While it still doesn't boast any major customers, netElastic Systems is starting to assemble a group of smaller operators around the world for its carrier NFV products.
A five-year-old Silicon Valley startup, netElastic specializes in network functions virtualization (NFV) software for telcos and other broadband providers. Its major products include software for software-defined networks and virtual CPE, a virtual Broadband Network Gateway (vBNG) and a virtual router, as well as what it claims to be the industry's first virtual MPLS Provider Edge router (vPE) at scale and an SD-WAN/vCPE with Orchestrator.
Competing against such large market incumbents as Cisco Systems, Juniper Networks, Nokia and Huawei, netElastic is now pursuing smaller operators with much smaller budgets in regions around the world. In a reflection of this strategy, it has recently signed up a handful of tiny operators in Brazil, a market with thousands of providers serving no more than 3,000 or 4,000 subscribers apiece.
A prime example is FIOS Technologia. No relation to Verizon's Fios service in the US, FIOS Technologia is a small ISP in Brazil's Amazon region with about 1,500 broadband customers. Like many smaller and mid-sized providers, it has been seeking to boost speeds to as high as 1 gig and improve service without overhauling its entire legacy network or installing costly new, customized equipment.
netElastic fits the bill for providers like FIOS because the vendor's vBNG, which leverages commodity x86 servers rather than proprietary hardware, costs a fraction of the servers from the big suppliers. Specifically, the vendor states that its software-based platform costs between $5,000 and $30,000, including the costs of the commodity servers and depending upon the size of the system. In contrast, proprietary gear from Cisco or Juniper can cost at least $100,000 and thus may not be very economical for smaller systems.
"The cost savings of vBNG allowed us to purchase two servers to ensure high availability, which was equal to the price of one Huawei router," said FIOS CEO & Founder Lucio Costa. "And the Huawei router didn't even include CGNAT, unlike the netElastic vBNG."
A Light Reading Leading Lights finalist in the NFV product strategy category three years ago, netElastic also claims to deliver high scalability, with the company offering a 'pay-as-you-grow license model that aligns costs to service revenues. In addition, the vendor promotes the fact that customers can buy their servers at less cost in their home country, rather than need to import them from abroad.
"It's very hard in Brazil to import equipment," said David Williams, metElastic's senior vice president of sales and marketing. "One big advantage (of using netElastics' software-based products) is that they can use COTS (commercial off-the-shelf) equipment locally."
Citing such success stories as FIOS, netElastic officials said they have now signed up four other small ISPs in Brazil for their vBNG solution. With approximately 12,000 similarly sized ISPs in Brazil, they aim to land a bunch more this year.
"We see a great opportunity to be a really strong partner in Brazil," Williams said. "Their (the big vendors') solutions can't get any smaller. We can get a lot smaller."
netElastic officials have also been expanding their sales efforts to other markets across the globe, including India, Pakistan, Australia, Bangladesh, Indonesia, Italy, the UK and parts of Africa as well as the US.
"We've got a couple of dozen deployments globally in Q1," Williams claimed. He said the company aims to quadruple that figure to more than 100 deployments by the end of 2021 and then double that number again next year.
How many of those deployments will be with big operators remains an open question. While Lumen Technologies conducted successful lab trials of the netElastic software in the US several years ago, the vendor still can't boast a major operator on its customer roster.
But netElastic executives profess not to be too worried about that. With hundreds of thousands of smaller operators scattered around the world, they believe their market opportunity is big enough right now. "It really is global," Williams said.
— Alan Breznick, Cable/Video Practice Leader, Light Reading