The traditional telecoms business model is broken — or about to be some would say. The world has changed, customers have matured, enterprises are better educated. And they all have one thing in common, or two: they all want speed of deployment to be able to go on about their digital lives and they don’t want to pay for what they are not going to use.
Software-as-a-Service (SaaS) has come into play in recent years to help deliver just that, and new start-ups such as Culver City-based PacketFabric deliver worldwide connectivity by bringing cloud-based logic to every fibre of the connectivity ecosystem using a SDN-based network-as-a-service platform built on APIs.
Its new CEO Dave Ward took the helm in May 2020 and has wasted no time in initiating his work to put PacketFabric at the forefront of the race to be the ultimate connectivity business around.
“As Wayne Gretzky said, PacketFabric as a company its technology is skating to where the puck is going, and that’s why I wanted to be involved,” Ward says.
“The move to PacketFabric is a very big move for me. There’s no reason to make small moves I believe, and change can be a very good thing. This is a big move even looking at the size of the company I worked for [Cisco]; it’s been quite a long time in my career since I’ve worked for a start-up.
“Cisco and PacketFabric are almost at different ends of the scale. But this is not a big move just from a corporate size, it’s a big move for me to move from CTO into the CEO role, which is a very different role, with a different focus on building a company.”
Ward’s career consists of some of the most well-known organisations that helped — and even more do so today — advance the telecommunications game. Serving as head of Cisco’s chief technology and architecture office, he led the American multinational’s core innovations, unifying and advancing strategic co-innovation partnerships and programmes. He is also one of two individuals to be both Cisco and Juniper Fellows working on the operating system and next-generation routing systems.
Beyond holding hundreds of patents, he has also served on the boards of the Alliance for Telecommunications Industry Solutions, Advanced Imaging Society, Linux Foundation, Linux Foundation Networking, ITU Telecommunication Standardization Sector, Governmental Advisory boards and Open Networking Foundation.
“There’s a couple of things that have made me want to move to PacketFabric and also related to why I wanted to move to a CEO role,” Ward reveals.
“On the technology side, which is my wheelhouse, PacketFabric is a secure private network that is managed from the cloud using modern software techniques, such as software defined networking (SDN), to speak to the devices themselves with optical and routing switching devices has an API or a programmable layer on top for customers to interact with directly.
“On the billing side, PacketFabric offers a cloud consumption model on demand. You pay for what you use. It’s exactly the way you would work in the public cloud and networking is the last piece of the IT to go into this on-demand consumption model and pay,” he continues.
A lot of what Ward describes of PacketFabric is reflected in a recent report published by Deloitte titled. In To be or not to be: The future of the telco business model, the think tank highlights four disruptive scenarios. In the first one, the “engineer strikes back” a new generation of hands-on creators are working on software-based networks that enable the business as a whole to innovate in the ways it generates revenues.
Secondly, Deloitte talks about “the new wholesale truth”, a reality where telco companies have “finally lost the end-user control points they cherished for so long”. In the report it reads that for telcos to remain relevant, they have gone back to taking full control over the network technology where they still have their core dependencies.
The virtual telco is Deloitte’s third scenario, a situation where telcos remain the primary customer relationship holders but are displaced from the network layer as they transfer tech domain sovereignty to vendors and other players who move into the network by becoming new infrastructure players.
Lastly, the fourth scenario contemplates “a vendor brand”, with the report’s authors saying that telco players have been driven out of both domains, customer relationships and technological mastery. It reads: “Telcos focus on their few remaining capabilities, trying to find their sweet spot in the market to maintain their relevance. Telcos are mere ghosts of their former selves and serve as the wholesale sales and service teams of their parent tech companies for B2B customers.”
Where’s the puck going?
As all those changes take place, PacketFabric is already helping address most as Ward previously explained. However, the natural question that follows to a recently appointed CEO — and in Ward’s case, he was only on his third day as PacketFabric’s chief when he gave this interview — is what’s next.
“I would like the company to be long established in the magic quadrant,” he says. “I would like to see PacketFabric have a global expansion to the major enterprise points on the globe. I would like to see several joint ventures in which we are expanding and bringing all our orchestration system and platform into many new markets globally.”
Ward calls it a “big audacious goal” but claims the business’ technology is right, and so too is its consumption and go-to-market model.
“It’s working with our partners and our investors. So much so that we can build out this network and build out this platform and really scale that to create a very large channel and reseller opportunity for all the partners that are integrating SD-WAN when delivering hybrid cloud delivery models, delivering these enterprise software services, providing disaster recovery and other services.
“There’s not a market vertical that we’re not going to go after. Of course, we have to focus, and that focus is really on this foundational technology and a go to market model that is affordable across many brokers in the industry.
These next three to four years are a perfect window for PacketFabric to establish itself.” Part of that journey to become a global powerhouse of automated SDN-based network architecture will be acquisitions, which Ward says, “are on the table without a doubt”.
“Certain acquisitions like revenue generating acquisitions [are on the table], but we’re going to be very picky. The culture of PacketFabric is really something that we want to maintain. I don’t want to come in as a new outside leader.
“I want to work with the founders that are still at the company and really those individuals that are key to the core, to the realm of PacketFabric.
“I need to earn my ‘key fabric’ and that’s what I’m doing right now as I began this journey. But at the same time, the leadership team knows that to grow rapidly and to expand it, to do markets and to create new products, we know that an acquisition may need to be on the table.”
Ward explains that the business is “working very closely” with Digital Alpha Advisors LLC, the primary investor in PacketFabric. Taking a step back, PacketFabric started with an initial Series A funding round in 2015, which saw the start-up raise $19 million. Three years later, the company was back and raised a further $25 million in Series B from NantCapital.
Launched in 2017, Digital Alpha Advisors is a digital infrastructure venture capital and private equity investor focused mainly on businesses around next-gen networks, cloud services and solutions, the internet of things and smart cities.
Over the years, the firm has invested nearly $275 million in several logos, $75 million of which is invested in PacketFabric, bringing PacketFabric’s total investments to $119 million when combined with the two previous rounds.
“There is plenty of funding right now for PacketFabric to continue forward,” Ward says. We are not actively raising a round right now, but who knows in the future. I just don’t want to predict when and how and who and the rest of it. Cause I can’t, to be honest.”
Ward moves on to clarify that his highest priority is to build the company’s sales and marketing strategy and assets.
“PacketFabric is very technological, technical engineering, a heavy start-up, which is a fantastic thing to build a great product because there are great engineers here that have built, run, operated, and delivered very large networks in the past. It’s an extremely talented team.
“I believe in being in the position of leading the conversation in the industry and so, even as I just stepped in, some of the first things I’m going to do is expand the sales and marketing teams, create a channel, a reseller programme, and an OEM programme.”
