Telecom equipment leaders such as Ericsson, Huawei and Nokia are facing competition from small companies in the telecom network market.

ABI Research says much smaller companies and even startups are now winning business against Ericsson, Huawei and Nokia. These companies win with software skills, cloud computing, open sourcing, and being free of a legacy business to support.

ABI Research has released its Telco Cloud Hot Tech Innovators report, outlining 15 companies that are creating new types of innovation for telecoms market.

Aparna, Aria Networks, BroadForward, Cloudify, CPlane Networks, Frinx, Inmanta, Metaswitch, netElastic, Netrolix, NFWare, Ubiqube, Ubuntu and Yotta Communications are the Telco Cloud Hot Tech Innovators prepared by ABI Research.

These companies include cloud players, new entrants, network specialists, and software developers, which were previously barred from entering the telecoms market.

“The 15 companies we have profiled illustrate a new way of developing network technology. In some cases, they have even won business against Tier-1 vendors, which are 100 times their size, have 100 times their R&D budget and have a formidable sales organization,” said Dimitris Mavrakis, research director at ABI Research.

Some of them are 10-people companies and rely on open source projects to win business from telecom operators. Frinx, inManta, Metaswitch, Netrolix, NFWare and Yotta Communications are a few examples of startups that would have no place in the market five years ago.

Small companies in the telecom equipment space will be winning many more deals, as telecoms will realize the world doesn’t end beyond the reach of large infrastructure vendors.

Dimitris Mavrakis said software expertise, fresh thinking and most important, no legacy business to maintain, will give new entrants advantages to become sustainable and profitable businesses.