Virtualization has made the IT world much more efficient and cloud technology allows applications to scale up and down at will in a far more cost-effective manner while requiring little to no CAPEX. There is hardly an industry which hasn’t been affected as software and hardware vendors have worked together to make sure they are ready for this new world where a single server can run multiple instances of an application on servers which are flung far around the globe. Even the PBX-world has gotten into the game with many vendors – especially those doing business with Fortune-class companies supporting virtualized software communications servers.

In a recent conversation with Steve Gleave (pictured) and Carol Daniels of Metaswith at Mobile World Congress 2013, I learned the company is taking the move to virtualization seriously and their recent product launch of 19 months ago – the SBC, was developed to run in a such an environment.

The benefits of this evolution are obvious – carriers will be able to utilize the same virtualized technology they use in their data centers in their networks and purchase in a far more flexible way. Moreover, their services will run on bare-metal servers and will scale far more rapidly. This means they can take advantage of public clouds, virtual private clouds, private clouds and hybrid clouds – all the amazing choices a typical enterprise has today. Security, cost and CAPEX versus OPEX decisions will likely drive their decisions – again, just like an enterprise or data center decision-maker.

One other crucial benefit of this move is there will be more choice for carriers looking to deploy solutions from the more innovative companies in the market. Typically these are the players who do the most interesting things but they quite often run out of money before carriers deploy their solutions and subsequently they go under. For me its been about 30 years spent meeting the principals of these doomed entities – early in my career at trade shows such as TCA, SuperComm, ICA, Computer Telephony and NATA which took place in the eighties and nineties.

The large-scale euthanizing of innovative telco suppliers (and many of the events they attended as a side-effect) has created a cycle of uncertainty where carriers want to be sure their solution partners are going to be around for the long-haul. Moreover they want them to be there to scale rapidly and service what they sell. In the world of hardware this means a new vendor has to have very deep pockets to be able to sell to large carriers.

What has become common in the market is for CSPs to wait for the larger players to emulate what the smaller guys are doing and just buy from the company they arre used to doing business with. Or in other cases, the smaller players would be “coerced” into agreements with large equipment providers who would take part of the revenue from the sale and provide the gravitas, relationships and support needed to keep the large carrier happy. This is how Acme Packet got its start for example and in doing so, took out the competition in the SBC space last decade.

The point is, now hardware players will become software companies which means the bar for purchase from a large telco while still high, has dropped down quite a bit. This was the goal by the way of the ATCA modular communications initiative last decade from Intel where hardware vendors could all write software on a single hardware standard but the Intel division certainly wasn’t pulling its own weight as evidenced by the fact it was sold off to Radisys in 2007 for $25M.

This time though the chicken-and-egg problem may finally have eroded allowing current carriers to be far more flexible in the new services they offer and upstart carriers can rapidly scale and compete with incumbents without having to purchase massive amounts of central office equipment to get started.

Gleave further discussed the industry’s proactive push towards Network Standards Virtualization through the ETSI working group by the same name. The backers of this initiative are the largest global carriers such as AT&T, BT, Deutsche Telekom, Orange, Telecom Italia, Telefonica and Verizon and 52 other vendors joined together to support this initiative this past January. Obviously there seems to be a huge push to shake up the way comms systems are designed.

You may remember, Metaswitch once owned a separate company called Data Connection which was very strong in developing and selling low-level protocol software stacks and related solutions. The two companies merged some years back into the parent company. Gleave emphasized, “We have software experience.” He continued with a bit more confidence, “Writing for multicore and hypervisor environments are skills we believe we have as well.” He added in a manner which seemed to be subtly taunting the competition, “All the core functions [of our solutions] such as IMS have been rewritten from the ground up to run in the cloud.”

Expect the Metaswitch you know as the application server, gateway and SBC company to still do all these things but in software, running in virtualized environments on bare-metal servers. Their goal is to sell these solutions to you in order to turn your hardware telco into a software telco.

As a result of the meeting I asked Steve Gleave to speak on being a software telco at ITEXPO in Las Vegas, August 27-29 in Las Vegas. He is a great speaker and worth the trip to come see. I would mark your calendar now.