How Will the Major Vendors Fare in This Fall’s Operator Planning?

I blogged earlier this week about the “fall planning cycle” for network operators, and the issues and forces associated with that cycle this year.  An obvious follow-on question is how vendors will be impacted by the cycle.  Will some be hurt by events, others helped, and is there still time to move yourself from the “hurt” to “help” group?  Time is short here, so whatever happens will have to be focused as much on positioning as on product.  I can’t review every vendor in a blog like this, but let’s look at some major “revolutionary” vendors and see where they are and what they might do.

Alcatel-Lucent is one of the functional market leaders in NFV and is the runaway winner in SDN.  As they have since the merger that created them, Alcatel-Lucent has been near dead last in terms of positioning effectiveness.  Always a geeky player, they’ve relied on technical engagement to advance their goals, but the problem with the current SDN/NFV revolutionary period is that there are a lot of new players to sell.  Even where Alcatel-Lucent has the strength to promote a holistic strategy, the inexplicably separate their wonderfully unified stuff into functional silos.  OSS/BSS, NFV, IMS, Rapport…all of these should be bricks on the pathway to the new networking age.  They’re not.

The biggest challenge for Alcatel-Lucent is positioning Nuage, their SDN strategy, given the dominance of traditional routing within the company.  You have to protect your sales, of course, but you can’t protect them for long if you ignore evolution and hunker down on the present.  Earth to Alcatel-Lucent; you can’t virtualize most of your infrastructure by 2020 (as AT&T says it will) by staying with Big Iron.  Alcatel-Lucent is at risk to losing their SDN lead while they’re dallying on whether SDN matters enough to promote it.

Cisco is the poster child for dallying in the eyes of most.  They always seem to be trying to cap any new development, largely because they are.  Why foster change when you’re winning the current game?  In the case of SDN, Cisco definitely plays a “cap” game; they’ve built a software veneer on top of the usual infrastructure to tap off a lot of the early motivation to change to “real” SDN.  The problem for them is that they’re defending against their own success.  Cisco’s best chance to be the next IBM is to ride the wave of the “network-facilitated cloud”, which uses SDN for tenant networking and NFV for deployment and operation of features.  If Alcatel-Lucent were stronger in Nuage positioning they’d have put Cisco’s SDN strategy to bed already.  There’s still time for them to do that.

While Alcatel-Lucent could clean Cisco’s SDN clock, HP is the biggest potential disruptor of the networking industry.  HP has, via M&A, a decent SDN position, a superb NFV story, what might be the best IoT strategy of anyone.  They have all the products needed to build the virtual world of the future, and most importantly they have the hardware framework that will earn the most revenue, so they have the best financial incentive to stay engaged.  Their problem is the ISG’s Proof-of-Concept activities.  HP got seduced into believing that if you won at PoCs you won in deployment.  That would be true if the PoCs were aligned with convincing business cases, but they aren’t.

The future of NFV and SDN is the future of networking, either proactively or reactively.  HP needs to build its own ecosystemic story, crossing over the boundaries between its product areas, its technologies, and most important crossing over all those PoCs.  We are building one network here, gang, not a bunch of PoC silos.  What your vision is for that one network must be communicated clearly and (most important) quickly.

Huawei is way beyond the 900-pound gorilla phase of evolution in networking.  They are the price leader, and likely will be forever.  That gives them both assured success even if no real network evolution happens, and a solid shot at framing the future if they want to.  That’s because low prices can ease the risk burden that buyers of revolutionary stuff always have to face.  Huawei knows all of this, I think.  They have quietly managed to put together a lot of strong elements in NFV and SDN, not only the glamorous high-level stuff but also some of the base technology stuff.

Huawei has two problems that are related.  First is their lack of marketing/positioning skill.  While they’ve been getting better, Huawei isn’t a marketing-driven player and you have to be that to foster a revolution, or take your place in one.  The second problem is their political impasse with US carrier sales.  Not only are the US operators giant spenders, they’re also often on the leading edge of technology changes.  Further, they are close to the tech media both geographically and culturally.  If you are not winning hearts and minds in the US, the US media doesn’t take you as seriously.  Huawei can never fix their political problems, but they could position.

Oracle doesn’t need to learn much about positioning, in my view.  Their technology credentials in NFV are limited and their credentials in SDN even more so, but they were smart enough to see something that all the SDN and NFV leaders failed to see—and still largely fail to see.  You cannot win at either SDN or NFV without an operations story so complete and compelling that it shines like sunrise in the darkness.  They’ve been making (can you believe it!) OSS/BSS announcements and relating them to NFV and SDN!  From the PR of most of the NFV players, you’d think there was no such thing as an OSS/BSS.

Service agility and operations efficiency depend on operations systems.  Oracle has grasped that, but they are still weak in terms of how their operations vision actually combines with either SDN or NFV.  You can’t sell SDN or NFV without operations, but you’re not going to upset the network applecart by starting to revamp operations and hoping it will trickle down.  That’s why this whole SDN/NFV thing is complicated; it’s inherently multifaceted, both in technology and constituency.

Oracle is the only player in the revolutionary networking space that actually needs new product functionality.  They should be looking out there for somebody with strong SDN and NFV credentials to buy—somebody with good technology but not too much market cap.  Cisco, I suspect, has the technology it needs but is still focused on retention of the old model—“fast following”.  Alcatel-Lucent is torn between a revolutionary cadre and a bunch of stick-in-the-muds, and HP is chasing too many different rabbits with too many different hounds.  Huawei may be the player doing the most right, but they win primarily if everyone else messes up.

Which, so far, they are.  Every one of these vendors needs to make a major SDN/NFV/operations policy announcement by early October at the latest.  If anyone does that well, they gain an upper hand in budget planning for 2016.  If only one does it well, they may have won the SDN/NFV future.