HP Ups Ante In Service-Provider Battle Against Cisco, Acquires SDN Superstar ConteXtream

Hewlett-Packard on Tuesday said it has acquired software defined networking (SDN) innovator ConteXtream, a provider of OpenDaylight-based, carrier-grade SDN fabric, as it steps up its service-provider land grab.

Terms of the deal for the Mountain View, Calif.-based ConteXtream -- whose advanced technology is deployed on a number of major carrier networks -- were not disclosed.

Solution providers said the deal once again puts into sharp contrast the open standards approach being employed by HP versus rival Cisco.

[Related: Infonetics: Carrier SDN Market Will Climb To $11 Billion By 2018]

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Cisco did not respond to a request for comment at press time.

Chad Williams, vice president of research and education at Matrix Integration, No. 338 on the CRN Solution Provider 500 -- which is on track to double its HP Networking business in 2015 -- said the acquisition positions HP as a "thought leader" in Network Functions Virtualization (NFV), which is redefining the carrier-grade economics for communications service providers.

"This is just another example of HP embracing the open standards community, which is quite the opposite of their competitors," said Williams.

Williams said he sees the acquisition as making HP an even more attractive networking vendor in the university market, where NFV is starting to be embraced in Requests for Proposals (RFPs). "It's a desirable addition to RFPs now," he said. "I think you'll see it written into university RFPs over the next several years."

Bob Venero, CEO of Holbrook, N.Y.-based solution provider Future Tech, No. 234 on the CRN SP500, said the deal strikes at the heart of Cisco's bid to keep customers locked into proprietary Cisco networks switches and routers.

"This is part of the software defined networking (SDN) trend to pull companies off hardware ports," he said. "What companies like HP are doing is making acquisitions to take the hardware layer out as much as possible. At the end of the day, companies like HP and Dell see that open networking standards are the future. It's amazing that Cisco doesn’t see it. 'Software defined networking' is not a good word in the Cisco world. That's because the predominant amount of their sales and profits come from network hardware."

Saar Gillai, senior vice president and general manager of HP's Communications Solutions Business and global leader, Telco, said in a blog post that the deal further strengthens "HP’s leadership in the fast-growing NFV market, which some analysts expect to grow to $11B by 2018."

Once the deal closes, ConteXtream will become part of HP's Communications Solutions Business. ConteXtream Chairman, CEO and co-founder Nachman Shelef will continue to lead the business, reporting to Gillai.

"Communications Services Providers (CSPs) have a significant opportunity to explore new markets and business models," wrote Gillai in the blog post. "It’s a time of change not only in the application of technology, but within the organization as well. HP will leverage our technology, partners, services, labs and commitment to open standards to help CSPs thrive."