazar said next: that thinking and behaving like software companies in the way they address network transformation and business plans will also help telcos become more valuable and potentially attract more investment.

"You only have to look at Whatsapp, which sold for, what, $19 billion," Lazar pointed out. "Investors both private and public like companies that use software smarts to cut costs, increase revenues, drive innovation, and become more open and agile. So it's not just about the technology in the network; it's about your value."

That's interesting thinking for a market that has been battered by the loss of federal subsidies, in addition to the loss of traditional revenues. The message may be intended to get the attention of telcos who might think the current transition to virtualization through SDN and NFV isn't yet relevant for them. Because it is.

— Carol Wilson, Editor-at-Large, Light Reading

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