When edge services provider Graphiant exited stealth just months ago, the company expected to make an enemy out of telcos with its cloud-based software-as-a-service network model “upsetting” traditional business models that rely on data centers, hardware, and bespoke software licensing, founder and CEO Khalid Raza said.

But much to the surprise of the company’s executives, Graphiant has partnered with both small, regional and large, multinational service providers.

“The response has been amazing. We have had so much interaction, so much traction, so much discussion with partners, with enterprise customers, with other technology partners that we thought might be competitors,” VP Matt Krieg said.

The Graphiant service functions as a firewall and a cloud-based router that can direct programmable devices such as switches, routers, and IoT devices at the edge of the network. Applications and edge devices can be programmed with tags that give data packets instructions for the routing on the network.

Futuriom Analyst Scott Raynovich said Graphiant is different from other network vendors because of its “specific stateless core routing approach.”

“Graphiant is pitching a new networking architecture for cloud that doesn’t involve spinning up new network tunnels, which are typically constructed using standardized protocols such as IPsec,” Raynovich wrote in a blog. “Graphiant has built a new routing system, with the routing control coming from a Graphiant Core hosted in the cloud, communicating to devices guided by software tags that Graphiant places at the edge with software.”

In September, Krieg and Raza told SDxCentral they anticipated the company’s stateless core would be “a pretty big threat to the traditional hardware technology providers, hardware networking providers, infrastructure or telco business,” but have since seen the opposite effect.

Small tier two regional providers typically can’t compete with multinational providers because they don’t have the points-of-presence (PoPs) footprint, Raza noted. With its stateless core, Graphiant can give these providers access to wider footprints by connecting them to a global backbone through its partnerships with cloud providers like AWS, Intel, and Google Cloud.

Raza said smaller telcos have put up PoPs with Graphiant managing the core in order to “bid against the big providers, because there's no global footprint of this type of architecture.”

Graphiant is also helping larger telcos break out of their regions the same way, but Raza pointed out there is a second value with these providers. Telcos with “huge central office facilities” are still looking to create connectivity points inside data centers and remote locations, and as a result central offices often have bandwidth limitations, he said.

The Graphiant distributed cloud model allows for peer-to-peer last mile connectivity and increases bandwidth – an opportunity that he said has “really piqued the interest” of larger service providers.

“I was surprised that the service providers have come to us and wanted to partner,” Krieg added. “To see someone that we thought was going to be a competitor and somebody that we thought we were going to battle against come to us and say hey, there's an opportunity to partner here. Let's see what we can do.”

Graphiant’s “ideal customer profile” coming out of stealth was Fortune 2000 enterprises with a billion dollars or more in revenue. According to Krieg, the industries that Graphiant expected to tap into, including financial services, healthcare, manufacturing, and retail “have been spot on.”

The mid-market enterprise has been an unexpected client for Graphiant. “Mid-market financial services specifically, the COOs at these banks, care about everything that we're talking about,” Krieg added. “They care about digital transformation, they care about compliance and data sovereignty and they care about being cost safe.”

Many of Graphiant’s customers are pursuing a transformation from traditional networking stacks like MPLS and SD-WAN. Notably, Krieg said the company is hearing a “desire to consume rather than build networks” from enterprises of all sizes.

“I would say 80-plus percent of them want to go to a network-as-a-service [NaaS] type of model where they where they consume, and they pay for what they consume, rather than rather than pre-building, buying a bunch of hardware or buying a bunch of software licenses or subscriptions,” Krieg added.