Whatever Happened to ATCA?

The technology that aimed to speed up telecom product cycles is still expected to thrive, but on lowered expectations

Craig Matsumoto, Editor-in-Chief, Light Reading

December 4, 2007

6 Min Read
Whatever Happened to ATCA?

Wasn't AdvancedTCA supposed to be a $1 billion market by now?

More like multiple billions, actually. (See ATCA to Be Worth $3.7B in 2007.) But ATCA -- a set of standards from PCI Industrial Computer Manufacturers Group (PICMG) for building telecom hardware -- has come down to Earth, at least in terms of forecasts.

On top of that, big names Intel Corp. (Nasdaq: INTC) and Motorola Inc. (NYSE: MOT) have sold off their ATCA-related divisions, although the ATCA camp notes that neither company is abandoning the technology (more on that later). And you've got IBM Corp. (NYSE: IBM) still hoping to push its BladeCenter franchise into ATCA territory.

Even so, ATCA proponents say the technology and the market prospects remain sound. It's just that the numbers got smaller.

ATCA sales will close 2007 at $600 million to $700 million, estimates Crystal Cube Consulting analyst Ernie Bergstrom. He's "pretty confident we'll hit close to $1 billion" in 2008 and is predicting a $3 billion to $4 billion ATCA market in 2010.

So, what happened? For one thing, ATCA didn't turn out to have the scope some equipment makers were expecting circa 2002 or 2003.

"There was a sense they were going to be able to do a lot of augmentation of the existing systems," Bergstrom says. "That really did not happen, so it had an effect on the revenues."

Then there's the possibility that ATCA, like a lot of technologies, just turned out to be harder in real life than on paper.

"I've been watching one customer for the past year," says Mike Coward, chief technology officer for Continuous Computing Corp. . "They should have been in the market by now, but they had to increase the platform team from one person to five because of how badly they underestimated the integration. They slipped the entire product by a year."

Keep in mind, Continuous is hoping to make money on ATCA integration services; that's the crux of the FlexTCA offering it announced in October. (See Continuous Unveils FlexTCA.) Still, Coward notes that customers' expectations for ATCA have slipped out by two years, and he says it's because of integration.

Specifically, some equipment makers hoped to slap together an ATCA system within a year, using components from various suppliers. "I can't think of a single customer that's put together building blocks and gotten something out in a year," Coward says.

Buying time
ATCA just went through a minor acquisition frenzy. Intel sold its board business to Radisys Corp. (Nasdaq: RSYS). More notably, Motorola sold its Embedded Communications Computing (ECC) group, which has 1,100 employees and had 2006 revenues of $520 million, to Emerson Electric Co. . (See Sun Beams on ATCA and Emerson to Acquire Mot ECC.)

Intel and Motorola were two big proponents of ATCA early on, but most in the industry aren't too concerned about either company abandoning the technology.

Intel has been backing out of some telecom markets anyway. (See Intel Hands Off to Cortina and Marvell Takes a Bit of Intel.) The company still sees ATCA as a viable market for its chips; it's just that it doesn't want to sell the blades any more.

"They made it very clear in their keynote they are not at all backing away from AdvancedTCA," Bergstrom says of Intel's appearance at the AdvancedTCA Summit 2007 in October.

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And Motorola's departure is seen by most as a symptom of its more general retrenching, as the company has had its share of problems this year. (See Zander Steps Down as Moto CEO.)

Most observers believe the loss of the Intel and Motorola names shouldn't harm the technology's cachet much. Radisys was already a vocal ATCA proponent, and Emerson happens to be a major supplier of power supplies to telecom equipment manufacturers. Still other folks -- OK, IBM -- think ATCA has some cause for worry.

"What Intel brought to ATCA, Intel's marketing muscle, really helped the ATCA movement, and I think they're going to miss it. Intel put a lot into that," says Scott Firth, telecommunications industry director for the IBM Systems Group.

Battling Big Blue
Even ATCA's smaller forecasts could be in jeopardy, if IBM can make anything of its BladeCenter line of blade servers.

"Part of the $3 billion or $4 billion could be IBM BladeCenter HT revenues," Crystal Cube's Bergstrom says, referring to his 2010 market forecast.

BladeCenter was launched five years ago and added a telecom focus in 2004, with the introduction of BladeCenter T. That was followed up last year with the larger and more telecom-hardened BladeCenter HT. (See IBM's BladeServer Blitz and IBM Bolsters BladeCenter.)

The HT platform brought in higher-speed switching and packs 12 blades instead of eight. In other words, service providers thought BladeCenter T was too small. "Carriers came back and said it was a good first entry, but..." Firth says.

Why not just go with ATCA, though? Firth says IBM didn't like the power limits per slot, for one thing. "Some of the more advanced microprocessors just don't work in ATCA." IBM also didn't like the way ATCA consumes slots for Ethernet switching. "We figure we can get 30 percent more compute power and three to four times the switching capability in a BladeCenter versus a similarly priced ATCA offering."

BladeCenter's opponents have an easy counter: It's an IBM product, as opposed to an industrywide standard.

"We think it has an interesting feature set, but it remains a closed architecture. You can't buy it from multiple vendors, so you don't get the cost benefits," says Dan Leigh, ATCA marketing manager for Motorola (soon to be Emerson). "You can build it any way you want as long as it's what IBM says."

Then again, IBM offers multiple operating systems and microprocessors to go with BladeCenter, so it's not like getting stuck in an overpriced frozen yogurt shop that has only one or two flavors. [WARNING: Link includes an annoying audio track.] "If you go to IBM, they say, 'What does an open system do that we can't?' " Bergstrom says.

Continuous, for one, is hedging its bets between ATCA and BladeCenter. "We're making our technology available on both, and the reason is our customers -- the software vendors, the systems manufacturers -- they want to make their products available to both," says CCPU's Coward.

When it comes to a rivalry with ATCA, though, IBM is playing nice, conceding that BladeCenter won't have the whole market to itself.

"ATCA will do well. I just don't think it's going to grow at the levels people thought two or three years ago," Firth says.

— Craig Matsumoto, West Coast Editor, Light Reading

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Craig Matsumoto

Editor-in-Chief, Light Reading

Yes, THAT Craig Matsumoto – who used to be at Light Reading from 2002 until 2013 and then went away and did other stuff and now HE'S BACK! As Editor-in-Chief. Go Craig!!

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