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Infonetics Research released vendor market share and preliminary analysis from its 2nd quarter 2014 (2Q14) Service Provider Routers and Switches report. (Full report available by Aug. 29.).  Also see companion report highlights below.

2Q14 CARRIER ROUTER AND SWITCH MARKET HIGHLIGHTS:
. Worldwide service provider router and switch revenue, including IP edge and core routers and carrier Ethernet switches (CES), is up 20% in 2Q14 over 1Q14, to $3.9 billion
. Though the quarter’s increase was solid, the long-term trend is reflected in the decline of 4% from the year-ago quarter (2Q13)
. The IP edge router, IP core router, and CES segments all had double-digit revenue gains in 2Q14 from 1Q14
. On a year-over-year basis, EMEA is the only region to achieve positive revenue growth (+3%) in the carrier router and switch market in 2Q14, while all regions-North America, EMEA, Asia Pacific, and CALA-are up quarter over quarter
. The usual suspects continued to battle it out for the top 4 router and CES market share spots: Cisco stayed in the lead in 2Q14, with Alcatel-Lucent, Huawei, and Juniper (listed in alphabetical order) in a fight for the 2-4 positions
. Infonetics expects global service provider router and switch revenue to grow at a 2.8% CAGR from 2013 to 2018

Analyst Comment:

“As we’ve been cautioning, service providers of all sizes are being more guarded with their router spending habits as massive network transformation goals involving software-defined networking (SDN) and network functions virtualization (NFV) translate into specific activities and milestones. But this does not mean router and switch spending will tank or even take a sizeable downturn,” notes Michael Howard, principal analyst for carrier networks and co-founder of Infonetics Research.

Continues Howard: “Core router upgrades and replacements prompted by the move to 100GE and paired with many aging core routers drove the core router segment to 11% sequential growth in the second quarter of 2014, and with a lot of capacity ‘in the ground,’ we believe core routers will stay positive for the full year.” 

ROUTER & SWITCH REPORT SYNOPSIS:
Infonetics’ quarterly service provider router and switch report provides worldwide, regional, China, and Japan market share, market size, forecasts through 2018, analysis, and trends for IP edge and core routers and carrier Ethernet switches. Vendors tracked: Alaxala, Alcatel-Lucent, Brocade, Ciena, Cisco, Coriant, Ericsson, Fujitsu, Hitachi, Huawei, Juniper, NEC, UTStarcom, ZTE, others. To buy the report, contact Infonetics: 

www.infonetics.com/contact.asp

Companion Report: Router and Switch Vendor Leadership: Global Service Provider Survey

Infonetics Research released excerpts from its annual Router and Switch Vendor Leadership: Global Service Provider Survey, which explores service providers’ perceptions of edge router and carrier Ethernet switch (CES) manufacturers and their criteria for choosing vendors.

ROUTER / SWITCH SURVEY HIGHLIGHTS:
. In addition to being named the top router/CES manufacturers by carriers in Infonetics’ survey, Alcatel-Lucent, Cisco, Huawei, and Juniper are also the leading vendors worldwide in router/CES revenue market share
. Making up a distant second tier of vendors as rated by service providers are, in alphabetical order, Adtran, Ciena, Ericsson, Overture Networks, Tellabs, and ZTE
. In the survey, operators also rank vendors of carrier Ethernet switches and routers based on 10 specific criteria: technology innovation, security, management software, price to performance ratio (value), product reliability, pricing, product roadmap, financial stability, solution breadth, and service and support
. Over 80% of service provider router and switch spending is on edge routers and carrier Ethernet switches (CES)

Analyst Comment:

“The carriers participating in our latest router/switch survey tell us that when it comes to choosing an edge router/CES manufacturer, it’s product reliability, value, and service and support that matter most,” notes Michael Howard, Infonetics Research’s co-founder and principal analyst for carrier networks. 

Howard continues: “Then in an open-ended question, we asked carriers to name the top 3 edge router/CES manufacturers and Cisco came out on top, with 90% of our respondents naming them, followed by Juniper, Alcatel-Lucent, and Huawei. Three out of these four vendors earn top marks from our service providers in at least two of the top vendor selection criteria.”

ABOUT THE SURVEY:
For its 18-page router/switch vendor leadership survey, Infonetics interviewed network equipment purchase-decision makers at 31 incumbent, competitive, and mobile operators and MSOs from Europe, the Middle East, and Africa (EMEA), Asia Pacific, North America, and the Caribbean and Latin America (CALA). Together, the operators represent 41% of global telecom capex. The survey sheds light on how service providers select router and carrier Ethernet switch (CES) manufacturers, whose equipment they have installed and will evaluate for future purchases, and which manufacturers they consider to be leaders in key manufacturer selection criteria. To buy the report, contact Infonetics:

www.infonetics.com/contact.asp

RELATED REPORT EXCERPTS:

. Infonetics’ August Carrier Routing, Switching, and Ethernet research brief:
http://www.infonetics.com/2014-newsletters/Carrier-Routing-Switching-and-Ethernet-August.html
. Operators plan to move security, QoS, VPN, other services to virtual routers, shows survey
. Infonetics Research unveils new logo
. $1 trillion to be spent on telecom and datacom equipment and software over next 5 years
. Ethernet 10G and 100G service revenue set to grow to 300% by 2018
. Telecom operators spending $150 billion over 5 years on carrier Ethernet gear, driven by IP

SDN WEBINAR:
Join Michael Howard Sept. 4 at 11:00 AM EDT for Making Your Network Run Hotter With SDN to examine SDN architectural concepts that address challenges operators face today, including a look at actual operator SDN deployments. Attend live or access the replay at: http://w.on24.com/r.htm?e=828549&s=1&k=F60165254CA9F9103599DE4F83EDD3BC.

ANALYST CONFERENCE CALL FOR CLIENTS:
Clients, join Michael Howard Sept. 11 at 12:30 PM EDT for his live carrier routing and switching market recap and outlook, or view on-demand: www.infonetics.com/cgp/login.asp?id=865.

Infonetics Research released vendor market share and preliminary analysis from its 2nd quarter 2014 (2Q14) Optical Network Hardware report. (Full report published by August 25.).  Kim Peinado, VP Marketing at Infonetics wrote in an email:  “While our headline focuses on Internet Content Providers boosting North America’s growth this quarter, Asia had an even bigger spike, led by Huawei and ZTE, which helped the global market offset year-over-year declines in other regions (see notes in the bullet points of the release).”

• In North America, internet content providers (ICPs) such as Google and others generated a wave of optical spending at a handful of vendors including Adva, BTI, and Infinera, altogether accounting for an estimated $40 million surge in 2Q14
• Worldwide optical network hardware revenue, including SONET/SDH and WDM, totaled $3.3 billion in 2Q14, a sequential gain of 27% aided by strong seasonal performances from Huawei and ZTE
• Global optical spending is roughly flat year-over-year (2Q14 from 2Q13) as strength in Asia Pacific offset weakening spending trends in EMEA
• Worldwide WDM equipment revenue in 2Q14 is up 6% year-over-year
• The 1st half of 2014 brought another huge flood of 100G WDM shipments by Alcatel-Lucent, Ciena, Cisco, Huawei, and Infinera
• Ciena’s and Infinera’s North American optical revenue grew rapidly on a year-over-year basis in 2Q14, while Fujitsu’s and Alcatel-Lucent’s decreased

 OPTICAL ANALYST COMMENT:

“While the term ‘tier-1’ is traditionally associated with the incumbent operators of Europe and RBOCs in North America, it is now qualitatively clear that tier-1 spending growth is coming from the competitive dark fiber and internet exchange carriers. These carriers, as well as vertically-integrated internet content providers (ICPs), provide a growing portion of core internet connectivity and intra-datacenter capacity,” notes Andrew Schmitt, principal analyst for carrier transport networking at Infonetics Research. 

Clients, log in to join Andrew Schmitt Sept. 5 at 9:00 a.m. PDT for his live optical hardware market recap and outlook, or view on-demand: www.infonetics.com/cgp/login.asp?id=874.

Infonetics’ quarterly optical hardware report provides worldwide and regional market size, market share, forecasts through 2018, analysis, and trends for metro and long haul SONET/SDH and WDM equipment, Ethernet optical ports, SONET/SDH/POS ports, and WDM ports. Vendors tracked: Adtran, Adva, Alcatel-Lucent, Ciena, Cisco, Coriant, Cyan, ECI, Fujitsu, Huawei, Infinera, NEC, Padtec, Transmode, Tyco Telecom, ZTE, and others.

To buy the report, contact Infonetics: www.infonetics.com/contact.asp

Related news article:  Telstra Picks Ericsson, Ciena for Optical, SDN/NFV

http://www.lightreading.com/nfv/nfv-elements/telstra-picks-ericsson-ciena-for-optical-sdn-nfv/d/d-id/710370

On Monday, August 4th, I attended the Peer 2.0 Internet engineering conference, put on by the Peer 2.0 Foundation.  The sessions I attended were excellent tutorials that would be of great value to network engineers, Internet architects and business leaders.  Due to an auto accident and damage to my car, I had to leave at 2pm Monday and unfortunately missed all sessions that took place afer that.

For the complete program, please visit: http://peer2.org/schedule/

“One of the things that’s important about this event is that the networking business is changing,” SiliconANGLE founder observed to co-host Jeff Frick in their opening segment for the two-day event. The market is going through a once-in-a-decade transition that is not only reshaping the technology landscape but the competitive playing field as well, and not necessary for the better.  “We’re seeing a huge changing of the guard between who runs these big networks, Comcast and Time Warner are in a merger situation, if they control access to the Internet we might not see the next Netflix, we might not see the next Google,” he warned.

“It’s nice that the guys who pioneered a lot of the innovation, founded a lot of the early companies like Equinix, are now providing the education and giving back to the next engineers that are coming up through the system who will help us define what the future holds,” Frick said during his opening remarks.  ”Traditionally the network has enabled innovation on top of it but now the mode seems to be flipping around and innovation is going to be dictated to the network form the top of the stack,” he added. 

The first day’s focus was on “Interconnection/Peering 101” highlighting the traditional interconnection paradigms, processes, motivations and business cases for connecting to the core of the Internet.

Bill Norton of IIX provided the necessary background during his three Monday morning tutorials:  Internet Transit, Network Peering, The Business Case for Peering and Next Generation Interconnection, The Evolution of the U.S. Peering Ecosystem.  

The following topics were covered with quizes for the audience along the way:

Internet Transit Service – the model used by the overwhelming majority of all Internet connections between ISPs and network/content providers.  In particular, between larger (tier 1) and smaller (tier 2) ISPs/ network providers.

 Internet transit is the business relationship whereby an entity provides (usually sells) access to the Internet. Transit service permits network traffic to cross or “transit” an IP network, usually used to connect a smaller Internet service provider (ISP) to the larger Internet.

[An Internet Service Provider (ISP), also called a “Transit Provider”is an entity that sells access to the Internet.]

Internet Transit service consists of two bundled services: The advertisement of customer routes to other ISPs, thereby soliciting inbound traffic toward the customer from them The advertisement of other ISPs’ routes (usually but not necessarily in the form of a default route or a full set of routes to all of the destinations on the Internet) to the ISP’s customer, thereby soliciting outbound traffic from the customer towards these networks.

The transit service is typically priced per megabit per second per month, and customers are often required to commit to a minimum volume of bandwidth, and usually to a minimum term of service as well. Some transit agreements provide “service-level agreements” which purport to offer money-back guarantees of performance between the customer’s Internet connection and specific points on the Internet, typically major Internet exchange points (IXPs) within a continental geography such as North America. These service level agreements (SLAs) still provide only best-effort delivery since they do not guarantee service the other half of the way, from the Internet exchange point to the final destination

Some of the techniques used by some of the most intelligent network coordinators to optimize their transit purchases were also discussed.

Network Peering; The Business Case for Peering and Next Generation Interconnection.  The Business Case for direct interconnection, selecting an IXP, and Public vs. Private interconnection were explained.

Evolution of the U.S. Peering Ecosystem:  This talk described how the major ISPs and other players got involved in Internet tiering.  Network peering is a direct connection between entities- usually Tier 1 ISPs (free peering), but more recently between a Tier 1 ISP and a Content Provider (paid peering).

[A Tier 1 ISP is an ISP that has access to the entire Internet Region routing table only through its settlement free peering relationships.]

[Tier 2 ISP is an ISP thathas to buy transit from someone toreach some destinations in the Internet Region]

[A Content Provider focuses on content production and usually  buys transit.service with the exception of “paid peering” – see description below.”]

The cablecos/MSOs got involved in peering when @Home went bankrupt and they needed to connect with one another and other ISPs to make their cable modem Internet services work.  

“Paid peering” was described as something network providers do, but don’t talk about.  The most recent example was the paid peering deal Netflix struck with AT&T.  

The presentation with Q & A helped me understand the interconnect political dynamics of the tier 1/ tier 2 ISPs and content providers.

I attended only the first two talks in the afternoon.  Both were excellent:

Surviving a DDoS Attack – What Every Host Needs to Know, Martin Levy of CloudFlare

The magnitude of the attacks was startling and only getting worse.  The source of the attacks, best practices for good protocol hygiene, what steps to take to implement infrastructure ACLs and how to build relationships upstream in order to survive were all described.

Peering Improves Performance, Zaid Ali Kahn, LinkedIn & Ritesh Maheshwari, LinkedIn

This tag team presentation presented the performance benefits observed from peering over millions of page loads.  A monitoring tool was described that can assess and be used to improve web page loading latency.

The second day of the conference (which I did not attend) was to address the more advanced and evolving aspects of interconnection, with discussions and panels led by experienced industry professionals.]

At the 7^th meeting of ETSI’s Network Functions Virtualisation (NFV) Industry Specification Group (ISG), co-hosted by Citrix and Ericsson in Santa Clara from 29 July to 1 August 2014, nine draft NFV documents were released for industry comment, a new leadership team was elected and plans for the next phase of NFV were laid down.

The nine draft documents made openly available for comment this week will together complete the first release of NFV when published at the end of the year. The ISG NFV has adopted a policy of making draft specifications openly available to the industry in order to encourage feedback. The documents released this week describe an infrastructure overview, the virtualized network functions architecture and the compute, hypervisor and infrastructure network domains. They also cover management and orchestration, resiliency, interfaces and abstractions, and security.

These drafts are now available for industry comment from http://docbox.etsi.org/ISG/NFV/Open, and will be completed and published before the end of 2014.

As well as focusing on the technical content of the first release at this meeting, plans for the content and structure of the second phase of NFV were discussed and laid down. The main objectives of this next phase are to build on the achievements made in the first two years of the ISG and include interoperability, formal testing, as well as working closer with projects developing open source NFV implementations. The activities will include both normative and informative work.

NFV ISG has chosen a new management team to carry the group forward. Dr. Steven Wright, of AT&T, was elected as chairman, and Mr. Nakamura Tetsuya, of NTT DoCoMo, was chosen as vice-chairman. Both are elected for a period of two years.

Dr. Wright commented “I’d like to thank the outgoing chair, Prodip Sen, and all the ISG participants, for their hard work to bring the ISG to this point. I look forward to assisting the ISG as it continues to progress towards its goal of an open NFV ecosystem with interoperable implementations.”

The ETSI NFV ISG held its first meeting in January 2013. Since then it has grown to over 220 participating organizations, with over 300 delegates attending this last meeting. The first five ETSI Group Specifications resulting from the NFV ISG’s work were published in October 2013.

References:

http://www.etsi.org/technologies-clusters/technologies/nfv

http://www.etsi.org/index.php/news-events/news/700-2013-10-etsi-publishe…

http://docbox.etsi.org/ISG/NFV/Open/Latest_Drafts/NFV-INF001v036-Infrast…

About ETSI

ETSI produces globally-applicable standards for Information and Communications Technologies (ICT), including fixed, mobile, radio, converged, aeronautical, broadcast and internet technologies and is officially recognized by the European Union as a European Standards Organization. ETSI is an independent, not-for-profit association whose more than 700 member companies and organizations, drawn from 63 countries across five continents worldwide, determine its work programme and participate directly in its work. 

Infonetics Research released excerpts from its 2014 SDN Strategies: North American Enterprise Survey, which analyzes the trends and assesses the needs of corporate private-network businesses deploying software-defined networking (SDN) in their data centers and campus LANs. 

Kim Peinado of Infonetics clarifies the survey results- it is not a forecast!

“We surveyed businesses about their plans and this is what they reported to us. It’s not Infonetics predicting 87% of medium and large businesses planning to have SDN live in the data center by 2016 – it’s businesses we contacted TELLING us that.”

SDN SURVEY HIGHLIGHTS 

.    Infonetics’ enterprise respondents are expanding the number of data center sites and LAN sites they operate over the next 2 years and are investing significant capital on servers and LAN Ethernet switching equipment 

.    A majority of survey respondents are currently conducting data center SDN lab trials or will do so this year; 45% are planning to have SDN in live production in the data center in 2015, growing to 87% in 2016 o    Respondents’ plans for LAN SDN are nearly identical to their data center plans 

.    Among respondents, the top drivers for deploying SDN are improving management capabilities and improving application performance, while potential network interruptions and interoperability with existing network equipment are the leading barriers 

.    Meanwhile, enabling hybrid cloud is dead last on the list of drivers, a sign that SDN vendors have some work to do in educating enterprises that SDN can be an important enabler of hybrid cloud architectures 

.    On average, 17% of respondents’ data center Ethernet switch ports are on bare metal switches, and only 21% of those are in-use for SDN 

.    Nearly ¼ of businesses surveyed are ready to consider non-traditional network vendors for their SDN applications and orchestration software 

SDN SURVEY SYNOPSIS

  For its 42-page SDN enterprise survey, Infonetics interviewed 101 purchase-decision makers at medium and large North American organizations that are implementing software-defined networks (SDNs) now or planning to evaluate SDNs by the end of 2015. The survey provides new data on how the enterprise SDN market is evolving, including insights on the intent of corporate private network buyers to help vendors determine how to invest in product development and position their products in the marketplace. The study delves into deployment drivers and barriers, rollout plans, applications, use cases, vendors installed and under evaluation, and top rated venors.

Analyst Comments:

“Software-defined networking (SDN) spells opportunity for existing and new vendors, and the time to act is now. The leaders in the SDN market serving the enterprise will be solidified during the next two years as lab trials give way to live production deployments in 2015 and significant growth by 2016. The timelines for businesses moving from lab trials to live production for the data center and LAN are almost identical,” notes Cliff Grossner, Ph.D., directing analyst for data center, cloud, and SDN at Infonetics Research. Continues Grossner:

“There’s still some work to do on the part of SDN vendors. Expectations for SDN are clear, but there are still serious concerns about the maturity of the technology and the business case. Vendors need to work with their lead enterprise customers to complete lab trials and provide public demonstrations of success.” 

Email from Cliff Grossner received July 29, 2014:

As Kimberly said, we are reporting data shared with us by North American enterprises, not making our own prediction.

The caveats that I would add 1) actual deployments may occur slower that intended, and 2) having SDN live in the DC does not mean that ALL of the network in the DC is SDN.

My interpretation of the result is that after completing the lab and production trials, some portion of the DC network will go in-use for SDN by the survey respondents.

One also needs to look at our definition for SDN (below), which is fairly broad as it includes use of RESTful APIs and other programmable interfaces with published APIs. We do not include CLI scripting, or use of NETCONF and SNMP as SDN.

Definition of SDNs (software-defined networks):

Deliver automation of the network through increased programmability. Inherent to SDNs are a method to abstract and separate a control plane from the data plane, providing centralized control of physical switches or providing network virtualization overlays. SDNs include a method (APIs or specialized protocols such as OpenFlow, etc.) that can be used by applications, SDN controllers, or orchestration software to ask for network state, information, or services.

To buy the report, contact Infonetics at:

www.infonetics.com/contact.asp

Related article:

Open Data Center Alliance Accelerates Enterprise Path to Software-Defined Networking with New Usage Model Publication

http://vmblog.com/archive/2014/07/23/open-data-center-alliance-accelerat…

AT&T will upgrade its U-verse fiber to the premises service with speeds up to 1 Gbps through its GigaPower program in parts of Dallas and Fort Worth, TX this summer. The company said it would begin at speeds up to 100 Mbps, with upgrades to 1 Gbps by the end of the year.  U-verse is AT&T’s high-speed broadband double and triple play service to residential subscribers.   However, both U-verse TV and U-verse Internet are available as single service offerings.

In Austin,TX – the first market to get access to AT&T’s GigaPower platform -the giant telco is initially offering 300 Mbps, and plans to accelerate to 1-Gig sometime later this year. Google Fiber has begun to build out its 1-Gig infrastructure in Austin so that must be providing AT&T with motivation and incentive to build out GigaPower in Austin.

AT&T has not announced pricing for GigaPower services in Dallas/Ft. Worth. In Austin, the broadband service runs $70 per month; $100 per month when paired with the U-verse Voice Unlimited service; $120 per month with the U200 TV package with HBO;  and $150 per month with U200 TV with HBO and U-verse Voice Unlimited. All offers come with one-year commitments that could result in an early termination fee of up to $348, The Austin version of U-verse with GigaPower is also capped at 1 terabyte per month. AT&T charges $10 for each additional bucket of 50 Gigabytes above that threshold, with a maximum monthly overage charge of $30.

Note: From my own personal U-Verse customer experience (2+ years), prices rise sharply afer the one year promo ends.

AT&T is considering a plan to expand GigaPower to as many as 100 candidate cities, and has proposed to expand GigaPower to an additional 2 million customers as a condition of its pending acquisition of DirecTV.

AT&T’s U-verse service attracted 488,000 new customers in the quarter, bringing the total to 11.5 million subscribers. Total U-verse revenues, including business,were up 27.9% year over year.  U-verse is now a $13 billion annualized revenue stream for AT&T.

Overall U-verse revenues increased by almost 28% y-o-y on the back of solid growth in U-verse TV and Broadband Internet revenues. U-verse TV added 190,000 subscribers in Q2 to take its total user base to 5.9 million and U-verse high speed Internet added 488,000 new subscribers in the quarter to take its total to 11.5 million.

This rise in subscriptions helped the company improve its proportion of U-verse subscribers to total broadband users to 70% in Q2 2014 from 55% in the year-ago quarter.  And why not?  The cost-performance of U-verse Internet is much better than the older ATM over ADSL Internet.

References:

http://www.multichannel.com/news/technology/att-preps-summer-gigapower-d…

http://www.att.com/att/gigapowercities/

http://www.forbes.com/sites/greatspeculations/2014/07/24/atts-q2-earning…

http://www.att.com/Investor/Earnings/4q13/ib_final_4q13.pdf

http://www.att.com/gen/investor-relations?pid=262

Infonetics Research released excerpts from its 2014 Enterprise Networking and Communication Equipment Vendor Scorecard, which profiles, analyzes, and ranks the 7 leading vendors of enterprise networking, network security, and communication equipment and software worldwide: Alcatel-Lucent, Avaya, Brocade, Cisco, HP, Juniper, and NEC.

The only report of its kind, Infonetics’ scorecard evaluates vendors on criteria using actual data and metrics, such as direct feedback from buyers, vendor market share, share momentum, financials, and solution portfolio. This approach eliminates subjective scoring and ensures vendors are assessed accurately and fairly.

Infonetics sub-divides the Enterprise Network & Communications Infrastructure market into three categories:

Here’s the $ sales breakdown for each market segment for calendar years 2012 and 2013:

ENTERPRISE SCORECARD HIGHLIGHTS:
.    The enterprise networking and communication infrastructure market is highly fragmented, with well over 100 vendors vying for a piece of this US$50 billion market
.    Repeating its performance in last year’s scorecard, Cisco once again earned the highest overall score by far, attaining perfect scores in 6 of 7 criteria and even improving on market share momentum
.    The battle for 2nd place heated up this year, with Brocade holding on to the #2 spot again thanks to its strong financials, and is followed very closely by HP and Juniper
.    HP captured the #1 position for market share momentum
.    Juniper ranks among the top 3 vendors for 5 of Infonetics’ scorecard criteria: market share momentum, financials, product reliability, technology innovation, and service and support
.    NEC’s #1 position in Japan’s enterprise telephony market helped place it 5th in Infonetics’ 2014 scorecard

SCORECARD SYNOPSIS:
Infonetics’ 29-page enterprise vendor scorecard evaluates the leading enterprise networking and communication equipment vendors using criteria that are commonly used by buyers to select vendors, demonstrate success in the marketplace, and position a vendor for success. The matrix rankings are based on 7 criteria including market share; market share momentum; financials; solution breadth; technology innovation; product reliability; and service and support. Companies ranked: Alcatel Lucent, Avaya, Brocade, Cisco, HP, Juniper, and NEC.

ANALYST NOTE:
“Cisco dominates the enterprise networking and communication market by a wide margin, due to offering the broadest solution portfolio, receiving positive feedback from enterprises, and capturing significant market share. The battle for second place is raging between Brocade, HP, and Juniper, and each has unique strengths: Brocade has the strongest financials, HP is growing the fastest, and Juniper has experienced the highest improvement in enterprise feedback,” notes Matthias Machowinski, directing analyst for enterprise networks and video at Infonetics Research and lead author of the report. 

To buy the report, contact Infonetics:

http://www.infonetics.com/contact.asp.

RELATED RESEARCH (See http://www.infonetics.com/market-research-report-highlights.asp): 
.    US$1 trillion to be spent on telecom and datacom equipment and software over next 5 years
.    Infonetics releases Global Telecom and Datacom Market Trends and Drivers report
.    Cloud is our #1 networking initiative, say businesses in Infonetics’ latest survey
.    PBX-based video buoys videoconferencing market
.    Security and data center vendors renew focus on DDoS as attacks multiply; Arbor leads
.    Integrated security solutions gain share in network security market in 1Q14
.    Cisco entrenched atop enterprise session border controller (eSBC) market
.    Wireless LAN access point ASPs on the rise, sparked by 802.11ac
.    Enterprise router market off to a rough start, plunges 14% sequentially
.    Ethernet switch market down 15% in the first quarter as growth stalls

RECENT AND UPCOMING ENTERPRISE RESEARCH:
Download Infonetics’ 2014 market research brochure, publication calendar, events brochure, report highlights, tables of contents, and more at www.infonetics.com/login.
.    DDoS Mitigation Strategies & Vendor Leadership: N.A. Enterprise Survey (June)
.    WLAN Infrastructure Vendor Scorecard (July)
.    Analyst Note: Genband Unveils Kloud & Kandy (July)
.    Business Cloud VoIP & UC Services Forecast (Aug.)
.    Next Generation Threat Prevention Strategies & Vendor Leadership Survey (Aug.)
.    Enterprise Routers Forecast (Aug.)
.    Enterprise Unified Communications & Voice Equipment Forecast (Aug.)
.    Enterprise Switches Forecast (Sept.)
.    Wireless LAN Equipment & WiFi Phones Forecast (Sept.)
.    Enterprise Session Border Controllers Forecast (Sept.)

Infonetics Research released data from its 2014 Telecom and Datacom Network Equipment and Software report, which provides a big picture of the health of the overall market. Network equipment bought by service providers as well as by SMBs and enterprises is tracked in the report, separately and together to gauge how the entire market is doing and to see who leads overall (see Report Synopsis in the release for a list of equipment and software categories). 

“Despite the fact that enterprises and service providers are in the middle of massive network upheavals due to the evolution of software-defined networking (SDN) and network functions virtualization (NFV) technology, the telecom and datacom networking equipment and software market is on track to grow annually through 2018 with the fastest growth coming in 2015,” notes Jeff Wilson, principal analyst at Infonetics Research. 

Michael Howard, co-founder of Infonetics and co-author of the report, adds, “Looking at just the service provider equipment space, we’re seeing a shakeup in vendor market share, with Huawei leapfrogging longtime number-one Ericsson to take the top spot in 2013. While Huawei’s been doing well in a number of regions, China’s economy is a key factor keeping Huawei’s growth so strong.” 

TOTAL TELECOM AND DATACOM MARKET HIGHLIGHTS:

Based on global revenue, the overall telecom and datacom network equipment and software market share leaders are, in rank order: Cisco, Huawei, Ericsson, Alcatel-Lucent, and ZTE – the same top 5 vendors with virtually the same shares as the year prior .    

Vendor share positions held steady in the enterprise segment, with Cisco in the driver’s seat and followed distantly by tightly bunched Avaya, Brocade, HP, and Juniper (listed in alphabetical order) .    

Worldwide, sales of telecom and datacom equipment and software came to $183 billion in 2013, an uptick of 3% versus the previous year.    

Asia Pacific put some breathing room between itself and North America in the regional race for telecom/datacom equipment and software revenue, growing 6% year-over-year as compared to North America’s 4.5%; this trend is expected to continue through at least 2018.    

Infonetics is projecting a cumulative $1.01 Trillion will be spent by service providers and enterprises on telecom/ datacom gear and software over the 5 years from 2014 to 2018.

REPORT SYNOPSIS:

Infonetics’ annual datacom and telecom equipment and software pivot report compiles worldwide and regional market size, vendor market share, and forecasts through 2018 from all of its reports that track enterprise and service provider gear. It is the majority of all data networking and telecom equipment for service providers, cable companies, and small, medium, and large organizations, excluding consumer electronics. 

The 11 major categories of equipment and software tracked in Infonetics’ report include broadband aggregation; broadband CPE; pay TV; optical network hardware; carrier routing, switching, and Ethernet; service provider VoIP and IMS; service provider mobile/wireless infrastructure; service enablement and subscriber intelligence; security; enterprise and data center networks; and enterprise communications.

Companies tracked include Alcatel-Lucent, Avaya, Brocade, Ciena, Cisco, Ericsson, Fujitsu, HP, Huawei, Juniper, Motorola, NEC, Nokia, Samsung, Siemens, ZTE, and many others.

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AT&T’s online-video joint venture with Chernin Group has made its first acquisition.  It’s paying $10 million for Creativebug according to a SEC filing.  San Francisco-based Creativebug was founded in 2012 and features more than 300 online classes on arts and crafts.  

According to the Creativebug site, the service offers some free content alongside paid offerings, including unlimited access to workshops for $9.95 per month, and an a la carte option that hawks single workshops starting at $9.95 each. Workshop categories include bookbinding, crochet, embroidery, felting, kids crafts, patchwork, stamping and home decor.

AT&T and its partner, the Chernin Group, also renamed their over-the-top video joint venture company Otter Media which will be focused on acquiring, investing in and launching OTT video services,  AT&T and The Chernin Group committed to invest $500 million in the venture when they announced it in April.

Reference:

http://www.multichannel.com/news/technology/chernin-att-jv-buys-creativebug-10-million/375916#sthash.rfF13jl7.dpuf

Intel, Samsung and Dell have established the Open Interconnect Consortium (OIC). The new consortium has pledged to develop and distribute specifications for the emerging Internet of Things.  It is competing with the AllSeen Alliance, which was founded by Qualcomm.

The group, which also includes Atmel, Broadcom, and Wind River (owned by Intel), will focus on creating an open-source standard for wirelessly connecting devices to one another and to the Internet. Like other open-source projects, the member companies pledge to donate intellectual property, or IP, that all members and others can work on and use.

“We’d like to quickly get the key industry players to structure the standards properly” for devices to interoperate, said Imad N. Sousou, general manager of Intel’s open-source technology center. Products using the Open Interconnect standard will most likely come out in 2015, he said.  

Intel’s Gary Martz said the OIC wil first establish standards around connectivity, discovery and authentication of devices, and data-gathering instruments in “smart homes,” consumer electronics and enterprises.  OIC will certify devices compliant with its standards. The group will work on standards encompassing a range of wireless technologies including Wi-Fi, Bluetooth, ZigBee and NFC (near-field communication).

Analysis:

The reason for all this activity is sheer numbers, and potentially a lot of market power. The IoT is expected to eventually touch some 200 billion cars, appliances, machinery and devices globally, handling things like remote operation, monitoring and interaction among Internet-connected products.

So far, such connections are at best uneven, but workable uniform standards could help that get better.

It’s likely that the communications standards governing these things will also affect the means for collecting data about the behavior of both devices and the people that use them. That makes it a very important future subset of the Internet, since data like that will inform things like future product development and what ads individual consumers are shown.

Why didn’t the Interconnect group just go with AllSeen, which started earlier and is signing up product companies — even if the project was initiated by the Intel rival Qualcomm? “Intel and its partners evaluated all of the existing work,” Mr. Sousou said. “It’s not being done in a way that will drive widespread adoption.”

According to people in the consortium, who asked not to be named in order to sustain relations with AllSeen members, many of the other chip companies did not trust Qualcomm to fully part with its intellectual property.

There is also an ITU-T standardization effort for the IoTs which has been ongoing for several years.  The Global Standards Initiative on Internet of Things (IoT-GSI) promotes a unified approach in ITU-T for development of technical standards (Recommendations) enabling the Internet of Things on a global scale. ITU-T Recommendations developed under the IoT-GSI by the various ITU-T Questions – in collaboration with other standards developing organizations (SDOs) – will enable worldwide service providers to offer the wide range of services expected by this technology. IoT-GSI also aims to act as an umbrella for IoT standards development worldwide.  The IoT-GSI group will have its tenth meeting 12-18 November 2014 in Geneva, Switzerland.

Caroline Gabriel of Rethink Wireless wrote:

The OIC is short on details of its approach so far, though it will publish its code later this quarter, but its announcements suggest it will be a rival to AllJoyn in using the weight of its big-name backers to establish a de facto standard. It says it will devise, and contribute to open source, a peer-to-peer protocol which handles device discovery and authentication. However, Intel says the key difference from AllJoyn is that the OIC code will be created collaboratively, rather than forming a supporters’ club around an existing technology from a single firm.

This will certainly not be the last body formed to help the big chip vendors – all of them in urgent need of a leadership role in at least some aspects of IoT standards – to position themselves as standards setters. As seen in other technology markets, the array of would-be standards will gradually consolidate as the real market makers – such as the large-scale consumer and industrial devices vendors – make their choices.

In this way, the OIC has scored one big point, by netting Samsung, although the Korean firm’s semiconductor division does not necessarily influence the alliances made by its consumer products activities. It will be positive to see some of those market makers taking some decisions, or risk the chip giants tearing IoT platforms into fragments with their politicking, before the segment has even gained scale.

References:

http://www.openinterconnect.org/ 

http://bits.blogs.nytimes.com/2014/07/08/standard-behavior-in-an-interne…

http://news.techworld.com/data-centre/3529314/samsung-intel-dell-team-on…

http://www.rethink-wireless.com/2014/07/08/intel-leads-anti-qualcomm-iot…

https://allseenalliance.org/

https://techblog.comsoc.org/2014/05/26/tiecon-2014-summary-part-3…

http://www.itu.int/en/ITU-T/techwatch/Pages/internetofthings.aspx

http://www.itu.int/en/ITU-T/gsi/iot/Pages/default.aspx