2005 Top Ten: Heavy Findings

There's little doubt 2005 saw the beginnings of some great things for the telecom industry, including a few trends that promise to drive the recovery that's clearly gotten its wheels on track.

Heavy Reading was there, capturing and quantifying the best, brightest, and newest ideas getting kicked around the telecom water cooler. Here we've laid out the key findings (a joke you'd get if you read the reports):

  • 10. OSS: Who Are These Guys? Telecom providers worldwide now spend more than $40 billion a year on operations support system (OSS) software to keep their networks running, but the companies supplying that critical software aren't doing an effective job of establishing their brand identities with their customers, according to Heavy Reading's 2005 OSS Market Perception Study. Ironically, the company that had the best perception ratings across multiple product categories -- Micromuse Inc. (Nasdaq: MUSE) -- ended the year by announcing it was being bought by IBM Corp. (NYSE: IBM), which also has struggled to gain a foothold in the telecom software sector.

  • 9. Trouble at the Multiservice Switch? The push by network operators to deliver a full range of services over a converged IP/MPLS infrastructure is making life tough for multiservice switch vendors, a group that includes some of the world's largest telecom equipment companies. They're in danger of falling behind customers' shifting priorities, notes Scott Clavenna, author of The Future of Multiservice Switching in Converged IP/MPLS Networks. "There is a disconnect between what customers now say they want and how vendors are positioning themselves. Left unaddressed, this expectation gap will challenge the status of multiservice switch vendors in the market, as router vendors offer up solutions optimized around IP services," he says.

  • 8. Nothing Phony About Pseudowires "Pseudowire technology is the solution for convergence in future telecommunications networks," Clavenna writes in Pseudowires and the Future of Transport and Access Networks. And he means nearly every aspect of every type of network. The ability of pseudowire products to channel legacy data services, such as Frame Relay and ATM, over IP-based networks has undeniable appeal to network operators who want to continue to sell those profitable services even as they migrate to next-gen architectures, Clavenna writes.

    It's an edge-router play so far, but the market has promising potential for the wave of pseudowire specialists that includes Axerra Networks Inc. , Hammerhead Systems Inc. , Mangrove Systems Inc. , Overture Networks Inc. , and RAD Data Communications Ltd.

  • 7. They Did It Huawei Suddenly, Huawei Technologies Co. Ltd. of China is a major force. It's already surpassed several incumbent vendors in perceived market leadership, according to results of a worldwide survey of service provider professionals published in Heavy Reading's 2005 Wireline Telecom Equipment Market Perception Study.

    Huawei's huge jump in market perception ratings from Heavy Reading's Fall 2003 survey is the most remarkable and probably most important development in the wireline telecom equipment industry. Huawei still has a minimal presence in the North American market, but it's landed some big contracts elsewhere including a piece of the BT Group plc (NYSE: BT; London: BTA) 21CN project, and that success had led to some interesting acquisition theories. (See BT Unveils 21CN Suppliers and Could Huawei Buy Marconi?.)

  • 6. The ROADM to Ethernet The rush to embrace Ethernet as a carrier-class service is sparking renewed interest in reconfigurable optical add/drop multiplexers (ROADMs). "Rollouts of triple-play access infrastructure and business Ethernet services infrastructure will drive demand for reconfigurable optical network systems," writes Clavenna in ROADMs and the Future of Metro Optical Networks. "Ethernet and triple play will push a lot of traffic onto carrier interoffice facilities and metro core facilities, requiring more than simple, incremental bandwidth additions. The unique transport requirements of these services will force operators to move to a new generation of optical systems and architectures," he predicts.

    Surveying service providers worldwide, Heavy Reading saw the ROADM market beginning to soar in late 2005, with most operators focused on 2006-2007 as the timeframe for more aggressive deployments.

  • 5. SDP: Clear as Mud Service delivery platforms (SDPs) continue gaining acceptance as a way for telecom network providers to deliver new services quickly and inexpensively, but SDP suppliers need to do a much better job of explaining what their products do and how they fit into a carrier's service delivery environment. It's "a weakness that threatens to hamper SDP market development," notes Caroline Chappell, analyst at large with Heavy Reading and author of The Future of SDP.

    "Operators may stay with their stovepipe service delivery approach because it seems simpler than trying to understand vendors's very different -- and often contradictory -- architectural approaches. Or they will buy the names they've heard of, rather than exploring best-of-breed products whose descriptions they don't understand," she writes. Some SDP standards would improve things, but that's a ways off -- vendors are still at the stage of trying to make their SDPs look different. (See IBM Unveils IMS Offerings, Lucent Launches SDP , HP, Telcordia Hop SDP Bandwagon, HP Takes Flash Approach to SDPs, Microsoft Preps for Telco Battle, Alcatel Launches Service Manager, and Sun Announces SDP Plan.)

  • 4. ATCA Changes OEM Priorities ... The availability of Advanced Telecom Computing Architecture (AdvancedTCA) components and systems is accelerating a major shift in the telecom supply chain, with systems integrators taking on much of the development previously kept in-house by systems OEMs. "ATCA opens up new opportunities for silicon vendors, system integrators, OEMs, and service providers," notes Simon Stanley, Heavy Reading analyst at large and author of AdvancedTCA: Who's Doing What. "As with all paradigm shifts, there will be winners and losers -- making this a key market to watch." (See ATCA Finds Its Way.)

    Further ATCA research published this week by Light Reading's Comm Chip Insider estimates that about one-quarter of all systems OEMs are working with integrators to bring ATCA into their products – a huge change from the do-it-yourself model that OEMs have almost exclusively followed up to now. (See ATCA Initiates Launch Sequence.)

  • 3. ... While IMS Reshapes Service Delivery IP Multimedia Subsystem (IMS) is generating apparently unstoppable momentum as the potential network and service architecture for delivering revenue-generating IP applications. It's also a keystone in the fixed/mobile convergence trend, making IMS a hot issue for wireline and wireless providers alike. "IMS has won near-universal support among equipment vendors, and most are now tailoring their products to meet its specifications," notes Graham Finnie, Heavy Reading Senior Analyst and author of IMS and the Future of Network Convergence.

    Naturally, that's made IMS attractive, with Heavy Reading identifying at least 70 companies with IMS propositions as of July. Not the least of the bunch is Lucent Technologies Inc. (NYSE: LU), which has used IMS to spearhead a corporate turnaround that turned the heads of the 2005 Leading Lights judges. (See Lucent Lands BellSouth IMS Deal, Lucent in the Lead for Verizon IMS?, LR Names 2005 Leading Lights Winners and A Night of Lighties.)

  • 2. Survivor: IPTV It's at the top of every incumbent telco's to-do list: Get IPTV. "Competition, specifically in North America, is the primary driver for the buildout of IPTV networks and the delivery of IP video services," writes Heavy Reading senior analyst Rick Thompson in IPTV and the Future of Telecom Video Network Architectures.

    Some small North American carriers are already delivering IPTV, but the plans at the Bell companies -- driven by a cable industry nipping on their heels -- create the best opportunities for vendors, he writes. But success isn't in the bag, as video comes with pitfalls including the "unprecedented scale" of these IPTV plans, he writes. (See Verizon's Elby: IPTV Could Take Years, Source: SBC Plans IPTV for Businesses, BellSouth's Smith Details IPTV Plans, and SBC, Microsoft Defend Lightspeed.)

    The push by telecom service providers to deliver IP video as part of a triple-play service bundle is leading to a massive overhaul of carrier broadband edge networks – and the creation of a new class of broadband edge equipment, as Thompson describes in his latest report, IP Video and the New Broadband Edge.

  • 1. Carrier Ethernet Gone Wild On sheer quantity of Heavy Reading pages, this one deserves to win, but it also happens to be a defining movement for telecom right now, more so than IPTV. Network operators stampeded to deliver Ethernet services to business users in 2005, as documented in the Heavy Reading report, Ethernet Services Carrier Scorecard: North America. Of the roughly 180 North American service providers evaluated, 122 were selling a total of 585 Ethernet services and applications.

    The result, according to the Carrier Ethernet Equipment Market Outlook, is a potential boom in carrier-grade Ethernet platforms, particularly for switch/router vendors and particularly as Ethernet expands into the triple-play realm for residential customers. And that, in turn, was the subject of a third report: Sonet/SDH-to-Ethernet Migration Strategies. "The transition to the EOTN – Ethernet Optical Transport Network -- is already underway in the metro network, and is showing signs of progress in carrier access and core networks as well," Clavenna notes in that report. (See Last Call for Sonet/SDH?.)

    — Craig Matsumoto, Senior Editor, Light Reading, and Dennis Mendyk, Managing Director, Heavy Reading

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    Pete Baldwin 12/5/2012 | 2:48:06 AM
    re: 2005 Top Ten: Heavy Findings Obviously, this list is based on conclusions published in Heavy Reading reports. Anything they didn't write, didn't make the list. Likewise for anything they're keeping secret, although I'm not sure why they would do that. ("No, Scott, this knowledge about Frame Relay could DESTROY US ALL...")

    Your turn to be Heavy Reading Guy/Gal for a day: What topic should they have picked up?
    alchemy 12/5/2012 | 2:48:06 AM
    re: 2005 Top Ten: Heavy Findings Personally, I don't see pseudowire as the next great application. There are specific applications like 2.5G cellular backhaul where you can use it without needing echo cancellers. Most applications are better-served by putting an IP interface directly into the product rather than coming out TDM and using a hack pseudowire box to attach it to the internet.

    I liken the market for PseudoWire boxes to the market for ethernet telnet terminal server boxes in the 1980's. Sure, you can sell some telnet boxes to connect glass TTYs to minicomputers but in the medium term, it's not a viable product since client devices all ended up having ethernet interfaces. Today, you can buy a telnet box from Digi but it's hardly a billion dollar business worthy of hundreds of millions of dollars of venture capital investment.
    Dredgie 12/5/2012 | 2:48:05 AM
    re: 2005 Top Ten: Heavy Findings GǣGǪSDP suppliers need to do a much better job of explaining what their products doGǪGǥ

    IGm sure theyGve explained what their products do. They are just service development and execution environments that are useful to software developers. You need to ask those developers what applications they plan to write on them to understand if they will be useful.
    paolo.franzoi 12/5/2012 | 2:48:05 AM
    re: 2005 Top Ten: Heavy Findings
    There are two that are missing:

    1 - Fiber Access and the changes it will bring.

    2 - The changing procurement strategies at the major carriers.

    alchemy 12/5/2012 | 2:48:04 AM
    re: 2005 Top Ten: Heavy Findings Missed? Hmmm...

    Since porn is the only profitable content on the internet, you've completely missed the tie-in of porn with IMS and SDP. I suppose this properly belongs in a Larry, Attack Monkey blog but Heavy Reading could take a crack at it, too.
    paolo.franzoi 12/5/2012 | 2:48:03 AM
    re: 2005 Top Ten: Heavy Findings

    I have pushed at least one LR editor (and perhaps HR would be a better place to do this) to study the gaming (not gambling) industry and its needs. After video, online gaming is listed as the next big potential app. But nobody ever seems to talk to the game suppliers. Or the gamers.

    Peter Heywood 12/5/2012 | 2:48:02 AM
    re: 2005 Top Ten: Heavy Findings Seven - good point on gaming. Fancy helping me correct this?

    paolo.franzoi 12/5/2012 | 2:48:01 AM
    re: 2005 Top Ten: Heavy Findings
    I am not sure if I am fancy :).

    I can give you a gamers perspective. But I would be talking to EA, Valve, Sierra, Sony Online Entertainment, and Blizzard if I wanted the game company's perspective.

    World of Warcraft just hit 5 million users worldwide. There was even a College Jeopardy - Final Jeopardy answer concerning the World of Warcraft. Leroy Jenkins for the win! And for some of the people on this set of message boards its time to learn the language of 1337 (aka "leet").

    Take a look at Valve and their Steam Network. Then take a look at Blizzard and WoW. You will find two completely different business models for the game companies.

    Here is a real big shocker for y'all (and this has not been recalculated recently). In 2001, Norrath was calculated to be the 25th (iirc - if I recall correctly) largest economy in the world. Now what the heck is Norrath and how did it get to be so big under your noses? Norrath is the home world of Everquest. People online through sites like eBay (and Player Auctions) pay Real Life Currency for items and Game Life "money". This sets up an exchange ratio. Then the approximate money per hour is calculated to generate a GDP for an online world. Before you guffaw this off, remember a Dollar Bill is only worth a Dollar because we all think it is. If you are willing to pay (exchange) that Dollar for a Gold Piece in Norrath...then the exchange rate for the Gold Piece is set. My guess is that the current ranking of Azeroth (the home of the World of Warcraft) is bigger than Norrath ever obtained. Maybe closing in on the top 20. Just before you guffaw more, there are companies in China that are what gamers call "farmers" and play all the time to get money and items for sale through online sites. The players get paid to do this work.

    Finally, this is also the place that VoIP, IM and IRC is the NORM for communications. Go to a guild sometime and get them to switch between Ventrilo and TeamSpeak or vice versa.

    One final comment. Remember many of the people spending the dollars here are teenagers. They often don't have credit cards. They use the equivalent of gift cards (called Game Cards) to pay for the monthly fees (if there are any) much of the time.

    Some linkage to save you some time:




    I could go on and on. Best thing you can do Peter is go spend $45 and get a copy of World of Warcraft. Install it (and find out why bittorrent $*%$*^%$). Play it a bit. Figure out a few things - WoW provides an easy startup mechanism. Even the unitiated can get started....Heck and the stuff I listed are just MMORPGS and 1 FPS. There are online RTSes...The Sims online...ya da ya da ya da.

    <entering gamer="" speak="">
    gtg boss aggro rtm need hepl ftw lol

    <translating english="" to="">
    Got to go boss coming "red to me" <i.e. me="" more="" much="" powerful="" than=""> need help for the win <i.e. defeat="" him="" to=""> laughing out loud

    paolo.franzoi 12/5/2012 | 2:47:58 AM
    re: 2005 Top Ten: Heavy Findings
    I thought I might provide some links to sites that sell game items online....




    Link to the Leroy Jenkins Jeopardy Question:


    A way to download the original Leroy Jenkins movie:


    My WoW guild's website:


    Generally a website with a lot of info....


    Frank 12/5/2012 | 2:47:40 AM
    re: 2005 Top Ten: Heavy Findings IMO, the promise of pseudo-wire hasn't even been broached yet. As consumer and So-Ho grade data rates continue to rise, I suspect some first mile service providers in combination with a top tier backbone provider will release a version of QoS-like service based on pwe that removes a users traffic from the Open Internet and its attendant bottlenecks. Consider the needs of sub-second response time users such as gamers and day traders who will pay the extra freight for a pseudo-channel of their own outside the contention zones of the great unwashed. Could happen. But as for pwe's already demonstrated popularity? I also have to ask, Where is it?

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