Hewlett-Packard Co. has just acquired ConteXtream in a move that should give a significant boost to its network virtualization capabilities, the company said. Terms of the deal were not disclosed.

ConteXtream offers a carrier-grade software-defined networking fabric for network-functions virtualization environments. But rather than going after enterprises, ConteXtream has followed a strategy of targeting service providers and deploying its software in data centers so they can centralize network management.

The company has done pretty well too – in 2013, it told the now defunct GigaOM it had deployed software for 40 million subscribers of an unnamed U.S. wireless service provider.

ConteXtream is no stranger to HP. The two firms have been partners in network-functions virtualization (NFV) for some time, and earlier this year ConteXtream signed on as a member of HP’s OpenNFV program. Now, HP has gone the whole hog and brought the company entirely into its stable, announcing a definitive agreement to acquire it on May 26.

According to Saar Gillai, senior vice president and general manager of HP’s Communications Solutions business, the deal is designed to boost HP’s NFV capabilities. The company says NFV is critical to communications service providers (CSPs) whose networks experience rapid ups and downs in terms of traffic, and face stiff competition from rival firms that offer offer over-the-top (OTT) services.

NFV, along with software-defined networking (SDN), promises more agile, flexible and programmable networks because the technology eliminated the control plane and networking tasks from the hardware, instead building these into the software. ConteXtream’s technology should give HP more options to offer service providers looking to migrate to SDN infrastructure.

“We’re moving away from being tied to dedicated machines to having a resource pool with automated, self-service mechanisms,” wrote Gillai in a blog post. “In the networking world, there are countless functions—firewall, caching, optimization, filtering, etc.—and a bunch of inflexible hardware to do those things. NFV is about saying, ‘Why can’t we put these various functions in the cloud? Why does each function need to be on specialized and dedicated hardware?'”

Gillai said ConteXtream’s technology will compliment HP’s own NFV products, and will be critical for the company as it fights for a share of what will be an $11 billion market by 2018, according to some analysts.

“ConteXtream’s SDN controller platform complements HP OpenNFV solutions and aligns with NFV’s evolution as an open source-driven architecture,” Gillai added. “With this acquisition, HP will increase its involvement in and contribute key ConteXtream capabilities to the OpenDaylight community.”

Upon completion of the deal, the plan is for ConteXtream to folded into HP’s Communications Solutions business.

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