Steve Vogelsang, the CTO of IP and Optical Networks at Nokia and President of the New IP Agency, talks to Light Reading Founder and CEO Steve Saunders.

Steve Saunders, Founder, Light Reading

April 7, 2016

11 Min Read
CEO Chat: Nokia's Steve Vogelsang

I've known Steve Vogelsang for more than 20 years, since his time at FORE Systems, the ATM pioneer (that's "asynchronous transfer mode," not "automatic teller machine," for you young'uns in our audience), and then as a founder at edge router startup Laurel Networks.

We lost touch for a bit while I was spending a few years on gardening leave (tending vegetables, mainly), but when I rejoined the telecom industry in 2014, Steve was one of the first people I saw (a chance meeting in the lobby of the San Francisco Westin). By that time he'd attached himself to Team Basil Alwan at TiMetra, which had been acquired by Alcatel, and was, as we now know, destined to become part of the "new" Nokia Corp. (NYSE: NOK), where he now serves as CTO of IP and Optical Networks. (See Nokia, AlcaLu Steady Ship on Costs Before Tie-Up and Nokia Confirms Leadership Team.)

In other words, Steve has more experience with bleeding-edge technology than just about anyone in our industry, and in these days of totally unprecedented tech disruption, and unprecedented hype, that's an absolutely essential characteristic. Steve's extensive experience has clearly influenced his take on technology; he's known for being a pragmatist and, indeed, a skeptic, and not someone who is going to go all in on the latest industry bandwagon without doing his own meticulous analysis. (Behind his back, colleagues refer to him affectionately as the CCO, or Chief Cynical Officer, something of which he isn't aware... until he reads this, obviously.)

It's not often that I've seen Steve get excited about anything, which is why it's interesting to see him so energized on the topic of virtualization.

Well, now Steve has a new title to add to his illustrious CV: President of the The New IP Agency (NIA), the not-for-profit independent initiative providing information, education, analysis, community services and testing to support and accelerate the development of a global economy based on open, advanced, virtualized IP networks. (See 5 Firms Join NIA As It Enters Phase 3 and Colt Says NIA Can Help Speed Up NFV Rollout.)

I sat down with Steve to get his take on the NIA's mission and also to get some insights into life at Nokia. It was a great conversation with a nice guy and someone for whom I have a huge amount of respect.

If you enjoy this interview, I strongly encourage you to attend Steve's keynote at Light Reading's Big Communications Event (BCE) in Austin, Texas, on May 24 and 25.

Figure 1: Steve Vogelsang, CTO of IP and Optical Networks, Nokia Steve Vogelsang, CTO of IP and Optical Networks, Nokia

Steve Saunders: Hey Steve. How are you?

Steve Vogelsang: Good.

SS: How are things going with the Nokia integration? Keeping you busy?

SV: Yeah, absolutely. I just arrived back home this morning on the red eye, so another wonderful day of being half-asleep.

SS: I'll try not to take advantage of that by asking you hard questions. Let's start with the big one: Why did Nokia feel it was important to join the NIA?

SV: Good question. We see that there's a pretty major change happening, with service providers virtualizing their infrastructure and adopting IT technology to make their networks more efficient and more agile. We believed the industry really needed a forum where we could come together and drive collaboration.

SS: Right.

SV: We don't have all the answers and there's no single entity that has all the answers. We really need to establish those communication channels to get service providers, the vendors and standards organizations, all the groups out there, coming together and sharing information in a productive way.

SS: Over time, what do you see the NIA becoming? Will it be like a GSMA type of organization or should it have a more educational goal? And what about independent testing?

SV: Probably a bit of all of them. It's still early days. We only formed the NIA literally just a few months ago. From my perspective, what the NIA is already beginning to do is provide real, pragmatic information for service providers that are looking to deploy virtualized infrastructures. The testing is a big part of that, because it gives you a sense of reality -- what works, what doesn't work.

In addition, I also see the collaboration starting now within the NIA, bringing together vendors in testing. You start to establish a dialogue and understand how each other's products work. I think that really helps to drive the process forward. Where this goes longer term, I'm not sure. We'll have to wait and see!

SS: It has taken off very quickly, hasn't it? Congratulations on that. One of the things I think is apparent from the interest in the NIA is that there's a learning curve around virtualization, and in some ways the vendors, or the solution providers, are further ahead in understanding the technology than some of their customers, the service providers. Where do you think the service providers are in the learning curve around NFV right now?

SV: For the most part, all of the service providers have begun to build cloud infrastructure and really understand how it works, and what the moving parts are. And I think they're realizing that the moving parts of cloud infrastructure involve a lot of open source code. You really need a software development team that understands how to put all these pieces together. In the vendor community we tend to have more of those resources than the service providers, so that's the main reason we've been a bit ahead. The service providers are starting to build some of that up, but over time they'll probably end up leaning back on the vendor community, because that's what we do. Our role in the industry is to help them build infrastructure.

SS: Is the NIA's testing program equally important to the vendors that are involved as it is to the service providers?

SV: It's about the same level of importance to both of them, but for different reasons. For the vendors it allows us to showcase some of our products and functionality, and do so on a broader stage, which is very helpful when we interact with customers. But the scale of the testing is also fantastic for the service providers. In the first NIA test we evaluated more than 60 combinations of VNFs [virtual network functions] and NFVi (NFV infrastructure]. There's no way for them to do that testing themselves. It would take them forever -- they'd be at it for a year.

So just by coordinating that interoperability testing, and doing it very quickly, gives the service providers an initial analysis of where the industry is with NFV; what works, what doesn't. And that's incredibly important to moving the industry along. That's why it's so important for the NIA to continue with its test program.

SS: The entire industry is becoming far more focused on software. Where is hardware still critical?

SV: The simple answer is everywhere, because even virtualized software needs to run on hardware.

SS: [Laughs] Good point!

SV: I tend to think of it a little bit differently. It really comes down to what type of hardware is required for different functions. For the heavy machinery that still goes in access and aggregation and core networks, you still want workload specific processing. We're still using processors, but we're using processors that are designed specifically to move packets. That will continue.

But the shape and type of processing that we use will vary depending on where you are in the network. In aggregation networks, access networks, I think we're going to see more fixed function type processing, so we can really drive the cost.

Nearer to the core, and the areas where you have dense connectivity, where you're interconnecting tiers and managing multiple different services, you probably need more flexible packet processing functionality.

And finally when you get into value-added services, that's where the commodity x86 type of environment will play, because it gives you the flexibility to really do anything you want. The other thing that we see happening in that environment are the functions, like network slicing, where you want to spin out a dedicated network for the customer, whether it's an enterprise customer, or an IoT deployment. A lot of that functionality will move into the x86 environment, because you can spin it up quickly.

But then at some point in the future, if you really need to scale it, we may be able to do some optimization, and move on to, again, what I call workload-specific processing, using purpose-built chips optimized for packet processing.

Next page: Industry consolidation and competitive pricing

Industry consolidation and competitive pricing

SS: There's a huge amount of consolidation going on right now, with these huge mergers and partnerships. Is that good for the customers? What are your customers telling you?

SV: The response to the Nokia/Alcatel-Lucent merger has been overwhelmingly positive, for a couple of reasons. First, as you know, both Nokia and Alcatel-Lucent were just completing a restructuring and getting their respective businesses back on track and generating cash. By going through that and then combining the two organizations, we now have a company that's on a very solid footing and customers think that's a good thing.

The other reason it's been very positive is because we're going through a pretty massive change cycle in the way we build networks. We've got 5G now coming online, which requires a huge R&D investment. The move to virtualization, the adoption of IT technology... all these things require significant innovation in R&D. As a larger organization, we have a larger pool of R&D to address these problems.

SS: Almost double.

SV: Pretty close.

SS: We're hearing a lot about major vendors having to get aggressive with pricing in order to win deals. I know Nokia has been putting up some amazingly good numbers recently, so obviously whatever you are doing is working, but have you had to cut some deals to create a beachhead into the virtualization market?

SV: It's still early days. For the most part we haven't see those huge volume deployments [of NFV] just yet. I would say at this point the pricing models are still somewhat fluid. As an industry we're trying to figure out what is the right model that strikes a balance between what our customers want -- lower costs, no matter what -- and ensuring that there's sufficient revenue and margin for us to continue investing the R&D dollars to innovate and improve the solutions over time. From time to time we'll see deals where we have to be aggressive. It changes, you know, with different parts of the world at different times. But overall it tends to average out. And then you can see in our financials that we've been improving margins pretty consistently across a number of businesses.

SS: There seems to be a big question over the business case for NFV. It seems to have moved from being looked at as a way to primarily save money, much more towards developing new services. What's your take on this? What do you see from your customers?

SV: I definitely see a similar trend, that the emphasis is now increasingly on new services and "service agility" rather than on pure cost savings.

Part of that is to do with performance. If you can't drive VNF performance on the Intel chipsets, the business case isn't really going to pan out. We've been playing a pretty significant role to change the equation by getting more performance out of those processors. That's helping a lot.

But there's also a recognition amongst a lot of the network operators that, at least initially, NFV is complex, it's non-trivial -- we all have a lot of work to do to figure it out. You're not going to see this immediate quick win on cost savings. Rather, you have to go through a complex technology curve where you adopt the technology and eventually the cost will come down. But the cost savings will ultimately be more driven through operational savings, and the best way to achieve operational savings is to tie them to a new service.

So the focus is now really shifting to how can we roll out new services that are, from day one, far more agile. Using virtualized infrastructure is a fantastic way to do that. That's my perspective on why we're seeing that shift.

SS: Thanks again for taking the President role in NIA – it's really gathering some membership momentum, which is very exciting.

SV: You're welcome, Steve. Good dialogue -- always enjoy talking with you.

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About the Author(s)

Steve Saunders

Founder, Light Reading

Steve Saunders is the Founder of Light Reading.

He was previously the Managing Director of UBM DeusM, an integrated marketing services division of UBM, which has successfully launched 45 online communities in less than three years.

DeusM communities are based on Saunders' vision for a structured system of community publishing, one which creates unprecedented engagement among highly qualified business users. Based on the success of the first dozen UBM DeusM communities, the UBM Tech division in 2013 made the decision to move its online business to the UBM DeusM community platform – including 20 year old flagship brands such as Information Week and EE Times.

Saunders' next mission for UBM is the development of UBM's Integrated Community Business Model (ICBM), a publishing system designed to take advantage of, and build upon, UBM's competitive strengths as a leading provider of live events around the globe. The model is designed to extend the ability of UBM's events to generate revenue 365 days of the year by contextually integrating content from community and event sites, and directories, to drive bigger audiences to all three platforms, and thereby create additional value for customers. In turn, these amplified audiences will allow business leaders to grow both revenues and profits through higher directory fees and online sponsorship. The ICBM concept is currently being discussed with a broad group of business leaders across UBM, and is earmarked to be piloted in the second half of 2013 and early 2014.

UBM DeusM is Saunders' fifth successful start-up. In 2008, he founded Internet Evolution (www.internetevolution.com), a ground-breaking, award-winning, global online community dedicated to investigating the future of the Internet, now in its fifth year.

Prior to Internet Evolution, Saunders was the founder and CEO of Light Reading (www.lightreading.com), Heavy Reading (www.heavyreading.com

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