Light Reading
Alcatel-Lucent was ahead of its major peers in pivoting to a cloud-IP strategy.

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
FakeMitchWagner
50%
50%
FakeMitchWagner,
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
Open is possible, definable and important, because an environment of freedom is a superior construct.
Every component of the smart home ecosystem is changing, creating new opportunities – and challenges – for service providers.
Don't let new technologies and whizz-bang gadgets keep you from respecting those speaking to you and giving them the full attention they deserve.
Defining SDN realistically will help carriers cut through the hype, says Sunil Khandekar, CEO of Alcatel-Lucent's Nuage Networks.
They can go from also-rans to leaders -- if they don't mess up.
Flash Poll
Wagner’s Ring
Data Centers Drive Telcos Into the Future

8|28|14   |   2:20   |   (2) comments


Data centers are at the heart of key trends driving telecom -- network virtualization, the drive for increased agility, and the need to compete with OTT providers.
LRTV Custom TV
Why SPs Should Consider Cisco's EPN

8|27|14   |   5:40   |   (0) comments


Sultan Dawood from Cisco discusses Cisco's EPN, which enables SPs to build agile and programmable networks delivering new network virtualized services using Cisco's Evolved Services Platform (ESP).
LRTV Huawei Video Resource Center
Huawei’s Showcase @ Big Telecom Event 2014

8|26|14   |   2.56   |   (0) comments


SoftCOM is Huawei's framework for telecom business and network transformation. Haofei Liu, Solution Marketing Manager, Carrier Business Group, Huawei, showcases Huawei's SoftCOM architecture in this video.
LRTV Huawei Video Resource Center
Huawei @ BTE 2014: Director of Integrated Solutions on SoftCOM & NFV Monetization

8|26|14   |   4.43   |   (0) comments


Libin Dai, Director of Integrated Solutions, Carrier Business Group, discusses Huawei's SoftCOM and NFV monetization. Huawei believes that NFV monetization should be service-driven rather than network-driven, and that operators should have network transformation, service transformation and a compatible and collaborative ecosystem in place in order to deploy NFV.
LRTV Huawei Video Resource Center
Huawei @ BTE 2014: Director of US NFV Lab on CloudEdge & the Future of NFV

8|26|14   |   4.06   |   (0) comments


Sean Chen, Director of US NFV Lab at Huawei, discusses Huawei's new approach to NFV in open collaboration. Huawei believes that through Proof of Concept tests, it could help operators learn and communicate with the industry more effectively. Sean believes that successful implementation of NFV should have its values reaching to end users and discusses how Huawei's ...
LRTV Huawei Video Resource Center
Huawei's Highlights @ Big Telecom Event 2014

8|26|14   |   3.34   |   (0) comments


At the Big Telecom Event in Chicago Huawei showcases its high-level strategy, the SoftCOM architecture, which helps operators reduce the cost of ownership of their network infrastructure and generate additional revenue in the ICT service environment. Huawei showcases over 30 pilot programs from across the globe, focusing on the industry-leading commercial ...
LRTV Custom TV
VeEX – Live from the Show

8|21|14   |   5:58   |   (0) comments


An overview of VeEX Test and Measurement solutions including TX300S multi-service test set with VeExpress cloud-based management system, UX400 universal modular platform supporting 100G testing, and the redesigned RXT modular platform.
LRTV Custom TV
Transitioning CE 2.0 Networks Into the SDN & NFV Era With Telco Systems

8|19|14   |   5:19   |   (0) comments


Telco Systems' Ariel Efrati (CEO) and Moshe Shimon (VP of Product Management) discuss virtualization and how the company's new Open Metro Edge solution utilizes the SDN and NFV concepts to accelerate and orchestrate service delivery through its innovative product portfolio and software applications.
LRTV Custom TV
NFV Myths: Is NFV Still Several Years Away?

8|11|14   |   1:13   |   (0) comments


Some say that NFV (network functions virtualization) is still several years away from being implemented on mobile operator networks. This isn't the case. Operators can get started on their paths to NFV now, as this short video from Skyfire shows.
LRTV Custom TV
A New Security Paradigm in SDN/NFV

7|28|14   |   02:54   |   (0) comments


Paul Shaneck, Global Director Network Solutions for Symantec, discusses the evolving virtualized network, explaining how Symantec is leading the security discussion as it relates to SDN and NFV, and helping to ensure the network is protected and compliant.
LRTV Documentaries
Sprint's Network Evolution

7|24|14   |   14:59   |   (0) comments


Sprint's Jay Bluhm gives a keynote speech at the Big Telecom Event (BTE) about Sprint's network and services evolution strategy, including Spark.
LRTV Documentaries
BTE Keynote: The Software-Defined Operator

7|24|14   |   18:43   |   (1) comment


Deutsche Telekom's Axel Clauberg explains the concept of the software-defined operator to the Big Telecom Event (BTE) crowd.
Upcoming Live Events!!
September 16, 2014, Santa Clara, CA
September 16, 2014, Santa Clara, CA
September 23, 2014, Denver, CO
October 29, 2014, New York City
November 6, 2014, Santa Clara
November 11, 2014, Atlanta, GA
December 9-10, 2014, Reykjavik, Iceland
June 9-10, 2015, Chicago, IL
Infographics
A survey conducted by Vasona Networks suggests that 72% of mobile users expect good performance all the time, and they'll blame the network operator when it's not up to par.
Hot Topics
Rogers, Shaw Take Aim at Netflix
Mari Silbey, Independent Technology Editor, 8/26/2014
Utilities to Pump $11.2B Into Smart Grid – Study
Jason Meyers, Senior Editor, Utility Communications/IoT, 8/26/2014
Verizon Launches QR Code Security Solution
Carol Wilson, Editor-at-large, 8/26/2014
Fiber Revival at Deutsche Telekom
Iain Morris, 8/25/2014
M2M's In Fashion: Wearables Play the US Open
Sarah Reedy, Senior Editor, 8/25/2014
Like Us on Facebook
Twitter Feed