by Stefan Pongratz, VP Dell’Oro Group

Following four consecutive years of modest telecom equipment growth across the six telecom programs tracked at the Dell’Oro Group, preliminary findings show that the aggregate telecom equipment market moderated somewhat from the 8% revenue increase in 2021 to 3% year-over-year (Y/Y) in 2022.

Looking back at the full year, the results were slightly lower than the 4% growth rate we projected a year ago going into 2022. In addition to more challenging comparisons in the advanced 5G markets and the supplier exits in Russia, the strengthening USD weighed on the broader telecom equipment market. Supply issues also impacted the market negatively during 1H22 but eased somewhat in the second half.

Regional developments were mixed, underpinned by strong growth in North America and CALA, which was enough to offset more challenging conditions in EMEA and the Asia Pacific. With China growing around 4%, we estimate global telecom equipment revenues excluding China increase around 3% in 2022.

From a technology perspective, there is a bit of capex shift now underway between wireless and wireline. Multiple indicators suggest Broadband Access revenues surged in 2022, however, this double-digit growth was offset by stable or low-single-digit growth across the other five segments (Microwave Transport, Mobile Core Network, Optical Transport, RAN, SP Router & Switch).

Vendor dynamics were relatively stable between 2021 and 2022, with the top 7 suppliers (Huawei, Ericsson, Nokia, ZTE, Cisco, Ciena and Samsung) driving around 80% of the overall market. Despite on-going efforts by the US government to limit Huawei’s TAM and access to the latest silicon, our assessment is that Huawei still leads the global telecom equipment market, in part because Huawei remains the #1 supplier in five out of the six telecom segments we track. At the same time, Huawei has lost some ground outside of China. Still, Nokia, Ericsson, and Huawei were the top 3 suppliers outside of China in 2022, accounting for around 20%, 18%, and 18% of the market, respectively.

Editor’s Note:

MTN Consulting recently noted that network spending was starting to flatten in the telco segment. In 3Q22, telco capex dipped 5% YoY, the first decline since 4Q20. The vendor market also weakened in 3Q22, as Telco Network Infrastructure (NI) vendor revenues grew just 2% after seven straight quarters of much stronger growth. Now we have a solid set of preliminary results for 2022’s final three months, 4Q22. For the 105 vendors available, Telco NI revenues fell by 1% YoY in 4Q22; this is the first decline for this group of Telco NI vendors since 2Q20, when COVID shut down economies. For CY2022, Telco NI grew just 2% YoY, down from +9% in 2021, when telcos splurged post-COVID, and the 5G RAN market saw a nice run-up. Among the larger reporting vendors, the best 4Q22 Telco NI growth was recorded at the three cloud providers (AWS, Azure, and GCP); engineering services companies Dycom and MasTec; NEPs Calix, Ciena, Samsung, and Technicolor (now Vantiva). New vendor Rakuten Symphony recorded the best overall growth rate in 4Q-2022, with revenues of $180M up 193% YoY. On the other side, Cisco, Ericsson, and ZTE saw the worst declines in 4Q-2022, due in part to a downswing in spending among their largest customers.

For the overall market, some of the decline seen in 4Q-2022 was inevitable, as telcos slow down their initial 5G network buildouts. Other negatives include higher interest rates, higher energy costs, weak economic growth, cloud alternatives to network builds, and 5G’s inability to deliver services revenue growth. Revenue guidance for 2023 from key vendors suggests a flat to slightly down market, as telcos absorb capacity and continue to wrestle with these challenges. Capex guidance from telcos is consistent.

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Following five consecutive years of growth, the Dell’Oro Group believes there is more room left in the tank. Collectively the analyst team is forecasting the overall telecom equipment market to increase 1% in 2023 and record a sixth consecutive year of growth. Risks are broadly balanced and the analysts will continue to monitor the 5G rollouts in India, capex cuts in the US, and 5G slowdown in China (preliminary data by MIIT suggest new 5G BTS volumes will drop by a third in 2023 relative to 2022), wireless and broadband investments in Europe, forex fluctuations, and inventory optimization.

*Telecommunications Infrastructure programs covered at Dell’Oro Group, include Broadband Access, Microwave & Optical Transport, Mobile Core Network (MCN), Radio Access Network (RAN), and SP Router & Switch.

References:

Worldwide Telecom Equipment up 3 Percent in 2022

Telco NI vendor growth slips to 2% YoY in 2022

Dell’Oro: PONs boost Broadband Access; Total Telecom & Enterprise Network Equipment Markets

Gartner defines the network firewall market as the market for firewalls that use bidirectional stateful traffic inspection (for both egress and ingress) to secure networks. Network firewalls are enforced through hardware, virtual appliances and cloud-native controls. Network firewalls are used to secure networks. These can be on-premises, hybrid (on-premises and cloud), public cloud or private cloud networks. Network firewall products support different deployment use cases, such as for perimeters, midsize enterprises, data centers, clouds, cloud-native and distributed offices.

• Networking: This includes support for routing tables with destination network address translation (DNAT) and static network address translation (SNAT) capability.
• Stateful inspection: This enables inspection of traffic based on stateful firewall rules.
• Threat detection and inspection: This includes intrusion prevention system (IPS) and malware inspection capabilities.
• Web filtering: This includes filtering of outbound traffic for HTTP and HTTPS and applications.
• Advanced logging and reporting: All actions of firewall administrators can be logged, and reports can be customized and run based on different object types and traffic types. Threat-based and web-filtering-based granular reports can be generated.

• Internet of Things (IoT) security: This is achieved either using a module built into threat detection controls or via a dedicated subscription integrated within network firewall offerings. Specific features may include discovery of IoT devices, risk analysis and dedicated rules to block attacks related to these devices. Also, IoT signatures as a part of IPS signature base.
• Network sandboxing: Network sandboxing monitors network traffic for suspicious objects and automatically submits them to the sandbox environment, where they are analyzed and assigned malware probability scores and severity ratings.
• Zero trust network access (ZTNA): Zero trust network access (ZTNA) makes possible an identity- and context-based access boundary between any user and device to applications.
• Operational technology (OT) security: This includes integrated or dedicated features related to protecting an OT environment. Stand-alone OT security offerings are not considered here. Features may include dedicated OT-related threat intelligence, dedicated IPS signatures for OT devices, support for supervisory control and data acquisition (SCADA) applications and threat inspection.
• Domain Name System (DNS) security: This secures traffic to DNS by offering monitoring, detection and prevention capabilities against DNS layer attacks.
• Software-defined wide-area network (SD-WAN): This provides dynamic path selection, based on business or application policy, centralized policy and management of appliances, virtual private network (VPN), and zero-touch configuration

As network firewalls evolve into hybrid mesh firewalls with the emergence of cloud firewalls and firewall-as-a-service offerings, selecting the most suitable vendor is a challenge. Gartner assessed 17 Network Firewall vendors to help security and risk management leaders make the right choice for their organization.

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Fortinet was recognized in 2022 Gartner® Magic Quadrant™ for Network Firewalls for the 13th time.   It leads for appliance-based distributed-office use cases, thanks to its offer of mature SD-WAN and firewall capabilities in a single box.

The company’s FortiGate Next-Generation Firewalls deliver seamless AI/ML-powered security and networking convergence over a single operating system (FortiOS) and across any form factor. This includes hardware appliances, virtual machines, and SASE services.

FortiGate NGFWs offer (Source: Fortinet):

• Powerful security and networking convergence. Secure networking services like SD-WAN, ZTNA, and SSL decryption are included – no need for extra licensing.
• Best price-per-performance. Our unique ASIC architecture delivers the highest ROI plus hyperscale support and ultra-low latency.
• AI/ML-powered threat protection. Multiple AI/ML-powered security services stop advanced threats and prevent business disruptions.

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Palo Alto Networks was among the 17 vendors that Gartner evaluated for its 2022 Magic Quadrant for Network Firewalls, which evaluates vendors’ Ability to Execute as well as their Completeness of Vision. Palo Alto Networks believes its vision of offering best-in-class security as part of an integrated network security platform, combined with its commitment to customer success, has helped the company earn a Leader position for the 11th consecutive year.

“From the industry’s first Next-Generation Firewall in 2007 to the most recently announced PAN-OS 11.0 Nova, Palo Alto Networks relentless innovation helps provide powerful protection for customers. We are honored to be recognized as a Leader in eleven consecutive Gartner Magic Quadrant for Network Firewalls reports,” said Anand Oswal, senior vice president for Products, Network Security. “We believe this recognition by Gartner is a testament to both our innovation, using ML and AI to stop the most evasive threats, and our ability to simplify network security for our customers with a consolidated platform approach.”

Palo Alto Networks believes its leader position in network firewalls is fueled by:

• Best-in-class security that prevents zero-day threats: Modern malware is now highly evasive and sandbox-aware. To address this, the recently announced PAN-OS 11.0 Nova introduced the new Advanced WildFire® cloud-delivered security service, which provides unprecedented protection against evasive malware. Advanced Threat Prevention (ATP) now helps protect against zero-day injection attacks in addition to highly evasive command-and-control communications.  Additionally, Advanced URL Filtering offers industry-first prevention of zero-day web attacks with inline machine learning capabilities.
• Strength in SASE: The industry’s most complete SASE solution, Prisma® SASE simplifies secure access by connecting all users and locations with all apps from a single product. The superior security of ZTNA 2.0 protects both access and data to dramatically reduce the risk of a data breach, while a cloud-native architecture with integrated Autonomous Digital Experience Management (ADEM) provides exceptional user experiences.
• Helping customers improve their security posture: Palo Alto Networks AIOps helps customers adopt best practices with guided recommendations, reduce misconfigurations that can lead to security breaches, and predict network-impacting issues before they occur. AIOps, launched earlier this year, now processes 49 billion metrics monthly across 60,000 firewalls and proactively shares 24,000 misconfigurations and 17,000 firewall health and other issues with customers for resolution every month.
• A comprehensive product portfolio offered as a platform: Palo Alto Networks offers multiple cloud-delivered security services that work together to prevent attacks at every stage of the attack lifecycle. These security services are offered as part of a network security platform, which makes it easy for customers to consume these services while consistently protecting their data centers, branch offices and mobile workers as well as applications in multicloud and hybrid environments with best-in-class security everywhere.

Since the Gartner evaluation, Palo Alto Networks has further strengthened its NGFW capabilities with the announcement of the latest version of its industry-leading PAN-OS® software, PAN-OS 11.0 Nova. The innovations announced also included the new Advanced WildFire cloud-delivered security service, which brings unparalleled protection against evasive malware, enhancements in the Advanced Threat Prevention service and new fourth-generation ML-powered NGFWs. The company has also taken strides to enhance its customer support experience and grown its Global Customer Service organization.

To learn more about Palo Alto Networks recognition in the 2022 Gartner Magic Quadrant for Network Firewalls, please visit:
https://www.paloaltonetworks.com/blog/2022/12/gartner-leader-11-straight-times/

To read a complimentary copy of the 2022 Gartner Magic Quadrant for Network Firewalls, please visit:
https://start.paloaltonetworks.com/gartner-mq-for-firewalls.html

Register for the Palo Alto Networks PAN-OS 11.0 Nova launch event here:
https://start.paloaltonetworks.com/nova

To learn more about the Palo Alto Networks Next-Generation Firewall platform, visit:
https://www.paloaltonetworks.com/products/secure-the-network/next-generation-firewall

References:

https://www.gartner.com/reviews/market/network-firewalls

https://www.gartner.com/doc/reprints?id=1-2C62ETHZ&ct=230103&st=sb

https://www.fortinet.com/solutions/gartner-network-firewalls

https://www.wcax.com/prnewswire/2023/01/11/palo-alto-networks-positioned-leader-2022-gartner-magic-quadrant-network-firewalls-11th-consecutive-year/

Well, it’s certainly about time for IPv6!  The transition from IPv4 to IPv6 has been going on for at least 12 years (See New Urgency to Move to IPv6 as Last Block of IPv4 Addresses are Allocated, published Feb 6, 2011!).

IPv6 is the first and might be the last upgrade of the global network in the coming decades. The development of IPv6 and IPv6 derivative and convergence technology standards will meet the objective requirements of the continuous expansion of the future network, facilitate the digital transformation in multiple fields, and become a new track of global digital technology innovation. In light of this, the “Global IPv6 Development and Standard Evolution Symposium and the Release Ceremony of the 2022 IPv6 Support White Paper,” held by the IPv6 Forum and the China Future Internet Engineering Center (CFIEC) on January 5, 2023.

The event accumulates global experts from global organizations from IPv6 Forum, CFIEC, Asia-Pacific Internet Network Information Center (APNIC), China Academy of Information and Communications Technology (CAICT), Internet Engineering Task Force (IETF), China Communication Standardization Association (CCSA), Institute of Electrical and Electronics Engineers (IEEE), European Telecommunications Standardization Association IPv6 Enhanced Innovation Working Group (ETSI IPE). Experts discuss the development vitality and opportunities of IPv6 under the new turning point of digital economy, strengthen the in-depth cooperation between different organizations, establish a perfect IPv6 and derived and fusion technology standards. accelerating large-scale deployment of IPv6 globally in the “global IPv6 development” and “IPv6 standard evolution” dimensions.

IPv6 is leading the development of the Internet

IPv6 provides more innovation capacity and development space for network infrastructure. Wu Hequan, academician of the CAE Member, summarizes the current development trend and characteristics of IPv6 at the meeting. He believes that the global Internet development has entered the dominant period of IPv6, which mainly presents three characteristics: first, the transition from IPv4 to IPv6 is accelerating; Second, from IPv4/IPv6 dual stack to IPv6 only; Third, IPv6 is developing towards IPv6+, with the developing IPv6 address space capabilities and fully integrating with the new generation of IT. IPv6 is playing an active role.

Liu Dong, Vice President of IPv6 Forum, introduced the development of the global IPv6 deployment in general: “The global IPv6 deployment speeds up to a new level in 2022. Countries or regions with a combined IPv6 deployment rate of around 30% or above account for more than half of the world. IPv6 deployment rate in 26 countries exceeded 40%, an increase of 9% compared with 2021; 37 countries have deployment rates exceeding 30%; The deployment rate of 51 countries exceeded 20%. IPv6-only has become a global consensus. The IPv6 applications and users will grow rapidly in the future ”

Sharing the development of IPv6 deployment in the Asia-Pacific region at the conference, Pan Guangliang, Director of Basic Resource Services at the Asia Pacific Internet Network Information Center (APNIC), puts, “The growth of the Internet has not stopped and will not stop. As more and more devices connects to the Internet, IPv6 is the way to go and is growing globally, with Asia seeing strong growth in overall IPv6 capability. According to APNIC statistics, the IPv6 support capacity in Asia exceeds the global average level by nearly 40%. Several countries such as China, India and Malaysia have witnessed rapid IPv6 development. In the next few years, the deployment of IPv6 will continue to improve, and more innovative applications based on IPv6 will appear ”

The development of IPv6 in China is outstanding. Gao Wei, director of the Internet Center of the Standards Institute of the China Academy of Information and Communications Technology, points out at the conference: “China is among the first countries in the world to carry out research, standard setting, application development and large-scale commercialization of IPv6 and next-generation Internet technologies. By December 2022, the number of IPv6 users in China has reached 717.7 million, with IPv6 traffic on fixed networks accounting for 12% and mobile networks 46%, showing a good momentum of development. IPv6 transformation achieves monumental success especially in the cloud platform, to achieve the new era of IPv6 traffic increase to provide strong support.”

IPv6 standard evolves from IPv6-Only to “cloud network”, “computing network” and “security”

In the era of digital economy, the integration of the Internet and the economy continues to deepen, and industrial digitalization with digital industrialization have become opportunities for all industries to score a new chapter. As an important starting point of digital transformation, standard is more conducive to opening up a leading advantage in the changing situation. The research, development and creation of IPv6 and its derived and converged technical standards are closely related to the development and deployment of IPv6. With the accelerated deployment of IPv6, the international standardization of IPv6 has entered a new stage and came across new changes.

Zhao Huiling, chairman of CCSA TC3 Technical Committee of China Communications Standardization Association, says that after 20 years of development, the current IPv6 standards have formed a systematic and standardized trend, covering five categories of standards: resources, networks, applications, security and transition. The standards at this stage can meet the needs of IPv6 network construction, but the security standards and application standards still have a lot to catch up. She also proposes four key directions for the creation of IPv6 industry standards in the new stage:

• First, in the field of cloud network integration, IPv6 supports the deep integration of new resources such as cloud network edge intelligent collaboration and data computing power;
• Second, in the field of IOT, IPv6 supports seamless global coverage, and anyone can communicate with anyone at any place and any time.
• Third, in the field of intelligent operation and maintenance, IPv6 supports end-to-end network quality assurance to ensure that the demands of the cloud on the network in enterprise production scenarios are met.
• Fourth, in the field of security and credibility, IPv6 supports end-to-end security endogenous mechanisms, adaptive security frameworks and security atomic capabilities, security defense, detection, and response prediction.

Li Zhenbin, member of the IETF Internet Architecture Committee (IAB) and Huawei’s chief IP protocol expert, also mentions that, “As the data communication industry moves towards the intelligent connection era of IPv6+, IETF has also gradually carried out various IPv6 standardization work, including the IPv6+1.0 (SRv6) standard, the IPv6+2.0 (5G&Cloud) standard Important achievements have been made in relevant standards. At this stage, IPv6 provides more differentiated service capabilities. Cloud network and computing network become the key applications of IPv6. Through IPv6 expansion and APN and other technologies, personalized networks can be realized and diverse computing power requirements can be met. In terms of APN6, we have signed a standard manuscript with several operators to successfully promote BOF at IETF, which will be the key direction of future technology innovation and standard creation. In addition, the general tunnel encapsulation technology GIP6 based on IPv6 also deserves further attention. ”

After years of deployment and penetration, IPv6 has entered a golden age of IPv6-Only evolution. When introducing the development of IPv6 at ETSI, Xie Chongfeng, Vice Chairman of ISG at ETSI IPE (IPv6 Enhanced innovation) and senior expert on IPv6 at China Academy of Telecommunication Research, says that network infrastructure is multi-domain and multi-scenario. To this end, we should actively promote the multi-domainIPv6-Only network architecture and technical requirements, in the form of a standard in the industry consensus, which will help operators, OTT, and service and devices manufacturers to buildIPv6-Only networks, and promote network infrastructure towards IPv6-Only.

The Release of 2022 Global IPv6 Support White Paper:

This seminar is not only a rare multilateral interaction and exchange between domestic and foreign organizations and experts on IPv6 development and standards, but also a demonstration of the fruitful results achieved in promoting IPv6 globally in the past year. At the meeting, the 2022 Global IPv6 Support White Paper jointly prepared by the IPv6 Forum and CFIEC was officially released. Latif Ladid, the president of the IPv6 Forum, says at the release ceremony that the white paper is based on the latest progress of global IPv6 technology, the number of global users, the network and domain name system, international operators, websites, cloud services Network equipment and other parties elaborate on the global IPv6 support and make multi-dimensional and multi-dimensional statistics to comprehensively, objectively and accurately reflect the global IPv6 development. At the same time, the IPv6 Forum also selected “IPv6 Outstanding Contribution Enterprises” and “IPv6 Pioneer Enterprises” in 2022 based on the white paper. Latif Latid gives awards to five enterprises including Cisco, Huawei, HP, H3C and D-Link, with the “IPv6 Outstanding Contribution Enterprise” award, and ten enterprises, Dell, IBM, TOPSEC, QI-ANXIN, Allied Telesis, Panasonic, Microsoft, ZTE, China Mobile and TP Link, receive the “IPv6 Pioneer Enterprise” award. Yang Wu, chief architect of the H3C Router product line, Zhu Keyi, head of the Huawei Digital Communication Standards and Patent Department, and Han Minglei, an expert on TUPSEC protocol conversion products, also shared the latest IPv6 solutions and products at the meeting.

Liu Dong, Vice President of the IPv6 Forum and director of CFIEC, illustrates: “At the beginning of the year, it is a great pleasure to meet with you online. Through your sharing, we can see that we have made progress in two important dimensions, ‘Global IPv6 Development’ and ‘IPv6 Standard Evolution’, and formed a large number of new achievements. In the future, our various organizations will continue to deepen cooperation and make use of advantages. While moving towards IPv6-Only, the first is to maintain continuous innovation and improve the IPv6 network value; The second is to actively expand the innovative application of IPv6 in the context of the Internet of Everything. The third is to create and improve new technical standards for the sustainable development of IPv6. Let us accelerate the global IPv6 scale deployment, and let IPv6 and the Internet benefit everyone. ”

SOURCE Beijing Internet Institute

References:

https://www.prnewswire.com/news-releases/the-internet-has-entered-the-new-era-led-by-ipv6-301716195.html

Akamai: U.S. Internet speeds increased 22% YoY; IPv6 adoption is a conundrum

New Urgency to Move to IPv6 as Last Block of IPv4 Addresses are Allocated