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ConteXtream claims mystery carrier has deployed its SDN technology to 40M customers

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ConteXtream, an early player in software-defined networking (SDN), has apparently deployed its software for around 40 million subscribers of a wireless service provider in the United States, although it refuses to say which company is using the services. Telecommunications companies have been kicking the tires on implementing software-defined networks for the sake of efficiency, cost savings and agility, but a big one like this suggests that the benefit could outweigh the cost.

With offices in Israel and Palo Alto, Calif., ConteXtream was founded in 2007 and focuses on using software to help service providers virtualize network functions. It has picked up investments from Comcast Ventures and Verizon Ventures, among others. “You can imagine that those two investment arms are very interested in what we do,” said Nachman Shelef, ConteXtream’s CEO and a co-founder.

The customer’s total subscriber base is least double the number that the virtualized network covers, Shelef said, meaning that it could be either AT&T (s t) or Verizon, (s vz) and given that Verizon has invested in ContexTream, it seems hard to imagine it would be selling services to its investor’s biggest rival, although Shelef wouldn’t say one way or the other.

Running ConteXtream’s Grid software on servers would allow a wireless carrier to more quickly roll out new revenue-generating features while also looking at traffic flows and directing certain subscribers only to the services they need, such as content filtering, customized billing, video optimization and subscriber statistics. “The old way of doing this was all the traffic goes through all functions, whether it needs to or not, without identifying each flow,” Shelef said. As a result, network appliances can be used more efficiently.

It’s a step toward the future of running all network functions as software on servers. “That vision is still very far off,” Shelef said.

Early SDN deployments have come from managed-hosting providers. Webscale deployments from Amazon and Facebook appear to be in the works. Enterprises have been slower to jump on board, even though many have expressed interest in SDN.

ConteXtream and other SDN vendors are eager to capitalize on the continuing hype cycle, and VMware (s vmw) is no exception to that, following its $1.26 billion acquisition last year of Nicira. Using software to virtualize networks is one component of VMware’s software-defined data center vision, which VMware CEO Pat Gelsinger will discuss with my colleague Om Malik at GigaOM’s Structure conference in San Francisco on June 19. Also at Structure, Juniper Networks (s jnpr) executive Bob Muglia will talk SDN with GigaOM Research Analyst David Linthicum.

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