Alcatel-Lucent Ups the Access Ante with ISAM Release 3.3

On March 27th Alcatel-Lucent announced its latest broadband access innovations with the introduction of Release 3.3 to its ISAM product family. R3.3 is designed to enable very high-speed broadband services from central offices and street cabinets, using VDSL2 to leverage existing copper infrastructure.

Recommended Competitive Responses

► Huawei, which has established itself as Alcatel-Lucent’s undisputed chief rival in the broadband infrastructure market over the past several years, needs to communicate more effectively the advanced service delivery capabilities of its broadband access portfolio, including specific customer proof points.

► Ericsson has made dramatic strides forward in the broadband and digital media infrastructure sectors over the past six quarters, thanks to multiple acquisitions (i.e., Marconi, Redback, Entrisphere, and TANDBERG TV). Now, Ericsson needs to demonstrate that these acquisitions will drive incremental revenue for the company and show that it can establish itself as a strong contender in the DSL infrastructure market.

► Nokia Siemens Networks needs to provide detailed information on how its own broadband infrastructure solution set compares to the Alcatel-Lucent ISAM series, especially in light of the new Release 3.3 enhancements.

► ECI Telecom needs to highlight its own recent slate of enhancements to its Hi-FOCuS 5 MSAN solution set, which include the incorporation of virtual routing and new “IMS-tuned” voice service-enabling technologies.

► Fujitsu, Iskratel, KEYMILE, PacketFront, Teledata, and other vendors targeting the ETSI markets need to leverage their respective MSAP product/solution set differentiators vis-à-vis Alcatel-Lucent and other rivals as they strive for customer and market share gains in the ETSI broadband access markets worldwide.

► APAC-based vendors (e.g., NEC, Sumitomo, UTStarcom, ZyXEL, and ZTE) and North American-based vendors (e.g., ADTRAN, Allied Telesis, Calix, Motorola, Occam, Tellabs, TelStrat, and Zhone) also need to address the competitive proposition posed by Alcatel-Lucent and other top contenders in their respective geographies (and target markets).

Recommended End User/Customer Responses

► Current ISAM customers interested in the Release 3.3 enhancements need to trial the specific components/solutions per their respective service delivery imperatives. For example, those considering FTTN-based IPTV services need to evaluate the new 48-port VDSL2 and 6/12-port GigE network interface line cards, while operators more focused on migration from circuit-to-packet-based voice services in the near term need to evaluate the new ISAM 3.3 voice packet server and/or POTS termination cards.

► Operators considering forklift upgrades to their current access networks, or looking at greenfield infrastructure deployments, need to evaluate the Alcatel-Lucent ISAM solution set against similar platforms and product portfolios. For vendors in ETSI markets, this includes solutions such as Ericsson’s EDA MSAN and IP DSLAM platforms, Huawei’s SmartAX and HONET 5000 platforms, ECI Telecom’s Hi-FOCuS 5 MSAN, and Nokia Siemens’ Hi-X IP DSLAM series.

► Carriers committed to large-scale deployments of FTTN IP access nodes need to evaluate the Alcatel-Lucent ISAM 7330 series, which also benefits from the Release 3.3 enhancements and is already widely deployed in multiple geographies supporting advanced multi-play services over copper. Again, remote DSLAM solutions from vendors such as ECI Telecom, Ericsson, Huawei, and Nokia Siemens Networks, as well as ADTRAN and Tellabs in the North American market, are worthy of consideration.

Juniper Announces New Policy Management Portfolio for NGN Applications

On March 19th Juniper introduced a portfolio of session and resource control (SRC) solutions to provide subscriber management and policy control capabilities, enabling service providers to ensure user experiences for multi-play and mobile services in next-generation networks.

Recommended Competitive Responses

► Alcatel-Lucent should highlight the advantages of its Triple Play Service Delivery Architecture (TPSDA), designed to integrate key components to deliver scalable, highly-available NGN services.

► Cisco should point out its major initiatives related to delivering an intelligent network infrastructure to meet NGN objectives. Cisco should show the depth of its Service Exchange Framework to deploy personalized services while improving the OpEx and control within a common infrastructure.

► Redback, now part of Ericsson, can highlight the capabilities of its IP portfolio consisting of the SmartEdge Multiservice Edge Router (MSER) to support services such as IP/TV, video on demand, and interactive online gaming.

► Nokia Siemens Networks should highlight the capabilities of the combined company to offer full end-to-end solutions that can leverage the advances made by Juniper for IP transport.

► Other router and software vendors should adopt the emerging standard interfaces evolving from the various standards organizations and industry forums. With IMS becoming a reality, all vendors will need to participate in end-to-end solutions over the course of the next two years. Service providers will be seeking vendors that are committed to multi-vendor interoperability as well as best-of-breed devices.

Recommended End User/Customer Responses

► Service providers should press their vendors for proof points related to how rapidly their systems can be instrumented for deployment in their specific networks to support applications such as IPTV, VoIP, and advanced business services.

► Service providers should carefully track how their competition is leveraging technologies from the major vendors to augment their existing back office systems and real-time operational systems and practices. With integrated end-to-end policy and control in place, dynamic service allocation and monitoring should improve operational efficiency and create a higher-quality user experience.

► Service providers should evaluate the best-of-breed solutions for IPTV, VoIP, and other advanced services to determine the best fit for their planned and future offerings. Providers should give serious consideration to equipment vendors that have strong relationships and support OSS/BSS integration, since a comprehensive set of planning, provisioning, and real-time operational systems will be necessary to meet customer expectations.

COMPETITIVE INTELLIGENCE HIGHLIGHT

Nokia Siemens Networks Day One

On April 2nd Nokia Siemens Networks (NSN) started operations as anticipated following delay brought on by an on-going investigation of Siemens Communications. NSN is a 50/50 joint venture, combining the telecom operator networks businesses of Nokia Networks and Siemens Communications.

Analytical Summary

► Current Perspective: Very positive on the official start of the joint venture between Nokia and Siemens, because it heralds the birth of a significant new telecommunications infrastructure company composed of two leading telecommunications equipment manufacturers (TEMs), producing potential scale advantages to drive sales and profits. Well-documented mobile and fixed portfolio synergies put the new company in good position to attack the number one industry player.

Unfortunately, however, a three-month delay for day one translates into a head start for prime contender Alcatel-Lucent. Ultimately, effective execution determines NSN’s success and the effort must begin in earnest with a merging of its considerable resources into a unified force capable of seizing opportunities. Done well, the three-month delay will mean little.

► Vendor Importance: High to Nokia Siemens Networks, because the merger was important to address new competition, including newly merged companies such as Alcatel-Lucent and emerging contenders such as Huawei. Closing the deal was essential to move to the next step: execution.

► Market Impact: Read impact of the new Nokia Siemens Networks in the Broadband, Carrier, Carrier IP Telephony, Optical, Wireless and Telecom Infrastructure Services markets.

Competitive Positives

► Commencement of Day One means that product portfolio rationalization can begin in earnest. While both Nokia and Siemens developed extensive portfolio messaging prior to 3GSM Barcelona, closing the deal signals the start of making the adjustments real. Elimination of non-essential product lines is a key driver for research and development efficiencies. More importantly, communication of the decisions to the installed customer base settles worries about long-term product support while unlocking purchase decisions held in suspense pending Day One.

► While the start of the new company moved from its original date of January 1, the two companies moved vigorously to match Alcatel-Lucent’s strong start by getting permission to jointly display at both 3GSM Barcelona (February 2007) and CTIA (March 2007). The plan to delay the start of the company made sense given fiscal integrity issues at Siemens. Presenting a unified front with a comprehensive portfolio description was equally important for signaling that the new company has been in operation in all but name.

► The proposed NSN product rationalization decisions are logical. Maintaining both companies’ GSM and UMTS RAN portfolios puts NSN in the best position to please existing customers. Plans to develop a joint RNC and joint radio access products going forward yield scale efficiencies. Likewise, where one company’s product line will be the lead offer – Mobile Softswitch (Nokia), Mobile WiMAX (Nokia), IMS (Siemens), Network Management (Nokia), TD-SCDMA (Siemens) – the decisions were largely based on market momentum…again putting NSN in a position to meet most market demands with credible kit.

► Beyond the balance sheet, companies are societies influenced by employees’ attitudes. Nokia and Siemens enjoy close alignment of work ethic, social mores, technology focus, and time zones. Though a daunting and disruptive process is underway, close cultural alignment can provide social lubrication limiting long-term damage to internal relationships.

Competitive Concerns

► Core capabilities of the new company have not changed. Yes, NSN can start working on deals. Yes, NSN can start actually merging portfolios. Yet, basic assets remain the same and the new company does not enter into any new markets. When all is said and done, not much is different this week than last.

► Celebrating day one is easy, but the core tasks needed to demonstrate execution excellence have not changed. Integrating product portfolios takes time and energy and melding disparate, highly competitive sales and marketing teams requires strong leadership and sustained effort. As the inevitable downside of rationalization hits, momentum can falter – potentially endangering customer relationships.