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Arch Red goes inside the box

Karri Huhtanen (left) and Jaakko Stenhäll have led Arch Red to new heights.Arch Red

A few years ago, Finnish Arch Red swallowed an Australian partner much bigger than itself – and didn’t choke. Now it’s taking on the world with full force.

The Internet provides plenty of information about network function virtualisation, NFV. However, sometimes the explanations can be difficult to get one’s not-so-techhead around.

CEO Karri Huhtanen and sales director Jaakko Stenhäll from Tampere-based Arch Red: explain to me like I’m five, please.

“The network infrastructure had been based on physical routers and firewalls, which have all been dedicated devices, ‘boxes’,” Huhtanen begins. “The new concept, NFV, means that we move on from dedicated boxes to virtual functions. The transition is similar to when companies stopped running their own, physical data centres and instead started buying the capacity directly from the cloud of an outsourced provider.”

NFV is, then, an ‘internal cloud’ in which the company can run its network functions virtually. This makes a lot of sense: previously, when a company needed to add capacity to its firewall, it needed to order a sturdier box, wait for its delivery and find people to configure it, all of which might take up to several weeks.

Now, instead of the operator having to invest and the customer having to wait, the virtual software can make the exact same changes, even automatically, in minutes. No need for costly machinery and manual labour, and meeting the needs of individual customers is easier and faster than ever.

Bye bye boxes

In this vast ocean of zeroes and ones that NFV is, Arch Red has its own niche: AAA, in other words authentication, authorisation and accounting. Whenever and wherever a user joins any given network, the user must be recognised and authenticated.

“If you dial a call somewhere in Europe, your phone number indicates certain things about you to your operator,” Stenhäll says. “It must know, for example, what kind of subscription you’ve got and what services are included.”

Arch Red took over Radiator from its Australian partner. Image: Arch Red

When multinational operators have a dozen mobile networks in just as many countries, a big pile of boxes is needed. Or, better said, used to be. Now Arch Red can provide them with Radiator, a single software that renders the box army redundant.

The same goes to operators that serve customers in a single country but use several networks, like WiFi and mobile. With Radiator, user authentication for all these networks can be dealt with using just one tool.

Reaching for the clouds

Initially, Radiator belonged to Australian Open System Consultants (OSC), and Arch Red was the company’s partner in product integration and customer support. A few years ago, OSC founders wanted to focus on their new business and transfer Radiator in the hands of the Finnish team. In 2013, Arch Red purchased all shares, and now OSC is its subsidiary.

At that point, Arch Red had a turnover of a few hundred thousand euros, whereas that of OSC was more than a million. Stenhäll admits that the risk was significant – but worth taking, as the subsidiary’s turnover has since been doubled.

Tables have turned since. When previously Arch Red was the one selling and supporting Radiator, now it focusses on product development. The team consists of 14 full-time employees, as well as a team of over 50 distribution partners around the globe.

Approximately 80 to 90 per cent of sales goes abroad, the majority to Europe. The markets in Asia and the Middle East are growing.

“By default, the product is usable all over the world,” Huhtanen says and points out that Radiator is capable of challenging big, traditional multinational players. “This opens up an abundance of opportunities. You could say we’re reaching for the clouds and so is our growth.”

By: Anne Salomäki