& cplSiteName &

How Alcatel-Lucent Set a Telco Cloud Example

Mitch Wagner
4/30/2014
0%
100%

For a long time, Alcatel-Lucent seemed to have only two kinds of news: bad news, and "Hey, we stopped the bleeding! That's good, right?"

The company has had its fair share of problems, which it's working hard to sort out, specifically with its Shift Plan, and there are signs it is turning a corner. (See Alcatel-Lucent Builds Future Around IP and Alcatel-Lucent Shifts Up a Gear to End 2013.)

But during the past few years Alcatel-Lucent (NYSE: ALU) has had some bright spots, and it's becoming clearer that, in one respect at least, the vendor has shown itself to be something of a trendsetter.

It appears to be about two years ahead of some of its main telco vendor rivals in structuring its business to take advantage of the opportunities in cloud, the telco data center, and next-gen IP platforms.

Ericsson AB (Nasdaq: ERIC), a day after announcing a 13% year-over-year decline in revenues in its networking division, has now split the division into two units focused on radio and cloud/IP, which it has named (daringly enough) "Radio" and "Cloud & IP." (See Ericsson Creates Cloud & IP Unit and Ericsson CEO's New Business Logic.)

In many respects, Ericsson is following in the footsteps of Alcatel-Lucent, which, using the expertise it had built up in its IP division, launched an independent, wholly owned business last year, Nuage Networks , to focus on providing SDN technology for cloud providers. (See Alcatel-Lucent Spins Up Its SDN, Defining SDN & NFV, and Alcatel-Lucent Has a Top-Secret SDN Startup!)

Last week, Nuage celebrated the one-year anniversary of its public launch by bragging about significant customer engagements and future strategic direction. (See Nuage Claims SDN Progress.)

So after years of getting beat up by the market, Alcatel-Lucent is, suddenly, looking like a positive role model.

The public springboard for its cloud and data center push was the development and launch more than two years ago of CloudBand, a set of software and IT assets for telcos deploying cloud services that was clearly a game-changer when displayed at the Mobile World Congress in February 2012. (See AlcaLu Unveils Its Carrier Cloud Play.)

Like Nuage, the kernel of that development came from the company's IP division, which stems from the 2003 acquisition of TiMetra, which Alcatel, and then Alcatel-Lucent, built from what was effectively a standing start to become one of the telco router market's leading players. (See Alcatel & TiMetra Seal the Deal, and check out the comments from the VC who thought Alcatel was being robbed...)

The challenge for Ericsson will be to emulate Alcatel-Lucent's early success in leveraging its IP assets and expertise to become a credible player in the telco cloud/datacenter sector, surely one of the most critical areas of development for operators right now. And to do that, Ericsson needs to do more than just create a separate business unit in name only, with different business cards but the same mindset: Instead, it needs to create a separate team with a different culture and modus operandi that will do something different. That's what Nuage has done.

Of course, Alcatel-Lucent and Ericsson aren't the only major vendors with the telco cloud market in their sights. Obviously, Brocade Communications Systems Inc. (Nasdaq: BRCD), Cisco Systems Inc. (Nasdaq: CSCO), Huawei Technologies Co. Ltd. , Juniper Networks Inc. (NYSE: JNPR), and others are chasing the same business. What Alcatel-Lucent did early on, though, was make a very clear corporate statement of intent, utilizing the appropriate assets to build a new business. That can also be seen as a risky strategy -- it could divorce an important area of development from the parent company. But Nuage has prospered and benefited from its relationship with AlcaLu's IP division. It's played its cards well.

The Nuage team this week took a virtual victory lap after what it said was a successful first year in business. It claims to have participated in more than 30 successful trials with Fortune 500 enterprises, cloud providers, and telecom companies, including French cloud provider Numergy, Canadian operator Telus Corp. (NYSE: TU; Toronto: T), global operator NTT Communications Corp. (NYSE: NTT), and infrastructure providers IDC Frontier and Evonte.

Nuage's business is to provide virtual networking technology to help carriers deploy cloud services. "Whether it's a public cloud or private cloud, the common thread is to allow business agility to deploy applications driven by the needs of the user to access applications anytime, anyplace, on any cloud," Sunil Khandekar, Nuage CEO, tells Light Reading. Compute virtualization allows users to simply log into a portal to fire up virtual machines; Nuage's technology is designed to make configuring virtual networks that easy.

For the future, Nuage is working on technology to connect networks in VMware and KVM environments, as well as transitioning from a data center focus to work across branch offices and business campuses.

It's a vision that aligns well with the market: If Alcatel-Lucent can execute well on that strategy, it will be the rare multinational business that manages to recover from a death spiral. And taking that leap of faith with its CloudBand and Nuage developments could look even smarter than it does already.

— Mitch Wagner, Circle me on Google+ Follow me on TwitterVisit my LinkedIn profileFollow me on Facebook, West Coast Bureau Chief, Light Reading. Got a tip about SDN or NFV? Send it to wagner@lightreading.com.


Basil Alwan, president, IP Routing and Transport for Alcatel-Lucent is a featured keynote at Light Reading's Big Telecom Event (BTE). Join us June 17 and 18 at the Sheraton Chicago Hotel and Towers. The event combines the educational power of interactive conference sessions, devised and hosted by Heavy Reading's experienced industry analysts, with multi-vendor interoperability and proof-of-concept networking and application showcases. For more on the event, the topics, and the stellar service provider speaker lineup, see Telecommunication Luminaries to Discuss the Hottest Industry Trends at Light Reading's Big Telecom Event in June.


(3)  | 
Comment  | 
Print  | 
Newest First  |  Oldest First  |  Threaded View        ADD A COMMENT
Mitch Wagner
50%
50%
Mitch Wagner,
User Rank: Lightning
5/1/2014 | 2:33:15 PM
Weaknesses?
What are AlcaLu's weaknesses? How might they fail, other than failure to execute, which is a threat to any good business model?
R Clark
50%
50%
R Clark,
User Rank: Blogger
5/1/2014 | 2:30:02 AM
Customer end
AGree. there's lots to like about ALU's good product set and strategy. The challenge will be at the customer end. Telcos take time to make big decisions, giving a chance for incumbent vendors to catch up to ALU.
Carol Wilson
100%
0%
Carol Wilson,
User Rank: Blogger
4/30/2014 | 2:10:47 PM
CloudBand success
Interesting link between CloudBand and AlcaLu's success with Nuage. 

Alcatel-Lucent seems to be back in the game, after trialing late in the third period. Oh wait, that's hockey. Sorry, I'm getting the two halves of my life confused.
More Blogs from Column
IEEE's Nita Patel outlines the specific overlapping and critical elements that you must possess to successfully and simultaneously be a leader, mentor and mentee.
As companies virtualize, too many fail to bring anywhere near the same rigor to monitoring their cloud services that they'd applied to their physical networks -- and that's playing with fire.
How cable operators can use advanced customer-aware data analytics to improve the customer experience, reduce service disruptions and cut both tuck rolls and call center costs.
Spectrum sharing is becoming a bigger issue as the 5G radio specification evolves.
Addressing current and future app demands while laying the foundation for mobile's next big network transition.
From The Founder
Cisco's Conrad Clemson, recently promoted to head up the company's Service Provider Apps & Platforms developments, talks to Light Reading's Founder and CEO Steve Saunders about how he's bringing cloud video, mobile and virtualization together to empower network operators.
Flash Poll
Live Streaming Video
Charting the CSP's Future
Six different communications service providers join to debate their visions of the future CSP, following a landmark presentation from AT&T on its massive virtualization efforts and a look back on where the telecom industry has been and where it's going from two industry veterans.
LRTV Interviews
Heavy Reading: The Web-Scale View

1|18|17   |     |   (0) comments


At Light Reading's 2020 Vision Executive Summit in Rome, Heavy Reading's former chief analyst Patrick Donegan shared insight from the recent web-scale operators report, which featured research on how web-scale operators view the market, the best web-scale companies to ...
LRTV Custom TV
Cisco's Cloud Scale Networking: Automation, Virtualization & Simplification

1|18|17   |     |   (0) comments


Cisco's Sanjeev Mervana outlines the latest innovations in networking technology at CES 2017 in Las Vegas.
LRTV Custom TV
ADVA Talks Innovation & the Future of Networking

1|17|17   |     |   (0) comments


Ray Le Maistre and Christoph Glingener, CTO of ADVA Optical Networking, discuss the current state of the industry, cooperation and collaboration, open innovation and the future of networking.
LRTV Custom TV
Cisco's Infinite Video Platform

1|17|17   |     |   (0) comments


Cisco's Infinite Video Platform allows service providers to deliver broadcast-quality video over IP networks. Infinite video supports many devices, from 4K TVs to tablets to game consoles. Join Cisco's Rajeev Raman for a brief tour and live demo.
LRTV Interviews
Masergy: Ability to Adapt Key for NFV

1|16|17   |   6:40   |   (0) comments


Speaking at Light Reading's 2020 Vision in Rome, Masergy's VP, Global Technology, Ray Watson, said agility is key to providing the mix and match NFV-based services that are driving business for the managed service provider today.
LRTV Interviews
Equinix: The Data Explosion

1|13|17   |   4:16   |   (0) comments


At Light Reading's 2020 Vision in Rome, Eric Schwartz, president of EMEA, Equinix, talked about how Equinix is helping its customers manage the influx of data today, and how it's preparing for a future filled with millions of connected IoT devices.
LRTV Interviews
Heavy Reading: The Changing Data Center Landscape

1|12|17   |   6:05   |   (1) comment


At Light Reading's 2020 Vision event in Rome, Heavy Reading's Senior Analyst Roz Roseboro talks about how virtualization is impacting data center evolution and how that evolution is affecting the relationship between service providers, data center operators and public cloud providers.
LRTV Interviews
Boingo: Prepping for Millions of Devices

1|12|17   |   5:07   |   (1) comment


At Light Reading's 2020 Vision in Rome, Boingo's CTO Derek Peterson discusses how wireless operators will address the needs of low-bandwidth and high-bandwidth apps at the same time, the need for more MHz, the impact of IoT and more.
LRTV Interviews
Comcast Shows Off Gig Gateway at CES

1|11|17   |     |   (1) comment


With its largest presence at CES in years, Comcast took the wraps off its long-awaited gigabit gateway and a new platform for managing the home WiFi network. Light Reading Senior Editor Mari Silbey sat down with EVP Chris Satchell to discuss the latest Comcast advance, and met with VP of Product Strategy and Development Andrea Peiro to walk through a demo of the ...
LRTV Interviews
Colt: End-to-End Key for 2017

1|10|17   |   6:21   |   (0) comments


At Light Reading's 2020 Vision Executive Summit in Rome, Nico Fischbach of Colt said having a multi-carrier, end-to-end service proposition is going to be key for 2017 -- and SD-WAN is instrumental in making it happen.
From the Founder
Cisco's Clemson on Mobile Cloud Video

1|9|17   |     |   (1) comment


Cisco's Conrad Clemson, recently promoted to head up the company's Service Provider Apps & Platforms developments, talks to Light Reading's Founder and CEO Steve Saunders about how he's bringing cloud video, mobile and virtualization together to empower network operators. "If you think about where we're going… whether it's a mobile application, or a video ...
LRTV Custom TV
VMware Telco NFV Solutions – Preparing for 5G & IOT

1|9|17   |     |   (0) comments


Shekar Ayyar, EVP & Corporate Strategy/General Manager of Telco for VMware, discusses VMware's Telco NFV solutions role and foundation for the Imminent Arrival of 5G & IOT.
Upcoming Live Events
May 15-17, 2017, Austin Convention Center, Austin, TX
All Upcoming Live Events
Infographics
Hot Topics
A Women in Comms Glossary
Sarah Thomas, Director, Women in Comms, 1/18/2017
Next Plugfest Gets G.fast Closer to Market
Brian Santo, Senior editor, Test & Measurement / Components, Light Reading, 1/13/2017
TV's Paradox: No HDR Without 4K
Mari Silbey, Senior Editor, Cable/Video, 1/17/2017
Nokia CTO: 2017 Is the Year 5G Gets in the Field
Dan Jones, Mobile Editor, 1/19/2017
Cable Has One Thing Verizon Needs
Mari Silbey, Senior Editor, Cable/Video, 1/17/2017
Like Us on Facebook
Twitter Feed
BETWEEN THE CEOs - Executive Interviews
Light Reading founder and CEO Steve Saunders chats with Sportlogiq CEO Craig Buntin about sports data analysis.
Eyal Waldman, CEO of Mellanox Technologies, speaks to Steve Saunders, CEO of Light Reading, for an exclusive interview about the 100 GB cable challenge, cybersecurity and much more.
Animals with Phones
Live Digital Audio

Playing it safe can only get you so far. Sometimes the biggest bets have the biggest payouts, and that is true in your career as well. For this radio show, Caroline Chan, general manager of the 5G Infrastructure Division of the Network Platform Group at Intel, will share her own personal story of how she successfully took big bets to build a successful career, as well as offer advice on how you can do the same. We’ll cover everything from how to overcome fear and manage risk, how to be prepared for where technology is going in the future and how to structure your career in a way to ensure you keep progressing. Chan, a seasoned telecom veteran and effective risk taker herself, will also leave plenty of time to answer all your questions live on the air.