In my preview post from last week, I wrote that the future of the networking industry is going to involve a lot of software, and that is going to alter the balance of companies in the networking space. One offshoot of that is the changing role of the top telcom equipment vendors – Alcatel, Cisco, Ericsson, Huawei, Nokia, Samsung and ZTE. There are some pretty big changes happening in this space now. Changes which merit a very long note. I am including these comments in this appendix because I do not yet have a full picture of the changes. I only had time to visit with Cisco, Huawei and Nokia at the show. There are big changes underway at Alcatel and Ericsson, and Samsung is now becoming an important player here, but I did not have enough interaction with these teams at MWC. So expect more at a later date.
That all being said, one of the more important, if understated, developments at the show was the launch of Nokia’s partnership program. Nokia is a new company. They have $7 billion in cash from the sale of their handset business to Microsoft, and this has reinvigorated their efforts. For a moment, it looked like Nokia would gradually fade away. They went through some pretty dire financial straits, which meant they had an anemic R&D budget for networking. As a result, they have some pretty big holes in their offerings. For instance, their core IP switch line-up is pretty thin.
The management team must have recognized this, which is why their new partnering ecosystem is so important. All of the equipment vendors have some form of channel partnerships in place. What makes Nokia’s stand out now is how serious they are taking it. A number of large software vendors pointed this out to me. For example, one big software company told me that their conversations with Nokia in the past always led to months of follow-on meetings with little real progress. This time, they said their Nokia meetings were leading to immediate decisions and actions steps around joint customer visits starting as early as the week after the show. Something has clearly changed at Nokia.
If I had to guess, I think the Nokia of the future will look very different. It sounds like they are moving towards becoming a real systems integrator for the telecom industry. This is more than past efforts which revolved largely around service agreements for their own equipment. Now, Nokia seems to be bringing teams of partners into the fold. Delivering advanced software + hardware (and dare I say it, cloud) solutions to customers.
Watch for more on this space incoming weeks.
Emerging China Networking Companies
On a somewhat related note, I am starting to see a growing class of China-based network equipment vendors. These are largely focused on radio access network (RAN) products – small base stations, remote radio heads, distributed antenna systems. Hong Kong-based Comba has been in this space for a long time, but new (to me) companies like Fingu, Gewei and ZCTT (with the interestingly named “Netpecker” line of equipment) also had sizable presence at the show. These companies have moved beyond basic offerings of selling antennas and metal-bending to selling more interesting distributed products. I did not find anything among them that was incredibly new, but this is a slow moving space anyway. What I did find was a growing maturity of products and marketing. These companies clearly have ambitions to sell to the global market, a big advance over just a few years ago when companies like Grentech and Telestone catered largely to domestic operators.
This is a tough industry, stuck in between the operators and the equipment majors. So it is hard to be too enthusiastic. Nonetheless, there is still a large capex pool out there which is going to get deployed for indoor systems and super-dense 5G systems. So it is worth keeping track of these companies.
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