Israeli software startup DriveNets landed $110 million in first round financing to boost its focus on helping service providers disaggregate proprietary routers from their networks as they move to 5G.
The company was founded in 2015. Ido Susan, who was one of its co-founders and is currently CEO, was the force behind startup Intucell, which was purchased by Cisco for $475 million in 2013. The other co-founder, Hillel Kobrinsky, founded Interwise, which AT&T purchased for $121 million.
Susan said the DriveNets software is designed to support SDN in core, aggregation, and provider edge networks, and complement SDN in other parts of a network. He noted that carriers can save as much as 50 percent on hardware and software costs with the company’s platform.
The cost for buying white box hardware “is typically substantially more cost-effective than vendor-specific networking hardware design,” he said. DriveNets’ customers only pay for their software costs, separate from the size of their networks and growing bandwidth demands.
After paying for the software, a carrier can “typically enable greater savings than 20 percent,” he added. Actual software costs were not disclosed.
Susan explained that the company’s orchestration system supports network cloud lifecycle management with zero-touch deployment. Carriers can deploy with their own internal teams or partners who work in the DriveNets ecosystem.
Susan said that the company expects “some competition,” (but) not a lot “since the solution challenges existing vendors’ economic models, while barriers to entry are high for smaller players.”
The funding round was led by Bessemer Venture Partners and Pitango Growth. DriveNets will use the funds to expand its product portfolio; boost its market reach; and hire 50 more employees by year-end, which will push its total workforce to 200 employees.
Ray Mota, principal analyst at ACG Research, said he hasn’t tested DriveNets software, but sees its value to service providers. “Traffic is going up for service providers and revenue is flat to slightly up for some,” he said.
Mota cited DriveNets pricing model as unique in the marketplace with software licensing that excludes consideration for the increasing bandwidth that a carrier has or uses, unlike traditional pricing models. “Service providers will be able to manage their financial models better with this type of licensing despite how much traffic grows,” Mota explained.
However, Mota said DriveNets could run into challenges in dealing with service providers that employ engineers with certifications from Juniper, Nokia, and Cisco who have built and run large proprietary networks.
“It will be a tough sell” for DriveNets, Mota said. “If I’m a certified Cisco engineer, do I really want something like this white box instead?”