Appledore Perspective: NETSCOUT Transformed

Anil Singhal ENGAGE19

As founder, partner, and principal analyst of Appledore Research, Patrick Kelly has 25 years’ experience in the data networking and software industry, with a particular focus on NFV orchestration and management, analytics, customer experience management, cloud computing, and M2M.  Kelly met with senior executives, product managers, in each division, and customers at Engage19, our recent customer event in Nashville, to hear about our transformative vision for the future.

This post was originally written by Patrick Kelly and is reproduced with permission from Appledore’s blog of April 17, 2019.

NETSCOUT has transformed itself to become a diversified supplier of radio planning, subscriber analytics, and intelligent service assurance solutions to the telecommunication market. At the core of its offering is InfiniStreamNG (ISNG) which collects and makes available detailed packet data for use in service level reporting, subscriber analysis, session decode, and RAN-based geoanalytics. It is the largest supplier of passive and active probing solutions in the telecommunication market.

The transformation of NETSCOUT has occurred as a result of:

  1. An aggressive acquisition strategy over the past four years that brings adjacent, complementary assets together in the telemetry, analytics, RAN geoanalytics, and threat detection market.
  2. A global customer base originating from strong relationships built over decades that enables NETSCOUT to effectively cross sell solutions in its expanding portfolio.
  3. A unified architecture built on ISNG that enables NETSCOUT to deliver new product solutions much faster to its customers and lower overall support and integration cost. This is a multi-year development effort to move vertically developed products from acquisitions to a shared common data model and new agile development architected as microservices to support different cloud deployment models.
  4. A partner-friendly approach to exposing NETSCOUT smart data. In the past NETSCOUT was resistant to open its platform via API exposure. In the past year, NETSCOUT is promoting open REST APIs to technology partners and system integrators. This approach should result in wider deployments of NETSCOUT technology yielding new sources of revenue via its new pricing models. It also enables NETSCOUT to gain market reach in countries where NETSCOUT resources are limited.
  5. More flexible pricing and packaging models. NETSCOUT revised its pricing and packaging models as the network becomes more software-based. Virtualization and workloads moving to the edge create a more dynamic network. NETSCOUT is enabling its customers to purchase and deploy its solutions in both a CAPEX and OPEX model. It also delivers its probes in different form factors including appliance, VM, container, or "as a service".

Appledore Research attended the NETSCOUT customer-focused Engage event held in Nashville, TN on April 15 - 16, 2019. It allowed us the opportunity to meet with senior executives, product managers in each division, and customers who represented all industries and regional geographic markets. CSPs that we spoke to attending the event included Verizon, Bell Mobility, BT, Telecom Argentina, Volkswagen, and Cerner. This was the 1st event that NETSCOUT hosted which combined customers with industry analysts.

NETSCOUT posted revenue of USD 675 Million in the first nine months of its fiscal 2019. Its fiscal year ends March 31, 2019. NETSCOUT revenue from CSP is 49% and Enterprise customers account for 51% of revenue. The Enterprise business in the past year has been growing while the CSP business has been in decline - mostly as a result of delayed investment by CSPs. Booking in the CSP segment are improving as CSPs prepare for the next technology upgrade cycle which includes 5G, Edge computing, and virtualization of the core network. NETSCOUT is putting a greater emphasis on leveraging its common "smart data" set in the security threat detection market. Most of these solutions are being developed from the Arbor assets.

NETSCOUT has effectively combined a diverse set of assets from many acquisitions over the past four years into a more unified enriched data platform. This data is now being made available to 3rd party partners via REST API's. NETSCOUT is extending capabilities via its own set of add-on modules that include nGeniusONE, nGenius Session Analyzer, nGenius Business Analytics, and TrueCall GeoAnalytics (formerly Newfield Wireless), and Sightline (formerly Arbor).

NETSCOUT is the largest supplier of physical and virtual probes with deployments in most of the top tier CSPs globally. The vScout is a virtual probe that resides alongside the VNF in a virtual machine or container, monitoring data flows. The vStream product operates in the real time data ingest layer and is used for long-term packet recording including session trace details. nGenius Business Analytics provides mobile analytics using preprogramed KPI analysis. TrueCall for RAN is a leading RAN geoanalytics solution with 3.5 Million LTE cells being monitored.

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Patrick Kelly is founder, partner, and principal analyst of Appledore Research