Ottawa, Canada-based startup CENX today announced that Ericsson‘s Managed Services Delivery Platform will be using CENX’s Cortx Service Orchestration to monitor customer networks and data connectivity for availability and performance.
This deal, which is driven by Tier-1 service-provider customers, shows real demand for a new software management layer for open networks, a market called lifecycle service orchestration (LSO).
CENX President and CEO Ed Ogonek said the deal proves the need for third-party service orchestration and monitoring functions that can work in multivendor environments in large service-provider networks.
“These networks are complex. You have equipment from different vendors, you have management from different vendors, and you have third-party access circuits. A large proportion of the equipment [that Ericsson manages] comes from vendors other than Ericsson. It’s important to have multivendor integration.”
CENX is a fast-growing provider of management and orchestration software targeting software defined networking (SDN) and network functions virtualization (NFV) networks. Its Cortx Service Orchestration enables service providers to monitor performance degradation such as frame loss, latency and jitter, using graphical dashboards. Ericsson will be using this to identify network faults and fix circuits before customers suffer outages.
This deal is driven by specific customer use cases. Cortx will be used to monitor end-to-end connectivity in the mobile backhaul networks of two tier-1 providers, according to CENX. Ogonek said these customers have “tens of millions of subscribers.” Neither Ericsson nor CENX is naming the customers.
It’s not surprising that Ericsson picked CENX, as Ericsson is one of the company’s investors. CENX has raised $9.5 million from investors including Cross Creek Advisors, DCM, Ericsson, Highland Capital, Mesirow Financial, and Verizon. At an event earlier this year, CENX founder Nan Chen said the company plans to double in size this year — it currently has close to 150 employees. Sources say the company is close to profitability.
Ogonek said that momentum is strong for his company and the software category in general.
“What’s very encouraging is the pace of end-to-end service orchestration is picking up significantly,” said Ogonek in a phone interview yesterday. In addition to existing customers, Ogonek said more deals are in development. “We have a number of tier-1 NFV trials, a number well above what we targeted for the year.”
CENX is part of a group of companies developing software that is likely to replace traditional operations support systems (OSS) and billing support (BSS) tools, which service providers say aren’t open and flexible enough. Many OSS and BSS systems were put in place many years ago when networks were purpose-built using proprietary systems. The new trend is to be open.
Research indicates that global operators want this change. The Service Provider Lifecycle Service Orchestration (LSO) Overview and Market Forecast, conducted by my analysis firm, concluded that SDN and NFV technology is driving the need for a more flexible and open orchestration and management software layer.
The report included the results of a joint survey with the MEF, which discovered a real thirst for new LSO and OSS tools. The survey revealed that service providers named network automation (60%), support for faster service delivery (60%), and multi-vendor support (58%) as their greatest challenges. Sixty percent of the service providers surveyed said their existing OSS systems “lack the capabilities to launch new services in a timely, cost-effective manner.” Fifty-four percent called their OSS technology “outdated and inefficient.”
The market for LSO software tools that help service providers migrate their OSS systems to an SDN and NFV world is likely to grow at least $2.75 billion over the next four years, according to the Service Orchestration (LSO) Overview and Market Forecast.
It’s clear that global operators are skeptical that existing OSS and BSS systems can adapt to the emerging SDN/NFV landscape. They are ready to invest in new software as well as efforts to migrate existing OSS/BSS systems, as demonstrated by the Ericsson/CENX deal. Expect to see a lot more action in this market over the coming year.