Networking technology provider Ciena (CIEN) is looking to step up the development of the Network Functions Virtualization (NFV) market with the introduction of Agility Matrix, a broad platform for helping service providers deploy managed services ranging from encryption and firewalls to Virtual Private Networks (VPNs).
Ciena’s new business includes an online marketplace called VNF Market, where service providers can go for third-party Virtualized Network Functions (VNFs). Virtualized network functions — the product of the technology known as Network Functions Virtualization (NFV) — provide common communications service offerings such as firewall, security, or load-balancing functions as software only, rather than with specific hardware.
Yes, you can call this Ciena’s “app store” for enterprise communications services. It wants to give service providers a way to more easily offer services in the cloud. In an ideal world, a business customers could go to a Web portal and sign up for a VPN, and have it be deployed quickly with software. Most network functions today, such as VPN and firewalls, require specialized hardware installations that can take weeks or months.
Part of the reality that has intervened with NFV is that it requires a reorganization of business management and worklfow, in addition to hardware and software deployment. Service provdiers need new billing and operations systems to support cloud NFV, not just a simple software widget. Ciena has put a lot of thought into this by building Agility Matrix and VNF market with many components.
Ciena has established a new business division, Ciena Agility, to help service providers accelerate deployment of services across the (WAN). The division includes resources for software development, product line management, product marketing, service and support, sales and business development. Ciena Agility will be led by Kevin Sheehan, vice president and general manager, who is a networking industry veteran.
What would a new product launch be without alliances? Ciena has those, too. The optical networking vendor is working with many network appliance vendors to build the platform, including BlackRidge Technology, Brocade (BRCD), Certes Networks, Silver Peak and Spirent Communications.
This is a big move by Ciena, and it takes aim at a lot of pain points for the industry: Service providers want a way to more quickly build VNF services, without having to handle all of the infrastructure and integration headaches. Ciena’s model will essentially outsource development of VNFs for the service providers.
Ciena’s stock price rose 2.76% on the news, to $16.40 in early trading. Investors probably like the NFV story because it is a software and service business model, rather than another hardware product. Investors have been concerned lately about what appears to be a perpetual squeeze in service provider networking margins, where Ciena gets most of its revenue.