ACG Research

ACG Research
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Monday, June 17, 2013

Composers Increasingly Important in Cloud Orchestration Frameworks

The value of cloud computing is best realized when services function transparently and automatically at any scale. Although this nirvana goal is clearly in sight for both service developers and providers, platform offerings are moving toward it in progressive stages of innovation, arriving at an inflection point now in which new capabilities housed in service composer applications are moving us closer to the goal.  

Early developments toward cloud computing in the last four to five years have provided good capabilities for creating virtual infrastructure resources, mostly on an a la carte basis. For example, systems have been developed to create virtual machines, storage pools, and virtual networking services typically within a single cloud architectural context such as VMware’s ESX and vCloud, Citrix’s XenServer and CloudPlatform, and Red Hat’s KVM and Enterprise Virtualization. Although there are resources to help stitch pieces together and some stages of orchestration across resource types to simplify provisioning, these have been largely focused on creating the pools and less on constructing whole services.

These foundations have been crucial in setting the baselines on which many XaaS capabilities available today have been realized. However, on their own they do not accomplish the goal of automating design and composition of whole services from multiple infrastructure categories or even multiple clouds. There has been significant progress made toward this goal in the past year, and we are now entering the composer applications phase, which provides new capabilities on top of resource provisioning to accelerate service design and delivery.

Composers are about creating offerings at the level of a consumable service, for example, burst computing, elastic archiving or application development integrating the services of multiple clouds. Composers assemble a service from multiple contributing sources and deploy it to a target user community. These sources can be virtual pools from within an individual cloud, combinations assembled from the resources of multiple clouds (private or public), and software to support important functions such as metering, monitoring, and SLA support.

These expanded capabilities can be seen in many deployment scenarios. Here are just two:

1.  A corporate IT group creates an on-demand XaaS offering (on-demand compute or elastic storage backup) in a private cloud. The service is offered consistently across diverse user groups (multiple business units or functional areas). The common offering is realized from the underlying resources of two or more virtual infrastructure platforms, for example VMware vCloud and Red Hat Enterprise Virtualization. The composer simplifies and streamlines the job of integrating the facilities of the two virtualization environments into a single XaaS capability for the company.  
                                                                                                   
2. An elastic storage archiving service is developed that blends enterprise on-premise and public cloud resources transparently. Designing the service is simplified by a composer app that automatically combines the private and public resources into a complete service offering more rapidly than if the combination had to be hand tooled. The service provides cost and scaling benefits to the organization, and the entire deliverable is produced more efficiently.

Examples of systems providing composer capabilities include IBM’s SmartCloud Orchestrator, HP’s Cloud Service Automation suite, Dell’s Enstratius Cloud Management platform, and Flexiant’s Cloud Orchestrator system. This year expect the Open Stack Heat orchestration project (currently under development) to yield an open-source platform for multicloud service composition (in conjunction with other functions it will provide).

The upside of this collection of developments for providers of cloud computing services is greater efficiency and speed, and increased agility in deployment of services. Leveraging the automation of a composer platform may improve speed and efficiency on the order of 50 percent or more, depending on the details of the environment. The opportunity to achieve improvements of this size in design and delivery efficiencies elevates the importance of composers in the toolkit planning providers of cloud services need to do for creation of their packages.

With this new level of service design and deployment functionality emerging at the upper layers of operators’ service management environments we can anticipate rapid production of a richer mix of applications and services. And because of their ability to accelerate time to value as well as the speed of innovation, we can expect this new powerful class of composer applications to occupy a place of prominence in operators’ plans for their cloud orchestration systems. 




Thursday, June 13, 2013

Cisco Captures Pole Position in 1Q 2013 WW Mobile IP Infrastructure Market

1Q 2013 Worldwide Mobile IP Infrastructure market grew to $1.2B as Mobile SPs continue investments in Mobile IP Backhaul and Packet Core networks, including significant CapEx spend shift to LTE networks. This phenomenon has been prevalent in NAM for 12 months and is now taking shape in APAC. EMEA Mobile SPs are beginning to confidently plan LTE investments as the regulatory environment becomes more favorable.

Mobile IP Infrastructure Worldwide Market Shares Q1/13
Company
Rank
Market Share
Cisco
1
42.0%
Ericsson
2
15.5%
ALU
3
13.0%
NSN
4
7.1%
Huawei
5
5.8%

Cisco has executed well with significant market share gains in 1Q 2013, achieving pole position to lead all three segments: Mobile IP Backbone, Mobile IP Backhaul, and Packet Core at total 42 percent WW Mobile IP Infrastructure market share. Cisco has also out-executed Ericsson’s stated “seasonal weakness,” taking the #1 position in the coveted EPC segment. Although Cisco has focused its Packet Core offerings with a high price/performance portfolio strategy, its sales execution within the US, Canada, and EMEA markets is yielding strongholds in key LTE markets with wins in Vimpelcom (Russia), SFR (France), select T-Mobile properties in Europe, as well as with mobile network expansions in Bell Canada, du, Bharti Airtel, Tata, and KDDI. Cisco’s core strengths in Packet Core and its deep LTE core network experience are a result of its large/incumbent position in AT&T and Verizon Wireless where it has acquired complex deployment experience in 3G migration, LTE capacity planning, subscriber policy management, and multimedia/video revenue creation models.

Ericsson, despite its 1Q 2013 weakness, maintains its “Game of Thrones” empire on LTE networks. Massive global LTE deployments and a high rate of trial contract conversions/expansions, will fuel growth throughout 2013 for Ericsson. LATAM Mobile SPs have already selected key LTE suppliers, with Ericsson winning a majority market share. Ericsson has also demonstrated the world’s first end-to-end LTE broadcast video solution and has commercial deployment endorsements from Verizon Wireless and Telstra. Ericsson's unique combination eMBMS, HEVC and MPEG DASH, three new standards, enables Mobile SPs to provide premium video services with guaranteed quality and cost-efficient delivery over LTE.

Market Trends/Predictions
ACG sees several trends emerging in Mobile SP CapEx outlays. 3G network CapEx in RAN and core segments has eroded, and ACG expects a decline of 20–30% Y/Y through 2013 across many regions. Mobile IP Backhaul CapEx will continue to grow in double digits through 2013 globally as operators continue to optimize cell site capacity and network operations costs. ACG expects CapEx spend to increase 15–20% Y/Y on mmW and NLOS technologies as these are optimal for small cells and provide deployment flexibility in metro zones where macro cell sites do not make economic sense. ACG expects EPC to grow at record pace, averaging 45–50% Y/Y in 2013 with the US and Canada undergoing national builds, and with APAC and LATAM driving additional LTE ‘deployment’ revenues.

Next Wave of Mega LTE Networks: India & China
For the LTE industry overall, ACG predicts the next wave of growth opportunities will come from TD-LTE builds in India and China. Although the timing of mass LTE deployments in India is questionable, as policy/licensing issues, as well as regulator/tax collector actions against the country’s top Mobile SPs continue to escalate and cause unfavorable investment climate. In contrast, 3G subscriptions in China continue to skyrocket, and demand for TD-LTE networks with its inherent cost/spectrum efficiencies is at its peak. For example, China Mobile will spend more than $7 billion in CapEx this year on its TD-LTE network build. China Unicom and China Telecom will make decisions regarding TD-LTE in mid 2013, with rollouts beginning as early as end of 2013. Tier 1 vendors such as Alcatel-Lucent and Nokia Siemens are tripling investments and resources in China to support accelerated TD-LTE build-outs.

For more information about ACG's Mobile IP Infrastructure services, contact sales@acgresesearch.net

Wednesday, June 5, 2013

ACG Research Discusses SDN with Nuage Networks

Ray Mota discusses software-defined networking and its potential opportunities to reduce CapEx and OpEx for providers. 

Listen to his comments on Nuage Networks and what the company is doing in virtualization, scalability and the role of the control plane.

For more information about ACG Research's Router and Switching service or other syndicated and consulting services, contact sales@acgresearch.net.

Optical Networking 1Q WW Results

The Optical Networking worldwide market revenue dropped 22 percent quarter over quarter. This drop mirrors last year’s performance and seems to have become a seasonal pattern for this industry segment. If Q2 follows a similar pattern the overall industry will be positioned to achieve a year-over-year growth rate in the low single digits. Although this growth is positive news for the industry, the vendor level isn’t so rosy and reveals a different story.

On a percentage revenue basis for quarter-over-quarter performance, the vendor community ranged from a high of +43.5 percent to a low of -41 percent. The wide range of performance drove a major reshuffling within the ranks of the top 10 vendors and throughout the subsegments as well. This is generally an indication of fierce competition and more importantly points to the probability that some vendors are gaining market share at the expense of their competitors. The Optical segment also had a major spin off and IPO during Q1, an indication that at least for these organizations they believe there is long-term revenue and growth opportunity within the Optical Networking segment.

Within the optical technology segments the ranked order remained the same from a revenue generation standpoint with Long Haul DWDM, Metro WDM and MSPP generating 83.5% of the total optical market revenue. The first two are experiencing double-digit year-over-year growth, but the MSPP segment has experienced double-digit decline on both a quarter-over-quarter and year-over-year basis. Regionally, North America became the number one region in 1Q; deployments within Tier 2 and 3 service providers drove this growth.

For more information about ACG Research’s optical services, contact sales@acgresearch.net.

         Jeff Ogle
     www.acgresearch


Thursday, May 30, 2013

Business Case for ActiveVideo's CloudTV

ActiveVideo has introduced CloudTV, a cloud-based approach to delivery of modern user interfaces and other applications. This cloud-based approach supports immediate delivery to all consumer devices and at much lower cost than set-top box-based (STB) solutions. The cloud-based approach eliminates the need to develop device-dependent software and application program interfaces (API) for devices, including several generations of STBs, media hubs, Blue-ray players, connected televisions, game consoles and personal media players. It also eliminates the need to undertake an expensive and time consuming program of replacing first-generation STBs.

ACG Research compared the total cost of ownership (TCO) of the immediate deployment of CloudTV to all consumer devices to a program of upgrading STBs to support a modern user interface. It found an 83 percent TCO savings over five years for CloudTV as compared to the STB replacement program. The analysis also tested the robustness of the TCO findings by performing a number of sensitivity studies. These studies found that the TCO savings of CloudTV are significant and extend well beyond probable operating conditions. 


Click here for more information about ACG's business case analysis consulting research service.

mkennedy@acgresearch.net
www.acgresearch

Wednesday, May 29, 2013

Optical Technology vs. Network Traffic Growth: SPs Face Challenge

Network traffic growth driven by widespread adoption of smartphones, tablets, video content, and cloud computing is exploding. Service providers' revenues are not keeping pace and, thus, the cost to support the traffic growth threatens service providers' operating margins. This threat is being neutralized in the optical transport sector by rapid technological progress and by intense competition among optical systems vendors. Click here to read more.

For more information about Michael Kennedy, click here.

Click here for more information about ACG's business case analysis consulting research service.

mkennedy@acgresearch.net
www.acgresearch


Tuesday, May 21, 2013

Worldwide Carrier Routing & Switching Market Decreases

The Worldwide Carrier Routing & Switching market decreased both quarter over quarter and year over year, 10.6% and 6.6% respectively, posting revenues of $2.6 billion in Q1. 

Although the US economy has improved slightly and there is an increase in global carriers’ CapEx, ACG Research anticipates that the service provider switching and router market will increase slightly in 2013. There are, however, some positive signs in the market; in EMEA, the Middle East and in some parts of Africa the growth is solid and expected to continue throughout 2013. 

Countries in Europe are still contending with floundering and unstable economies; organizations and governments have maintained persistence in their demands for changes in exchange for bailouts. For all vendors Europe and the public/government sectors continue to be challenging markets. Service providers in Europe have indicated that they need to spend on their networks or risk falling behind to competitors and ultimately becoming obsolete. Whether they will remains to be seen.

For more information about ACG Research's Router and Switching service or other syndicated and consulting services, contact sales@acgresearch.net.




Tuesday, May 14, 2013

Hybrid Cloud Networks Face Challenges, but SDN May Be the Answer

While the potential benefits of running IT services in the cloud are clear, there are still important challenges to overcome before the full promise of elastic clouds can be realized. The nature of these challenges varies -- affecting cloud networks, compute resources and storage -- and perhaps the most critical place they must be addressed is in hybrid cloud deployments. 

Click to read ACG's cloud analyst Paul Parker-Johnson's SearchCloudProvider article.


Paul Parker-Johnson
pparkerjohnson@acgresearch.net
www.acgresearch.net

Tuesday, May 7, 2013

Dell Strengthens Its Cloud Management Hand with Enstratius Acquisition


Among the cloud’s great promises are the lure of unmatched agility and scale delivering IT applications and services. Along with these great promises the cloud’s early days have also seen challenges handling governance of applications as they stretch dynamically across their virtualized infrastructures, and actually simplifying management of multitiered applications as they deploy across private and hybrid private/public clouds. A strong ‘felt need’ for simplified management of enterprise application portfolios across multiple supporting cloud service platforms has emerged. In fact, to realize the agility and scaling goals of the cloud across a whole portfolio of applications, providing that kind of consistent management for a heterogeneous mix of infrastructures is an essential tool for IT moving forward.

Recognizing this, as Dell has strengthened its hand for enabling its enterprise customers to meet these challenges of the clouds with its acquisition of Enstratius on May 6. Enstratius’ Cloud Management System brings a ‘cloud neutral’ approach to providing consistent governance and management to enterprise applications across a flexible mix of virtualized cloud environments in private and hybrid private/public deployments. Enterprises are able to leverage the capabilities of virtual data center management platforms from say, VMware and OpenStack and integrate them into a portfolio of applications managed from Enstratius’ CMS. If needs dictate the use of public clouds for overload computing, flexibly expanded development resources, or automated disaster recovery across applications, secure access to public cloud resources from, say, Rackspace, Azure, or Terremark services (to name a few) can be enabled from CMS via integrated functionality and APIs. The net effect is to introduce a layer of consistency in managing applications across the multiple virtual infrastructure platforms.

As enterprise customers, and service providers supporting them, address their need for consistent, scalable controls, and simplified management of applications across multiple participating clouds, a layer of management such as Dell’s newly acquired Enstratius CMS may provide an important building block in enabling the cloud’s potential. Kudos to Dell for perceiving the importance of this need, and bringing the Enstratius CMS into its menu of offerings for cloud IT.

For more information on ACG's cloud services and SDN services, contact sales@acgresearch.net.


Paul Parker-Johnson
pparkerjohnson@acgresearch.net
www.acgresearch.net


Friday, May 3, 2013

ACG Launches SDN Syndicated and Consulting Services


Software-Defined Networking is an approach to architecting networking equipment that fundamentally changes the way we design and build networks. Software-Defined Networking separates the control plane from the data plane in network switches and routers. The control plane is implemented in software on servers separate from the network equipment and the data plane is implemented in network equipment. OpenFlow is the leading API offered in the SDN architecture.

ACG Research's SDN Practice combines three of ACG Research's leading market syndicated services into one practice that is focused on service providers. Our forecast covers the controller market size and the impact it has on routers and switches. 

ACG’s syndicated and consulting services cover: Market Analysis, SDN Education, Business Case Modeling, Architectures and Recommendations.

For more information or to subscribe to the service, contact sales@acgresearch.net.