Partners: AT&T Acquisition Of Brocade's Software A 'Monumental Shift' From Proprietary Cisco, Juniper Gear

AT&T's acquisition of Brocade Communications' Vyatta Software Platform signals a significant shift in how the service provider will provide networking solutions in the future.

Channel partners of Brocade and AT&T said that Vyatta's technology, including its virtual network functions (VNFs), would enable the Dallas-based service provider to focus more heavily on white-box networking and allow the carrier to purchase more selectively from traditional network solutions from the likes of Cisco and Juniper Networks.

"This is groundbreaking," said Ed Fox, vice president of network services for MetTel, a New York-based communications solution provider and AT&T Platinum Elite partner. "It's a monumental shift in the whole supply chain."

[Related: Pulse Secure To Acquire Brocade's Virtual Application Delivery Controller Business]

One top executive from a solution provider who partners with Brocade and Cisco said the AT&T's acquisition was "a big deal" for the networking industry.

"AT&T has traditionally bought a ton of equipment from Cisco – customer premise equipment (CPE) and things like that," said the executive who is a Cisco Gold partner, who asked not to be identified. "With them having NFV [network functions virtualization], what it does is allow them to put white boxes out there at a much smaller cost that can do all of these types of things that they want at a CPE-level, and not purchase purpose-built hardware from Cisco or Juniper or anyone else."

AT&T will be able to use Vyatta's software within their white box switches and sell as a Platform as a Service (PaaS) offering through its partners or directly to business customers.

"It's not a surprise to me they went after this technology," Fox said. "It literally makes AT&T not need to purchase routers from the big IT vendors to put at their customers' sites," Fox said. "It's a definite game-changer."

Terms of the deal were not disclosed.

Meanwhile, thanks for NFV and other network dynamics, Cisco's service provider (SP) business has been consistency declining over the last four quarters.

The company's SP business dropped 10 percent year over year during its recent third fiscal quarter. SP revenues decreased 1 percent during its second fiscal quarter, fell 12 percent in its first fiscal quarter, and 5 percent for its fourth fiscal quarter 2016.

Both Cisco and Juniper did not respond to a request for comment by press time.

Once the deal closes, AT&T will own the Vyatta network operating system, including its VNFs and distributed services platform, software under development as part of its unreleased roadmap, existing software licenses, and related patents and patent applications.

The carrier is also expecting to hire several of the Brocade employees tied to Vyatta.

AT&T will also be using the Vyatta platform to push ahead with its ambitious network virtualization plans. In March, AT&T successfully completed a trial with a handful of companies and industry groups to design and build its own white box switches to manage data traffic more efficiently across our network, according to the carrier.

The Dallas-based carrier said that it expects to virtualize 75 percent of its network by 2020. The Vyatta platform will help AT&T deliver cloud- and premises-based VNFs more quickly, including its SD-WAN cloud service that the provider announced in 2016.

For partners, this means access to selling programmable networks and new, value-added features to business customers, such as automatically giving the WAN more bandwidth during a video conferencing session, Fox said.

AT&T acquisition comes just one day after Brocade revealed that it was selling off its virtual Application Delivery Controller (vADC) business to Pulse Secure.

"We don't even consider Brocade a partner anymore. We're written them off our list at this point," said the Brocade and Cisco Gold partner executive.

In May 2016, Brocade acquired Ruckus Wireless for $1.2 billion. However, partners were quickly left confused as Broadcom announced in November that it was buying Brocade for $5.9 billion, a deal expected to close later this year, with plans to divest Brocade business units.

Brocade has since agreed to sell its network-edge portfolio, which includes the Ruckus Wireless and ICX Switch product families, for $800 million to Arris International.

It also decided to sell its data center networking business to Extreme Networks for $55 million. Both the Extreme and Arris acquisitions are set to take place this year after Broadcom closes its deal to acquire Brocade.

"There's nothing left Brocade-wise left for the channel," said the partner executive. "They're divesting all these products, and these other assets are basically spun-out, so there isn't a Brocade anymore for us to partner with."