Month: June 2012

It’s recapitulation Friday, and there were some items of interest that were crowded out of my blogspace during the week.  One deals with the important topic of SDN and OpenFlow.  Extreme became the new kid on the OpenFlow block, which at one level is a good thing.  The reason it’s not an unqualified good thing is that the whole announcement reveals that we’re still looking at SDNs and OpenFlow from the wrong perspective.  Vendor positioning and vapid coverage are perpetuating a myth that can only hurt SDN credibility in the long run.

What Extreme is doing with OpenFlow is about as much as any vendor can do, which is to support the standard.  They’re also enhancing their exposure of network APIs, which they have been doing for quite a while under the covers.  Extreme was our partner in a test of ExperiaSphere control over the network several years ago, in fact.  Their assertion that they have some special sauce in terms of SDN is at least historically credible.

The problem is that if you have goals for SDN, for OpenFlow, then the present processes really aren’t going to meet them.  Debates over whether a vendor’s architecture is better for OpenFlow or not disguise the broader question of whether OpenFlow is enough to create an SDN, and if not where the rest is going to come from.  In fact, Cisco’s ONE, which doesn’t even include explicit support for OpenFlow, is a more credible SDN strategy than the “standard” ones are.

SDN success comes from uniting two conceptual layers, ones that in prior writings I’ve called the “Cloudifier” and the “Topologizer”.  The first of these owns the collection and abstraction of application connectivity needs so that they can be expressed in a systematic and consistent way.  The second owns the abstraction and dissemination of network information, from topology to status and capability.  The central intelligence, my “SDN Central” element, that many SDN definitions hypothesize is responsible for uniting these layers.  Only we don’t have any firm conception of the layers, nor do we have any for the central intelligence.  No, the OpenFlow controller isn’t that, it’s something that simply commands individual switches.

You can’t create a connection from individual forwarding changes; only a consistent strategy for path-building that’s implemented as a set of single-switch rules creates a connection.  Where does that strategy live?  In the Cloudifier, the Topologizer, and that mystery intelligence in the middle.  Where are they defined?   Nowhere, not even for Cisco’s ONE in any organized way.  Cisco actually finesses the issue by drawing on a distributed vision of SDN, which is contrary to many definitions, but unless somebody offers a centralized vision Cisco’s approach is the only game in town.

My spring survey results for enterprises are already showing that among the most cloud-literate of the firms, the role of SDNs as the mechanism for creating “cloud networks” is becoming clear.  Since the cloud is the principle IT driver of our time, the network vendors either have to link to it or be buried under the trend.  Cisco’s ONE also puts pressure on, and as a result we’ll likely see a number of vendor-proprietary visions of SDN…before we ever see a standardized one.

I would love to see a standard framework for SDNs with central application control.  I think the chances of that happening are about the same as Angela Merkel’s suddenly announcing the collectivization of all EU debt under a German guarantee.  The standards process today is broken; only something harmless can advance.  What we can then hope for is at least reasonable dialog on the issues, and we’re not having that now.  There is no SDN without central intelligence linking application needs to network capabilities.  There is no framework to provide that.  Can we talk about the issues?  If you think your company can make a contribution there, then email me and I’ll write about you.  No smoke, and I’m past the age of fascination with mirrors.

Speaking of smoke and mirrors, we have Facebook and social advertising.  Nobody needs to be reminded that Facebook’s IPO was highly disappointing, and as more Street researchers cover the stock things aren’t looking much better.  Another report just out says that a third of social-network advertisers don’t know if they get any return on their ad investment because they don’t know if it influences buying decisions.

This whole mess is something like an “Emperor’s New Clothes” scandal that’s complicated by the fact that even though the clothing is only virtual we’re still not only wearing it but buying and selling it.  Further, since there’s a finite limit to what the total adspend of the globe could be (and it’s proportional to GDP) we also have to account for virtual shortages of raw material.  The root problem is that nobody wants to step on the explosive growth of the Internet by insisting on anything as pedestrian as pay-for-what-you-get.  Ad sponsorship is “free” in the minds of users, and to a point that’s right.  The question Facebook has presented us with is whether we’re approaching that point.

There’s ad reality.  There’s SDN reality.  Whatever reality there is, you eventually have to face it.  RIM taught the lesson this week; can everyone else learn from that, or will they have to be burned to appreciate fire?

Google announced its tablet and some other things besides, and the question now is whether there’s some grand strategy at work here or just a bunch of geeks throwing products at a marketplace.  I think there’s some thinking here, but whether it’s sound thinking remains to be seen.

The Nexus 7 tablet is pretty much what it was rumored to be, which is a kind of super-Kindle-Fire.  Like Kindle Fire, it’s aimed at the content consumption market, but unlike Amazon Google doesn’t have history in the book and content space, though they did announce enhancements to Play to include the sale of movies.  Either Play is going to be expanded rather radically to come close to matching Apple and Amazon or they’ve left the Nexus at the alter.  But even with a bookstore and content to match Amazon, all Nexus can be is an up-and-coming Kindle Fire competitor, and that’s not enough.

One might wonder why Google would take a swipe at an Android friend instead of the Apple enemy, and the answer is twofold.  First, they can’t swipe at Apple directly without hitting the 10-inch models of all their prime Android partners.  Second, Amazon isn’t an Android partner, they’re a user of the open-source earlier version, from which Amazon created their own code fork.  They don’t really promote Google’s agenda.

Nexus does run the new Jelly Bean version of Android, which will surely put pressure not only on the mainstream Android tablet community to stay up to date, but also perhaps pressure Amazon to opt into Google’s Android community instead of using free software.  The new Jelly Bean gets good reviews from pretty much everyone, and Google has also included a developer kit that will facilitate partner customization of this and subsequent versions, which they clearly hope will further drive the convergence of the community on a single version.  I think it’s very possible that some of the tablet vendors (like both my own and my wife’s) who have not yet released Ice Cream Sandwich may jump over it to Jelly Bean.  It would be smart.

The next thing on Google’s inventory of announcements was the Nexus Q, which I think Google intends to be a combination of a home social video platform and even a home control platform.  The Q is a sphere that has no screen but that can be controlled online from pretty much any Android device.  In media terms, the Q acts as a kind of anchor process that can mediate among home devices to deliver video to any of several, in succession or together.  You can do screen-switching at least in-home with it, and I think Google plans to broaden this capability by adding cloud support down the line.  They seem excited about the prospects of having a house full of Qs collaborating on stuff, and this is where I believe the hope to expand more into home automation and other similar monitoring and control tasks, with or without developer support.  Since Q is about twice the price of Apple TV there’s going to have to be a kicker here in some form.

From developers?  That’s too much to ask.  Google Wave failed because Google let others drive the process with minimal guidance.  So far, arguably, they’ve let others carry the water for Android too.  If Nexus 7 means Google knows they have to play a greater role, the new role they’ve defined isn’t sufficient.  What is most lacking is the vision of the cloud that could unify everything—that MUST unify it.

Google has generated three announcements and an Android version upgrade, and separately what they’ve done is interesting but not market-shaking.  Potentially the four things could combine to create a new direction for Google, one that takes a more participatory role in the appliance space, pushes Google more into an Amazon-like retailer, validates a socially integrated cloud that extends through the home and to all a user’s devices…a lot of really good stuff.  Will any of it happen?  Right now we can’t be sure.

 

Google’s expected tablet announcement may be hours away, but some of the goals being set for it by the developers whose conference would be the platform for the launch seem unlikely to be fulfilled.  Developers want a unified platform for Android, but Google has clearly lost control over the Android development process and may never regain it.  If that’s true, then Microsoft has a real shot in the tablet space and, if it plays its cards right, might even have a shot at the phone market.

The problem with Android is the fact that appliance vendors typically customize the OS to their devices.  When a new Android version comes along (Jelly Bean is also expected today) it is quickly adopted by new devices but often takes a LONG time to percolate back to older ones.  That’s because the vendors see little value in spending the effort to retro the new OS to stuff already sold and not generating incremental profit.

Developers find that some features won’t work on current devices and have to either tune their apps to avoid hitting one or abandon the installed base of the older OS versions, which means less TAM for them.  In some cases the whole mess is an embarrassment; Google Chrome for Android works only on the current Ice Cream Sandwich release that’s not supported by the majority of Android devices!  I tried Mozilla Firefox, which is supposed to work on earlier Android versions, on my tablet (still on the older version because its ICS update was delayed).  It doesn’t work.

This puts the Google tablet, if there indeed is one, in a new perspective.  It may be that the primary goal is not to build an Apple-like ecosystem, it’s to force its appliance partners to retro their gear to be compatible with newer Android versions.  If Google commits to Nexus 7’s quick retrofitting with support in all forthcoming versions, it makes life really difficult for vendors who haven’t kept their own stuff up to date.  And since Google is making their rumored announcement of the tablet at a developer conference, might this not be a logical slant?

Google has a lot at stake here because it’s clear that the cloud acts as a kind of virtual appliance that envelopes all the real devices from the vendor.  If Apple continues to build affinity between its iCloud, iPad, and iPhone and if Microsoft (as it surely will) follows suit, then Google has to worry whether a developer revolt in Android tablets would limit Google’s ability to build a similar cloud bridge.  So this is what I think we should be looking for at this conference.  Google needs a developer community, not a technical version of the Balkans.  Are they taking steps—solid steps—to get that, or are they risking a loss of tabletshare that creates a loss of phoneshare, that opens the door for Microsoft?  We’ll see.

Of course, this sort of thing will also drive changes in mobile cloud services.  We already see vendors offering what are effectively virtual shared drives in the cloud.  Clearly we’re going to be seeing virtual shared apps.  I think it’s also inevitable that we start seeing apps that are componentized, with pieces running in tablets or phones or in the cloud depending on just what device capabilities happen to be and how efficient current connectivity is.  All of that will change the service-feature-SaaS opportunity for cloud providers, which changes the cloud business model.

Mobility and the cloud probably represent the Great Opportunity, the largest pie available for cutting because it crosses between consumer and worker behavior.  And while cloud projects at operators are mature and content projects are being run increasingly by operators themselves (who are disgusted with vendor participation), there is still a chance for vendors to seize the union of the cloud and mobile services.  Takers anyone?

 

The challenges with coming to terms with technical concepts in our Age of Hype is embodied in a story about SDN that appears in Network World.  The story lists five drivers of SDN transition, which include mobility, the cloud, consumerization of IT, traffic patterns in data centers, and agile service delivery.  The challenge is that in a direct sense these challenges work against what most would say is “SDN” and not toward it.

Things that are attributes of service usage need a service as a foundation, and as I’ve noted the purist form of SDN, embodied in OpenFlow, is about per-device forwarding control and not collective service behavior.  If an application or user wants a “service” from an OpenFlow network, the way that network resources function collectively to move traffic has to be known by the central intelligence guiding the forwarding process.  In short, there has to be a service, and this was the point that Cisco was making at Live; if you have to support current services with SDN principles it will be easier to work through current protocols.  Cisco ONE proposes, in effect, to apply application intelligence but not from a single central point.

The example of Google’s OpenFlow application is cited by most SDN advocates, including myself, but it’s important to recognize that what Google did was to embed OpenFlow inside a service network.  That means that OpenFlow addressed not the totality of the service needs but the needs of a collection of devices embedded in the service.  Even that wasn’t a particularly easy job; at the boundary point between IP and OpenFlow you have to satisfy the “language” or control behavior of the IP network or the OpenFlow part won’t work in harmony.

The point here is that this whole issue of OpenFlow and SDNs is a lot more complicated than most people think it is, and the most complicated part of all is just how SDN principles can be harmonized with the current Ethernet and IP networks, for which all or applications are written and all our devices wired.  The notion of “embedded SDN” makes a lot of sense because it simplifies the problem by containing it to somewhere inside the network where “services” really aren’t visible except as control exchanges among devices.

Wall Street upgraded Ciena today, and even here we see an issue.  Ciena embraces the notion of SDN control over optics, which could be the key to creating an OTN that functions inside an IP or Ethernet core but doesn’t require a lot of IP/Ethernet logic be duplicated in order to work.  The Credit Suisse research report makes some good points about the trends in optics, and the fact that operators would at this point rather spend on optical capacity than adding electrical features to manage bandwidth that’s eroding in price by 50% per year.  The thing is, all of those benefits would be maximized by applying the SDN OpenFlow and Google model to optical cores.  What OpenFlow does here is to support forwarding systems that can look like virtual devices, hiding all the interior structure and features.  Think of it as everyone peering with a giant router, making everything one hop away.  Yes, there are issues of harmonizing with routing protocols, but that’s where OpenFlow can shine.  If, of course, everyone works on the problem.  Which happens only if somebody stands up and says we need to.

Cisco, meanwhile, is working on architectures and at the same time getting ready to take advantage of market conditions to steal some market share.  In their rhetoric they’ve identified two prime competitive targets, Huawei and Juniper.  In the case of Huawei Cisco’s moves are defensive; the Chinese giant has clear price/cost advantages and Cisco doesn’t want the market to sink into pushing featureless bits or Huawei will win.  In the case of Juniper, Cisco’s in predator mode.  They believe, following another Wall Street theme, that Juniper simply cannot keep up at this point.  Much of what Cisco is delivering in its architectures announcement were talked about by Juniper, as long as four years ago, but that have stalled in delivery.  One concept, “architectures”, positions Cisco.

 

With Microsoft entering the tablet business it’s fair to wonder just how far they’ll go to emulate Apple.  The decision by Apple to suddenly give big raises to its retail employees could be an indication they believe a rival is going to launch a store and might pirate Apple employees.  Microsoft might well have those plans, or Google might.  Would the move be a smart one for either?  It depends.

Apple has hit on a basic truth, which is that consumers are obtuse about just what provides them a visible service.  How much of an app is really running on an iPhone or iPad?  I know that on my tablet I have some apps that have entirely local functionality (viewers for photos shot in RAW mode, for example) and some that are nothing more than lightly composed URLs.  So I think the question of where Microsoft or Google might go with stores, and whether having a chain of their own is a good idea, is subordinate to a bigger question, which is what’s the future of mobile services.

The simplistic vision of the mobile future is that everyone streams HD video to their iPhones.  That’s probably highly inaccurate, as anyone who does the math on the overage costs for capacity will quickly realize.  And guess what?  Mobile bandwidth is not going to get significantly cheaper.  Anyway, was the iPhone a success because it supported video?  So did (and do) a lot of featurephones.  No, it was successful because it supported apps.

So for Microsoft and Google, the solution to their Apple Envy is to win in the cloud service space?  Not so fast.  Yes, I believe that the mobile market will ultimately revolve around “answer services”, meaning answers to basic questions like Siri might answer, delivered through apps/appliances.  The problem is that it’s going to be hard for Microsoft and Google to offer something in services that Apple doesn’t already have or can’t quickly get.  The basic nature of the cloud is that it tends to level the appliance space by sucking differentiation inward.  You could argue that’s positive for Google and Microsoft, but it doesn’t level the playing field with Apple except by possibly commoditizing the whole appliance space.  Google and Microsoft already announced participation in that space, so why commoditize it?

Google’s Nexus 7 is expected out, along with the new Android Jelly Bean release, later this week (expectations aren’t always met, of course).  A seven-inch tablet would be a smart play for Google since it hits at a void in Apple’s product, supports a lower price, and also doesn’t intersect with Microsoft’s announced position.  The most successful Android tablets have been e-readers from Amazon and B&N, the latter of which has a partnering with Microsoft.  So might Google also announce a store?  I don’t think this is the right time of year, nor is it for Microsoft to move.  Wait till the fall.

 

This morning I found a press release from Telefonica that described their cooperation with China Unicom and Telstra on creating a platform for managing SIMs used for embedded M2M applications.  The solution will be compatible with the GSMA standard and Giesecke&Devrient, a German-based integrator, will provide technology support.

What I find interesting about this is the fact that three operators are doing what some vendor should have been doing, and this is reflective of the problem in the telecom and even Internet space.  Particularly when you combine this with the operators taking the initiative in content (I blogged on that earlier this week) and even with Google’s initiative in OpenFlow.

This gets back to Cisco’s “architectures” theme.  Forget for the moment what the specifics of the story was.  The most important thing may be that there IS a story.  If the fairy tale industry of the past were modeled like the networking industry of the present, we’d have thrown kids a set of Scrabble letters and told them to have a ball.  Since when has it been the buyers’ responsibility to figure out what to do with a product, to build the business case for it?

Another interesting point is that enterprises are sliding into the same position as the operators took four years ago regarding vendor support for strategy.  Operators then rated their vendors “unsatisfactory” in their support for operator business goals.  Today, enterprises rate their network vendors as “marginally satisfactory” in the same category, down from “satisfactory” back in 2010.

I think this demonstrates that Cisco had motives beyond the cynical for their Live pronouncements on architecture (though cynicism likely played a part).  Network vendors, particularly those who sell in the operator space, need to show not the letters or words but the WHOLE STORY to the buyer, because the buyer wants somebody to take responsibility.

But there’s another side to this, another truth.  Since 1991 when I started to survey and model buyer behavior on a large scale, I’ve seen the influence of the media fall from second place (behind “experience of a trusted peer”) to sixth place in terms of decision support.    Let me offer an example.  One online publication has a post today that says that “some believe Cisco ONE misses the mark”.  OK, well some also believe that we never landed on the moon, that the moon is made of green cheese, that aliens from it visit us…you get the picture.  You cannot define an issue by saying that any solution that someone holds is as good as any other.  It’s particularly bad when the piece goes on to list all of the applications that SDNs are being touted as supporting.  If SDNs are what the standard currently defines, then that “support” doesn’t come from the SDN but something outside it.  SDNs don’t even address those issues today.

Then there’s the cloud.  Everyone knows that Amazon is the runaway leader in the public cloud, at least if you read.  The problem with that truth is that it’s like saying “Runs-Away” is leading in the Derby a half-step out of the gate.  We have at this moment realized perhaps four-tenths of one percent of public cloud revenue opportunity.  Who cares who leads, unless the leader is addressing the issues that will drive the other 99.6% into realization?  And how do we find out what that issue set is when nobody talks about what the real opportunities are or what’s missing to address them?

Cisco stock, as of this morning, is down over 6% YTD.  Ericsson is down over 13%, and Juniper over 22%.  If I were an executive in these companies I’d be demanding to know why we weren’t doing better.  Same if I were a board member or a big investor.  Only Alcatel-Lucent of the key network equipment vendors is up (by under 4%).  This is not the state of a healthy industry, and that in part is because we don’t have a healthy market.  We need to fix our vision of the future to achieve it.

 

Some early data from my spring enterprise survey is suggesting an interesting shift in behavior and policy in business use of voice services.  The stuff isn’t surprising at one level, but it may be having a significant impact on the future of communication and collaboration.

Over the last three years, my surveys of “mobility” among senior workers has shown that more and more time is spent away from their desk.  The problem isn’t out-of-office travel but movement within a facility, and the interesting point is that the pace of change seems to be driven by mobile devices.  It’s not that business change is driving mobile adoption for primary communication, but the other way around.

At the same time, the survey shows an increase in the use of SMS and a decline in the use of voice calling as a means of communication.  I’d speculate that this is due to the fact that privacy in voice exchanges, when you’re wandering the building, is hard to assure.  Further, users think they’d want more textual communication and also access to their apps while away from their desk, but they don’t think they need or want video.

What we seem to be seeing here is a restructuring of worker collaboration, particularly at the supervisory level.  The “new worker” has something (a tablet, obviously) that provides access to key applications while they’re away from their desk.  The use this to stay connected with their key information resources and they draw on those resources and textual coordination to provide high-level support for their workers.  They also use these tools to stay in touch upstream to their own management and laterally with peers.  That would mean that the local communications/collaboration stuff is setting worker appetites for technology support, not the more obvious stuff.

How about “meetings”?  The data doesn’t show any statistical gain in the number of hours per week spent in meetings.  Some of that is due to the fact that the always-on-data model of collaboration is reducing some types of meetings (regular staff meetings) and increasing others (planning and brainstorming).  The mix of meeting time live versus video has crept slightly in the video direction over time but there wasn’t any significant change in the spring data versus even last spring’s numbers.

I think all of this adds up to the fact that in trying to come up with communications and collaboration technology to support workers, we’re not just shooting behind the duck, we’re shooting in the wrong pond.  I wonder whether the vendors might not be missing an opportunity here, a chance to reignite the UC/UCC space that has been stagnant for years now.

A related point here is whether the need to create application connections for roaming workers will drive greater use of HTML5 and cloud or VDI models of computing.  A mobile app, tablet or handset, is a cooperative process where parts of the logic live in the appliance and parts in the host systems.  Further, the appliance part can be specialized to the device or generalized (HTML5) to a browser interface.  If businesses, driven by BYOD, push for browser-based app hosting, the effect would be to move the business market away from a dedicated app model.  Might that then roll over into consumer apps?

Apple would certainly hate to see a model for client-server computing (or client-cloud if you prefer the modern spin) shift to one that isn’t locking developers into Apple, and Google would likely feel the same way.  But how about Microsoft?  Might HTML5 be a Windows tablet’s secret weapon, a way of offering developers an open-pan-device interface that oh-by-the-way-accidentally undermines competitors’ installed base of apps and loyalty base of developers?

If you think about it, the trends in business use of collaborative tools may be driving a major change in the way handsets and tablets are linked to the cloud even as vendors try to create their own proprietary ponds of interest.  The more cloudy and roaming-coupled apps need to be and the greater the variety of devices that have to be supported, the more impossible it is to create a uniform framework for empowerment that crosses all these lines successfully.

 

Tablets, say the research, are becoming a more favored platform for video viewing, with one in ten tablet users viewing content at least daily.  The key point in the data may not be the frequency, which likely surprises no one, but the demography.  The largest tablet penetration is in the key 25-35 year-olds, the swing point in video viewing behavior.  Change this segment’s habits and you change the whole market picture.

It’s this kind of data that’s driving the network operators in their content monetization projects; this data that made content their highest priority.  Well guess what.  Our spring survey shows that content projects advanced only a little in the last six months even among Tier One providers, while cloud projects literally took off.  I’d talked before about the fact that cloud computing, third among the operators’ monetization priorities two years ago, was taking the lead in execution.  The cloud has now crossed the finish line and most content projects are still stalled in pilot or earlier.

Yesterday, I blogged about how Telstra had invested in a multi-screen startup, and cited it as an example of a disgusted operator sector taking matters into their own hands.  I blogged on Monday about NSN and the chances it might be selling pieces off quickly.  Today, we hear that Belgacom has acquired the rights (non-exclusive, I hear) to NSN’s multi-screen video package and will be developing the stuff itself, as a video integrator.  Not only that, the rumor mill says that there are two other operators who are in the same sort of discussion.  Think about this for a minute.  You’re a network operator.  You want content monetization, and you have a solution offered by another operator and “solutions” offered by network equipment vendors who had to be dragged kicking and screaming to the table.  Who do you buy from?

I really liked NSN’s video positioning and so did operators.  If it becomes widely supported by operator integrators themselves, it’s going to be a tough act to follow.  Furthermore, if operators find out (as they are finding out, so they tell me) that doing this stuff themselves is really not all that difficult (especially compared to making vendors accept the role) then this could change forever the strategic relationship between operator and equipment vendor.  Then, could the enterprise be following behind?

Most network operators self-integrated their cloud approaches, though most still depended in part on a single vendor for the majority of their components, and most still acknowledge a strategic contribution from that vendor.  Most of the Tier One operators are now looking at non-vendor strategies for content.  That leaves only mobile/behavioral opportunity on the table for vendors to leverage if they want to drive the monetization efforts of their customers, and of course reap the benefits.

The interesting thing about this shift is that it might, in the short term, help vendors who had stumbled at the service layer if they play their cards right.  The worst thing you can do in a changing market is shoot at the leading edge and end up substantially behind the duck.  That raises your costs, dilutes your sales focus, and sets up competitors to attack you tactically where you now have less chance of defending.  The problem is that absent any sort of transformation project to support and through which you can create differentiation, you have no chance of sustaining margins.

 

Microsoft’s new tablet, the  “Surface” was announced with much fanfare, but the product has been getting mixed reviews in no small part because it’s really not possible to review it at all.  You can’t get one, even to play with, so far.  No pun intended, but on the surface the device appears well-made and it has some interesting features, like a touchcover keypad.  There will be both an ARM/RT version and a Wintel Windows 8 version, with the latter clearly costing more.

Microsoft is being coy about the context for the Surface, but it appears that it intends to couple it tightly to its Xbox for entertainment and also to SkyDrive and Live services for productivity.  The company is resisting attempts to typecast the Surface into a business mold, but it sure looks to me like the RT version is more consumeristic and the Windows 8 version more productivity-friendly.  That would explain the keyboard, something the average consumer tablet user isn’t exactly clamoring for.

If you look at what we know about the device, it seems obvious that this could never hope to succeed on hardware differentiation.  Does Microsoft think that RT or Windows 8 will be that much better than Android or iOS?  I doubt it, which is why I’ve said from the first that tablet wars were cloud wars.  The stories of how Microsoft will be linking the devices to Xbox and Office and even Microsoft’s commercial tools have already emerged in early form with SmartGlass and the notion that Microsoft’s next-gen OSs will be exempt from some special per-seat licensing charges.  But even these won’t be enough, and I’m sure that Microsoft’s big announcement, one linked to the cloud, is yet to come.  If not, the Surface is going to be a yawn.

Nothing was said about when the product would be on sale or what its price would be, but I think it’s safe to assume it will come out this fall with Windows 8 as part of a coordinated launch.  Did Microsoft see other tablet changes coming along from Apple or Google and wanted to get out in front?  It’s hard to say, but for sure the iPad is gaining ground on Android at this point and Microsoft may feel it has a shot at being number two in the space, which I hear is their goal.

An unusual story out of Asia is that Telstra, the Australian carrier, has taken a lead in a round of investment in multi-screen video startup Ooyala, a company who has been working hard and with increasing success to capitalize on the stumbles of traditional carrier-video solution providers, particularly the network equipment vendors.  The move probably spells further trouble in content delivery for the traditional network vendors, because at the least the Ooyala solution would sap the higher value and differentiation.  Since every one of the major players has a video story they were hoping to capitalize on, the idea that the operators are running out to fund players who are doing better has got to rankle.  It should; content monetization has been a top operator priority and vendors have generally been doing it badly.

Last week’s story of Nokia’s fall from grace in the handset market probably didn’t surprise anyone because it’s been a slow and agonizing decline, a wasting away for all to see.  At this point, turning around almost certainly would require the company being acquired, either by another player or by a private equity firm who would make radical changes, likely including breaking up and selling off pieces.

What happened here?  The answer is that Nokia like other companies fell victim to “network consumerism”.  Phones were largely utilitarian gadgets up to the iPhone, and Nokia did well producing stuff that worked but wasn’t going to turn heads and make their users a social success.  Once smartphones began then fashionphones were in no matter what.  Nokia was one of many companies who never figured out how to market fashion stuff; they produced solid, conservative products but never dreamed of being glamorous.  You can’t buck reality.

The immediate question for the network equipment space is what will happen to NSN.  The fact that Nokia couldn’t sell a stake in NSN isn’t why they’re in the tank; all that would have done was give them a longer runway to the same point they’re at now.  Nevertheless, NSN is in an awkward position.  It’s unlikely that it can continue as a Nokia-Siemens partnership, even more unlikely than that Nokia can continue as a company.  And what happens to NSN may impact other players in the space.

NSN had contracted their scope, focusing on wireless and LTE, but that’s not going to be enough at this point to sustain the operation lacking backing from the parents.  They have to find a suitor too, either independently of Nokia or as part of the deal.  Or Siemens and Nokia have to shake hands and call their JV a day.  There isn’t time to wait out a return to happy days of service provider capex, both because of lack of financial resources and because we don’t know if that will ever happen.

Part of the problem with NSN’s own position is the same conservatism that hit Nokia.  The communications industry isn’t the happy old world of Bell and PTTs and the CCITT.  When you’re not selling to a regulated monopoly with a mandate to provide specific services, you have to worry a little about the value proposition of your buyer, and as that value proposition becomes more consumeristic so must your consideration.  Nokia, and NSN, never mastered that.  But they’re not alone, and that’s what makes me wonder what else might happen in the network vendor space.

The rumor that Microsoft is going to field a tablet stirs this pot.  It’s not yet clear if this is a Microsoft-branded Windows 8 tablet, a Barnes & Noble partnership for an Android Kindle competitor that works with Xbox and includes a placeholder Windows 8 app, or something in between.  Some Windows 8 connection seems essential, but it’s hard to see how Microsoft would enter a Windows 8 tablet of its own into the fray when it has to count on loyalty of device vendors for both Windows 8 and its Phone 7 software.  The thing is, tablet competition from Microsoft is inevitable, particularly given that Android tablets aren’t sweeping the market as Android is sweeping smartphones.

How about the network vendors, then?  The presumption I’d make is that cloud wars at the tablet level will accelerate the drive to the cloud across the board, both for productivity applications in business (which Microsoft is sure to push) and for entertainment to the consumer.  That implies that it would accelerate service provider cloud deployment, private cloud adoption, etc.  I think the former would be impacted more and faster than the latter, but both areas are likely going to show more life in 2013 than they would have otherwise.

Cisco emerges here as the likely big winner, whether due to incredible insight in the timing of their Live “architectures” pitches or to incredible serendipity we’ll never know for sure.  The point is that they have set themselves up to be a more obvious player in the emerging cloud space than any of their competitors have.  Beyond Cisco, it’s hard for me to handicap things.  A cloud war isn’t necessarily a wireless war, it’s a more general service-layer war.  That means that Alcatel-Lucent, Ericsson, and NSN don’t have a natural position of strength to leverage.  Juniper, whose own analyst event offered no real cloud insights, is still talking bits and boxes.  Any of these guys could in theory revamp their positioning, but since they’ve not been singing a good cloud song we don’t know if they really have any assets to work with.  If not, this acceleration could be a bad thing because it only shortens the time to their own moment of reckoning.

Here’s the point.  Even under the current pace of change, Nokia is threatened.  Is anyone out there silly enough to think there’s not a systemic problem behind that?  If tablet wars speed cloud wars, which speeds OTT service conceptualization, it only accelerates a shift up the value chain from bits.  I think Cisco showed it got that message.  I don’t think the others have demonstrated their own grasp of the present, or the future.