IEEE ComSoc Technology Blog

Gartner: Magic Quadrant for Global Network Services has Orange Business #1

Posted on February 27, 2019 by

Summary:

Driven by cloud IT service adoption, the market for global enterprise network services is undergoing a generational shift in both technologies and the provider landscape. Infrastructure and operations leaders must adapt their network sourcing approaches to reflect this transformation.

Market Definition/Description:

The market for global network services continues its rapid evolution. In response to enterprise demand for WANs that can support cloud IT delivery and achieve much higher levels of agility, network service providers (NSPs) have been deploying a range of new software-based networking services. They are also changing their business models to allow for more flexible sourcing. This Magic Quadrant focuses on these transformational technologies and/or approaches that deliver on the future needs of the enterprise, rather than simply concentrating on legacy services. However, delivering a consistent set of service features and user experiences across all these elements on a global basis remains a challenge that requires scale and operational maturity.

Gartner defines the network service global market as the delivery of fixed corporate networking services with worldwide coverage. Services that are evaluated in this Magic Quadrant include both established and emerging global network service categories, such as:

WAN transport services, used to form hybrid WANs and underpin managed software-defined WAN (SD-WAN) services — These include MPLS, Ethernet services and internet services, including dedicated internet access (DIA), broadband and cellular.
Carrier-based cloud interconnect — This refers to direct MPLS, internet and/or Ethernet connections to leading providers of cloud services, including infrastructure as a service (IaaS), platform as a service (PaaS) and software as a Service (SaaS). These services improve the performance, availability and security of connectivity to critical cloud services, compared with generic public internet access. The option to insert network functions, such as firewalling and WAN optimization (which are often virtualized), into these connections is increasingly common.
Managed software-defined WAN (SD-WAN) services — While some enterprises are renewing their existing MPLS or hybrid WANs, virtually all new managed global network deployments seen by Gartner in 2018 were managed SD-WAN networks, a trend we expect to see continue through 2019 and beyond. These services are based on edge devices with zero-touch configuration, able to dynamically route traffic over different links based on policies under central policy management control (see “Technology Insight for Software-Defined WAN [SD-WAN]”). SD-WAN improves WAN agility by allowing easier and faster deployment of new sites, flexibility in the link types used, and simplified addition of new applications to the network. In addition, SD-WAN services typically provide significantly enhanced levels of application visibility compared to traditional managed router services.
Network on-demand services — Network on-demand services from NSPs enable enterprises to make real-time changes to access/port bandwidth, change the WAN service types delivered over a network port and, in some cases, even add and remove endpoints, such as connections to cloud providers all under software control. They are controlled by the enterprise, via the provider’s web portal or APIs. Many providers are using software-defined networking (SDN) to deliver this functionality.
Network function virtualization (NFV) services — This functionality is the replacement for purpose-built hardware devices, such as routers, security devices or WAN optimizers, with software running on industry-standard hardware equipment (see “Network Function Virtualization Will Enable Greater WAN Agility and Flexibility”). It can be run in virtual customer premises equipment (vCPE), which consists of on-site x86-based servers, supporting multiple virtualized network functions. Alternatively, some functions can run NFV service nodes, located in the provider’s network; although, in this case, some form of on-premises device will still be needed. NFV allows network functions to be activated on demand and consumed on an “as a service” basis, seeking to improve both the agility and cost-effectiveness of the enterprise WAN.
vCPE — vCPE is the use of industry-standard, x86-based servers, rather than function-specific appliances, at enterprise premises to deliver enterprise network edge functions, such as WAN edge routers, including SD-WAN, WAN optimization controllers (WOCs), and security functions such as firewalls. (See “Innovation Insight for Virtual CPE.”)

What’s Changed?

In the past 12 months, Gartner has observed continued evolution of enterprise requirements and buying criteria for global networks. Enterprises are focusing on increasing the agility of their networks and on services that can enable their adoption of cloud IT delivery and eventual adoption of the Internet of Things (IoT). This is leading to most new global networks being based on SD-WAN and making greater use of the internet as a primary WAN transport.

Additionally, enterprises are more willing to utilize smaller providers and innovative services consumed on an as-a-service basis. This places less emphasis on larger providers, network scale and the availability of large numbers of provider staff to deliver customized capabilities to address site- or application-specific requirements.

Both enterprises and network service providers are taking advantage of the marketplace created by colocation hubs, such as Equinix and Digital Realty, to allow them to source access that is distance-insensitive at the national or even regional level. This simplifies the overall design and reduces the need for the deployment of large numbers of network points of presence (POPs; see “Five Key Factors to Prepare Your WAN for Multicloud Connectivity”). However, coverage for at least the country level is still important, both to reduce costs and to improve performance when accessing cloud services and network-based virtual functions. The trend of moving away from customized solutions toward standard off-the-shelf managed services continues, with more and more services consumed on an as-a-service basis. Although uptake of NFV and vCPE has been slower than expected due to relatively high prices and technological limitations of some early implementations, the momentum behind these services is increasing, as enterprises see the value of the increased agility they can bring. (For example, in the 2018 iteration of this Magic Quadrant, less than 50% of providers offered these services. In this 2019 edition, that number is almost 90%.)

Network on-demand services are gaining in popularity, not to reduce costs by varying WAN bandwidth over the course of the day or week, but rather to dynamically adjust the capacity of different network services (e.g., Shrink MPLS and grow internet access as SD-WAN is rolled out). This allows enterprises to accommodate new applications and even create connections to new destinations, such as additional cloud providers, on demand, potentially allowing for dynamic load balancing of cloud providers and cloud performance optimization. However, these offerings are in their infancy in terms of functionality and coverage.

While delivering against a strong technological roadmap is important, it must be combined with good operational performance to deliver and sustain these services. Some service providers have been struggling to deliver the new capabilities they are offering with the levels of quality enterprises require.

To strengthen the focus of this research on these key trends and capabilities, Gartner is no longer evaluating SIP trunk services, managed LANs or wireless LANs (WLANs). SIP trunk services will be covered in a separate Market Guide.

The inclusion and exclusion criteria for this year’s Magic Quadrant, although similar to prior years, have been adjusted to reflect these trends.

Magic Quadrant

Figure 1. Magic Quadrant for Network Services, Global

Source: Gartner (February 2019)

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https://www.gartner.com/document/code/354862?ref=ddisp&refval=354862

AT&T tests 5G and network edge computing with Microsoft Azure; Partners with Vodafone Business for IoT

Posted on February 27, 2019 by Alan Weissberger

AT&T announced at MWC 2019 that it is working with Microsoft on a proof of concept to integrate network edge compute (NEC) capabilities with its 5G network and Microsoft Azure cloud services. The solution would be important for the industries and Internet of Things (IoT) use cases of retail, healthcare, public safety, entertainment, and manufacturing, AT&T said, as it would provide businesses with lower latency, access to high compute power, and network routing without needing on-premises hardware.

“We’re testing our ability to substantially reduce latency and improve user experience by deploying advanced cloud services in specific geographic locations closer to business sites. A fully-scaled deployment will give businesses access to compute power, lower latency and optimized network routing without the need for dedicated on-premises hardware.” These advantages will be important for the low-latency cloud and IoT solutions used by retail, healthcare, public safety, manufacturing and entertainment.

Last month, AT&T* announced its approach to 5G for businesses, laying out three key pillars: mobile, fixed and edge computing.

“Our collaboration will pave the way to enable Microsoft Azure cloud services to connect to more customers and devices across the US through AT&T’s nationwide wireless network,” Microsoft corporate VP of Azure Networking Yousef Khalidi said. “Our two companies are working together to achieve the low-latency connectivity needed for the explosion of devices and immense amount of data being created by computing at the edge,” he added.

AT&T is using drones to test the network edge compute capabilities with Azure, working with Israel-based startup Vorpal in its foundry in Plano, Texas. Vorpal’s VigilAir product detects and geo-locates drones in real-time, which could be used by law enforcement agencies and airports.

“By running their VigilAir application using Azure cloud services delivered through the Plano AT&T test environment, and connecting their drone-tracking sensors using AT&T LTE and 5G networks, Vorpal could achieve the low latency and compute scalability required,” the carrier said.

AT&T expects to share more details about NEC services with Microsoft Azure later this year. NEC is part of AT&T’s broader edge compute strategy that also includes AT&T Multi-Access Edge Compute (MEC).

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Earlier at MWC 2019, AT&T announced it’s working with Vodafone Business on IoT applications for the automotive space, including safety, security, and entertainment.

“This alliance with Vodafone Business is a natural extension of our existing relationship,” said Chris Penrose, President, Internet of Things Solutions, AT&T. “We each have rich experience in connected vehicle technology. By working together, we can innovate faster and help our global customers bring connectivity, entertainment and telematics to more vehicles across our respective footprints.”

“Our work with AT&T will benefit automotive manufacturers and their customers around the world as we simplify processes and provide a consistent experience to accelerate IoT adoption in this fast-moving market,” said Stefano Gastaut, IoT Director, Vodafone Business. “As technology complexity increases, this is the right time to make technology adoption easier for the automotive industry to help them achieve their business outcomes. This is the goal of this alliance.”

The two companies said they would develop connected car solutions across 5G and autonomous vehicle technology; vehicle-to-everything (V2X) capabilities; in-vehicle entertainment; connected car applications and services; global service quality models; and the intersection of connected cars and smart cities.

The companies will prioritize projects to enhance safety, security and entertainment capabilities. Key areas of focus will be:

5G and autonomous vehicle technology
V2X capabilities (vehicle-to-everything)
In-vehicle entertainment
Connected car applications and services
Global service quality models
Connected car/ smart cities intersection

AT&T and Vodafone Business each provide connected car services and products for the automotive, fleet and insurance industries. They integrate electronic and telematics systems into complex vehicles, both at the point of manufacture and beyond. Together, the companies bring more than 50 years of experience in the automotive industry. And they collectively work with nearly 50 global automotive brands and connect more than 43 million cars and trucks on the road today.

References:

https://about.att.com/story/2019/att_nec.html

https://www.zdnet.com/article/mwc-2019-at-t-tests-5g-and-edge-computing-with-microsoft-azure/

https://www.prnewswire.com/news-releases/att-and-vodafone-business-team-up-to-drive-internet-of-things-iot-connectivity-in-the-automotive-industry-300800916.html

AT&T tests 5G and network edge computing with Microsoft Azure; Partners with Vodafone Business for IoT

Posted on February 27, 2019 by

Last month, AT&T* announced its approach to 5G for businesses, laying out three key pillars: mobile, fixed and edge computing.

Earlier at MWC 2019, AT&T announced it’s working with Vodafone Business on IoT applications for the automotive space, including safety, security, and entertainment.

The companies will prioritize projects to enhance safety, security and entertainment capabilities. Key areas of focus will be:

5G and autonomous vehicle technology
V2X capabilities (vehicle-to-everything)
In-vehicle entertainment
Connected car applications and services
Global service quality models
Connected car/ smart cities intersection

References:

https://about.att.com/story/2019/att_nec.html

https://www.zdnet.com/article/mwc-2019-at-t-tests-5g-and-edge-computing-with-microsoft-azure/

https://www.prnewswire.com/news-releases/att-and-vodafone-business-team-up-to-drive-internet-of-things-iot-connectivity-in-the-automotive-industry-300800916.html

MWC 2019: Korean companies set to present new world of 5G connectivity & smart phones

Posted on February 24, 2019 by Alan Weissberger

Wireless network providers/ telcos, telecom equipment, industrial giants, and smart device companies have arrived in Barcelona, Spain for the Mobile World Congress (MWC) that kicks off on Feb. 25th. Under the theme of “Intelligent Connectivity,” the four-day event features companies demonstrating how new technologies will change everyday lives.

There has been so much hype surrounding 5G in the past few years, it’s deafening. Yet the world still needs to wait for full-fledged 5G standards and associated services. Hopefully, this year’s MWC will paint a clearer picture about a world powered by 5G networks.

“I have never seen tech companies at MWC rallying behind a single banner. And that is 5G,” said a senior official from a South Korean telecom giant, who visited the MWC venue in Fira Barcelona before the event officially kicked off.

Some mobile device manufacturers, such LG Electronics and Huawei, unveiled their first 5G-based smartphones on Feb. 24, a day before the official launch of the MWC. Samsung’s Galaxy S10 5G will be demonstrated to the public after its debut in San Francisco on Feb. 20. South Korean telecom giants (like SK Telecom, Korea Telecom, and LG U+ –formerly LG Telecom) will also unveil platforms that capitalize on the hyper-speed, low-latency network. These are expected to include futuristic hotel services, smart factories and unmanned blimps.

Leading telecom companies at MWC include Verizon, AT&T and NTT Docomo, along with IT giants like Microsoft, Google Cloud, Amazon Web Service, Huawei, Xiaomi, Nokia, Ericsson, Renovo, Intel and Qualcomm.

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Approximately 222 South Korean firms have come for the event, with combined investments of 100 billion won ($89 million) and some 3,000 officials. They will join some 2,500 companies from around the world in presenting technologies that span eight areas: connectivity, artificial intelligence, industry 4.0, immersive content, destructive innovation, digital wellness, digital trust and the future.

LG Electronics’ first 5G-powered smartphone, the V50 ThinQ (pre-standard) 5G, will be on display at MWC. The company joins Samsung in having a (pre-standard) 5G-capable smartphones in the market. Samsung will live broadcast the MWC 2019 Barcelona’s official media channel using its prototype 5G network on big screens throughout the Fira Gran Via venue and about 280 hotels in Barcelona, as well as stream the event live globally.

China’s Huawei, the world’s second-largest smart phone maker after Samsung, is expected to unveil its 5G foldable smartphone, the Mate X, during a press conference at the MWC.

During the MWC sessions, SK Telecom, KT and LG Uplus said they would demonstrate how the 5G network can transform business and leisure when the first 5G-based smartphones hit the market this March.

KT will demonstrate the extent to which seamless communication is possible regardless of distance. Using its remotely controlled blip, called 5G Skyship, the company showed images sent in real time to Barcelona all the way from South Korea’s southern port city of Busan. As the 5G Skyship’s high-definition camera is capable of delivering flawless images sent from halfway around the world, the company said the technology could be used in search-and-rescue missions in the event of natural disasters and other emergencies.

KT said Sunday it will be remotely controlling its KT 5G Skyship airship drone in the skies above Haeundae in Busan, South Korea from the location of the Mobile World Congress 2019 in Barcelona, Spain, through a (pre-standard) 5G network.

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“Signals capable of controlling the blip’s camera are sent from Busan to Barcelona through international circuit lines. … Visitors can control the blip’s movement whatever they see fit and enjoy the night scenery of Busan from Barcelona,” said KT officials.

KT is joining the GSMA Innovation City exhibition alongside leading brands such as Google and Huawei to present its connected devices, immersive content and services under the theme “5G becomes reality.”

The company will exhibit Skyship, a 5G-enabled real-time airborne platform for disaster management, and provide a hands-on experience for remote autonomous driving and inspection of a 5G factory zone. It will also present 5G-connected robots, AR glasses, remote support solutions for enterprises, a VR baseball park, a 360-degree video zone and a robot hotel.

KT Chairman Hwang Chang-gyu plans to deliver his third MWC keynote speech to unveil his 5G vision, following similar addresses in 2015 and 2017. Hwang plans to visit the exhibition halls of Samsung Electronics, Ericsson and Nokia to explore business opportunities with the major wireless equipment manufacturers.

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Meanwhile, KT’s biggest rival, SK Telecom, plans to show how 5G can greatly improve productivity in factories and offices by using AI, robots, connected devices and security solutions. It unveiled the 5G Hyper Space platform that could blur the line between the virtual and real world by allowing users to toggle back and forth between the two.

“Having copied the images of hotels and offices in the real world, those wearing the VR machine can hardly feel the difference in the virtual world,” said an official from SK Telecom. “In accordance with the commercial rollout of 5G, we will expand the service.”

According to SK Telecom, users can visit a restaurant and see a hotel room “virtually” via virtual reality goggles before making reservations. Reservations made in the virtual world would also be effective in the real world.

“Commercialization of 5G is speeding up technology integration, highlighting the importance of cooperation at the global level,” SK Telecom said. “As only a few companies have shown 5G solutions for the commercial market, we expect global telecom and ICT companies to show interest in partnerships with SK Telecom.”

The two Korean telcos will also show a system for “smart factories” connected by a 5G network. By processing enormous volumes of data at hyper speed, the system can reduce the amount of defected products and the risk of safety accidents, they said.

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Korea’s third-biggest mobile carrier, LG Uplus, will push for strategic partnerships with global telecom firms, handset makers and media companies during this year’s MWC. It revealed a service that allows consumers to enjoy sports events and music performances with advanced quality. The company said the hyper-speed network allows users to watch footage with minimum latency.

The #3 South Korean mobile carrier will present remote-controlled robots, smart drones, smart CCTV and a block chain payment service for businesses. Visitors can, moreover, enjoy baseball, golf and K-pop, as well as AR, VR and hologram content based on 5G. CEO Ha Hyun-hoi plans to meet with senior officials of major mobile operators, including Verizon, T-Mobile and Vodafone, to discuss 5G strategy and fresh business opportunities, LG Uplus said.

“LG Uplus’ 5G technologies and services will illustrate how the advanced cellular technology can change everyday lives in a better way,” the company said in a release. LG Uplus, which provides Netflix videos on its set-top boxes, expressed a hope to form partnerships with major media players to provide AR, VR, AI and Internet of Things services in connection with 5G.

LG Uplus is teaming up with LG Electronics Inc. to unveil the latter’s first 5G smartphone, V50 ThinQ, on the eve of MWC.

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Among the MWC conference sessions we’re interested in are:

Unlocking the benefits of 5G for the Enterprise Market

What’s Keeping Operator CTOs up at Night?

5G Summit 2019 — Embracing 5G Era (ZTE)

Huawei Product & Solution Launch: 5G is On

The Internet of the Skies – Connecting Drones

China Unicom MEC Edge-Cloud Commercial Acceleration Plan

Aligning 5G Technology and Policy

Cloud without Limits (VMware)

Smart Buildings & 5G: The Use Case

First 5G tele-mentored Live Surgery!

5G Cities: Connecting People, Here, There and Everywhere

IoT Debate: LPWA Let’s get to ready to RUMBLE

References:

http://www.theinvestor.co.kr/view.php?ud=20190224000155

http://koreabizwire.com/s-korean-tech-telecom-firms-to-present-5g-future-at-mwc/133090

https://www.mwcbarcelona.com/conference-programmes/agenda/#day=7808

MWC 2019: Korean companies set to present new world of 5G connectivity & smart phones

Posted on February 24, 2019 by

China’s Huawei, the world’s second-largest smart phone maker after Samsung, is expected to unveil its 5G foldable smartphone, the Mate X, during a press conference at the MWC.

During the MWC sessions, SK Telecom, KT and LG Uplus said they would demonstrate how the 5G network can transform business and leisure when the first 5G-based smartphones hit the market this March.

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LG Uplus is teaming up with LG Electronics Inc. to unveil the latter’s first 5G smartphone, V50 ThinQ, on the eve of MWC.

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Among the MWC conference sessions we’re interested in are:

Unlocking the benefits of 5G for the Enterprise Market

What’s Keeping Operator CTOs up at Night?

5G Summit 2019 — Embracing 5G Era (ZTE)

Huawei Product & Solution Launch: 5G is On

The Internet of the Skies – Connecting Drones

China Unicom MEC Edge-Cloud Commercial Acceleration Plan

Aligning 5G Technology and Policy

Cloud without Limits (VMware)

Smart Buildings & 5G: The Use Case

First 5G tele-mentored Live Surgery!

5G Cities: Connecting People, Here, There and Everywhere

IoT Debate: LPWA Let’s get to ready to RUMBLE

References:

http://www.theinvestor.co.kr/view.php?ud=20190224000155

http://koreabizwire.com/s-korean-tech-telecom-firms-to-present-5g-future-at-mwc/133090

https://www.mwcbarcelona.com/conference-programmes/agenda/#day=7808

AT&T to shut down 3G network in 2022; Verizon at end of 2019

Posted on February 22, 2019 by Alan Weissberger

AT&T will shut down its 3G network in early 2022 as the company shifts its focus to 5G implementation (?) and compatible 4G LTE networks. Research firm Ovum estimates that the number of devices using 3G exceeds 85 million, while AT&T reports that 3G was still the choice for 11% of the company’s postpaid users last year.

AT&T’s decision to shutter 3G, disclosed in a Wednesday regulatory filing, follows rival Verizon Communications’s warning that it will disconnect 3G cellphones at the end of this year. Verizon said in a recent filing it is “aggressively refarming 3G bands” for 4G but still needs more spectrum to keep up with its users’ demands. Verizon executive Ronan Dunne told investors at a Thursday meeting that its 5G service will reach 30 cities this year. AT&T’s 5G service touched parts of 12 cities at the end of 2018, with nationwide service expected in 2020.

The demise of 3G in the U.S. has been all but certain after cellphone carriers spent billions of dollars over the past decade to blanket the country with 4G service. That standard, also known as long-term evolution, or LTE, allows users to download data 10 times as fast as its predecessor and has paved the way for many smartphone apps that require ample mobile bandwidth.

Winding down obsolete versions is a habit for telecom companies. In the 1990s they pushed analog cellphone users to the first digital standards, and later persuaded 2G users to upgrade to one of several wireless technologies with the 3G label.

The companies are driven by necessity. Cellphone users with unlimited data plans stream more video on the go, testing the limits of what service providers can handle. Getting customers off 3G allows carriers to free up wireless frequencies for 4G signals over broader swaths of the radio spectrum.

Early 3G phones kicked off the smartphone era by giving customers a reason to use their devices for more than just talking and texting. Apple Inc.’s cellphone sales took off after it launched the iPhone 3G.

AT&T said 11% of its postpaid customers were using 3G service at the end of 2018. More than 85 million devices use 3G, according to research firm Ovum. They include smartphones, tablets and devices like vehicle-location trackers. The coming changes could also affect users of prepaid cellphone brands like TracFone that use other companies’ networks.

Telecom executives are already shifting their attention to the latest group of engineering standards known as 5G, which are expected to make video streaming and downloads even quicker. The specifications also support many more connections at once, allowing carriers to go after more types of gadgets.

The end of 4G LTE service, if it comes, is years away. ITU-R [1] and ITU-T haven’t finished writing 5G standards, and telecom companies say it will take years to make 5G commonplace. Companies are less motivated to kill 4G service because it can work in tandem with 5G, unlike previous generations that forced carriers to devote a band of wireless spectrum to one technology.

Note 1. An AT&T representative chairs ITU-R WP 5D which is responsible for the IMT 2020 (official 5G) standard. Another AT&T rep chairs the WP 5D SWG on Radio Aspects within the Technology WG. Hence, AT&T has tremendous influence and impact on IMT 2020 yet it’s marketing communications department falsely claims the company has deployed “standards based” mobile 5G.

References:

https://www.wsj.com/articles/at-t-gives-3g-service-three-years-to-live-11550765221

Have a 3G phone? Here’s why it’s time to start thinking about upgrading

AT&T to shut down 3G network in 2022; Verizon at end of 2019

Posted on February 22, 2019 by

References:

https://www.wsj.com/articles/at-t-gives-3g-service-three-years-to-live-11550765221

Have a 3G phone? Here’s why it’s time to start thinking about upgrading

Gartner: Enterprise Network Service Prices Continue to Decline

Posted on February 22, 2019 by

Prices for enterprise fixed and mobile network services around the globe have declined from 2017 through 2018 by up to 20%, with further declines expected through 2019. Highlights:

Since 2012, overall network service prices in the developed world have declined by 5% to 20% annually, depending on the specific service and geography, but enterprises often fail to achieve the full potential savings.
Prices for nonstandard or legacy network services see little decrease or even increases.
Although network technology improvements can reduce an operator’s cost of delivering service, network service providers (NSPs) will only pass on savings to customers when they’re pressured to do so.
By 2020, 10 Mbps Ethernet access to Multiprotocol Label Switching (MPLS) or internet services will be priced lower than T1 or E1 access to the same services, from a premium of up to 1.5 times today’s T1/E1 price.
By 2020, MPLS pricing in mature markets will equalize with business-grade internet services, down from the 10% to 20% premium in 2018.
By 2020, the cost of 5G enterprise cellular services will be priced at a premium of 10% or less above 4G cellular services.

There is considerable country-to-country variation within regions. The countries with a greater degree of competition (three or more viable choices for a service) have seen larger price decreases than countries that have little or no competition. We have noted with an asterisk (*) the regions in which there is either too little data or where large variations in pricing exist, negating any meaningful “average” price trend.

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The North American telecommunications market is very mature, with highly competitive conditions. Within all five service group categories, there are more than three providers. Since the competitive landscape has seen some consolidation, the only truly viable way for Gartner clients to take advantage of these conditions is to create a competitive RFP.

T1 or any other TDM-based access to any network services should be treated as legacy and only used when no other access services are available. These prices are not changing, and Gartner predicts they could possibly increase in the near future as providers are eager to shed those amortized assets.
The pricing of MPLS and direct internet access, over optical Ethernet access, continues to converge with internet access typically not more than 10% to 15% cheaper than MPLS, while Ethernet services remain significantly cheaper. Broadband internet access pricing is not decreasing significantly, although average speeds are continuing to increase, as are the number of providers in the market.
SIP trunking is fully mature, and existing ISDN lines should be replaced with SIP as soon as the contractual opportunity arises.
Cellular is a mature service, with 4G LTE the default network technology for most voice, messaging and data plans. While 3G network fallback still is available for areas of weak 4G coverage, providers do not differentiate service plans or prices for the two technologies. Data plan cost reductions primarily have occurred due to more competitive negotiated discounts from standard or rate card prices. Standards-based 5G technology providing higher data speeds, lower latency and the ability to support significantly higher cellular endpoint density than 4G LTE will begin commercial availability in 2020 and later.

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Recommendations:

Avoid sourcing services that are not part of provider’s standard portfolio, even if this means accelerating the depreciation of nonstandard devices or losing some functionality of nonstandard configurations.
Migrate away from legacy network services, even if it means replacing edge devices, while seeking improved pricing from the provider in return for adopting the current offerings.
Ensure you are fully aware of any end-of-life announcements for network services you are using and aim to migrate away from such services.

Open Compute Project (OCP) Survey: 2018 non-Board OCP revenue hit $2.56B with YoY growth=120%

Posted on February 21, 2019 by

Since its inception, the Open Compute Project (OCP) has worked to drive innovation in and around the data center industry, bringing together thousands of engineers from nearly two hundred member organizations. The demands on the modern data center continue to expand with the growth of IoT, security and edge computing, as well as increasing energy consumption requirements.

IHS Markit interviewed OCP members, suppliers and service providers, as well as incorporated their own in-depth industry research to determine revenue by region and vertical worldwide, as well as update their forecast through 2022. In order to ascertain a more accurate assessment of true marketplace adoption, usage by OCP Board member companies Facebook, Goldman Sachs, Intel, Microsoft and Rackspace was excluded from this study.

Among the preliminary findings:

· 2017 actual non-board revenue was $1.16 billion, just shy of the original forecast of $1.18 billion

· 2018 non-board OCP revenue tops the 2017 forecast, reaching $2.56 billion, compared to a forecast of $1.84 billion, with year-over-year growth of 120%

· 2017 Non-Board OCP revenue actuals show increased market share, from .87% to .91%, while overall Market Value dropped from $137 billion to $127 billion

· 2022 non-board OCP revenue share is expected to climb to more than 5% by 2022, at $10.7 billion, with a CAGR of 56%

· Servers, Storage and Networking are the fastest projected growth categories, with PON a potential high-growth area. Markets are just forming for disaggregated cell tower equipment, but Telco spend is expected to surpass Hyperscalers by 2021.

· The Government sector actually passed financial institutions in non-board OCP spending in 2017, while automotive and manufacturing is expected to have the highest 5-year CAGR. Healthcare is in the early stages of OCP adoption.

· There were no large changes in the forecast for regional growth – America’s still dominate due to Hyperscalers and Financial, but also now driven by Telco.

· APAC will surpass EMEA by 2020 with a CAGR of 108%, compared to EMEA at 59%.

Furthermore, the drivers of adoption of OCP are growing more diverse – cost reduction and power efficiency are still the biggest reasons why, but the market is now realizing that feature flexibility and conformance to those specifications approved by OCP provide a measure of “comfort” to the market.

“We are pleased that the adoption momentum continues and accelerates, and we value the insight provided by the study regarding barriers, challenges and opportunities. We are committed to continued improvement in the entire ecosystem to support the future growth.” stated Rocky Bullock, CEO for the Open Compute Project Foundation.

“The market ecosystem for OCP-certified equipment continues to mature, with more diversity for increased choice and an expanded supply chain allowing more tier-two CSPs, telcos and enterprise consumers to participate. A notable difference from last year’s study was the shift from direct factory purchasing to suppliers with local support, as additional market segments increased adoption,” said Cliff Grossner, Ph.D., executive director research and analysis, cloud and data center research practice at IHS Markit, a global business information provider. “OCP equipment market drivers such as serviceability, disaggregation and the flexibility to add new features took on a greater importance this year, which typically happens when a market matures and more mainstream buyers deploy.”

OCP and IHS Markit will release the full results of the research at the Annual OCP Global Summit, to be held in San Jose Convention Center in San Jose, CA March 14 – 15, 2019. This will include an Executive Track at 1:00 PM Pacific on Day 1 featuring the details of the findings to be presented by Cliff Grossner, and Vlad Galabov, Principle Analyst for Data Center Compute at IHS Markit.

References:

https://www.opencompute.org/summit/global-summit

OCP Impact Study 2019: Market Place Matures, Adoption Increases

At the close of 2018, we conducted a follow on to our 2018 survey of top OCP vendors and end users. Combined with IHS Markit’s continual industry research, we determine growth of 2018 non-board member adoption over 2017. In addition, we asked respondents to share with us how the market has changed over the last 12 months covering technology demands, go to market models, distribution models, and more. Please join us to learn the details of our findings where we will discus how the market has matured, review 2018 results vs last year’s forecast and provide an updated forecast to 2022.

https://www.opencompute.org/summit/global-summit/schedule

IHS Markit: Ciena tops the list of optical equipment vendors + Cignal AI’s OFC Preview

Posted on February 21, 2019 by

By Heidi Adams, executive director, network infrastructure, IHS Markit

Each year IHS Markit surveys service providers, in order to find out which companies they view as the leaders of the optical equipment market. The survey also explores their perceptions of vendors in key decision metrics, like pricing, total cost of ownership, technology innovation, research-and-development (R&D) investment, and product reliability.

Following are some of the key findings from this year’s survey:

Optical equipment vendor leaders:

In brand awareness, respondents perceive Ciena, Huawei, and Nokia as the overall leaders for optical transmission and switching equipment in 2018, with no change in the rankings from last year. These results are well aligned with positioning in the global optical network hardware market in the first three quarters of 2018, where Huawei, Ciena, and Nokia were ranked as the top three vendors by market share in this period.

Ciena was the most cited leader in optical DCI, with Huawei and Infinera tied for second place. Ciena also made significant strides this year in market perception for leadership in optical disaggregation, rising from third position in our 2017 survey to first-ranked position in 2018. Coriant (now Infinera), Huawei and Nokia all tied for second place.

Purchasing criteria:

IHS Markit survey respondents were also asked to identify the leaders in purchasing criteria, including pricing, technology innovation, product reliability, service and support and investment in research and development. The top three vendor selection criteria for optical equipment purchasing decisions in 2018 were, as follows:

Product reliability
Pricing
Total cost of ownership

Ciena was the leader in 2018 for service provider perception of vendor leadership in product reliability, technology innovation, management software, and investment in research and development. Huawei topped the list for service provider perception of vendor leadership in pricing, total cost of ownership, solution breadth, and financial stability. Nokia was perceived as the leader in service and support for optical networks.

Optical Equipment Vendor Leadership Service Provider Survey – 2018

This survey explores how service providers evaluate and select optical transmission and switching equipment suppliers. It covers vendors installed and under evaluation and service provider opinions of vendors, including on key vendor selection criteria.

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Cignal AI on OFC 2019–

400ZR Steals the Show:

No single topic at OFC will command as much attention as 400ZR, which is based on fourth-generation coherent technology and an OIF standard for coherent short reach DCI applications. Product development is well underway with over a dozen component and equipment companies spending in excess of $300M in this effort. The market for short reach coherent extends well beyond the DCI needs of Microsoft and Google. Derivatives (known as ZR+ or ZR plus) are emerging which are designed to meet the broader needs of network operators everywhere. ZR is the first coherent technology that will be both standardized and pluggable, and the emergence of ZR products will shake up the optical equipment landscape. One major impact is that 10G WDM will become obsolete in its only remaining stronghold- the edge of the optical network. The greater question is what role standalone optical hardware will play in the network as the performance and interoperability of coherent pluggables improve. Expect a cascade of activity at OFC from component and equipment companies as they uncover their ZR plans and demonstrate the latest optical engines, and some bombshell announcements and partnerships from the leaders in this space – Inphi, Acacia, Ciena, Cisco, Huawei, Nokia, and NTT Electronics.

While fourth-generation 400G products have been announced at OFC already for the last two years, 2019 is the year that these products start deploying for revenue. Starting in early 2019, third generation solutions from Acacia (via multiple hardware vendors), Nokia, Huawei, Fujitsu, and Infinera will join Ciena in live network deployments. Now that 400G is deployed, there will be multiple roadmap announcements at OFC seeking to leapfrog 400G and propose the next generation of coherent optical speeds. 600G is a given, but there will be 800G and perhaps 1Tbps announcements as well. Components suppliers and equipment manufacturers will show roadmaps to higher speed sixthgeneration coherent optical components in preparation for a 2020 introduction.

We expect Infinera to disclose more detail on its ICE6 R&D efforts and would not be surprised to hear Ciena talk about a successor to the Wavelogic AI now that competitive products are arriving in the market.

Disaggregation Continues, with Many Definitions:

The disaggregation trend will continue to gain strength at OFC, but the definition will continue to change. Whereas the original concept was complete separation of switching transponders, ROADMs, and perhaps even components into separately manageable elements, now new solutions are starting to look more like traditional optical equipment. Compact modular systems, which are the most visible components of a disaggregation strategy, have moved from monolithic transponder or open line systems to more complex devices that can include switching and multiple functions in the same shelf. Some systems now even have modularity via cards (although they are called “sleds” rather than “cards”), making them look more like traditional systems in everything but physical dimensions. Several large operators are skeptical about disaggregation, while several others agree with the concept but consider current solutions too difficult to manage. Regardless, the industry-wide shift to disaggregation will accelerate as implementation becomes easier and better attuned to the needs of a wider variety of customers. General availability and customer announcements for 2019 are expected from several vendors, including ADVA, Cisco, Coriant, Fujitsu, and Nokia. In addition to the compact modular announcements,

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Summary:

What’s Changed?

Magic Quadrant

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