Obviously the big-name network equipment vendors had a natural advantage for winning carriers' service delivery platform business. While it's too early for final proclamations, the network-based service layer may be a total fail, with flexible service deployment capabilities moving into the data center rather than the network, which throws the advantage to IT vendors with solid server stories (think HP, IBM, Oracle and Microsoft).
For the past two years, service providers have been angry that vendors weren't listening to their needs for business transformation and service layer technology, and even more frustrating, failing to explain their high-level strategy rather than the individual pieces of the solution, said Tom Nolle, president of CIMI Corp., who talked to us recently about CIMI's new survey results.
Carrier next-gen revenue strategies have generally been pinned to the service layer. More often
than not these days, new services mean delivering
content via a next-generation
network services architecture integrated into operational
support systems (OSS).
"What we see at the highest levels of management is a sharp and sudden focus on next-gen revenue strategies, which has been considered a service-layer activity by most operators," Nolle said.
And there's the rub. Carrier support is fading because of a perceived lack of vendor tools to help realize the service layer vision. As an alternative, some operators have been building a bottom-up content strategy based on data center tools, servers, and server-side middleware, which mimics the strategies of over-the-top (OTT) competitors.
Tactical positioning of service layer solutions eludes high-level execs
Carrier frustration with network equipment vendors' inability to communicate their technology vision has gained more traction this year than the solutions themselves, Nolle said. The seeds of discontent were there long before, however. The change, he said, is that CIMI's new survey shows that the window of opportunity is closing for vendors to pull network-based solutions out of the fire.
The strategic credibility of network equipment vendors in the service layer showed the largest shift we've seen in all of the surveys we've done over the last 15 years.
President, CIMI Corp.
In networking, vendor strategy influences carrier buying, since carriers lay out a set of broad technology goals, then implement with an architecture described by a set of strategic vendors, Nolle said. But this time, if the trusted networking vendors don't have a product story that makes sense to senior management, Houston, we have a problem.
"The perception is that vendors are being too tactical in the way they present their solutions. They have been so focused on the pieces that they talk about a holistic strategy but only describe the pieces it's made up of," Nolle said. So discussing a good way to prioritize content in the network doesn't help senior management figure out the company's service monetization strategy at a high level, he added.
In its 15 years of conducting carrier surveys, CIMI has found historically that the way vendors are rated by carriers correlates to how well those vendors will do 18 months to two years down the line, Nolle said. "If vendors lose strategic planning influence now, the projects launched will be based on someone else's product strategy."
Alcatel-Lucent, Juniper Networks and others have laid out tactically oriented multi-part service layer visions, while NSN addresses clients' service-layer needs through its professional services division, as does Ericsson, which means individual solutions aren't discussed as commercial products -- again leaving high-level management in the strategic dark.
Network equipment vendor missteps open the door for other vendors
The result of inadequately positioned service layer solutions is a cautionary tale about network equipment vendor product development, the fast-forward march of technology, and the rise to dominance of IT vendors in the network space while network vendors were in the weeds.
"The strategic credibility of network equipment vendors in the service layer showed the largest shift we've seen in all of the surveys we've done over the last 15 years," Nolle said.
According to the CIMI survey, carriers have lost confidence in their vendors' ability to work with them strategically, with two notable exceptions -- Cisco and Huawei. Cisco increased its service-layer credibility score by 40% this year, Nolle said, which is the largest increase ever recorded. Cisco's gains come from its Unified Computing System (UCS) data center focus, as well as its recent ExtendMedia acquisition that addresses server-based content delivery capabilities -- which carriers perceive as service layer support.
"Cisco essentially gained credibility by taking itself out of the network equipment vendor category and it has been able to capitalize on the UCS server story exceptionally well," Nolle said.
Huawei gained service layer credibility with operators, as well, thanks largely to its increasing price-to-value strategy.
The bottom line for the network-based service layer -- kind of
More efficient ways for carriers to deliver content, in particular, will still come to pass, but it's looking like more next-gen services will be enabled in the data center rather than in the network, just as they are for OTT competitors, Nolle said.
As for networking vendors, Nolle believes they have about a year to fix any service layer strategies to get operator attention. "We're finally seeing a recognition by vendors that there is a service layer, and the key value of it could be addressed by the data center or the network side," he said. "If vendors don't grab their piece of this process, the other guy will inherit it all.
No matter what path the service layer takes, you'll find next steps covered in SearchTelecom.com's service delivery topic area. We'll stay loose and see where the market goes.
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This was first published in August 2010