Can the Optical Guys Get Out of the NGN Basement?

“The times they are a’changing”, as the song goes.  The pace and direction of the changes could be influenced by vendors agile and determined enough to get out there and take some bold steps.  We’ve looked at the IT giants who have the most to gain from a transition to a software-server vision of networking.  For all their assets (and likely ambitions) most of them are somewhat networking outsiders.  Cisco, the one who most clearly isn’t that, is far from being determined to be a proponent of software-server-centric shifts.  If we continue exploring the NGN transformation vendor landscape in order of decreasing potential gains, our next group is the optical vendors.

All of the optical vendors out there would benefit from a network transformation that skimped on spending on the L2/L3 part of the network, even if some of the savings went into buying software and servers.  Nobody believes that capacity needs won’t rise in the future, even if cost pressures increase.  Bits start in the optical layer.  The challenge for the optical vendors is creating a strategy that brings about a concentration of network-device spending on their own layer, almost certainly meaning extending their reach upward into the grooming part of the network.  This has to happen at a time when service strategy moves by operators seem to favor software/server vendors, far from the optical plane.

If you look at any realistic NGN vision, it includes some kind of “shim” between the optical part of the network and the service networks that could be created using overlay, hosted SDN, and NFV technology.  Today that shim is created by the L2/L3 infrastructure, meaning switches and routers.  Some of the features of the current L2/L3 can migrate upward to be hosted, but others will have to migrate downward toward the optical boundary.  I’ve suggested that an electrical grooming layer would emerge as the NGN shim, based on SDN technology and manipulating packet flows where optical granularity wasn’t efficient.  The optical players, in order to maximize their own role in the future, need to be thinking about doing or defining this new shim.

Adva, Alcatel-Lucent, Ciena, Fujitsu Network Communications, and Infinera all have optical network gear, and all have packet-optical strategies.  There are some differences in their approaches, the most significant perhaps being the extent to which vendor packet-optical strategies are influenced by current L2/L3 devices and positioning.  If we expect the NGN of the future to look different than networks of the present, it’s inevitable that the differences be primarily in how service-layer elements bind to optics.  A focus on current L2/L3 would tend to optimize evolution by reducing the differences between the then and the now.  We’ll look at how that, and other issues, impact vendors in alphabetical order as before.

Adva Optical is one of the smallest of our vendors, certainly in terms of number of web hits on “packet optical” plus their name.  Adva has partnered with Juniper to create a unified solution for packet optical, something that has plusses and minuses.  On the plus side, they aren’t committed to their own ossified L2/L3 approach, but on the minus side that’s likely what they’ll get from Juniper.  Partnerships are a very tough way to support a revolutionary change because they multiply the politics and positioning challenges.  Who ever heard of an aggressive partnership?  It’s going to be hard for Adva to be a conspicuous driver of progress toward a new optical/electrical harmony for NGN.

Alcatel-Lucent is an opposite, size-wise, but it may have some of the same issues as Adva.  Unlike Adva, they’re created by collision with Alcatel-Lucent’s own products at L2/L3.  You don’t have to be a market genius to understand how important switching/routing is to the company (Basil Alwan is the star of most of the company’s events).  On the other hand, Alcatel-Lucent did announce a virtual router and their Nuage SDN stuff is among the best in the industry.  So while Alcatel-Lucent is certainly unlikely to rush out and obsolete its star product family, it is in the position to support a graceful transformation if the industry really starts to move toward constraining equipment spending at L2/L3.  Combine that with Alcatel-Lucent’s strong position in NFV (CloudBand), and you have a vendor who clearly has the pieces of a next-gen infrastructure.  They also have “virtual mobile infrastructure” elements like IMS and EPC, a strong position in content delivery, and good carrier engagement.  Their optical stuff integrates well with all of this and even has generally harmonious management.  This isn’t an unbeatable combination, but it’s a strong one.  However, they’re likely to take the “fast follower” approach Cisco made famous, so we have to look for leadership from another player.

Ciena is an interesting player, with more PR traction for its approaches than the smaller players and also some very specific directions in NFV, something that only Alcatel-Lucent of the others can say.  They have a packet-optical strategy that’s a good fit to evolve to electrical grooming and no strong L2/L3 incumbency to protect.  While their new NFV approach is more a service (“pay-as-you-earn”) than a product, there is a product element to it and Ciena says they do have a strategy to let users wean away from the service-based model as they develop their markets.  Their Agility SDN controller (developed with Ericsson) is OpenDaylight-based and a good foundation for an evolving agile grooming layer.  On the negative side, they still haven’t created a cohesive picture of NGN and aligned their pieces to support it.

Fujitsu Network Communications (FNC) is a bit of an optical giant.  They have a wide variety of optical network devices and an Ethernet-based electrical aggregation and grooming approach that gets good scores from the operators.  While their electrical-layer positioning is very traditional, it certainly has the potential to evolve to the kind of model that I think will prevail by 2020.  What FNC lacks is positioning, perhaps more so than any vendor in the space.  Their SDN material, for example, is a useful tutorial but doesn’t provide enough to drive a project or even generate specific sales opportunities.  They have little presence in NFV and virtually nothing in the way of positioning or collateral.  I agree that NFV is above the optical space, but without talking about NFV and the cloud you can’t talk about NGN evolution.  These guys could be as big in the NGN space as anyone, or bigger, if they could sing and dance.

Infinera is our final optical player, a small and specialized one but big enough to have potential.  They recently hired Stu Elby from Verizon, one of the leading thinkers in terms of the evolution of carrier networks under price/cost pressures.  Infinera also has the DTN-X, arguably the most agile-optical-packet combination available, and a very practical (based on a Telefonica example) transport SDN example on their site.  Their DTN-X brochure has a diagram that is pretty congruent with the model of NGN I think will prevail, and this in a product brochure!  It’s impressive, for an optical player.  Their NFV positioning is very minimal, but more interesting and engaging than that of FNC for example.  If they made it better, if they created some bridge to the service layer in an explicit way, they could be powerful.

That “for an optical player” qualifier is the significant one here.  None of these players are setting the world on fire, positioning-wise.  Ciena and Infinera seem to be the leading players from the perspective of a strong and evolvable packet-optical-and-SDN story, but Alcatel-Lucent and FNC have the market position should they elect to make a bold move.  For all these players, the future may hinge on how well and how fast the IT giants move.  A strong story in the service or “cloud layer” of the network could effectively set standards for the grooming process that would tend to reduce opportunities by optical players to differentiate themselves.

That’s the critical point.  Bits are ones and zeros; not much else you can say.  If management and grooming are dictated from above then optical commoditization is the result of NGN evolution, not optical supremacy.  It’s going to come down to whether the service side or the transport side moves most effectively.