Palo Alto, CA – March 1, 2014
One of our primary investment theses for the next few years revolves around the movement of critical computing functionality from specialized hardware into software that can run on low cost, industry standard compute servers. This shift began in the late 80’s when Oracle delivered the first hardware independent database and is now just in the earliest stages of extending to other core system functions. The primary benefit of this move is the ability to scale capacity both up and down as needs require (by adding or removing server capacity), offering maximization of resources and significant cost savings. VMWare has built a significant business doing this for computer power and we believe dozens of new vendors will emerge in the coming 24 months offering similar capabilities around the network and storage. We believe that one of the early adopters of this capability is quickly becoming the carriers who are adopting a functionality known as Network Functions Virtualization or NFV.