Cloudify Cuts Risk to VNF Providers With New Consumption-Based Revenue Model
This week, the teams at GigaSpaces launched a new program by Cloudify, aimed to reduce the financial and technical risks faced by virtualized network functions VNF vendors looking to cash in on the rising tide of telecoms and large network operators making the move to cloud-native VNF architectures. The company explains that, rather than taking on the fixed costs of re-architecting their VNFs for cloud-native deployments, VNF vendors can now tie the expense of this transition to the success and scaling of commercial, revenue-generating production deployments.
The program is the first to offer VNF vendors a consumption-based model for moving their VNFs to cloud-native architectures, minimizing the upfront cost and associated risk of making the switch.
“Most VNFs are packaged today as a virtual appliance and were not designed for cloud-native architectures,” said Nati Shalom, founder and CTO of GigaSpaces. “They were not built for scale-out, and they’re not driven by APIs, nor do they support multi-tenancy. Most require manual intervention to set up. Cloud-native environments need all these, and that’s what the Cloud-Native VNF Program provides, in a model that virtually eliminates business risk by scaling fee to production revenue.”
Cloud-Native VNF Program Tiered Pricing Model
The tiered pricing model of the Cloudify Cloud-Native VNF Program reduces risk by tying transition costs to the eventual scale-up of production operations with customers. There are three phases in the model:
- Design Phase—A low-cost model allows users to quickly assess how the VNF can be redesigned for a cloud-native environment.
- Development Phase—A per-seat SLA for developer support is offered at this phase, when service developers need help determining which fee-based services they can build atop a given VNF or set of VNFs.
- Production Phase—Once design and development are complete, GigaSpaces offers back-to-back support, with the VNF providers delivering front-end support and GigaSpaces offering backend technical support. At this point, GigaSpaces can offer the pricing model that best fits the customer’s business model: revenue sharing, fixed price or tiered.
By breaking the process into three phases, the model reduces risk for customers, allowing them to isolate design and development activities into separate contract tiers, before commercial applicability is assessed.
“Building a cloud-native VNF should be a no-brainer,” said Shalom. “We’re bringing a commercial mindset to the migration of networking topologies from fixed and proprietary to cloud-native and open source. This model eliminates all of the barriers that hold VNF providers back from moving to cloud-native architectures. Tying pricing to the amount of value that VNF providers extract at each stage of the transition controls the costs associated with the transition, delivering that ‘no-brainer’ model everyone is looking for.”