Casa Systems won a multi-year purchase contract from Verizon to help power its mobile edge compute (MEC) offering – and Verizon is acquiring a nearly 10% ownership stake in the company.
Under the terms of the agreement, Casa Systems will provide its 5G core software to Verizon, powering its public MEC offering.
In addition, Verizon is making an investment of about $40 million in Casa common stock. Verizon’s investment amounts to an ownership stake of about 9.9%.
“We are honored to have them as a strategic partner,” said Casa Systems President and CEO Jerry Guo during a conference call today.
It marks an important milestone for Casa and represents a strong validation of its role in cloud native wireless technology, he noted. The company believes its connected cloud native wireless technology has the potential to “revolutionize” the telecom industry. It’s designed to disrupt the legacy-based architecture.
In fact, when asked to identify the usual competitors in this kind of bid, Guo said that in the traditional 5G core or previous packet core space, there were very few players. Cisco, which acquired Starent Networks, as well as Ericsson, Nokia and Chinese companies were among them, he said.
In this generation, “we see the three, the typical incumbents, and also one new disruptor,” he said, referring to the Microsoft acquisition of Affirmed Networks. “You really don’t have a lot of players in these very complex technologies.”
Verizon’s endorsement of Casa’s technology is expected to help unlock new business with other large operators around the world that are planning a shift to a cloud-native network architecture. This announcement effectively makes Casa Systems “the safe bet vendor for other carriers” who will monitor closely the decisions made by operators like Verizon, Guo said.
Move to cloud-native functions
In an interview with Fierce, Guo underscored the role Casa plays in making the public MEC service happen for Verizon. Casa’s technology supports the non-standalone (NSA) and standalone (SA) versions of 5G, as well as 4G LTE traffic.
Whereas virtual network functions (VNF) were part of a previous generation of virtualization, that’s no longer in the picture, according to Guo.
Now it’s all about cloud native network functions, or CNF, he said. You can still run VNFs on servers, but they’re very difficult to orchestrate and not easily scalable, he said. CNFs are really cloud native and that’s what the public cloud companies like Google and Amazon are doing, he said, noting CNFs are built for the Kubernetes environment.
Casa Systems is involved in three different business segments for the wireless industry: packet core, radio access network (RAN) and fixed wireless. But today’s announcement is strictly about the packet core.
That raises the question about what Casa has up its sleeve for future fixed wireless access (FWA) solutions with Verizon, but Guo was revealing nothing on that front.
“We have been working with Verizon on other products prior to this,” he said, noting Casa has established itself as a credible, reliable technology partner. “Of course, this is not the end. We have other things” that may be announced in the future. “We haven’t announced everything” that they’ve been working on.