Will Nokia Appreciate AlcaLu's Nuage?Will Nokia Appreciate AlcaLu's Nuage?

With the pending purchase of Alcatel-Lucent, Nokia gets a strong position in the emerging SDN market. But will Nokia value what Nuage has to offer?

Nokia Corp. (NYSE: NOK) said Wednesday it plans a €15.6 billion (US$16.6 billion) takeover of Alcatel-Lucent (NYSE: ALU), approved by both companies' boards of directors. As part of the Alcatel-Lucent package, Nokia gets ownership of Nuage Networks , a wholly owned AlcaLu subsidiary that's been making strides in SDN. (See Nokia & Alcatel-Lucent: What's Going On? and Nokia Makes €15.6B Bid for Alcatel-Lucent.)

It's like buying a used car and finding a nice set of golf clubs in the trunk.

"Nuage can only be helped by having the weight of Nokia behind it," says Roz Roseboro, Heavy Reading senior analyst. "Nokia doesn't have a similar product, nor a very compelling SDN/data center story, on its own, so no worry about anything getting rationalized away."

The acquisition will also help Nokia beef up its NFV offerings, Caroline Chappell, Heavy Reading principal analyst, says.

"On the NFV front, Nuage can and will work with any third-party vendor's NFV MANO stack as well as AlcaLu's own CloudBand. Nokia, however, needed to flesh out its NFV MANO stack -- it developed a VNF Manager very early on but didn't have the full orchestration capabilities of CloudBand and knew it needed to develop them," Chappell says. "The merger will mean it no longer has to -- it will be able to augment its own [OpenStack talent] with AlcaLu's considerable CloudBand expertise -- and given the difficulties of finding and keeping OpenStack talent, that has to be good news. Also excellent for CloudBand -- one fewer potential orchestration rival and access to Nokia's base of NFV customers."

In other words, Nuage is kind of a big deal in SDN.

Brief history

Nuage launched its Virtualized Services Platform in 2013, automating the data center network and creating secure "slices" for each user group or tenant while reducing provisioning time from days to seconds. The VSP controls both virtualized and non-virtualized infrastructures, allowing network operators to set policies across the network. It's designed to help service providers and enterprises implement cloud services.(See Alcatel-Lucent Spins Up Its SDN and Nuage Unveils SDN Gateway.)