IBM Sows Seed for New Telco Unit, Plans NFV/SDN Push

IBM is building the foundations for a new business unit that can pull together the many parts of its empire that are relevant to, and in many cases already engaging with, the global telecom industry.

In an effort to unify the tech giant's capabilities, Brian Naughton, director of worldwide telco sales at IBM Software, is devising an IBM Corp. (NYSE: IBM) Telco Strategy that, the company hopes, will provide a clear view of the company's broad portfolio and highlight its NFV and SDN credentials.

The company is already well entrenched with communications service providers (CSPs) around the world at an enterprise and operational level, generating billions of dollars in revenues each year (exact financials are not published) through the sale of software, hardware and professional services that support many different lines of business within operators, including OSS, cloud, mobile applications development, IoT, network and applications security, systems integration and more. (See IBM Courts Telcos in the Cloud, IBM Makes Intelliden Buy and IBM Buys Another OSS Firm.)

That business could grow still further with a clear and unified proposition that could help CSPs easily identify the various offers and the breadth of IBM's industry partnerships, which include tie-ups with Apple Inc. (Nasdaq: AAPL) for enterprise applications development and Huawei Technologies Co. Ltd. for small cell and IoT ecosystem development (particularly related to deployments in sports stadiums), believes Naughton.

The move follows a broader reorganization at IBM earlier this year that saw the company unify its networking capabilities into a single group and the unveiling of two Network Innovation Centers that will be designed to promote IBM's SDN, virtualization and analytics capabilities. (See Just Don't Say IBM Is 'Relaunching' Networking Business.)

Carrier cloud automation
And it's mainly IBM's desire to promote its virtualization capabilities that is prompting the need for greater focus and clarification of the company's communications networking capabilities.

The company is planning a full launch of its NFV solution -- with the next iteration of its Netcool OSS, advanced analytics and DevOps processes key to its proposition -- during the third quarter of this year, but has already published a white paper, entitled "IBM OSS for Cloud Based Networking," to lay the foundations for its launch.

That white paper outlines IBM's vision of the next-gen CSP, one that has unified, open source-based distributed cloud assets (for IT and networking), DevOps-based service lifecycle management for quicker and more efficient development and launch of services and applications, and real-time assurance and fulfillment capabilities underpinned by advanced analytics.

Naughton is convinced that the Dynamic Lifecycle Orchestration solution at the heart of IBM's NFV solution -- software that allows the "onboarding of virtual network functions (VNFs), orchestrates service instances and manages the required resources using policy management capabilities" -- delivers capabilities that are ready to be used in anger for automated carrier cloud operations and not just in academic exercises.

"We've developed all the tools and procedures needed for the data center and for telcos … NFV is the catalyst for the latest Netcool refresh," says Naughton. "This launch demonstrates a significant shift in our telco strategy -- we are focusing on extending IBM's cloud DevOps, Orchestration and telco operational assets to automate how [CSPs] manage NFV/SDN services in a cloud-like, agile fashion. IBM is investing in making NFV/SDN operationally viable rather than an academic project in ETSI, and IBM is not a [telco network infrastructure] supplier so we are going to help the operators realise their open vision of NFV/SDN."

And that vision involves a tough and painful transformation process that IBM believes it is well positioned to help CSPs manage. "A lot is changing -- the telcos will need to become programmers and become cloud companies and we have a lot of stuff that has a lot of relevancy [for that transformation]," notes Marisa Viveros, VP of strategy and business development for the telecoms industry at IBM.

The company's NFV and SDN proposition also includes a ready-made ecosystem of partnerships that includes relationships with Alcatel-Lucent, BroadSoft, Brocade/Connectem, Citrix, Juniper Networks, Metaswitch, VMware and Tech Mahindra, with which it teamed up at the recent TM Forum Live event in Nice, France, to participate in a catalyst project called "Recover First, Resolve Next" that focused on the management of virtual evolved packet core functions in a hybrid legacy/virtual network environment.

Next steps
The public launch of the OSS for the Cloud/Dynamic Lifecycle Orchestration will be one of a number of upcoming product and strategy announcements that will build a picture of what IBM's fledgling telecom unit has to offer to CSPs as they transform their businesses and operations to meet the demands of cloud, IoT and the migration towards 5G. "The new unit will be structured around a go-to-market focus and include efforts to incubate ideas and create [portfolio] solutions that make sense to customers. Operational trust is what we're offering to telcos. But we know this unit will need to earn its stripes," notes Naughton.

The IBM man is convinced that the Dynamic Lifecycle Orchestration tools and associated capabilities will "enable telcos to bundle IT capabilities with their traditional communications offerings. If the telcos can virtualize their networks then they can go after new business in multiple sectors in multiple ways. We want to help create business cases."

Key to IBM's renewed telco push are its analytics capabilities. The company has been developing analytics capabilities based on its Watson cognitive computing platform and "we're starting to use that in the telco sector," notes Viveros. The IT giant also has the domain expertise of The Now Factory, acquired in late 2013, to call on. "We've got a big analytics story to tell," adds Naughton. (See IBM Acquires Analytics Expert.)

Playing catch-up?
While there's little doubt that IBM has a lot of weapons in its telco arsenal, it has been somewhat slow in developing a battle plan, leaving rivals such as HP the opportunity to take a lead. (See Telefónica Taps HP for Unica NFV and HP Acquiring ConteXtream for Carrier SDN.)

"IBM has had many of the ingredients for NFV and SDN for some time but has seemed strangely reluctant to bring them together into a comprehensive offer for telcos," says Caroline Chappell, Heavy Reading's Principal Analyst, Cloud and NFV. "Perhaps seeing the traction that rivals such as HP are building in the NFV market has changed its mind or perhaps it has lost some of its earlier skepticism over telco willingness to adopt cloud and now sees an opportunity for advanced enterprise ingredients of its portfolio, for example consultancy around DevOps and service development based on its BlueMix PaaS."

Chappell believes IBM will need to be smart with the way it builds on its legacy market strength in network management. "Its current OSS play is around Netcool, which is based on legacy technology. As part of its new NFV-focused portfolio… it will be interesting to see whether this is a next-generation OSS for a virtualized/hybrid network that displaces Netcool or whether it is simply a reworking of it -- the latter would, in my opinion, be a mistake."

But the analyst believes IBM could really shake up the market if it gets its strategy right. "Like all the big players, IBM sees a significant systems integration/services opportunity around NFV -- especially with regard to telco data center transformation services and hybrid cloud security, both areas in which it has considerable experience. Its decision to target telcos more explicitly will rattle Ericsson and HP, both of which benefited from IBM's apparent lack of interest, and to a certain extent, Huawei, which is making a big play around telco ICT transformation, although probably at a different level of affordability," adds Chappell. (See NFV's Looming Battle: Systems Integration.)

— Ray Le Maistre, Circle me on Google+ Follow me on TwitterVisit my LinkedIn profile, Editor-in-Chief, Light Reading

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[email protected] 7/10/2015 | 4:42:19 AM
Re: Clarity most welcome I would say that IBM is playing catch-up in terms of getting its act together -- it appears to have the right capabilities to challenge and to present a cogent proposition to network operators/CSPs, but having the right tools and building a meaningful proposition are two separate things.

The opportunity is there for IBM -- let's see if it seizes it.

Step 1 -- present its SDN/NFV proposition to the market in a clear and relevant way.

Let's see what happens...
bosco_pcs 7/9/2015 | 7:05:39 PM
Re: Clarity most welcome That is a fair question. Being an outsider, it is hard to know CEO Ginni Rometty's thinking but this much we know: She is a lifer and her best act thus far is to repudiate her predecessor's stated goal - out of inevitability! She got a pass though since she was not the author of the financial engineering plan. But now she owns everything going forward. 

More importantly, maybe this is a necessity so she'd better stick to it. As you and I have agreed, networking is integral so she doesn't have a choice. I mean, you can swap a coupe for a SUV but you need engine and wheels and steering if you want to drive :)! The question is more how you want to implement it. Purchase outright, lease or rental, or even car sharing. That is why, according to Ray's report, IBM has deals with other vendors. But IBM will still need to invest, even if on the cloud and/or datacenter sides of things. But if I were IBM, I would make sure I am the one being indispensible, not the other guys
Mitch Wagner 7/9/2015 | 6:50:04 PM
Re: Clarity most welcome I agree that IT vendors need to have strong networking strategies. Networking is fundamental to computing the way servers were in previous decades. 

However, I question whether IBM has the commitment to stay in it. 
bosco_pcs 7/9/2015 | 3:28:49 PM
Re: Clarity most welcome Mitch, I don't think IBM, or any large integrator for that matter, can stay out of networking. At least it will try not to hitch its fate on someone else. Vonage was a prime example of not having its own real estate. That said, it is not like the old days when it has a vertical stack of MVS-SNA-CICS-DB2, so it will have to partner and acquire to fill in the gap. Upon reading this news, I continue to think it is trying to replicate its Websphere successes in the cloud-bigdata-networking era
bosco_pcs 7/9/2015 | 3:10:32 PM
Re: Clarity most welcome A bit confused here. Is IBM leading the charge in NFV/SDN or bringing up the rear here? To be clear, IBM has a lot of muscles and will not doubt gain a piece of the pie. Considering the cloud computing, big data and networking are more and more integrated, IBM will have able to fill in the gap in the hope of repeating its Websphere sucesses but certainly the NFV/SDN specialists and other integrators like Cisco and one of the HP kids (and even Oracle) will see to see that their turfs are protected. From the investment perspective, maybe it is a good time to check out the specialists
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