Network virtualisation is becoming one of the hottest topics for mobile operators looking to increase capacity on their network without substantial costs.
However, the big hardware suppliers are pushing back and trying to obstruct the roll-out of network virtualisation to protect revenues.
This was the belief of Chris Koopmans, vice-president and general manager of service provider platforms at Citrix. Koopmans was previously COO of Bytemobile, a software company acquired by Citrix and used by every mobile operator in the UK.
Currently the number of suppliers selling equipment to mobile operators is limited due to the proprietary nature of the hardware.
“If you look at your average carrier, you have a base station, a physical antenna that supports that and a whole series of boxes that manage mobility. That is all proprietary hardware today and has been forever,” said Koopmans. “Ericsson, Alcatel Lucent, Nokia Siemens Networks, Huawei, these are the guys that make billions selling all this equipment.
“What’s happened though is the number of suppliers doing that has shrunk. You have seen Motorola go, you have seen Nortel go. You have seen some mergers too, like Alcatel Lucent, but you have also seen companies going out of business too, and as the number of companies has shrunk, it hasn’t made it a great place for the operators because there isn’t much innovation anymore.”
Huawei did raise the game with its cheaper prices, according to Koopmans, “helping the operator hurt Ericsson and Alcatel Lucent”. But despite price being an issue, the lack of new and exciting products was the major concern for mobile providers.
“When was the last time you saw a new start-up in the wireless infrastructure market? If you have to build all the hardware, it is just too much of a barrier to entry,” he said.
Network virtualisation opens opportunities
Koopmans believes moving towards network virtualisation – he believes this is really about server technology but uses the current buzzword to garner interest – the market will be more open and will offer more opportunities.
“What mobile operators want to do is get all that custom stuff to run on standard HP, IBM, Cisco, Oracle blades,” he said. “Then they hope to see an explosion in the supplier landscape, so instead of four guys they can buy their equipment from, maybe there are 100 or so start-ups doing unique and interesting things and they can get their stuff out there more quickly.”
There is a problem with delaying this future for mobile networks, namely the need for low latency, more so than in any other industry.
“The thing about telecommunications is that operators are coming from real-time guaranteed latency,” said Koopmans. “We are talking about five nine SLAs because we can’t have dropped calls, it’s a really bad thing in a telco world. So, to be able to do that in real-time takes a lot of high-power equipment.”
Koopmans believes the industry is close to this ideal. He says that, in the next five years, everyone will be running their operations from software on off-the-shelf hardware, but those big four suppliers are less than happy about it.
“The big telecoms suppliers do not want this to happen,” he said. “They won’t say that. They will say, 'We are working on it and we want to do it, but virtualise other pieces of equipment first, not ours, because ours has all these unique features.'”
Yet there is an opportunity for those in other areas of networking to get into the mobile operator market and find new customers.
“Today the likes of Cisco or Juniper only ever make it into the core routing edge of the network,” added Koopmans. "They don’t actually do wireless software, they don’t actually do basestations and all that radio access equipment. However, if all that became software, it would open up more opportunities for them.”
He also believed IBM and Cisco could make their mark, as it becomes “a whole bunch more hardware they can sell” when it is software running across standard servers. However, it was Cisco he believed had the real chance to make an impact.
“Cisco has its UCS servers, so now they have an off-the-shelf piece of hardware so to speak,” he concluded. “If some of those network hardware boxes go away and solutions turn into software, it is OK because they can still sell it as a solution that doesn’t look that much different and get similar margins.
“I think Juniper is looking to do some similar things with their software strategy but they have less reach. Cisco already has such a bit of attachment across mobile and fixed networks and has quite a solution set. They have acquired other companies in the wireless space so I think they are pretty well positioned from a software position.”