SOFTWARE MONETIZATION Industries

Network equipment providers’ core business model is under pressure due to a combination of business and technology trends that make maintaining status quo a luxury few can afford.

Technology trends impacting network providers include:

• Increasing software intellectual property (IP) in physical products.
• Mainstreaming of virtualization technology.
• The ability to decouple software from hardware.
• An increasing desire for service providers and enterprises to transition from using custom hardware to generic, commercial off the shelf (COTS) hardware powered by software.

Network Function Virtualization and Software Defined Network are two of the more dramatic technology shifts impacting network equipment providers.

Business trends impacting network providers include:

• Pressures from service provider and enterprise customer segments to reduce costs.
• Demand for flexible buying and consumption models that involve a combination of capital and operating expenses (Capex and Opex).
• The advent of smaller, nimbler competitors that are looking to capitalize on the technology trends to leapfrog incumbents.