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Duh! 5/25/2016 | 4:52:42 PM
Re: Yes It's fair to say that the virtuous cycle started slowing down around 2000, from overheated levels. However, there has been a lot of vendor- and startup innovation since then. The SDN/White Box trend is going to put a stake in its heart.
brooks7 5/25/2016 | 3:57:56 PM
Re: Yes Duh!,

I think your timing is off.  The equipment industry has been in a depression since the collapse of the CLECs starting in 2000.  The virtuous cycle you mention was killed by the Telecom Act of 1996 and the reaction to it.  The equipment business is headed in an inevitable way to the structure of the aircraft business.  A few massive players, a couple of point solutions folks and no real innovation.  Yes, there are new planes and they are marvels.   And they all look a whole lot like a 707.

seven

 
Duh! 5/25/2016 | 3:19:41 PM
Re: Yes I worry that the virtuous cycle which sustained innovation and growth in our industry for the past three decades is collapsing.  Under the post-Divestiture structure, margins on the equipment side were large enough to sustain R&D - some of it forward looking.  They were also large enough to attract venture capital to teams of smart people with great, forward looking ideas.  The start-ups that emerged created value, rewarded their investors and founders, and the products boosted operators' top-line revenues while cut OPEX and even CAPEX. 

We've fallen into a vicious cycle.  Consolidation and short-term thinking on the operator side leads to margin compression on the vendor side, making investment and risk-taking unviable.  What value-added is left is pushed to the bottom of the food chain -- component suppliers, who are themselves consolidating.

It's all well that Operators can innovate by writing apps and VNFs. But who is going to innovate for the next generations of transport, metro, access and core switching/routing?  Those things can't just be cobbled together from commodity white boxes.  Specialized white boxes - ROADMs, OLTs, multi-Terrabit capable switches, line cards with line-speed processing at 400 Gigs -- aren't going to be developed by commodity vendors, only integrated if/when parts become available.  And with the margin squeeze extending down to component suppliers, the time might ultimately come that they won't bother, either.

Hopefully, enlightened self-interest will ultimately prevail at the operators. Otherwise, stasis.
brooks7 5/25/2016 | 1:52:56 PM
Re: Yes Let's compare the profit of equipment vendors and the profit of the carriers.  Who is in prison?

seven

 
sowen557 5/25/2016 | 12:43:30 PM
Re: Yes Have you seen Oracle Pricing on renewals of contracts?  Huawei used to give away kit now their annual maintenance is crazy talk.  At lease Telco's have alternativies.... oh wait, only few left.
rauf.sulya 5/25/2016 | 10:01:51 AM
Re: Yes Hmmm...I still wonder why so many members part of this group ? 

 

Too much is too bad. Different people, different ideas . It will be big headache to finalize on one platform. Can Service Providers or Web Giants can bring out Open commomdity hardware so called "White Boxes ". 

 

I see some Telecom software companies who already partner for different vendors in developing their equipments for ex :- Aricent for Cisco / Infinera/ Ciena..they r part of this group. 

 

It is not so easy to come out ...vendors are still strong ...they have thier own customers..good technology..
EMurphy63 5/24/2016 | 1:16:28 PM
Yes I absolutely agree with him. There is nothing worse than Vendor Prison!
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