Top Telecom Equipment Vendors:

According to a new Dell’Oro Group report, the top seven telecom equipment makers as of 3Q 2018 are: Huawei, Nokia, Ericsson, Cisco, ZTE, Ciena, and Samsung.  Huawei has captured a 29 percent share of the global telecom equipment market, increasing its market share by 8 percentage points since 2013.   Huawei’s revenue share improved by two percentage points of market share annually in each of the past five years.  That’s despite huge challenges in the U.S., UK, Australia and some European telecom markets due to security and backdoor issues.

During the same time period, Ericsson’s and Nokia’s market share declined about one percentage point annually on average until 2018 when both vendor held their market share flat.  ZTE’s share, which had typically been at 10 percent, dropped two percentage points in 2018 due to the U.S. ban that caused the company to shut down portions of its business during the second quarter.

Additional key takeaways from the reporting period include:

• Following three years of decline, the overall telecom equipment market grew 1 percent year-over-year in 2018. The positive turn in the year was due to higher demand for Broadband Access, Optical Transport, Microwave, and Mobile RAN.  The remaining equipment—Carrier IP Telephony, Wireless Packet Core, SP Router and Carrier Ethernet Switch—declined in the year.  The two largest equipment markets in the year were Mobile RAN and Optical Transport.
• The worldwide Mobile RAN market surprised on the upside and performed better than expected in 2018. In addition to the strong focus on LTE and LTE-Advanced, the shift toward 5G NR (3GPP Release 15 New Radio – Non Stand Alone) continued to accelerate throughout the year.
• The worldwide Optical Transport market continued to expand for a fourth consecutive year driven by strong sales of DWDM equipment in China and to large Internet content providers for data center interconnect (DCI).

According to TelecomLead.com estimates, Huawei generated revenue of around $38 billion from carrier business, $10 billion from enterprises and $52 billion from phones and other devices — in 2018.

• Huawei said in December 2018 that it expects total revenue to increase 21 percent to $109 billion in 2018.
• Nokia Networks business revenue was 20.121 billion euro (–2 percent) or $22.82 billion last year.
• Ericsson’s revenue was SEK 210.8 billion (+3 percent) or $22.58 billion in 2018.

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Mobile Operator CAPEX:

The latest GSMA report indicates that mobile operator CAPEX reached $161 billion in 2018 and is forecast to be $161 in 2019 and $160 billion in 2020.  5G related CAPEX will grow to $123 billion in 52 markets in 2020 from $81 billion in 19 markets in 2019 and $41 billion in two markets in 2018.

Mobile operators will invest around $480 billion worldwide between 2018 and 2020 in mobile CAPEX.  Their investment focus will be 3G, 4G, 5G roll outs; and network optimization; capabilities beyond core telco.

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5G Market:

5G is on track to account for 15 per cent of global mobile connections by 2025, as the number of 5G network launches and compatible devices ramps up this year, according to a new GSMA report. The 2019 global edition of the GSMA’s flagship Mobile Economy report series reveals that a further 16 major markets worldwide will switch on commercial 5G networks this year, following on from the first 5G launches in South Korea and the US in 2018. It is calculated that mobile operators worldwide are currently investing around $160 billion per year (CAPEX) on expanding and upgrading their networks, despite regulatory and competitive pressures.

“The arrival of 5G forms a major part of the world’s move towards an era of Intelligent Connectivity, which alongside developments in the Internet of Things, big data and artificial intelligence, is poised to be a key driver of economic growth over the coming years,” said Mats Granryd, Director General of the GSMA. “While 5G will transform businesses and provide an array of exciting new services, mobile technology is also helping to close the connectivity gap. We will connect more than a billion new people to the mobile internet over the next few years, spurring adoption of mobile-based tools and solutions in areas such as agriculture, education and healthcare, which will improve livelihoods of people around the world.”

The new GSMA report reveals that:

• The number of 5G connections will reach 1.4 billion by 2025 – 15 per cent of the global total. By this point, 5G is forecast to account for around 30 per cent of connections in markets such as China and Europe, and around half of the total in the US;
• 4G will continue to see strong growth over this period, accounting for almost 60 per cent of global connections by 2025 – up from 43 per cent last year;
• The number of global IoT connections will triple to 25 billion by 2025, while global IoT revenue will quadruple to $1.1 trillion;
• One billion new unique mobile subscribers² have been added in the four years since 2013, bringing the total to 5.1 billion by the end of 2018, representing about two thirds of the global population;
• More than 700 million new subscribers are forecast to be added over the next seven years, about a quarter of these coming from India alone;
• An additional 1.4 billion people will start using the mobile internet over the next seven years, bringing the total number of mobile internet subscribers globally to 5 billion by 2025 (more than 60 per cent of the population).

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According to Telecomlead.com, Huawei has signed 30 plus 5G commercial contracts. Huawei has delivered over 40,000 5G base stations for commercial use. Huawei has 50 plus 5G engagements with customers.   Nokia has 20 plus 5G contracts, and almost 100 5G engagements with customers.   Samsung shipped 36,000 5G base stations – mainly to operators in the US and Korea — in 2018.

According to Dave Bolen of Dell’Oro Group, Cisco, Ericsson, Huawei, Nokia, and ZTE are the top-five wireless/ mobile packet core infrastructure vendors.   At MWC 2019 in Barcelona, each put on a spectacular show with massive stands demonstrating its end-to-end technology prowess empowering 5G use cases, all enabled with their respective cloud-native cores. Their stands were packed with customers and potential customers leading to thousands of meetings. Each vendor had its share of press releases with 5G deals around the globe that are too numerous to name here. Links to the happenings at MWC19 from each of the top-five vendors may be found at Cisco, Ericsson, Huawei, Nokia, and ZTE.

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References:

http://www.delloro.com/delloro-group/telecom-equipment-market-2018

https://www.telecomlead.com/telecom-equipment/top-telecom-network-cos-huawei-nokia-ericsson-cisco-zte-ciena-samsung-89409

http://www.delloro.com/dave-bolan/5g-mwc19-barcelona-observations-its-all-about-the-core

https://www.gsma.com/newsroom/press-release/new-gsma-study-5g-to-account-for-15-of-global-mobile-industry-by-2025/

https://www.gsma.com/r/mobileeconomy/

https://www.gsmaintelligence.com/research/?file=5a33fb6782bc75def8b6dc66af5da976&download

Abstract (by Rohit Mehra, IDC Analyst):

Network transformation is well on its way with the evolution of SDN and SD-WAN, leading to flexible network architectures taking hold from the cloud to the enterprise edge, powered by intelligent automation. Increasing use of streaming analytics and pervasive visibility, enhanced by ML and AI, is creating a next-generation, agile network that self-remediates performance issues and proactively responds to security threats. The result will be greater operational efficiencies, improved user experience, and verified SLAs that ensure delivery of meaningful business outcomes.  The network is a foundation layer for enabling secure, scalable and efficient use of Cloud, Edge and IoT Applications.

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Please see comments below this post for Alan’s thoughts on Rohit’s presentation at IDC Directions 2019.

Network Requirements Continue to Expand: 

▪Fast and adaptive

▪ Capacity on-demand

▪ Edge-to-Cloud Latency

▪ Network-level security

▪ Analytics capable of yielding new insights and driving digital transformation (DX)

▪ Bridge cloud and telco domains

▪ Global reach

“Self-driving” Networks are now needed to be Automated, Orchestrated and Optimized Network System.  Traditional networks break down as they scale (get larger) and increase workloads, making automation essential in future networks, e.g. 5G.

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Definitions:

Network automation is a methodology in which software automatically configures, provisions, manages and tests network devices. It is used by enterprises and service providers to improve efficiency and reduce human error and operating expenses. Network automation tools support functions ranging from basic network mapping and device discovery, to more complex workflows like network configuration management and the provisioning of virtual network resources. Network automation also plays a key role in software-defined networking, network virtualization and network orchestration, enabling automated provisioning of virtual network tenants and functions, such as virtual load balancing.

Digital Transformation (DX):

IDC defines DX as the continuous process by which enterprises adapt to or drive disruptive changes in their operations, customers, and markets. Today, many businesses are implementing DX without success, and some fail entirely. In part, this is due to pervasive technology shifts that are changing how organizations transact business, address customer expectations, operate and secure products and services, and compete in the marketplace.

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IDC maintains that virtualization has matured from simple partitioning and encapsulation to leveraging the mobility of virtual machines to improve management and operations of IT environments. Virtualization 2.0 includes a host of new use cases that range from high availability and disaster recovery to hosted clients and true utility computing.  Note that this information was not discussed by Rohit, but rather assumed to be known by the session attendees.

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Emergence of AI-based Network Automation:

✓ Simpler declarative management, enhanced verification and closed-loop processes

✓Network will accurately apply/enforce intent

✓Respond in near real-time to application, network and security events

Limitations of Classical Network Monitoring:

• Lack of pervasive, end-to-end visibility across physical/virtual/cloud
• Minimal application context
• Limited, spotty Analytics
• Frequently complex/costly
• Ping/SNMP/S flow/Trace route
• Unable to capture real-time network events

The Case for Streaming Telemetry In Support for Visibility and Analytics (see Alan’s Comment in box below article):

Infrastructure at Scale Demands Streaming Network Telemetry! Hyperscalers have deployed streaming telemetry extensively because it can provide millions of updates per second:  Time stamped at source (for real time and network forensics)
▪ Event-driven, subscription-based
▪ Vendor support for standards based streaming telemetry • e.g., Cisco, Arista, Juniper, Ciena, Nokia

Optimization of apps/user experience (48% 0f respondents), plus security (41%)  are top priorities for AI-enabled network automation:

IDC asked: What do you see as the most important aspects of an AI-enabled Network Automation solution? (Pick 3).  Here’s the ordered ranking:

• Optimize and enhance application availability/performance and user experience  48%
• Implement security policies, including visibility into encrypted traffic  41%
• Work across multiple networks (on-premises and cloud-based)  38%
• Reduce cost and complexity of network operations  36%
• Simplicity in network deployment, management and operations  36%
• Incorporate streaming telemetry data for real-time visibility and insights  36%
• Leverage existing network infrastructure and/or software defined networking (SDN) deployment  35%
• Anticipate network outages and plan for network changes  30%

Automation at the Network Edge:

▪ Network platforms can leverage aggregate data from 1000s of deployments
▪ Crowd-sourced data is then dynamically applied to similar environments (anonymized)
▪ Benefits include dynamic scaling and mitigation of performance and/or security issues as they arise

Carrier Networks: The Automation Imperative – complexity across carrier networks continues to grow

▪ Multiple-generations of technology
• Ethernet, MPLS, Broadband IP VPNs
• 3G, 4G, 5G cellular
▪ Physical / Virtual
• VMs and Container based VNFs
• Evolution of Telco Cloud
▪ Cloud Aspirations
▪ Monetization Roadmap

The 5G Promise Is Not Achievable Without Significantly Enhanced Automation

▪ Network Slicing is key to delivering on the 5G promise (yet there are no implementable standards for network slicing; they are all proprietary implementations)
▪ Predicated upon automated provisioning, service chaining of cloud-native network components
▪ Automated traffic optimization across fronthaul, mid-haul and back-haul key to efficiency and customer experience

Security Analytics:  

▪Traffic Analytics and Behavior Modeling
▪AI-enabled Anomaly Identification
▪Automated, Policy-based Remedial Actions (e.g. Quarantine)

AI-enabled Capacity Planning and Optimization:

▪ AI-powered network automation platforms monitor and assist with network capacity requirements and dynamically optimize flows
▪ Cloud-enabled Day 1 network provisioning and management automation that meets IT and business needs

Automating Enterprise Network Operations:

▪ AI-powered network operations create self-healing networks
• System monitors operations
• Detects performance degradations
• Determines root cause
• Automatically remediates the problem before it impacts users
▪ AI-powered Helpdesk Automation
• User Interfaces leverage Natural Language Processing for queries, e.g. Q: Why is my Wi-Fi coverage weak on the fourth floor? A: Switch to the 2.5Ghz Band
▪ Automated QoS and App Performance Guarantees
• Operator specifies minimum quality of service levels, system automatically maintains those in real time
• Resources are spun up to ensure and maintain service levels

Self-Driving Networks Require Closed-Loop Visibility and Automation:

▪ Self-driving networks will rely on streaming telemetry and closed-loop automation to detect and proactively respond to traffic-management issues and security threats
▪ Feedback loop from AI/ML to policy/intent will provide the ability to Visualize, Correlate and Predict- key ingredients for automation
▪ Requires a robust eco-system of network, visibility/analytics and AI solutions, SI/SPs

Take a Pragmatic Approach to Network Automation:

❖ Pick the right network automation use case(s)
❖ Getting automation right is mission critical
❖ Ensuring Clean, Relevant and Secure Data will be foundational to building AI-enabled network automation
❖ Developing Skills for Network Automation will be key to success
❖ Vendors can do their part by making products simpler to consume, deploy, manage

Final Thoughts on Network Autonomy:

1. Journey has begun: We are now at the cusp of major advances thanks to areas such AI, visibility and analytics, streaming telemetry, etc.2
2. Broad Applicability: Autonomous Networks will extend from Cloud to the Enterprise/IoT Edge, and will also be foundational to 5G Rollouts
3. Augment, not Replace IT: AI-enabled network automation augments human capabilities
4. Be Judicious: Move forward judiciously, with caution, leveraging automation lessons from other IT domains

Rohit Mehra: [email protected]  +1 (508) 935-4343

https://www.gartner.com/doc/reprints?id=1-56H26OT&ct=180711&st=sb

The future-state network is an aspirational view of how enterprise network architectures should evolve to meet emerging business requirements and align more closely to critical business objectives.

The primary external forces driving network change are the adoption of digital business and the concept of “digital to the core.” This will result in increased adoption and investments in hybrid-cloud-based infrastructure, platform and application services to meet dynamic business requirements, and a greater focus on always-on service delivery to clients. Digital to the core will also drive IoT deployments to richer, more complex business models and processes, which will compound the pressure of increasing user expectations for consistently strong network performance, quality, reliability and security. This is overlaid with the fact that we anticipate increased pressure from the business to maintain flat networking budgets.

As expectations of greater network dynamism become the norm, network service providers will also follow suit with rapid delivery of new enterprise network services. These will be delivered through network function virtualization (NFV) capabilities, deployed on customer-located vCPE platforms, or within the service planning network, in next-generation, Central Office Re-architected as a Datacenter (CORD)-based architectures. We will see a continued trend to leverage software-based, virtualized network solutions deployed with enterprise networks — as xSP services and available as over-the-top (OTT) services from a growing number of players.

After decades of focusing on speed, network performance and features, future network innovation will target operational simplicity and business models that closely align with elastic cloud-based services. These services are becoming more prevalent in — and demanded by — organizations with strong digital transformation agendas. The evaluation of networking technology within the most successful enterprises will balance between functional, financial and operational requirements. Understanding when “good enough” is actually good enough will be critical to architecting networks that are ready for digital business.