Nokia makes big bet on Red Hat, transferring 350 employees to it

The market for virtualized and cloudified telco software is a crowded and confusing place, full of incompatible supporting platforms and what are uncharitably called vertical silos. Europe's telcos have spoken out about it a few times and it seems just as unwelcome to big software developers. Nokia's answer, revealed during a press conference on June 29, is to concentrate resources on just one of those platforms and hope telcos like it. But it's far from certain they will.

The platform it has picked is Red Hat, a cloud-computing subsidiary of US IT giant IBM. Henceforth, Red Hat will be the "primary infrastructure platform" for Nokia's core network applications, said Darrell Jordan-Smith, Red Hat's senior vice president for telco, media and entertainment, and edge on a call with reporters. In a sign of just how tight the two companies have become, about 350 people at Nokia will be transferring to Red Hat. With that, it is abandoning its own efforts to build the platforms that host its software.

This tie-up, the companies say, will allow telcos to run all their workloads on a common layer and ditch those vertical silos, where applications are divided across multiple platforms. To use a metaphor well-liked in the telecom sector, it is like throwing out the messy spaghetti and switching to a tidy lasagne instead. The nice thing is that telcos can consume all this in numerous cloud environments because Red Hat – as Jordan-Smith was eager to point out – can be deployed in AWS, Google Cloud and Microsoft Azure, as well as in a private-cloud setting.

What's not to like? Well, for starters, telcos might love Nokia's applications but prefer VMware or Wind River to Red Hat. Fran Heeran, Nokia's general manager of core networks, cloud and network services, who joined Jordan-Smith on the call, insists there will be no vendor "lock-in" and that Nokia will continue to support its applications on other platforms. But this will tend to be the case only when a telco is using Nokia applications alongside rival software. If it is buying a "full stack" of core network products from the Finnish vendor, Red Hat seems a part of the package. And Nokia would evidently rather not bother with other platforms at all.

"With all these offerings, as well as having to manage both virtual and cloud native, it's becoming a difficult landscape to support," said Heeran. "We would like to see the landscape getting a little bit simpler and having a little bit less choice, but at the moment it's going in the opposite direction."

Supporting that difficult landscape is likely to be even harder when 350 people, many involved in software development, have decamped to Red Hat. The reassigned employees include people involved in research and development, services teams responsible for delivering the platform and care and support organizations. If most of these people were at work on Nokia's own infrastructure platform, the transfer might not hinder its ability to handle software development for the likes of VMware and Wind River. But it will certainly not be helpful.

One throat to choke

Nokia seems to have made a big bet on the appetite for an end-to-end offering. "There is going to be a population of customers, and a fairly sizeable one, who want the suppliers of the core network to bring the solution end-to-end with hardware, the cloud infrastructure and the applications themselves," said Heeran. "In that scenario, which will be very common, if the customer wants us to bring a full solution and has no stated preference, the answer is going to be Nokia plus Red Hat as the application plus the infrastructure solution."

But little of this chimes with the recent telco discourse about having choice and being able to assemble multiple suppliers to have the best individual products across different areas. Ericsson tried to foist a full-stack business support system (BSS) on the market several years ago and ended up withdrawing the product – called Revenue Manager – after its customers failed to bite.

"There are pros and cons of buying a complete stack – you have one throat to choke, and you know stuff works together," said Mats Karlsson, Ericsson's head of BSS, when Light Reading caught up with him last September. "We are selling products standalone but also as a digital monetization platform." At the time, just 40 out of 300 customers were buying the platform.

The core is different, according to a research note issued by Omdia (a Light Reading sister company) and available on LinkedIn. "The vast majority of 4G virtualized packet core deployments were 'full stack' with the applications and virtualization platforms coming from the same vendor (Ericsson, Nokia, Huawei, etc.)," it says. "With 5G core most operators have taken a similar full stack approach given the complexities of managing containerized network functions."

Nevertheless, Europe's operators have pushed for a standards-based approach to the problem of vertical silos through initiatives such as Sylva. The idea of that one, which is backed by Ericsson and Nokia, is to come up with open source, non-proprietary cloud tools, not necessarily to have a part of IBM as the default horizontal layer.

The big problem there is the dependency this implies, especially if a telco starts to run all its network and IT workloads on that Red Hat layer. And if it keeps others in the mix, it risks creating spaghetti rather than lasagne. Using Red Hat as an abstraction layer to avoid overreliance on AWS or Microsoft Azure is all very well, but what if something happens to Red Hat?

It is seemingly an intractable problem. "At some point in that stack, there is going to be a dependency," said Roz Roseboro, a principal analyst with Omdia, during a previous conversation with Light Reading. "If you want to have something consistent, something must be a common factor. It's going to be VMware or Red Hat, or its going to be AWS, or it's going to be Microsoft services. Something must be the same." Nokia would apparently agree.

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— Iain Morris, International Editor, Light Reading