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Siemens Searching For NSN Buyer which might be Nokia!

Siemens has reportedly contacted private equity firms to gauge their interest in buying Nokia Siemens Networks or, as a
less likely alternative, taking over the German telecom equipment-maker's stake in the NSN venture, according to The Wall Street Journal. For its part, Finnish cellphone-maker Nokia reportedly has been exploring buying out Siemens' 50%
stake in the company. Some analysts have valued the company as a whole at nearly $9.4 billion.

The catalyst for the recent exploration of alternatives for NSN is a change in April in the shareholder agreement that frees each partner to explore options for its stake without the risk of a veto from the other party. Still, it is unclear how Nokia would view a possible sale of all or part of NSN to private-equity investors.

Siemens Chief Financial Officer Joe Kaeser earlier this year said NSN "is not a business that we have any aspirations to stay [in]…and I do believe that 2013 will be the time for Siemens to help NSN to move to a better place."

People familiar with the matter told the WSJ that Nokia is exploring a possible buyout of its 50-50 German partner in NSN.  Evidently, Nokia wants to keep NSN mobile network equipment and managed services business, which has propped up revenues and helped maintain cash levels during Nokia's shift to Windows Phone.  NSN had sold its optical network equipment business this past December to private investment firm Marlin Equity Partners.

Last quarter, NSN contributed €210m to Nokia's net cash position with revenues of €2.8bn, putting it on a par with Nokia's device and services sales of €2.88bn.

http://online.wsj.com/article/SB10001424127887323734304578544910076383572.html?KEYWORDS=siemens++NSN

Huawei widens lead in broadband CPE market; VDSL Vectoring to the Rescue!

Infonetics Research released excerpts from its 1st quarter 2013 (1Q13) Broadband CPE and Subscribers: PON, FTTH, Cable, and DSL market share, size and forecasts report, which tracks digital subscriber line (DSL), cable and fiber to the home (FTTH) customer premises equipment (CPE), residential gateways and broadband subscribers.


1Q13 BROADBAND CPE MARKET HIGHLIGHTS:   

  • Owing to the continued strong growth of FTTH and cable CPE, the global broadband CPE market hit $2.2 billion in 1Q13, an increase of 6% sequentially and 17% from the year-ago quarter .    
  • Though the overall DSL CPE market is slowing on an annual basis, VDSL CPE continues to enjoy strong growth (+30% YoY), particularly in North America and EMEA (Europe, Middle East, Africa ).    
  • Broadband CPE share leader Huawei pulled farther away from the pack in 1Q13, thanks to a 26% spike in revenue coming mostly from China , Singapore and Malaysia, where it is the primary supplier of GPON ONTs and ADSL CPE. 
  • Former #2 ZTE slipped to 4th place, leapfrogged by Technicolor and Arris .    
  • Pace's share of the broadband CPE market continues to grow, and Infonetics expects it to challenge for a place in the top 3 this year.    
  • Headless video gateways are forecast by Infonetics to grow at a 117% compound annual growth rate (CAGR) from 2012 to 2017

 

 

"Better than expected sales of higher-end cable CPE, including headed and headless video gateways being sold  in North America and Europe, helped the broadband CPE market put up another strong quarter," notes Jeff Heynen, principal analyst for broadband access and pay TV at Infonetics Research. Heynen adds: "Operators across multiple verticals are in the middle of a long-term transition to higher-speed broadband technologies like FTTH, DOCSIS 3.0 and VDSL2 to keep up with subscriber demand for multiscreen video."

REPORT SYNOPSIS:

Infonetics' quarterly broadband CPE report provides worldwide and regional market size, vendor market share, forecasts through 2017, analysis and trends for ADSL and VDSL modems, gateways and IADs; standard and DOCSIS 3.0 cable modems, gateways and EMTAs; FTTH ONTs and gateways; residential gateways; PON and Ethernet FTTH ports; and broadband subscribers. Companies tracked: Alcatel-Lucent, Arris, AVM, Cisco (Linksys, Scientific Atlanta), Comtrend, D-Link, Dasan Networks, Fiberhome, Hitron, Huawei, Mitsubishi, Motorola, Netgear, OF Networks, Pace, Sagemcom, SMC Networks, Sumitomo, Telsey, Technicolor, TP-Link, Ubee Interactive, Zhone, ZTE, Zyxel and others.

To buy report, contact Infonetics at: http://www.infonetics.com/contact.asp

Reference:  http://www.infonetics.com/newsletters/Broadband-Access-June-2013.html

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Comments on VDSL:  

After 10 years (1996-2006) of slow growth and unfilled potential, VDSL-based CPE grew 30 percent year-over-year in North America and EMEA.  For network operators that have a large base of copper plant, VDSL2 has become a viable near-term option to deliver higher speed services and video.

Three major telcos, including AT&T, Deutsche Telekom and Telecom Italia, have outlined large-scale build out plans that will continue through the year 2016. AT&T's Project VIP will extend U-Verse and IP DSLAM FTTN coverage by 8.5 million homes by 2015, while Deutsche Telekom will increase VDSL coverage to 65 percent by 2016. Telecom Italia will deploy fiber to the cabinet to 6.1 million homes in 100 cities by the end of 2014.

Unlike ADSL which uses ATM and AAL5 as a L2 framing, almost all VDSL/VDSL2 uses Ethernet MAC frames and Unnumbered Information (UI) Frames for Layer 2 (Data Link layer.  Hence, we see an increase of more Ethernet compatible gear in the home, small office and telco central office (e.g. IP/Ethernet DSLAMs).

More importantly, VDSL got a new lease on life through the concept of "vectoring," which was co-invented by IEEE ComSocSCV member George Ginis.  Check out his excellent paper on that topic:

Vectored DSL to the Rescue

http://www.ospmag.com/issue/article/vectored-dsl-rescue

Congrats George!

Analyst Takeaways from June 6th AT&T Management Meeting + 3 AT&T Talks @June 12 ComSocSCV Meeting!

Introduction:
AT&T has benefited from growing wireless revenue, as more of its customers switch over to smartphones. But the company has been falling behind Verizon Wireless in wireless subscriber numbers, as the two rivals battle each other for new U.S. customers. AT&T had 70.7 million contract wireless subscribers at the end of the first quarter.
The carrier now expects to add about 500,000 wireless contract customers in the current quarter, more than the 320,000 it added in the year-ago quarter. The company maintained its forecast for full-year revenue to grow more than 2%, higher than the average analyst estimate for 1% growth.   AT&T also touted strong growth in its U-verse broadband and television subscribers vs a year earlier.
http://online.wsj.com/article/BT-CO-20130606-712991.html
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"In the wireless segment, the company launched several successful promotions in the quarter which are driving strong sales, higher gross adds and smartphone upgrade rates similar to the first quarter,"  according to a press release on the company's website
http://www.att.com/gen/press-room?pid=24340&cdvn=news&newsarticleid=36572&mapcode=financial
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Quotes from Analysts that attended the June 6th meeting with AT&T Management:
Last Thursday, sell-side analysts were invited to meet with AT&T’s senior management, who provided a business overview and key insights and updates across a broad range of areas affecting the business.  Several of those analysts wrote research notes which contained several key takeaways from that meeting with AT&T's management.

1.  FBR Capital's David Dixon wrote:
"AT&T’s management reiterated top-line revenue guidance of above 2% for FY13, but we believe a key strategic challenge for AT&T (and other network operators) is how to drive wireless ARPU up from today’s levels (across the business and consumer segments), leveraging the high quality network in an environment where the market is mature, competition is intensifying, and further wireless consolidation is now unlikely in the near term, based on our latest regulatory checks."
"As many anticipated, AT&T has increased promotional activity in the wireless segment in response to weaker than expected subscriber growth and we believe there will be an increased level of advertising spending going forward."
"During the session, management reiterated its satisfaction in the improvement of AT&T’s macro radio access network which has been significant over the past three years evidenced by vendor checks and third party testing. The challenge is that both T Mobile USA and Sprint are also improving network performance on a relative basis."
................................................................................................................................................
Other Key Points (by David Dixon):
■ Increased competition from T-Mobile likely to continue. We expect T-Mobile to pressure both AT&T and Sprint in the prepaid market as it completes its 4G network upgrade (which shows better performance, versus T and VZ, according to our vendor checks), launches its LTE network, and markets its new "nocontract" plans with a reinvigorated device lineup.
■ Zealous versus pragmatic DOJ stance is cause for concern. As approval approaches for SoftBank’s investment in Sprint, and following recent shareholder approval of T-Mobile and MetroPCS, we see a new zealous stance by the DOJ and now see less potential for a merger between Sprint and T-Mobile USA. The DOJ appears excited by the fact that wireless network operators have no choice but to invest, even if incremental returns are poor. This is coupled with the DOJ looking to limit access to spectrum in upcoming auctions.
■ Too soon for a change in capex intensity, but do not discount the potential for a “hard pivot” away from incumbent vendors. AT&T is deploying SDN (Software Defined Networking) outside the datacenter, including Central Offices, to best serve U Verse and LTE-based features and applications (such as cached video) at low latency. We see a laser-sharp focus on open and flexible white box switches, with Broadcom cited as a company in focus. The era of simply driving lower costs from incumbent vendors appears to be over.
..................................................................................................
2.  Jonathan Chaplin of New Street Research (UK): 

AT&T CEO Randall Stephenson indicated that the company's capital expenditures had a "downward bias" and that capex could decline in absolute terms over time.
"The key driver of the shift is that they are only investing in the 'target architecture' in both wireless and wireline networks," Chaplin wrote. "For example, they expect 3G wireless traffic to peak in 3Q13, which means they will not have to invest anything more in 3G capacity. LTE capacity investments are 50 percent more efficient."
AT&T executives "suggested that there are a host of factors that could drive lower subsidy expense and higher margins, including: extending the upgrade rate as Verizon has done; shifting the mix; declining handset ASPs; and 'other factors' still to be announced."
AT&T indicated in March it is open to selling some of its non-core assets, which might include wireless towers. Chaplin wrote that AT&T management "seemed to suggest that conditions for a tower sale could get worse if rates continued to rise. We interpreted this to suggest that a sale is more likely." He estimates potential proceeds of $4 billion to $5 billion from a tower sale, which he noted would likely be used for share repurchases.
AT&T executives also said that "Europe is attractive," although it was not clear what exactly that meant. "They believe that many of the sources of revenue pressure have run their course and that there is a significant opportunity going forward as smartphone adoption and data usage follows similar trends to the U.S.," Chaplin wrote. "They reject the claim that ARPU in Europe is lower because of 'cultural factors.' They blamed lower ARPU on a host of factors that are correctible, including a lack of investment, poor pricing strategies and regulation."
===============================================================================
 3. Jefferies' analysts Thomas Seitz, Kunal Madhukar and Ankit Sharma:
"AT&T CTO John Donovan put some meat on that bone by indicating that the cloud based, session based, SDN network that [AT&T] was building today would be far more capital efficient than the connections and raw steel based network from which they are converting,"
"There probably was way more discussion on Europe than was warranted at present," the Jefferies analysts added.
"Nevertheless, [AT&T] senior management continues to say intriguing things regarding the opportunity they see overseas. In their view, many of the cloud based, session based platforms they are building in the U.S. are globally scalable. Consequently, they are exploring both network and non-network based ways of potentially deploying some of these platforms."
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June 12th IEEE ComSocSCV meeting (Santa Clara, CA) will feature talks on AT&Ts Palo Alto Foundry, Innovation Platform, and Wireless Infrastructure. 
 
 

100G is real: Alibaba selects ZTE for 100G in China; Global 100G market growing; Ciena's Perspective

Introduction

While there's been a lot of buzz about 100G fiber optic deployments, it's been the smaller network operators that to date have acutally built out such fiber optic networks.  Those include: XO Communications, DukeNet Communications, ARSAT, Kansas City Fiber Network, ORION in Canada, Intercontinental Transmission Links for Research and Education Community (Internet2, NORDUnet, ESnet, SURFnet, CANARIE, and GÉANT) and others. 

But many industry analysts and vendors believe the time for 100G is now here.  That is, for telcos, cableco's, governement agencies, and e-commerce companies to move to 100G OTN and/or 100G Optical Ethernet networks.   Note that SONET/SDH topped out at 40G so is not an option for 100G PHY layer.

1.  Alibaba Group has just announced a 100G network for China

ZTE’s ZXONE 8700 100G OTN series will be deployed to build Alibaba’s 100G transmission network. The first phase of the project will cover four MANs in Hangzhou, Tianjin and Beijing respectively. The ultra-large bandwidth, high capacity, and robust reliability of ZTE’s solutions, and the ability to provision a comprehensive range of services will serve the enormous networking needs of Alibaba, and support the continued high-speed growth of Alibaba’s operations.  Alibaba  is one of the world’s largest e-commerce companies, operating more than 10 platforms including Alibaba.com, Taobao Marketplace, Tmall.com, eTao, Alipay, Juhuasuan, Alibaba Cloud Computing and China Yahoo! When the construction of the broadband network is completed, it will carry most of Alibaba’s data traffic.

2.  Market Research firms Ovum and Frost & Sullivan say 100G is growing rapidly

"Growth in 100G remains a bright spot in the optical networking industry, as annualized revenues exceeded $1bn for the first time ever. 100G port shipments in 1Q13 grew 41% and revenues grew 24% versus 4Q12, with annualized revenues surpassing $1bn for the first time. Twenty vendors shipped 100G for revenue in 1Q13 and more are slated to enter the market throughout the year. Even with the growth of 100G, 40G shipments were holding; however, 1Q13 was the first time the market declined versus the year-ago quarter and the rolling 4Q average declined 2%, indicating perhaps the 40G market is starting to slow."

http://ovum.com/research/market-share-1q13-global-on/

Frost & Sullivan Estimates Global 100G Market to Continue to Grow, Reaching $4.8 Billion by 2016

Enterprises and data centers are fueling the global 100G optical network market, which is predicted to increase at a 52.2 percent compound annual growth rate (CAGR), reaching $4.8 billion by 2016, according to market research firm Frost & Sullivan.  Since its inception in 2010, the market has growth by 210 percent in 2011 and 387 percent in 2012, according to the research firm.

Alcatel-Lucent, Huawei, Infinera, Ciena and ZTE are the top five 100G vendors, accounting for over 76.2 percent of the market share by unit shipments. The research firm expects these firms to continue to dominate the market because of high barriers to market entry.

http://community.comsoc.org/blogs/alanweissberger/infonetics-and-frost-sullivan-optical-network-hardware-and-100g-wan-market

3.  Ciena - a leading vendor of 100G optical networking equipment (selected quotes related to 100G)

During Ciena's June 6th earnings call, CEO Gary Smith said, "the 100G (network) scale and beyond (is needed) to handle the sheer volume of connections and software-defined networking to make those connections as flexible and as valuable as possible."

http://seekingalpha.com/article/1485621-ciena-management-discusses-q2-2013-results-earnings-call-transcript?page=2

In answer to questions on 100G market and the competition, Mr Smith replied:

"I describe the 100G as one of the essential components for this next-generation architecture, along with OTN, converged packets and very tightly aligned software architectures as well, so I think it's one of the key components. We clearly have market leadership in that space in terms of revenues and Tier 1 (carrier) wins and overall capacity that we're now deploying on a global basis. We're seeing a strong uptick in 100G. We expect to see that continue and also spread into other areas of the architecture. We've got WaveLogic 3, which is our third-generation platform. Many of our competitors are struggling to get their (frankly) first generation fully operational in the marketplace. We've got a lot of features and functionality and in fact, software intelligence that is part of WaveLogic 3, so increasingly more smart photonics there that we're able to leverage, so we feel very positive from a competitive position around 100G, particularly when you encompass it with the complete solutions you're putting together around OTN, control plane, converged packets and then the software architecture approach that we have."

"We're now seeing finally the Ethernet business services, and it's the fastest-growing part of the enterprise data services market. And we expect the percentage of revenue coming from this business, Ethernet services, to increase. Our position is pretty strong in the marketplace, certainly, with the -- even with wireless backhaul. And I think we support about 50% of the fiber-fed U.S. towers for backhaul actually, which we've been able to deploy over the last couple of years."

In response to a question on what constitutes the non-telco portion of Ciena's customers: "It's cable operators, government, research and education. Some very large research and education networks around the globe, clearly a big requirement to move very, very large amounts of capacity around the enterprise space. There's a lot of very high-end enterprises who want carrier-class interconnectivity lodged in between their data centers. We're increasingly seeing opportunities in that space and also the content delivery network folks as well. So all of that together is about 25%."

http://seekingalpha.com/article/1485621-ciena-management-discusses-q2-2013-results-earnings-call-transcript?page=4

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Thomas Mock - Former Ciena Senior Vice President of Corporate Marketing & Communications- added, "We're now seeing 100G across all domains in the (optical) networks. And one of the ways you can get to those other domains in the network is to have the bigger architectural components. So that's really what's let us move from the core into the metro and also into the ultra long haul and undersea markets."

http://seekingalpha.com/article/1485621-ciena-management-discusses-q2-2013-results-earnings-call-transcript?page=4
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Long time Ciena Network Architecture Executive Joe Berthold (PhD-Physics) wrote this author, " Many network operators are making the transition to 100G. Many of our customers were waiting for our WaveLogic3 cards, which went GA at the end of last year. These cards support longer distances for 100G, are denser and more power efficient, and have the new ASICs capable of supporting multiple modulation formats."

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4.  Analyst Opinion on the 100G Upgrade Cycle and Ciena

FBR's Scott Thompson wrote in an email, "Ciena management made clear that it believes that the company is in the early stages of what is likely to be much more than a 100G upgrade cycle. On the earnings call, management emphasized that it thinks the industry is in the beginning stages of a significant shift in network architectures that will propel Ciena's business into a much larger opportunity. We believe that the industry analyst community has not fully realized the scope of this opportunity."

"Ciena will likely prove more strategically positioned than most in the communications space for what is likely to be one of the most significant transitions in the networking sector in more than two decades."

5. Another Analyst Opinion on Competition in 100G Network Gear

Note:  Huawei, ZTE, Alcatel-Lucent, Ciena, Fujitsu, Cisco, Infinera, Xtera, NSN Optical (owned by Marlin Equity Partners), and other network equipment vendors are all competing in this space.

Raymond James Financial analyst Simon Leopold notes that Ciena is strong in the 100Gbit/s equipment and carrier Ethernet markets but he believes there is "evidence of 100G price competition and maybe discounts for larger Ethernet projects."

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Closing Comment:

According to Frost & Sullivan, the 100G market is mainly driven by the demand for high quality broadband network services, especially by the growing IP traffic and number of broadband subscription during recent years and in the future. Implementing a 100G optical network results in high network efficiency and reduced per byte transmission costs for data, the research firm noted. 

Future 100G applications include: interconnection of cloud resident data centers, 4G LTE wireless backhaul, metro optical networks, submarine and ultra-long haul optical networks.

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References:

http://community.comsoc.org/blogs/alanweissberger/infonetics-and-frost-sullivan-optical-network-hardware-and-100g-wan-market

http://community.comsoc.org/blogs/michaelweiss/sprint-scale-core-network-40g100g-and-later-400g-cienas-6500-packet-optical-platf

http://community.comsoc.org/blogs/alanweissberger/infonetics-and-frost-sullivan-optical-network-hardware-and-100g-wan-market

http://community.comsoc.org/blogs/alanweissberger/optical-network-market-poised-growth-2013-especially-emea-region

http://viodi.com/2011/05/16/infonetics-carriers-making-major-push-to-otn-pmc-sierra-sees-healthy-otn-growth-during-next-5-years/

http://viodi.com/2012/05/08/otn/

http://community.comsoc.org/blogs/alanweissberger/when-will-40g100g-ethernet-be-real-market-oct-13-comsocscv-meeting-postscript

 

 

 

Infonetics & IDC: Worldwide Carrier Ethernet Switch & Router Results and Market Forecasts

Infonetics: Carrier Ethernet S/Rs down in last Quarter, but expected to grow 8.8% CAGR through 2017

Market research firm Infonetics Research released excerpts from its 1st quarter 2013 (1Q13) Service Provider Routers and Switches market share and forecasts report, which tracks IP edge and core routers and carrier Ethernet switches (CES).

SERVICE PROVIDER ROUTER AND SWITCH MARKET HIGHLIGHTS:

 Pushed lower by weakness in Europe, global service provider router and switch revenues declined 17% in 1Q13 from 4Q12, and is down 6% from the year-ago quarter (1Q12).    North America was the only geographic region to buck the usually down Q1, posting a 7% sequential gain.    EMEA (Europe, the Middle East, and Africa), Asia Pacific, and CALA (Caribbean and Latin America) all declined by double digits in 1Q13.    

Cisco maintains its strong hold on the #1 spot in the overall carrier router and switch market with 39% revenue share in 1Q13.   The competition for the next 3 positions in the carrier router and switch market remains tight, with less than 1 percentage point separating Alcatel-Lucent, Huawei, and Juniper Networks. Alcatel-Lucent edged ahead of Huawei for 2nd place in 1Q13.    Private router company Compass-EOS recently announced NTT as a customer for its new core router that provides terabit-per-second connectivity to facilitate software-defined networking (SDN) and network function virtualization (NFV).

"The 1st quarter is normally down for routers and carrier Ethernet switches, so it's better to look at the longer-term trends," explains  Michael Howard, principal analyst for carrier networks and co-founder of Infonetics Research. "The main growth drivers - the transition from TDM to packet and rising video traffic - are still in effect, the U.S. economy is slowly improving, and a number of large operators in the Euro zone intend to spend."   "Given these factors," Howard adds, "We expect the router and Carrier Ethernet Switch market to grow at an 8.8% CAGR through 2017."

REPORT SYNOPSIS:

Infonetics' quarterly router and switch report provides worldwide, regional, China and Japan market share, market size, forecasts and trends for IP edge and core routers, carrier Ethernet switches and the IP edge market by application. Vendors: Alaxala, Alcatel-Lucent, Brocade, Ciena, Cisco, Compass-EOS, Ericsson, Fujitsu, Hitachi Cable, Huawei, Juniper, NEC, Tellabs, ZTE, others.

Here's a chart of the leading Carrier Ethernet switch/router vendors (Cisco, Alcatel-Lucent, Huawei, Juniper, ZTE):



To buy report, contact Infonetics at: http://www.infonetics.com/contact.asp

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Meanwhile, IDC reported that the worldwide Ethernet switch/router market (Layer 2/3) grew 2.1% year over year in 1Q13, while the worldwide router market decreased 7.9% year over year. 

From a geographic perspective, the first quarter results found the Ethernet switch market was particularly strong in China where it increased 10.6% year over year, followed by Central and Eastern Europe, which was up 10.3% year over year. As a region, Asia/Pacific (excluding Japan) came in with a 6.6% increase, while the United States also performed relatively well in 1Q13 with an increase of 3.5% year over year. Western Europe remained an area of weakness, declining 6.2% year over year. On a positive note for Western Europe, this was an improvement over the double-digit year-over-year declines experienced in 3Q12 and 4Q12.

"While 10GbE continues to drive the worldwide Ethernet switch market, it is interesting to note the increasing divergence in the performance of the overall market across the various regions, and in some cases, specific countries," said Rohit Mehra, Vice President, Network Infrastructure at IDC. "While GbE is still expected to hold its own for the foreseeable future, we expect 10GbE and 40GbE to drive the wired infrastructure market forward in the coming years, both in the datacenter as well as campus core deployments. But as the market evolves, we should expect there will be pronounced market differences across the various theatres."

10Gb Ethernet switch (Layer 2/3) revenue increased 12.9% year over year to $1.87 billion while 10Gb Ethernet switch port shipments grew 37.6% year over year to 3.9 million ports in 1Q13. 10GbE continues to be the primary driver of the overall Ethernet switch market.

The worldwide Layer 4-7 switching market lost some momentum in 1Q13 and decreased 4.3% year over year. This was the first annual decline in more than three years.

The worldwide enterprise and service provider Router market declined 7.9% year over year and 13.0% sequentially in 1Q13. As with the Ethernet switch market, IDC saw very uneven performance across major geographies and countries this quarter. Asia/Pacific (excluding Japan) actually grew 4.2% year over year in 1Q13 while North America and the Middle East and Africa (MEA) regions were down only low single digits on an annual basis. Elsewhere, Japan, Latin America, and Western Europe all declined by more than 20% year over year. Specifically, Japan fell by 24.8%, Latin America by 22.5%, and Western Europe by 20.5% year over year, each a significant market move by any standard.

From a vendor perspective, Cisco's Ethernet switch (Layer 2/3) market share in 1Q13 came in at 62.7% reflecting a year-over-year decrease from 64.1% in 1Q12, but a solid increase from 61.4% Cisco held in the previous quarter. Cisco's market share in the fast growing 10GbE market segment was 66.7% in 1Q13.

An interactive graphic showing the relative market shares of the top 5 vendors in the worldwide Layer 2/3 Ethernet switch market over the previous five quarters is available here. The chart is intended for public use in online news articles and social media. Instructions on how to embed this graphic can be found by viewing this press release on IDC.com.

"While enterprise mobility is no doubt an area of focus for IT and network managers, the underlying wired infrastructure is also continuing to get mindshare, both in the enterprise campus as well as the datacenter, especially as IT looks to improving the application experience for enterprise users," said Petr Jirovský, Senior Research Analyst in IDC's Networking Trackers Group. "That said, the need to support a growing and diverse set of wired and wireless devices at the network edge will continue to keep the enterprise networking market relevant over the longer term."

The IDC's Worldwide Quarterly Ethernet Switch and Router Tracker provides total market size and vendor shares for the Ethernet switch and router technologies in an easy-to-use Excel pivot table format. The geographic coverage for both the Ethernet switch market and the router market includes eight major regions (USA, Canada, Latin America, Asia/Pacific (excluding Japan), Japan, Western Europe, Central and Eastern Europe, and Middle East and Africa) and 58 countries. The Ethernet switch market is further segmented by speed (100Mb, 1000Mb, 10Gb, 40Gb), form factor (fixed managed, fixed unmanaged, modular), and layer (L2, L3, L4-7). Measurement for the Ethernet switch market is provided in factory revenue, customer revenue, and port shipments. The router market is further split by product class (high-end, mid-range, low-end, SOHO) and deployment (service provider, enterprise) and the measurements are in factory revenue, customer revenue, and unit shipments.

http://www.idc.com/tracker/showproductinfo.jsp?prod_id=93

For more information about IDC's Worldwide Quarterly Ethernet Switch and Router Tracker, please contact Kathy Nagamine (knagamine@idc.com).


IEEE Tour to Sprint's M2M Collaboration Center & Fiber Optic POP in Burlingame, CA

Introduction:
On May 29, 2013, 30 IEEE members and guests enjoyed an exceptionally informative visit to the Sprint Machine to Machine (M2M) Collaboration Center in Burlingame, CA.  Our Sprint hosts were Samantha Jordan and Kris Philippe.
The Sprint M2M Collaboration Center brings together Sprint partners, equipment providers, customers and employees to rapidly prototype, test and launch concepts and new ideas.  The public and private labs (described below) enables Sprint's partner companies to accelerate time to market (and thereby realize revenue faster) and to support test cases. 
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Note: Sprint Wireless Network Offerings:
Sprint offers WiMAX through a reseller agreement with Sprint.  They provide their own 2G, 3G-CDMA, 3G+ via EVDO and 4G-LTE wireless network services.  Sprint may also resell Clearwire's version of LTE in the 2500MHz BRS band.  The March 6, 2013 seminar on Sprint's Network Vision may be downloaded from the ComSocSCV website at:
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We also had a guided tour of the adjacent fiber optic point of presence (POP) building, which is one of several major nodes on Sprint's Northern CA fiber optic network (the others are in SJ, SF and Sacramento).  Thanks to Steve for his down to earth explanation of all the equipment and fiber optic cables/jumpers we saw in that room!  See summary below.
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Inside the Collaboration Center:
The  facilities available within the Center include:
•GPS (location information) distribution
•Core router/switch infrastructure
•Tabletop RF isolation
•Secured private work areas (4 private labs where IP is protected)
•Collaborative work areas (public lab with multiple vendor equipment)
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Collaboration Center Public and private labs contain:
•Test equipment and RF chambers
•Cabled and native wireless access
•Solution design and engineering resources
•Innovation and collaboration rooms
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Within the Center, there is also a separate area called "Solutions Showcase" where various types of proto-types and proof of concept equipment/devices are  shown and demo'd. 
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M2M Application examples of Collaboration Center Lab Engagements:
Many have resulted a direct revenue impact for the partner company.  The applications include: Digital Signage, Retail Analytics, Retail Stores, Transportation Infrastructure, Utility Management, Public Sector Camera Solution, VTS Built Tablet, National Health Provider,and  International Utility Monitoring
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Sprint 2G (CDMA/1xRTT*) for M2M Applications Still Very Viable!
According to a newly released white paper by Heavy Reading, 2G technology is a widely used for M2M applications requiring low bandwidth, and 2G use is expected to increase substantially in terms of M2M subscription volumes. Sprint's 2G network is based on CDMA/1xRTT* in the 800MHz ESMR and 1900MHz PCS bands.
* 1x stands for one times the number of 1.25MHz channels, while RTT stands for radio transmission technology.
................................................................... 
Sprint's Open Enablement Principles:
First and foremost, make it easy to do business with the company. Multiple Sprint teams from different organizations and business units come to the Center to support partner test and development. 
Some of the core competencies of the Center are to:
  • Offer new tools and capabilities
  • Enable development through a universal framework and via partners
  • Embrace, advocate and leverage open operating systems
  • Accelerate speed to market
  • Support and manage the ecosystem
  • Ensure enabled services work in the most efficient manner
  • Develop polices to guarantee "best in class" customer experience

Sprint's goal is to help all partner companies realize increased value through:
  • Accelerate time to market to realize potential revenue quicker (e.g. from 9 months to 4 months)
  • Enablement and choice of 2G/3G/4G networks and related features
  • Working with Sprint on the proper data plan for M2M communications (it's not at all based on commercial cellular network data plans.  Instead, it is a custom plan for each M2M partner company, depending on their bandwith and and latency/priority traffic requirements
  •  Sprint provides it's lab resources and applications engineers (at the Center) free of charge to partner companies.  They hope that will establish sufficient trust, so that the company developing and/or testing their M2M products/proto-types will use Sprint as their wireless carrier of choice.
Sprint believes that a  "deep partnership" will help companies develop/test products and improve their brand name recognition.  With new partner company products and increased services available to end users, Sprint, it's partners, and customers will all win.  We agree!
........................................................................................................................
References for the Collaboration Center 
http://collaborationcenter.sprint.com/ 
email:  i.collaborate@sprint.com
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Inside Sprint's Burlingame POP:
The Point Of Presence (POP) is where the fiber optic based long distance network adds and drops off traffic (voice/data/video) from/to the local exchange carrier or large private company.  For example, local AT&T traffic is carried over Sprint's optical network and added/dropped at this POP.
The Sprint Burlingame POP is a node on the company's SONET OC48 ring (BLSR) that interconnects Stockton, San Francisco, San Jose and Burlingame, CA.   There are a total of 120 fiber optic strands terminated at the Sprint- Burlingame POP.  We were told that the average bandwidth utilization was quite high at 70 to 80% of information carrying capacity (using the payload within the SONET frames).  We also saw a generator and a bank of 48V DC batteries to keep traffic flowing for up to 8 hours after a power outage from the local electric utility company.
Ciena Corestream DWDM Add Drop Multiplexors (ADM) and Transceivers are the SONET equipment installed within this POP.  Corestream was said to use short reach optical interconnects.  There were no IP Routers or Ethernet switches installed  (those are located at the larger Stockton POP).  So we assume all fiber optic traffic into and out of the POP is SONET rather than OTN or Ethernet over DWDM (native mode Carrier Ethernet).
 
 

Bob Metcalfe's Closing Keynote at Ethernet Innovation Summit - May 23, 2013, CHM in Mt View, CA

Bob Metcalfe’s keynote wrapped up the 2 day, information packed Ethernet Innovation Summit, organized by NetEvents.org.  It can be viewed at:

http://www.netevents.org.uk/celebrating-40-years-of-ethernet-innovation-closing-keynote

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Here are Professor Metcalfe's main points, which summarized this excellent event:

-A key lesson learned from the early development of Ethernet (at XEROX PARC) was how to innovate.

-In 2012, Carrier Ethernet (CE) data traffic eclipsed the sum of ALL legacy wire-line traffic, including T1 private lines! And CE traffic continues to increase rapidly.

-$70B CE equipment and services is estimated to be $70B in 2013; growing to over $100B by 2017 (Source: Vertical Systems Group)

-Verizon just announced it will be extending its fiber optic network to 120K new office buildings.  That will facilitate a lot more fiber based Carrier Ethernet services to business customers.

-The MEF Services Operations committee was announced.  It will seek to provide guidelines to manage operations for mutli-carrier Ethernet networks.  The results will hopefully be more consistent contracts and clarification of different CE providers’ capabilities and a standardized ordering process that takes into account national regulatory factors as well as the greater diversity of CE services.

-Formation of the Cloud Ethernet Forum was announced as well as its relationship with the MEF.  The new Forum will address the specific issues of scaling and applying suitable Ethernet services to meet the stringent demands of delivering cloud services.  http://online.wsj.com/article/PR-CO-20130523-912875.html

NOTE: This new Cloud Ethernet Forum should NOT be confused with the MEF's spec on CE Delivery of Private Cloud Services.

http://metroethernetforum.org/PDF_Documents/Cloud/MEF_Carrier_Ethernet_for_Delivery_of_Private_Cloud_Services_20120031.pdf

-"Our goal (at Xerox and 3Com) was to make Ethernet a commodity. And it's been happening- in both silicon and boxes," Metcalfe said.

-Interoperability ethic of Ethernet brand helped make it successful.  It's possible to conform to a standard, but not interoperate, because of different vendor equipment implementing different options in the standard. Interoperability "plug fests" for all versions of Ethernet went a long way to establish this ethic and thereby increase Ethernet's market size.

-Rapid evolution of the Ethernet standard (IEEE 802.3), while maintaining backward compatibility was very important to Ethernet's success.  Different speed versions of Ethernet could be sorted out and determined by an auto-negotiation capability used at start-up time (before the information transfer phase).

-The reason Ethernet first ran at 2.94M b/sec (i.e. the version developed in 1973-74) was because there wasn’t room on the network interface card for a clock circuit, so he and co-inventor Dave Boggs derived the Ethernet clock signal from the system clock on the backplane (used to connect printed circuit boards). It turned out to be 2.94M b/sec. 

-The next version of Ethernet (designed in 1978-79 by Ron Crane), ran at 10M b/sec and was the basis for the so called DIX (DEC, Intel, Xerox) specification published on September 30, 1980: "The Ethernet, A Local Area Network. Data Link Layer and Physical Layer Specifications."  Later that year, the spec was submitted to IEEE 802* as the proposed single standard for LANs.

*Note: From 1980-1982, the IEEE 802 committee had not yet been divided into working groups.  The first IEEE 802.3 Ethernet standard -  10BASE5 (10 Mb/sec, Baseband transmission, 500m without repeaters) - was published in 1983.

-Panelists and Metcalfe observed that U.S. government and Corporate research is not what it used to be (it's greatly decreased in the past few years).  That's not good for the innovation process.

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During the Q & A part of this closing session, the audience was captivated by Bob's war stories – like being told the commoditization of Ethernet would doom 3Com. In fact, the higher volumes of Ethernet products sold by 3Com enabled the company to survive and thrive. “3Com is most successful acquisition HP ever made,” Metcalfe said to applause from the audience.

Metcalfe told the now famous Ron Crane "ceiling tile" story -at least his version of it.  (The author has heard Crane's version). He then acknowledged Crane's foresight by telling the "lightniing strikes" story.  Crane insisted on designing lightning protection into 3Com's Ethernet NIC for the IBM PC, which was neither in the IEEE 802.3 Ethernet standard, 3Com's design spec, nor was it requested  by 3COM's customers.  3Com then sold 1,000 cards to a New York City bank which hedged its bets by buying 1,000 cards from a different Ethernet NIC vendor. Lightning struck the NYC building, the 3Com cards continued to work, while the competitor cards were fried by the power surge. 3Com sold another 1,000 cards to the bank immediately thereafter, as a result of the built-in lightning surge protection. 

Note: There is also a 1993 "kite flying" story that measured RF interference from nearby radio stations for the version of 100 M b/sec Ethernet that used telephone grade unshielded twisted pairs (UTP-3).  Ron insisted that such interference was an issue, even though "IEEE 802.3 Fast Ethernet" was not intended for outdoor deployments. But that is a story for another time, or maybe never.
 
“Why did 3Com win in the LAN wars of the mid to late 1980s?” this author asked.  Metcalfe responded, “We had a time machine. Our Ethernet team at Xerox PARC went into the future and then came back.  As a result, we knew what the future would look like. Others, like as Ralph Ungermann (co-founder of Ungermann-Bass) worked on Ethernet concentrators for dumb (ASYNC ASCII) terminals but at 3COM we designed Ethernet cards for PCs cause we knew there would soon be PCs on everyone’s desks.”
 
And why would Ethernet keep getting faster and used more widely in so many different ways?  Metcalfe’s philosophy was: “Build it, and they [the network configurations and applications] will come.”  Today, we have Ethernet dominating the: workgroup (wired) LAN, campus LAN, Data Center switching, enterprise networks, access to IP-VPNs, Carrier Ethernet and other market segments.  You can't argue with success and ubiquity!

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References:

http://www.netevents.org.uk/ethernet-innovation-summit

http://www.netevents.org.uk/celebrating-40-years-of-ethernet-innovation-closing-keynote

http://www.eweek.com/innovation/ethernet-invention-revealed-the-origins-of-innovation/

http://www.eweek.com/networking/slideshows/ethernet-marks-40-years-linking-people-computers-in-a-wired-world/

http://www.theregister.co.uk/2013/05/22/metcalfe_on_moocs/

http://scriptpirates.com/topic/1024-as-ethernet-turns-40-some-seek-to-take-it-to-the-cloud-ethernet/

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Videos of the 2 day event: All video content can be found at the following URL's :

http://www.netevents.org.uk/celebrating-40-years-of-ethernet-innovation-day-2-introduction

http://www.netevents.org.uk/celebrating-40-years-of-ethernet-innovation-session-5

http://www.netevents.org.uk/celebrating-40-years-of-ethernet-innovation-session-6

http://www.netevents.org.uk/celebrating-40-years-of-ethernet-innovation-session-7

http://www.netevents.org.uk/celebrating-40-years-of-ethernet-innovation-session-8

http://www.netevents.org.uk/celebrating-40-years-of-ethernet-innovation-session-9

http://www.netevents.org.uk/celebrating-40-years-of-ethernet-innovation-closing-keynote

 

NetEvents announces 2013 Innovation Award Winners at Ethernet Innovation Summit

These prestigious awards recognise the very best in the Technology industry and reward the leading individuals and organisations for innovation and performance in the networking and telecommunications sector.

An independent panel of highly respected judges (including this author) voted for 1st, 2nd and 3rd place nominees in each category. 

Innovation 2013 Award Winners by Category:

  • Carrier Ethernet Business Services- Verizon - Transparent LAN service
  • Telecoms Product- RAD Data Communications – MiNiD
  • Enterprise Wireless Solutions - Xirrus – Enterprise Wireless
  • Cloud/Datacenter Solution-Arista Networks – 7500 ‘E’ Series Data Center Switch
  • Security Solution- Click Security – Realtime Security Analysis
  • SDN Solution- HP – Sentinel Security Application
  • Hottest ‘NEW’ Networking Company - Gigamon
  • ‘Ethernet Idol’-Andy Bechtolsheim of Arista Networks

======================================================================

References:

Pics of Innovation Award Winners:  http://www.netevents.org.uk/portfolio/innovation-awards-2013

Ethernet Innovation Summit Program at:

http://www.netevents.org.uk/portfolio/global-press-analyst-summit

Day 1 videos can be viewed at:  http://www.netevents.org.uk/global-netevents-summit-live

Related articles at:

http://community.comsoc.org/blogs/alanweissberger/infonetics-carrier-ethernet-market-declined-2012-expected-be-39b-2017

http://community.comsoc.org/blogs/alanweissberger/ethernet-innovation-summit-preview-may-22-23rd-computer-history-museum-mt-view

Infonetics and Frost & Sullivan on Optical Network Hardware and 100G WAN Market

1.  Infonetics Research released vendor market share and preliminary analysis from its 1st quarter 2013 (1Q13) Optical Network Hardware report. (Full report published May 24).  This new report provides worldwide and regional market size, market share, forecasts through 2017, analysis, and trends for metro and long haul SONET/SDH and WDM equipment, Ethernet optical ports, SONET/SDH/POS ports, and WDM ports. Companies tracked: ADVA, Alcatel-Lucent, Ciena, Cisco, Cyan, ECI Telecom, Fujitsu, Huawei, Infinera, NEC, Coriant (Nokia Siemens Networks), Tellabs, Transmode, Tyco Telecom, ZTE, and others. 

OPTICAL MARKET HIGHLIGHTS:
.    Worldwide, the overall optical network hardware market, including SONET/SDH and WDM equipment, totaled $2.6 billion in 1Q13
.    North America was the only region to post growth in overall optical hardware revenue on a quarterly basis in 1Q13, up 7.5% from 4Q12
.    Topping the optical market share leaderboard in 1Q13 are, in alphabetical order, Alcatel-Lucent, Ciena, Fujitsu, Huawei and ZTE
.    Ciena is now a larger supplier of WDM gear than Alcatel-Lucent and is 2nd only to Huawei
.    Cyan, now publicly traded, grew revenue 86% year-over-year (and is now tracked in Infonetics' Optical Network Hardware report)
.    Nokia-Siemens completed its divestiture of its optical division, now called Coriant (also tracked in Infonetics' optical report)

 

"The 4-quarter rolling average for global optical WDM equipment revenue notched a third consecutive quarter of growth in 1Q13, and we believe the market will continue trending in a positive direction this year," notes Andrew Schmitt, principal analyst for optical at Infonetics Research.

Schmitt adds: "On a year-over-year basis (1Q12 vs. 1Q13), total optical spending is down 5%, but this is only a result of massive cuts in legacy (SONET/SDH) spending over the past 12 months (down 30%). The WDM segment is up 10% year-over year, a welcome sign that spending in this more relevant segment is returning to long-term trend levels. I won't call it a recovery until WDM revenue is up by double-digit percents for several quarters on a year-over-year basis, but 2013 is looking good, especially in North America and China, where 100G rollouts are picking up speed."

To buy the report, contact Infonetics: http://www.infonetics.com/contact.asp

.........................................................................................................................

INFONETICS WEBINARS
Visit https://www.infonetics.com/infonetics-events to attend, view on demand, or sponsor Infonetics webinars. Topics available for sponsorship include 100G, OTN, P-OTS, and ROADMs. See http://www.infonetics.com/downloads/Infonetics-Webinars-Available-for-Sponsorship.pdf.
.    100G Optics: Why Operators Are Upgrading Now (Available on demand)
.    Leveraging Next-Gen Policy Management Solutions (June 11)
.    Integrating SDNs Into the Service Provider Network (June 26)

RELATED OPTICAL RESEARCH from Infonetics:
.    Latest Infonetics Optical research brief: http://bit.ly/14JNNRg
.    OTN switching reaching mainstream status with service providers
.    100G optical transceiver shipments more than doubling in 2013 and 2014
.    Optical transport network (OTN) market to top $13 billion by 2017
.    Breakout growth ahead for OTN switching
.    Optical transceiver market bolstered as 100G arrives in force

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2.  Frost & Sullivan Estimates Global 100G Market to Continue to Grow, Reaching $4.8 Billion by 2016

Enterprises and data centers are fueling the global 100G optical network market, which is predicted to increase at a 52.2 percent compound annual growth rate (CAGR), reaching $4.8 billion by 2016, according to market research firm Frost & Sullivan.  Since its inception in 2010, the market has growth by 210 percent in 2011 and 387 percent in 2012, according to the research firm. 

Alcatel-Lucent, Huawei, Infinera, Ciena and ZTE are the top five 100G vendors, accounting for over 76.2 percent of the market share by unit shipments. The research firm expects these firms to continue to dominate the market because of high barriers to market entry.

According to Frost & Sullivan, the market is mainly driven by the demand for high quality broadband network services, especially by the growing IP traffic and number of broadband subscription during recent years and in the future.

Implementing a 100G optical network results in high network efficiency and reduced per byte transmission costs for data, the research firm noted.  Future 100G applications include 4G LTE broadband wireless, metro optical networks and ultra-long reach networks.

 
Read more: http://www.frost.com/prod/servlet/press-release.pag?docid=278508117

Last week, DukeNet Communications, a regional fiber network provider in the southeastern United States, announced the deployment of 100G across its service area.

http://www.lightwaveonline.com/articles/2013/05/dukenet-communications-touts-100g-capabilities.html

MoCA driving growth in home networking market. Why not ITU G.hn or any version of WiFi?

Introduction:

Market research firm Infonetics Research released excerpts from its latest Home Networking Devices vendor market share and forecast report, which tracks residential gateways; broadband routers; HomePlug Powerline adapters; multimedia over coax (MoCA) set-top boxes (STBs), optical network terminals (ONTs), and coax-Ethernet adapters; and HPNA/G.hn adapters.

HOME NETWORKING MARKET HIGHLIGHTS:

.    The global home networking device market totaled $4.9 billion in the second half of 2012 (2H12)- a 5% increase over the first half of 2012 (1H12)
.    Sales of set-top boxes with embedded MoCA technology grew 23% in 2H12, while MoCA adapters, though
still shipping in small amounts, soared 129%
.    Broadband router revenue grew 6% in 2H12, thanks to shipments of higher-end 802.11ac and 802.11n WiFi routers in North America and EMEA (Europe, the Middle East, and Africa )
.    In the race for broadband router revenue market share, Actiontec saw the biggest jump, up 30% from 1H12
.    North America is the home networking device revenue share leader, capturing 45% of global 2H12 revenue
.    Infonetics expects MoCA STBs to account for 46% of home networking device sales by 2017

"MoCA (multimedia over coax) is again driving growth in the home networking device market, particularly shipments of video gateways in North America," notes Jeff Heynen, directing analyst for broadband access and pay TV at Infonetics
Research.

"Deployments of cable and satellite STBs with integrated MoCA are slowly reaching a boil, and we expect DirecTV's Genie, Dish's Hopper, and Comcast's XG1 set tops to see increased shipments throughout 2013 and beyond."

Infonetics believes the home networking market is shifting from broadband routers to residential gateways.  Temporarily, the broadband router market will get propped up as consumers upgrade to IEEE 802.11n and 802.11ac broadband routers as per the graph below.  "However, with the market shifting to residential gateways, the lift will not last," according to Infonetics Marketing Director Kimberly Peinado. 

AW Comment: AT&T has integrated WiFi into its U-Verse residential gateway, which connects home PC/gadgets and the U-Verse TV set top box to/from the U-Verse access network.

 

Alan W comment: 

Note that G.hn is now 3 years old, but hasn't picked up market traction. http://en.wikipedia.org/wiki/G.hn

Neither has IEEE 802.11n which was expected to be used for video distribution in home networks. http://www.ieee.org/about/news/2009/11september.html

REPORT SYNOPSIS:
Infonetics' biannual home networking report provides worldwide and regional market size, vendor market share, forecasts through 2017, analysis, and trends for residential gateways; MoCA STBs, ONTs, and coax-Ethernet adapters; wired and WiFi broadband routers (HomePlug Powerline, MoCA, and HPNA/G.hn); HomePlug Powerline adapters; and HPNA/G.hn adapters. Companies tracked: Actiontec, Alcatel Lucent, ARRIS, AVM, Belkin, Cisco, Comtrend, D-Link, Huawei, Motorola, NETGEAR, Pace, Sagemcom, SMC Networks, Technicolor, TP-LINK, TrendNet, Ubee Interactive, ZTE, ZyXEL, and others.

To buy the report, contact Infonetics:
http://www.infonetics.com/contact.asp

INFONETICS WEBINARS:
Visit https://www.infonetics.com/infonetics-events to register for upcoming webinars, to view recent webinars on demand, or to learn about sponsoring a webinar.
.    Securing and Managing Mobile Devices in a BYOD World (View on demand)
.    Preparing Enterprise Networks for a Wireless Multi-Device World (View on demand)
.    Leveraging Hotspot 2.0 for Carrier WiFi Networks (May 16: View live or on demand)
.    The Transcoder Boom in a Multiscreen World (Sponsorships available)

RELATED RESEARCH:   Infonetics May Broadband Access research brief: http://bit.ly/ZYr9kC