It used to be that trade shows were the best place to make new announcements because the media was all there, presumably captivated by the potential of all those vendors and products. Lately the opposite has been true; there are simply too many voices shouting to be heard and prospects get clickitis from even trying to follow the flood of URLs that emerge. Ericsson is taking this to heart by making a big announcement (a series, in fact) ahead of MWC, and it’s worth seeing how it might tie into industry conditions, competition, and futures.
Ericsson is interesting among the major network vendors because it’s really a “network equipment vendor” only in the mobile space. The company relies much more on a combination of OSS/BSS software (from its acquisition of Telcordia) and on professional services. On one hand, that could be a plus in the NFV space because it’s not much at risk to having its hardware displaced and operations efficiency is the sweet spot for NFV. On the other hand, NFV is a wide-scope initiative with much of the early PoC work focused on areas where Ericsson isn’t an incumbent.
Their MWC pre-announcement seems to be aiming at shoring up its position, and one reason they may be doing that is that at least some vendors (Oracle for one) are planning NFV announcements at MWC. Why not rain on their parades a bit? However, the most interesting thing about what Ericsson is doing is who it seems to be targeting, and why. For more we have to look at what they’ve announced.
The first step in Ericsson’s positioning sweep is what they call Digital Telco Transformation, which is a combination of their two strategic priorities, OSS/BSS software and professional services. The goal of this is offered by their head of consulting and integration: “Only a holistic approach that reinvents the telco operating model can ensure operators avoid major business model disruptions and realize their digital telco vision.” The key phrases are “holistic” and “reinvents the telco operating model”.
Because of their narrow equipment footprint, Ericsson is vulnerable to the death-of-a-thousand-cuts fragmentation of NFV momentum that all these PoCs create. They need to focus on the problem at a higher level than equipment, which means they have to focus on operations as the unifier of all the NFV stuff going on. “Holistic” means “across all services and equipment” to Ericsson, and “reinventing the telco operating model” means starting the transformation to NFV with an operations transformation. The net is that operations is driving operators to the future in Ericsson’s view.
This operations focus is interesting because up to this year, operators were driving PoCs out of their science and technology activity with the CIOs largely on the sidelines. That’s been changing this year as I’ve recently pointed out, and Ericsson is surely playing to that change and to this new and critical constituency. One that, by the way, Ericsson is in a good position to leverage. If operations efficiency is a key to making a broader business case for NFV (as I think it is), then the OSS/BSS people are the ones to work with.
Another thread in the same tapestry is the second Ericsson positioning step. Expert Analytics 15.0 is aimed at tracking customer satisfaction through the service transitions NFV and other developments would create. The tool is aimed at creating a feedback loop from customer perception/satisfaction to service automation and change, and it also involves OSS/BSS and the CIO. The tool is aimed at gathering information from many sources and driving automated processes, which sure sounds like a broad strategy.
Thread three is the App Experience Optimization which aims at the app user, and whose goal is the optimization of the app experience and operator profits in tandem. This is really a professional services tie-in, something that brings Ericsson’s integration and optimization expertise to bear. It extends that notion of a broad process that involves a lot of stuff, and it ties things into mobile services more tightly.
The fourth and fifth elements are products, both aimed directly at mobile infrastructure. One enhances Ericsson’s solutions in mobile backhaul routing and the other in CDN. Ericsson is integrating these network product elements with the operations announcements in a new software release and through some customized portfolios. This appears to me to be a second anchor—exploit operations, exploit mobility—to a new positioning that’s intended to do what I called “supersetting” in yesterday’s blog (referencing Cisco’s own SDN and NFV approach). Ericsson likely believes that if you generalize the problem and involve operations, you can defeat point-PoC NFV initiatives from other vendors, all of whom are reluctant to be “holistic” on NFV at all for various reasons, largely tactical.
While Ericsson makes a few connections between their announcement-fest and NFV it’s pretty obvious that NFV isn’t the specific focus. It sure seems to be waiting in the wings, though. Pushing this out now, well ahead of MWC, might also tune reporters at the show to the importance of operations in NFV, which is at the minimum going to force those who have an operations story to accent that piece of their announcement, perhaps laying back on areas where Ericsson has nothing comparable. Those who don’t have an ops story could even risk negative coverage.
It’s harder to say whether the Ericsson strategy will actually pay off in NFV traction. While it is true that the CIO is an ever-more-important player in NFV, it’s also true that they haven’t exactly been the prime movers in NFV so far. Operators are conflicted about whether operations needs to be leading the charge or changed out completely in favor of something else.
It’s also true that OSS/BSS vendors, including Ericsson, have yet to deliver on a real NFV story, though some have come close or promised it. But of course if you’re Ericsson you may reason (as I believe Cisco has) that if the price of advancing NFV is advancing your own disintermediation, why bother? By positioning their suite of announcements as operations enhancements and business model transformers, they’re elevating their story out of the NFV clutter. They may also be elevating it out of NFV relevance, though.
The tangible weak point is the MANO thing. Operators generally believe that service automation is about MANO, that NFV has introduced that key concept to the picture, and that MANO isn’t a part of OSS/BSS. That’s what leads some operators to see a completely new operations picture orchestrated around MANO. Some also see MANO creeping up into the OSS/BSS, and Ericsson doesn’t seem to be taking a position on that critical point.
It’s hard to see how Oracle would expect to win over competitors who could actually deliver an NFV product unless Oracle could deliver the heart and soul, at least, which is MANO. Ericsson may be hoping that the OPNFV effort (open-source software for NFV, under the Linux Foundation) will create software, or that it will at least marginalize those who attempt to provide an NFV product. That might be true if 1) OPNFV gets something done quickly and 2) it’s comprehensive enough to deliver on the expected NFV benefit case. It doesn’t seem likely either condition will be met this year.
Maybe I’m a conspiracy theorist here, but it seems to me like we’re seeing a lot of maneuvering around NFV right now, and I’m inclined to believe that it’s because operators are making progress with the business case. If that’s true, then we’re approaching the point where lack of a coherent NFV position could be a real problem for vendors who want to sell to operators. If that is true, then a lot of vendors who have been blowing kisses at NFV and engaging in vacuous partner programs (as opposed to programs where there is real value from a key player) are going to have to at least buy a ring and practice getting down on their knees to a strong partner. It’s too late to build something at this point.