Starent Upgrades and Extends Portfolio with ST40

| April 18, 2007 | Wireless Infrastructure | Competitive Intelligence Report

| Analyst: Peter Jarich

Current Perspective: Very Positive
Vendor Importance: High
Market Impact: Very High

Event Summary

On April 16th Starent introduced its ST40 “multimedia core platform.” Supporting multiple mobile core network functions – PDSN, GGSN, SGSN, FA/HA, ASN, P-CSCF, PDG, PDIF and IPSG – the ST40 is an incremental enhancement to Starent’s ST16 platform, handling up to 15,000 calls per second, 3 million sessions or 54 million BHCA while carrying forward the company’s focus on “in-line services” and deep packet inspection.

Analytical Summary

• Current Perspective: Positive on Starent’s new ST40 packet data platform. The increased capacity over the ST16 positions Starent to best meet PDSN customer demands going forward while making the vendor’s offer more attractive for WCDMA, LTE, WiMAX and UMB services as well. Perhaps more interesting are the company’s moves to introduce new capabilities: SGSN, PDG and PDIF. Yet, with mobile data adoption still slow to take off, it’s unclear that new capacity will strike a chord with operators in the near-term.

• Vendor Importance: Very high to Starent, because the company has built a marketing and product strategy based on a performance advantage over competing solutions. Where the ST16 was built to meet or exceed the demands of initial 3G deployments, operators are now investigating new technology deployments including WiMAX, LTE and UMB, all integrated with IMS functionality. A new core platform is essential to meet the demands of these technology evolutions, while also providing ancillary benefits including maintaining the image of a technological leader and cost effectively supporting existing 3G service – and helping build buzz just prior to going public.

• Market Impact: High on the wireless infrastructure market, because the packet data gateway is not the most dynamic component of the space. Yet it’s a pivotal part of current and future wireless data launches, particularly as operators look to layer service-aware applications such as content filtering, real time billing and added security features on top of these networks. Starent’s new ST40 platform takes a market leading platform and improves on its capabilities – immediately forcing competitors into a defensive position. At the same time, by continuing to integrate new IMS capabilities, Starent continues to encroach on new market spaces, emerging as a potential – though somewhat unproven – competitor on multiple fronts.

Recommended Competitor Actions

• Cisco needs to carry forward the upgrades to its CSG platform with new PDSN/GGSN capabilities and enhancements. Leveraging a “next-gen” line card, the CSG2 promises added session capacity for applications including content examination, content charging and access control.

• Ericsson needs to drive new marketing into its GGSN development. While GGSN R&D continues, the company has been fairly quiet in terms of J20 capacity and application development. To be fair, slow 3G service uptake has limited the importance of the GGSN in the past. However, as Ericsson (and competitors) push HSPA deeper into the market, the GGSN will become an increasingly important part of wireless deployments; the WCDMA leader can’t afford to let this part of its business (and product development) go unnoticed.

• Ericsson should consider a strategy bringing new applications and functionality into the J20. Ericsson has executed on its plans to become an IMS market leader. The logical extension of this leadership would be delivering IMS components within its GGSN offer, a strategy that meshes well with Ericsson’s promises to make the Redback products an edge solution for fixed and wireless services.

• Nokia Siemens Networks needs to detail its GGSN strategy more clearly. In tandem with 3GSM, the company provided insight into plans for consolidated WCDMA and GSM RAN solutions, mobile softswitching, mobile TV and IMS. Yet, it was generally quiet on how the new company would treat existing partnerships, including Siemens’ work with Cisco on GGSN products. Given Nokia’s capable GGSN, it’s clear that the Flexi ISN will live on. How this product evolves (while NSN supports Cisco deployments) and integrates new functionalities (IMS, ASN etc.) needs to be clearer.

• Alcatel-Lucent should consider acquiring or partnering with Starent. The company’s Watercove product is not a particularly strong GGSN solution, while a lack of PDSN support leaves the company juggling multiple packet data gateway platforms. Working with Starent would support WCDMA, CDMA2000 and even WiMAX offers while playing into the company’s IMS momentum. Given the upcoming IPO, it might be difficult to buy the company, but partnering should remain an option.

• Huawei and ZTE should consider acquiring or partnering with Starent. Product performance aside, China’s top two telecom vendors must contend with the fact that they’re relatively small wireless players with sprawling product lines. Working with Starent would add credibility to their overall wireless solutions while offloading what most vendors see as “non essential” R&D.

Recommended End User / Customer Actions

• Mobile operators need to seek details from Starent’s PDSN, GGSN and ASN competitors in terms of plans to integrate IMS functionality into their platforms. On paper, pushing IMS capabilities out to the edge of the network makes sense in terms of session handling and scale. If so, the PDSN, GGSN or ASN is the logical aggregation and “intelligence” point. While other vendors have been more aggressive with their IMS marketing and product development, none have talked up the notion of housing IMS functionality in the packet data gateway; operators need to know what these vendors have planned, if only for deal negotiation.

• Operators seriously looking at IMS deployments need to begin investigating the value of siting IMS components nearer to the network edge – such as in the PDSN or GGSN. Beyond the obvious latency benefits, moving IMS out to the network edge assumes new network architectures and deployment models. Clearly understanding the clear costs and benefits will be critical to forming the best IMS strategy.

• Potential Starent customers need to seek details on the company’s promised support for inter-technology handoffs. Per the company, support for multiple technologies – WiMAX, WCDMA and CDMA2000 – “promotes seamless mobility through universal roaming.” Yet, while supporting multiple technologies in one box is very different from linking them together into one continuous service. Operators need to know the technology basis behind the roaming claims (mobile IP, something more?), ideally seeing working examples.

• Would-be femtocell and picocell operators need to include core network solutions as an integral part of their network solutions. While the femtocell or picocell part of the network is the ultimate touch point with the customer, the manner of integrating it into the network is key for ensuring the delivery of familiar services. Beyond pre-packaged offers, operators should also be open to specifying their own core network partners in order to develop best-of-breed solutions.

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