Software: Infonetics claims ‘SDN hesitation’ in Q1; SAP set to expand cloud offering

Software is becoming an increasingly important part of telecommunication networks and deployments as both wired and wireless carriers look to add functionality to operations while increasing simplicity and reducing costs. RCR Wireless News is keeping an eye on recent developments through its weekly “Software” wrap up.
–The telecommunication industry’s rush towards virtualization looks to have taken a breather during the first quarter of this year, with a new report from Infonetics Research claiming a “SDN hesitation” that resulted in just a 2% increase in year-over-year revenues of router and switch equipment.
“Last quarter, we identified the ‘SDN hesitation,’ where we believe the enormity of the coming software-defined networking and network functions virtualization transformation is making carriers be more cautious with their spending,” explained Michael Howard, principal analyst for carrier networks and co-founder of Infonetics Research. “This hesitation reared its head in the first quarter of 2014, where global service provider router and switch revenue increased only 2% from the year-ago quarter.”
Infonetics reported that revenue from the sale of global carrier router and switch equipment, including IP edge, core routers and carrier Ethernet switches, dropped 13% sequentially during the first quarter to $3.2 billion, with revenues from all product segments chalking up double-digit sequential drops. All geographic segments posted sequential declines in sales, with North America also posting a year-over-year drop in segment sales.
As for top vendors in the space, Infonetics claimed Cisco maintained its lead in market share, followed by Juniper, Alcatel-Lucent and Huawei.
Despite the overall slowdown, the research firm remains confident that the SDN and NFV segments will continue to see strong potential as wireless operators continue to look for ways to decrease expenses and increase revenue potential.
“We believe the current generation of high-capacity edge and core routers can be nursed along for a while as the detailed steps of the SDN-NFV transformation are defined by each service provider-and many of the largest operators in the world are involved, including AT&T, BT, Deutsche Telekom, Telefónica, NTT, China Telecom and China Mobile,” Howard added. “And there is intensifying focus on multiple [content delivery networks] and smart traffic management across various routes and alternative routes to make routers and optical gear cooperate more closely.”
—Matrixx Software reported that Telstra Ventures led its latest funding round that Matrixx said could lead to “strategic synergies” for Australia-based Telstra and Telstra business units. Telstra was joined in the latest funding round by Matrixx’s existing investors Swisscom Ventures, Innovacom, Greylock Partners, Adams Street Partners and Tugboat Ventures.
Matrixx said it has developed real-time technology designed to deliver charging, policy and analytics solutions.
—The Wall Street Journal reported this week that SAP was set to launch a cloud-based sales force automation system designed to leverage social media and real-time technology in helping companies improve interaction with customers.
SAP said the offering is designed to help its enterprise customers to predict what their customers may want using a cloud-based platform.
“We see a whole new world for customer engagement commerce,” SAP chief executive Bill McDermott told The Wall Street Journal. “This is where the world is going. We will commoditize SFA, knock the price point and redefine the category entirely. And it will all be done in the cloud.”
–Business and operational support systems provider Subex reported a 10.6% year-over-year increase in revenues, hitting $58 million for its fiscal year ended March 31. The company noted that license and implementation accounted for 40% of total revenues, support services for 33% and managed services for 27%.
After tax profits surged more than 110% year-over-year to $8.6 million, a strong turnaround from a loss of $9.3 million for the previous financial year.
Make sure to check out the latest in telecom related software news at RCR Wireless News’ dedicated software page. Also, if you have telecom software news to share, please send it along to: dmeyer@rcrwireless.com.
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