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Ericsson: Marketing Must Adapt to SDN World

PARIS -- MPLS SDN World Congress -- Ericsson's Jan Häglund says the telecom industry has not thought through some of the business implications of adopting SDN and NFV technologies.

Häglund heads up Ericsson AB (Nasdaq: ERIC)'s cloud and IP business unit and is one of several speakers at this week's MPLS SDN World Congress in Paris to have raised concerns about the migration to new virtualization technologies.

While service providers see obvious attractions in the agility and efficiency benefits that will come with SDN and NFV, they have yet to provide wholly satisfactory answers to questions about the impact this seismic networking shift will have on their modus operandi.

During a panel discussion Tuesday afternoon, Carsten Rossenhoevel, the managing director of R&D for Germany's European Advanced Networking Test Center AG (EANTC) , suggested there might not be much of a business case for some of the services that virtualization will make possible. (See Bandwidth On-Demand Raises Business Model Concerns.)

Now Häglund has added his voice to these concerns. Marketing operations, in particular, look ill-prepared for a world in which services can be rolled out in just a fraction of the time it currently takes, he suggested during a keynote presentation Tuesday morning.

"With SDN you can introduce services on the fly but you need marketing to adapt to those processes as well or how will customers know you have something to offer?" he told delegates. "That really needs to be thought through."

Häglund is also worried about the concept of "multi-vendor integration." SDN and NFV are attracting interest partly because they should allow operators to work more easily with a number of suppliers, instead of relying on just one or two big names. But this could lead to confusion when a service fails or develops a problem. "Who do you call?" asks Häglund bluntly.

Indeed, troubleshooting may be an issue even if operators continue to maintain relationships with a small number of vendors. "When services fail operators typically replace the CPE but with SDN and NFV it may be harder to identify the source of the problem," says Häglund.

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Despite flagging a number of issues that need attention, however, Häglund is encouraged that service providers globally are beginning to embrace SDN and NFV technologies.

Service providers might also take encouragement from some of the figures Häglund cited during his presentation. Ericsson believes that an operator deploying a virtual home gateway in 2022 will be able to save 22.2% in operational costs compared with investing in a traditional home gateway product.

"You typically need to make some investments in the new virtualized service but there would also be savings on the capex side," he says.

Commenting on Ericsson's own strategy for success in the market for SDN and NFV products, Häglund emphasized that consulting and systems integration skills would be a critical need in future. "We are making some investments in that area," he says.

Spain's Telefónica recently appointed HP Inc. (NYSE: HPQ) as the systems integrator on its Unica project, and systems integration could fast become a battleground in the virtualization market as the multi-vendor model takes hold. (See NFV's Looming Battle: Systems Integration.)

Besides HP, Ericsson is likely to face tough competition from a variety of companies in this area, including traditional rivals such as Alcatel-Lucent (NYSE: ALU) and Huawei Technologies Co. Ltd. as well as the likes of Accenture , Capgemini , IBM Corp. (NYSE: IBM) and Wipro Ltd. (NYSE: WIT).

— Iain Morris, Circle me on Google+ Follow me on TwitterVisit my LinkedIn profile, News Editor, Light Reading

danielcawrey 3/18/2015 | 8:24:46 PM
Not easy I don't think marketing is going to be easy in the SDN space. Being able to translate what is a highly technical concept to the right audiences is going to be a challenge.

Those who are able to do this are going to be compensated very handsomely for their efforts, that's for sure. 
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