We previously commented on the NOKIA-Alcatel-Lucent (ALU) proposed acquisition
and the rationale behind the deal. This article evaluates the implication of a post-merger where the combined assets are rationalized and the benefits to helping CSPs operationalize the programmable network.
Appledore Research Group has just completed an comprehensive review of the major software supplier’s portfolios against a standardized ARG taxonomy. Our taxonomy is designed to normalize products against a common structure so that positioning, gaps, strengths and complementarity (yes, the precursor to synergy) becomes evident. From our indepth briefings and analysis, it in fact appears that there are significant opportunities for ALU and NOK to combine product lines, erase gaps and strengthen their position in the marketplace and the solutions they offer to customers.
Fortuitously, in the software space, NOKIA and ALU have taken very different approaches, and invested in complementary areas of the Appledore Research Group taxonomy. NOKIA has taken an evolutionary approach, re-using significant portions of its existing OSS base, and investing relatively less in the underlying Telco cloud platform infrastructure but providing a smooth migration for existing PNFs with emerging VNFs.
Nokia’s new investments have been concentrated in two areas – upgrading the long-standing NetAct network manager for FCAPs support (primarily service assurance and NE configuration) of hybrid infrastructure, combined with a new products named NFV-orchestrator and NFV-Manager, echoing the ETSI nomenclature. So far, NOK has left the VIM and SDN control functions to partners or embedded functionality. The NOK portfolio continues to have gaps in analytics, service creation, and order management. On the plus side, this approach promises a simple, low disruption path for operators to migrate from physical to hybrid and someday to virtual instances. On the down-side, it preserves today’s fundamental operations paradigms and does not necessarily usher in the opex improvements that virtualization promises.
ALU, on the other hand, invested early in CloudBand Node and CloudBand Manager – which cover the NFV-I, Resource Management and MANO spaces, plus its spin-in Nuage networks which is a leader in SDN-control. These systems have been GA for nearly 3 years, and evidence a significant degree of maturity. ALU also introduced a new but promising next-generation OSS system, Motive, based on dynamic topology and analytics technology. Motive promises a single view across silos, truly up-to-date and modern topology graphs, and the ability to automate proactive healing and configuration. Significantly, these are all areas where NOKIA largely collaborated with partners. We anticipate that the Nokia partnership with Juniper for SDN products will dissolve as Alcatel Lucent brings with it Nuage.
Looking at the same Appledore Research Group telco-cloud software taxonomy introduced by Patrick, we can see the synergistic effect of merging these portfolios.
Appledore Research Groups taxonomy creates a normalized vocabulary for the critical elements of virtualization management – from resource control, MANO, policy control, catalog driven service creation, shared topography graphs and inventory, analytics and order management/partner management storefront. The combined companies cover a significant portion of this taxonomy, including those layers most critical to the technology and process shift underway.
The devil is always in the details, but let’s look at one target scenario: the combined companies offer a much broader virtualization portfolio to their combined customer base, raising the revenue per customer for both, and reducing risk for operators. This may give both portfolios the revenue base to support robust investment, and provides a more credible alternative to existing OSS and virtualization software portfolios. The two are still relatively weak in the higher layers of BSS, billing and customer management, but, carefully integrated, the combined portfolio could make NOK-ALU a very credible software choice, especially where their combined optical and RAN offers are deployed or in strong contention.
For complete analysis of the emerging software environment for virtualization, as well as details on the ALU and NOK portfolios, please see the ARG reports “Managing the Telco Cloud” and “MANO Supplier Scorecard: Top Picks for 2015 ” – available via subscription at www.Appledoreresearch.com.