TIP Players Voice Open Source Misgivings

Iain Morris
Prime Reading
Iain Morris, International Editor

When Facebook launched its Telecom Infra Project (TIP) in early 2016, open source principles seemed essential to its mission. By encouraging members to pool their expertise, and even forego the royalty payments they would normally expect from intellectual property, Facebook aimed to spur innovation and lower costs in the market for telecom network equipment. (See Facebook TIPs Telcos Towards Open Source Networks.)

Through its Open Compute Project, Facebook had already made an impact on the data center market under an open source banner. Carrying the revolution into telecom would allow operators to build networks in places formerly considered off-limits because of deployment costs. That promised millions of new users for the social networking giant's expanding portfolio of online services.

Yet a number of technology suppliers involved with TIP harbor deep misgivings about open source technology. Those range from the very biggest to the very smallest players. For some, open source is simply incompatible with the need to make money. At worst, it is an existential threat. Others regard open source as an unstoppable force, and are trying to adapt or position themselves accordingly. But even here there is anxiety about its long-term implications.

Journey Into the Unknown
The signposts read open source, but where does the road lead?
The signposts read open source, but where does the road lead?

The biggest player to have joined TIP, while being consumed with doubt about the open source movement, is Nokia Corp. (NYSE: NOK). "Intellectual property is a key asset for companies like Nokia," explains Hossein Moiin, the Finnish vendor's chief technology officer. "Many initiatives have licensing terms that require you to give that away and those will not work for us." As far as Moiin is concerned, most open source projects have not shown much promise, either. "The only one that has been quite successful is Linux," he says, in a reference to the world-famous operating system for computers.

This means Nokia is participating in TIP very warily, acknowledges Moiin. "Membership is very selective in TIP," he says. "It is made up of many projects and we contribute to some but not all." He also denies there is widespread telco frustration with the modus operandi of the traditional vendors, and thinks TIP's efforts may ultimately prove futile. "Every five to six years someone tries to decompose the telecom stack to save money," he says. "They quickly discover the stack is rapidly commoditizing itself anyway and so they give up."

At the opposite end of the scale, even stronger criticism has come from a startup called Amarisoft, whose software could help service providers to "virtualize" their radio access networks (RANs). During a recent investor conference in Paris, hosted by French telecom incumbent Orange (NYSE: FTE), Amarisoft CEO Franck Spinelli said his company's aversion to open sourcing its technology had encountered "strong resistance" within TIP. "We don't want to let our technology go for nothing," he told his audience. "We want money for that and if you take the approach of open source it has to be free and so there is incompatibility there." (See Facebook Takes TIP in New Direction as Investors Doubt Open Source Payback.)

Next page: Not so open source after all

Not so open source after all
TIP does not require companies to open source their technologies as a condition of membership, however. No one is forced to share anything, members emphasize. And from the very outset, the various working groups that have taken shape within TIP have been able to operate on a royalty-free basis or using so-called "reasonable and non-discriminatory" (RAND) licensing terms. In this way, companies like Nokia and Amarisoft can still generate revenues from their proprietary expertise.

Of the eight working groups that are aimed strictly at developing new technologies, only two have taken the royalty-free approach -- the Facebook-led OpenCellular initiative, which aims to develop open source wireless access technologies, and one called "greenfield telecom networks," whose focus is on producing more efficient traffic management technologies for core networks.

Table 1: TIP Working Groups

Category Working group Approach Details
Access Edge computing RAND Lab and field implementations for services/applications at the network edge
Access OpenCellular Royalty-free Wireless access platforms
Access People and process - Cultural and process transformation
Access System integration and site optimization RAND System integration via innovative, cost-effective and efficient end-to-end solutions
Access Solutions integration RAND Open RAN architecture
Access vRAN fronthaul RAND Virtualization of the RAN for non-ideal backhaul
Backhaul Open optical packet transport RAND Dense Wavelength Division Multiplexing (DWDM) open packet transport architecture
Core and management Core network optimization RAND Recipes for services/applications in the radio core network
Core and management Greenfield telecom networks Royalty-free Solutions for managing continuously increasing network traffic volumes
TIP Community Lab @ Facebook TIP Community Lab @ Facebook - Collaborative working environment for project groups to test new end-to-end solutions
Source: TIP

All of the other six technology-focused working groups have adopted the RAND licensing approach. That includes the newest group, "virtual RAN fronthaul," which covers some of the technologies that Amarisoft is developing. Steve Jarrett, Facebook's head of infrastructure partnerships for Europe and the Middle East, reckons this group gives Amarisoft an "investable" alternative to pure open source under the TIP umbrella.

None of this makes TIP sound much like an open source initiative. Nor does Facebook claim it is purely an open source endeavor when quizzed by Light Reading. "TIP project groups operate under a variety of licensing models, and we are committed to assessing what works best for specific technologies," says a spokesperson for the web company in emailed comments.

For some members, clearly, the emphasis needs to be on open approaches rather than open source per se. That essentially means ensuring that interfaces are open, and that technologies are interoperable, without making vendors share their crown jewels. "It is about open interfaces but closed source, and being as open as possible to new companies and operators bringing their use cases and needs," says Alan Barbieri, the CEO of Phluido, a startup that has been a driving force behind the new virtual RAN fronthaul group. (See Facebook's TIP Seizes vRAN Initiative From 3GPP.)

TIP has evidently had to accommodate many competing interests. On the other side of the fence from Phluido are the large service providers that have arguably been the real instigators of the open source movement. For these companies, which have not historically made money from technology licensing, it is not hard to see why open source holds plenty of opportunity and seems to pose little threat. It could lead to more effective and cheaper ways of building networks. It promises to put operators in full control of their own network destinies, making them less dependent on a small number of big vendors. And there is no obvious reason why it should hurt the revenues that operators generate in the consumer and business markets. (See Open Sores: Are Telcos on a Collision Course With Vendors?)

Next page: The buck stops... where?

The buck stops... where?
But for the vendors that have grown rich off intellectual property, the appeal of open source is questionable. Both Nokia and Swedish rival Ericsson AB (Nasdaq: ERIC) have had to acknowledge its place in the market. They even work with open source technologies like OpenStack, a cloud-computing platform. But they will only tolerate so much. Ericsson, which remains firmly on the outside of TIP, has been outspoken on this matter. "I have yet to understand why we would open source something we think is really good software," said Ulf Ewaldsson, Ericsson's head of digital services, during a conversation with Light Reading earlier this year. (See Ericsson's Ewaldsson Takes Aim at Telco 'Conservatism'.)

Open Source Critic
Ulf Ewaldsson, the head of Ericsson's digital services unit, has little interest in open sourcing good software.
Ulf Ewaldsson, the head of Ericsson's digital services unit, has little interest in open sourcing good software.

On the TIP inside, optical equipment supplier Ciena Corp. (NYSE: CIEN) has similar qualms. "The fact of the matter is that we're not in the business of giving away our intellectual property and we don't believe customers want us to do this," says Nirav Modi, the vice president and general manager of Ciena's Blue Planet software division. "Creating, fostering and supporting an open source project that can universally support carrier networking environments and easily be integrated into their back offices systems is a large and perhaps even untenable undertaking."

Unlike in the data center environment, where technologies are relatively "homogeneous," telco networks are complex and sometimes bespoke, Modi points out. A few telcos, moreover, have flagged concern about the costs of integrating open source technologies with their operations. Some doubt whether open source platforms are sufficiently robust. Even the open source enthusiasts recognize that not everything can be open sourced. "We are dealing with hardware, and we are working in patent-rich areas like mobile," says Axel Clauberg, the vice president of aggregation, transport and IP architecture for Germany's Deutsche Telekom AG (NYSE: DT) and a key figure within TIP. The need to embrace traditional licensing models "is related to the IPR [intellectual property rights] reality we are facing in this industry," he explains.

For all the latest news from the wireless networking and services sector, check out our dedicated Mobile content channel here on Light Reading.

For the suppliers that have started to open source their technologies, a big concern is what replaces the revenue streams from those rights. The general assumption is that successful vendors will make money from the services, subscriptions and support they provide around open source technology. But that is not an easy leap to make, and there are few examples of pure open source vendors with profitable and growing businesses.

The oft-cited case is that of North Carolina's Red Hat Inc. (NYSE: RHT), which has grown both sales and net income at impressive rates for the last five years. But a startup like Amarisoft has simply not been set up to operate in the same way, as CEO Spinelli has pointed out. "He is saying my business model is not advertising or end-user subscriptions and that I'm a software guy and so I need to license my product, which is just common sense," says Bertrand Rojat, the deputy vice president of Orange's Technocentre R&D unit, in apparent sympathy with Amarisoft's plight. (See Startup Could Replace Ericsson, Says Orange.)

Next page: Doffing the cap to Red Hat

Doffing the cap to Red Hat
Others, however, are trying to emulate Red Hat's success to at least some degree. Those include Germany's ADVA, a participant in TIP's "open optical packet transport" working group. It is this part of TIP that is most closely associated with the design of Facebook's Voyager, an open optical switch, and ADVA Optical Networking (Frankfurt: ADV) believes it can develop a business case around that platform. "We can pick up Voyager as it existed when contributed, make sure it is ready for production network deployment and then provide services and support for that as well as integrate it with our network management software," says Niall Robinson, ADVA's vice president of global business development.

Hats Off
Revenue and profit growth at Red Hat ($M) over the 2011-2016 period. (Source: Red Hat)
Revenue and profit growth at Red Hat ($M) over the 2011-2016 period.
(Source: Red Hat)

Much smaller players are also trying to get ahead of the game, despite the risks. Canada's Nuran Wireless has been contributing basestation hardware designs on royalty-free terms to OpenCellular. It integrates those designs with its own proprietary software stack and basestation controller to form a complete radio access network solution, which is aimed at small communities in Africa and other low-income markets. But there is nothing to prevent other members of OpenCellular from doing the same thing, or even using the open source hardware designs in conjunction with open source software, acknowledges Maxime Dumas, Nuran's head of strategy and business development. (See Latest TIP Product? A Basestation That Looks Good for Africa.)

"There is an undeniable trend toward open source, whether for hardware or software, and that gives you three options: Work against it, follow it or be at the forefront of it," he tells Light Reading. "We have decided to be a pioneer. I cannot say exactly at which point we will benefit but we think there is more to be gained from doing this than in staying isolated."

The transition to an open source business model is evidently causing Nuran some financial discomfort. Having previously licensed its technologies to other companies on "white label" terms, it aims to generate revenues mainly from hardware and software maintenance in future. But in the first three months of this year, revenues fell by about 30%, to $1.1 million, compared with the year-earlier period. "There has been a downturn in the past year as we have transitioned to get solutions ready for carriers," says Dumas.

He is optimistic about an improvement in the coming quarters, however, and believes companies using Nuran's technology designs will struggle to acquire its expertise. "It is not like putting paper on a copy machine and reproducing it," he says. "This advantage should give us a dominant position in the market."

But while OpenCellular's stated goal is to open source both hardware and software designs for cellular access points, even Nuran balks at sharing all of its technology smarts with the wider community. And Dumas is skeptical that any telecom equipment vendor would go the whole hog. "Even those who say they are completely open source keep some parts for themselves," he says. Few would have predicted the open source movement could advance as far in telecom as it already has, though. Its continuing march looks set to create a lot more upheaval yet.

Iain Morris, Circle me on Google+ Follow me on TwitterVisit my LinkedIn profile, News Editor, Light Reading

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