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Incumbents: Do or Die

2015 turns out to be a significant year in the history of communications.

This is the year when it became clear that the communications industry isn't simply going through one of its occasional metamorphoses (think circuit to packet, or fixed to mobile).

Virtualization, New IP, open source, white box, IoT, 5G, telco cloud: These next-gen technologies are combining into a wave of innovation that, by the end of this decade, will pivot the entire communications industry on its axis, producing an unprecedented shift in the fortunes of companies old and new, for good and ill.

The only thing more complicated than these technologies is the competitive dynamic between the companies developing and deploying them. In both the solutions provider and service provider/carrier worlds, incumbent players are now facing potentially deadly competition from disruptive newcomers.

In the solution provider space, existing players like Cisco, Juniper, and Alcatel-Lucent are competing with a wave of new entrants: enterprise companies such as HP, Oracle, Brocade and VMware, that are making a major play for telecom business.

The winners of this particular conflict will be determined partly by which companies can best master the disciplines of technology development, innovation, creativity and business acumen. But there are other factors at play here -- specifically, trust and culture.

Light Reading recently asked 150 service providers which of the largest telco suppliers they would trust to build their next generation network and help them deliver new services. Five of the top six "most trusted" vendors were today's telecom incumbents (the other was Intel, interestingly). Below them, in terms of trust rating, came all of the enterprise disruptors.

Telecom has always been a relationship-based industry and the half-life of the trust-based dependencies between companies like Cisco, Ciena, Fujitsu, NEC and their customers is extraordinarily long. This means it will take longer (years longer) than enterprise companies expect or want until they win a significant chunk of the telecom market.

On the service provider side of the house, full scale war is inevitable between the existing Tier 1 providers and MSOs, and the new wave of web-scale and OTT players (Netflix, Google, Facebook, Amazon etc.). All of these protagonists now recognize that the end point in this conflict lies in an NFV-enabled distributed cloud running profitable applications and services over an underlying New IP network.

Who will control the cloud? Web-scale companies have the "profitable apps and services" piece of that future in their DNA -- a major advantage. For their part, the incumbents boast the installed networks and extensive customer relationships on their side.

Victory will partly be determined by how well Tier 1 operators time their move to next-gen virtualized networks. Move too quickly and they risk spending too much for technology that fails to deliver on its promise of reducing capex/opex and goosing revenues/profit. Too slowly, and the web-scale players could end up co-opting the cloud altogether, relegating the Tier 1s to play in the access portion of the network only (this would be a bad thing; personally, I'd rather set my hair on fire than live in a world where Google has a monopoly on both my Internet applications and long-distance telephone service).

What's clear is that this is unprecedented, life-or-death stuff for both incumbent service providers and today's equipment manufacturers. At the turn of the century it was inconceivable that these companies would face a set of technology choices that could put them out of business in the next five years if they get them wrong, but that's exactly the position that every one of these incumbent providers finds themselves in today.

A market as topsy-turvy, high stakes and gosh-darned confusing as this one requires a media vehicle that does it justice. And that's what we're endeavoring to provide through a series of developments and improvements to the Light Reading network this year, and into 2016.

Not for profits
If you've met me you probably know "not for profit" isn't really in my nature, but Light Reading has reached a point in its 15-year history where it needs to do more than just deliver news and analysis. That's why in 2016 we will be helping to launch not one but two 501c not for profit organizations.

  • Women in Comms (WiC) will be run by Sarah Thomas, with the remit of achieving gender parity in the next-gen communications industry. You can email Sarah for more information about WiC's work, here.

  • And then there's the New IP Agency (NIA), an organization that we pre-announced in June with the goal of accelerating the successful deployment of virtualization technologies through education and testing. (Note: NIA is also an antidote to the rampant politicking now going on in the industry over whose Open Source specs should form the foundation of virtualization). Check out the live online radio show about the aims of the NIA on Tuesday Oct. 27 and contact the Director of the NIA, Jeff Hannah, for more info.

    Enterprise coverage
    Part of my deal to reacquire Light Reading from UBM included a no-compete on enterprise coverage. That expires next year and the timing is good for Light Reading to explore this space using the same content-driven model we apply to telecom, especially since the incumbent enterprise publications appear to be on their last legs. I'm excited that we will finally be able to cover areas such as enterprise analytics, security and fax machines (kidding).

    BIG Communications Event (BCE)
    In 2016 we're changing the name of our biggest live show from BIG Telecom Event (BTE), to BIG Communications Event (BCE) to better reflect the market we serve. The convergence of enterprise and telecom is no longer an abstract concept; for the first time, companies like Cisco and AlcaLu are developing products that work equally well across both environments; inevitably, the old market definitions, and boundaries, are falling away. BCE, which takes place in Austin in May, is the one event where every member of the next-gen communications ecosystem can find the information they need to come out on the winning side of this singular period in the history of the comms industry.

    The work that the comms industry is now doing will form the basis of much more than just profitable services; it will create the next great, global, digital economy. At Light Reading, we couldn't be happier to be playing a part in that momentous mission.

    We're all in. Are you?

    — Stephen Saunders, Founder and CEO, Light Reading

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    MikeP688 12/6/2015 | 5:03:52 PM
    Re: What does the fax say? Ring-ding-ding-ding-ding-ding-ding-ding-ding... I appreciate you agreeing with this.   The challenge is whether all can accept and embrace it--and to what end.    It does begin with the notion that change is the only true constant--and whether the evolution of the New IP is helpful is the broader question as I see it--as I hope others can chime in as we bid farewell to  2015 and look to 2016 with the on-going evolution at hand.

     
    batye 12/6/2015 | 1:23:37 PM
    Re: What does the fax say? Ring-ding-ding-ding-ding-ding-ding-ding-ding... yes, you are right :)
    MikeP688 12/6/2015 | 12:24:56 PM
    Re: What does the fax say? Ring-ding-ding-ding-ding-ding-ding-ding-ding... Change is the only constant--no question.  The challenge for all of us is to harness this change in a way that would serve the long-term for all and not be "focused" on the short term.  That's the key challenge.    
    batye 12/6/2015 | 12:07:50 PM
    Re: What does the fax say? Ring-ding-ding-ding-ding-ding-ding-ding-ding... @mpouraryan  technology changing everything, including our day to day life...
    MikeP688 12/6/2015 | 10:28:23 AM
    Re: What does the fax say? Ring-ding-ding-ding-ding-ding-ding-ding-ding... Thank you For your Thoughts.    But if we did not have any risk takers, we would not have the PC, the ipod, the iPad, the iPhone, the tablet and now be witness to the evolution of the New IP that is seeing unparalleled evolution of the way we communicate and interact in our World.     
    batye 12/6/2015 | 5:18:25 AM
    Re: What does the fax say? Ring-ding-ding-ding-ding-ding-ding-ding-ding... @mpouraryan I;m always trying to avoid any gamble... 
    MikeP688 11/6/2015 | 2:18:30 AM
    Re: What does the fax say? Ring-ding-ding-ding-ding-ding-ding-ding-ding... The Stock market is a reasonable indicator (not the only indicator) of what a company does or not.    I note this because as it was noted, Dell is buying--and it is privately held so we would not "per se" know--unless we see some of the public filings they have to do.  The verdict is out--that's for sure.

     
    MikeP688 11/6/2015 | 2:17:03 AM
    Re: What does the fax say? Ring-ding-ding-ding-ding-ding-ding-ding-ding... I view it as a calculated risk for sure--but I also would not bet against Meg Whitman just yet.     
    batye 11/5/2015 | 11:29:55 PM
    Re: What does the fax say? Ring-ding-ding-ding-ding-ding-ding-ding-ding... @mpouraryan  thanks, interesting to know... as I do not know much about stock market....
    mhhf1ve 11/5/2015 | 8:59:12 PM
    Re: What does the fax say? Ring-ding-ding-ding-ding-ding-ding-ding-ding... HP is splitting up.. just as Dell is acquiring and expanding... I think the splitting up strategy isn't going to go so well... but I'm not sure Dell's strategy is going to work, either.
    Page 1 / 7   >   >>
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