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Siemens Gets Closer to Gen Band

Light Reading
News Analysis
Light Reading
7/27/2005

Siemens AG (NYSE: SI; Frankfurt: SIE) has invested more money in General Bandwidth Inc. (GB) and has announced a strategic relationship with the vendor. Siemens first invested in the company back in 2001, but it added more backing in the past 30 days.

Neither company will say how much the investment was, but both Siemens and GB are talking up the strategic relationship.

For Siemens, this is a crucial deal as it allows the vendor to push General Bandwidth as the preferred media gateway in its Next Generation Exchange (NGE) solution. The NGE is Siemens's plan to provide a circuit-to-packet migration -- and Class 5 switch displacement -- solution for U.S. carriers (see Siemens Unveils VOIP Package).

Siemens's pitch to carriers is that with NGE, they can keep their old access network and upgrade it as needed. Meanwhile, with a softswitch, some gateways, and some other elements in place, the carrier can start turning off its Class 5 switches and adding IP-based calling features to allow it to compete with what the cable companies, Vonage Holdings Corp., and Skype Technologies SA are rolling out. And it can do all this without losing any of the emergency services capabilities or calling features currently provided by its TDM switches.

For GB, having Siemens as a strategic partner and investor helps the company prove that it isn't quite as beholden to its other big vendor partner and investor, Alcatel, as it once seemed (see Alcatel Reins In General Bandwidth). Also, this gives GB an entrée to large incumbent carriers -- the kind its gear was designed to attract in the first place.

Siemens will resell General Bandwidth's G6 gateway, alongside the Siemens Surpass hiQ 8000 softswitch. Siemens says several G6 platforms can be hosted by a single hiQ 8000 to support networks above 100,000 access lines -- so its NGE solution has the ability to scale to meet even the largest U.S. IOCs.

The German vendor sees GB's gateway as being the key connection between the carrier's legacy access network and the public switched telephone network. And GB says its advantage over other gateway vendors is that it can offer the functions of a trunking gateway and a "reverse" gateway in the same chassis (see General Bandwidth Spins in Reverse).

By opting to work with GB, Siemens is reiterating to carriers one of the same thoughts that Heavy Reading spelled out in its report on media gateways nearly a year ago:

Telcos do not need to be locked into their existing TDM switch suppliers for trunk media gateways; the leading independent products interwork with a wide range of softswitches.


Siemens says it will work with vendors of all sorts in its NGE effort, but it will have preferred partners in case the carrier has no specific vendor preference. In fact, Harald Braun, president of Siemens Carrier Networks, says another Siemens preferred vendor will be media server maker IP Unity Inc., a company Siemens invested in back in 2003 (see Siemens Funds IP Unity).

This NGE strategy stems from carrier requests to stop investing in new TDM equipment and to have a softswitch architecture that migrates to a next-generation network. Braun says the NGE strategy is "U.S. first, but not U.S. only."

He says the solution is shipping to two carriers now and Siemens has several more carriers evaluating NGE. Braun says his goal is for Siemens to have "double-digit" NGE customers by the end of the year.

— Phil Harvey, News Editor, Light Reading

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flam
flam
12/5/2012 | 3:07:12 AM
re: Siemens Gets Closer to Gen Band
A valid argument indeed. But haven't we heard this song before: softswitches would save on real estate cost, thus improving the ROI?

Yes we have: google to the rescue:

http://www.lightreading.com/do...

Now, I wouldn't have bought into this a few years ago, given the (obscene) amount of CPU power that VOP consumes compared to good ol' POTS/TDM. But, on a lark, I did play with asterisk, the opensource PBX/softswitch, and I have to admit - it's getting interesting.
paolo.franzoi
paolo.franzoi
12/5/2012 | 3:07:12 AM
re: Siemens Gets Closer to Gen Band

Now, if you were a carrier would you be "displacing" your working class 5 switch and spend a lot of money to attach your existing POTS subscribers onto a softswitch?

Okay now that you see that this is a failed strategy, this seems like an easy way for Siemens to have some nice slides. I would expect things like FIOS and LightSlow (can't call it LightSpeed anymore) to move subscribers to packet voice as part of the new infrastructure. Eventually (read in several years), it may become cheaper to retire the existing voice switches. Until then, don't expect to see carriers "displacing" too many class 5s.

seven
alchemy
alchemy
12/5/2012 | 3:07:11 AM
re: Siemens Gets Closer to Gen Band
Siemens owns what used to be the Castle Networks / Unisphere media gateway. Does this mean they're giving up on that product and going with General Bandwidth instead?
dljvjbsl
dljvjbsl
12/5/2012 | 3:07:10 AM
re: Siemens Gets Closer to Gen Band
Now, if you were a carrier would you be "displacing" your working class 5 switch and spend a lot of money to attach your existing POTS subscribers onto a softswitch?

I would not expect a carrier to do such a thing. I would expect carriers to go bankrupt as their customers desert them and their class 5s. Customers are doing this now with wirelss and VoIP on broadband. We can expect this trend to continue. We can also expect the carriers to fade away into obscurity.
paolo.franzoi
paolo.franzoi
12/5/2012 | 3:07:10 AM
re: Siemens Gets Closer to Gen Band

dljvjbsl,

Interesting...

So, you think we are all disconnecting our phones and connecting to cable.

Since if its not cable, it is a carrier. Please note that the Wireless companies are the carriers in the US (in general).

seven
etherhead
etherhead
12/5/2012 | 3:07:08 AM
re: Siemens Gets Closer to Gen Band
You expect Carriers to fade away into nothingness??

What millenium?

What fantasy world do you live in, and where is the ignore button.
dljvjbsl
dljvjbsl
12/5/2012 | 3:07:07 AM
re: Siemens Gets Closer to Gen Band
You expect Carriers to fade away into nothingness??

What millenium?



It will be in the third millenium.

I refer you to movies from the 1940s that depict small town life. On the main street of every small town, there was a Western Union telegraph office. In larger cities people could even send 'straight wires' in which a message would be delivered to any address in the city. All of this is gone now. Western Union still exists as a business but the telegraph industry is gone and essentially forgotten.

So the demise of the carriers is something to be expected and desired. They will vanish as surely as Western Union and the transatlantic liner vanished.
dljvjbsl
dljvjbsl
12/5/2012 | 3:07:06 AM
re: Siemens Gets Closer to Gen Band
So, you think we are all disconnecting our phones and connecting to cable.

Since if its not cable, it is a carrier. Please note that the Wireless companies are the carriers in the US (in general).


What I really expect is that an entirely new network will arise to supplant the existing outside plant and the class 5s that serve them. I do not expect that the services supplied by this network will be anything like the services that are supplied by today's carriers and their wired and wireless networks. The carriers, if they are true to form, will be unable to cope with the challenges from the new network and will fade away like T.S. Eliot's Hollow Men.
etherhead
etherhead
12/5/2012 | 3:07:06 AM
re: Siemens Gets Closer to Gen Band
Why don't you emerge from the darkness of the lab they keep you locked in reading websites for data points, and get some visit time with the real world, hmmm.

Whether its right or wrong, the sheer issue of incumbency means these things will exist for decades.
dljvjbsl
dljvjbsl
12/5/2012 | 3:07:03 AM
re: Siemens Gets Closer to Gen Band
referring to the carriers' continued exisitence

Whether its right or wrong, the sheer issue of incumbency means these things will exist for decades.

In the same manner that the transatlantic ocean liners still ply their trade or that Studebaker still makes automobiles?

Incumbents are burdened by their existing markets and their entrenched attitudes. There are undoubtedly people inisde the carriers who want to adapt to the new market that technology is creating. However they will not be able to do so becuase they can always rationalize a small change to their exisiting services as an adequate response to a disruptive competitor's challenges.

Digital is gone becauae it could not adapt to the PC. AT&T bought NCR to try to adapt to the new network. AT&T is now fading away with its original market. As a result, people are getting new and better services more cheaply.

The world is unfolding as it should.

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