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For over a decade, Alphabet/Google (GOOGL) has been at the vanguard when it comes to designing its own data center hardware using off-the-shelf components, rather than buying more expensive (and often proprietary) gear from established enterprise IT and telecom equipment giants.
That makes Google's efforts to share its networking know-how with major mobile carriers something that investors in major data center and telecom equipment suppliers, such as Cisco Systems (CSCO) , Nokia (NOK) and Juniper Networks (JNPR) , should keep an eye on. Especially since Google seems to be prodding the carriers in a direction that some of them have already been moving in.
On Wednesday, Google announced it's teaming with major Indian carrier Bharti Airtel, top South Korean carrier SK Telecom and others to build "a platform for operators to run their network services." Importantly, the platform will make use of (among other things) software-defined networking (SDN) and network functions virtualization (NFV), two still-young technology concepts that Google has made heavy use of in its own infrastructure.
An SDN platform such as VMware's (VMW) NSX shifts networking intelligence from switches to software-based controllers that set policies on network traffic flows. And decisions on where to send traffic on a network is shifted from actual switches to "virtual switches" embedded in server virtualization software, with the former simply forwarding traffic as directed by the latter.