F5’s Look Ahead

I’ve always admired how F5 Networks built its business. Against what seemed heavy odds at the time, F5 took the fight to Cisco Systems and established market leadership in load balancing, which subsequently morphed into market leadership in application delivery controllers (ADC).

F5 now talks about its “Intelligent Services Platform,” which “connects any user, anywhere, from any device to the best application resources, independent of infrastructure.”

To be sure, as various permutations of cloud computing take hold and mobile devices proliferate, the market is shifting, and F5 is attempting to move with it. To get a feel for how F5 sees the world, where it sees things going, and how it intends to meet new challenges, you might want to have a look at a 211-slide (yes, that many) presentation that company executives made to analysts and investors yesterday. 

By its nature, the presentation is mostly high-level stuff, but it offers interesting nuggets on markets, products, technologies, and partnerships.  

Advertisement

Dell Makes Enterprise Moves, Confronts Dilemma

Dell reported its third-quarter earnings yesterday, and reactions to the news generally made for grim reading. The company cannot help but know that it faces a serious dilemma: It must continue an aggressive shift into enterprise solutions while propping up a punch-drunk personal-computer business that is staggered, bloody, and all but beaten.

The word “dilemma” is particularly appropriate in this context. The definition of dilemma is “a situation in which a difficult choice has to be made between two or more alternatives, especially equally undesirable ones.” 

Hard Choices

Dell seems too attached to the PC to give it up, but in the unlikely event that Dell chose to kick to the commoditized box to the curb, it would surrender a large, though diminishing, pool of low-margin revenue. The market would react adversely, particularly if Dell were not able to accelerate growth in other areas.  

While Dell is growing its revenue in servers and networking, especially the latter, those numbers aren’t rising fast enough to compensate for erosion in what Dell calls “mobility” and “desktop.” What’s more, Dell’s storage business has gone into a funk, with “Dell-owned IP storage revenue” down 3% on a year-to-year basis.

Increased Enterprise Focus

To its credit, Dell seems to recognize that it needs to pull out all the stops. It continues to make acquisitions, most of them related to software, designed bolster its enterprise-solutions profile. Today, in fact, it announced the acquisition of Gale Technologies, and it also announced that Dario Zamarian, a former Cisco executive who has been serving as VP and GM of Dell Networking, has become vice president and general manager of  the newly formed Dell Enterprise Systems & Solutions, “focused on the delivery of converged and enterprise workload topologies and solutions.” Zamarian will report to former HP executive Marius Haas, president of Dell Enterprise Solutions Group. 

Zamarian’s former role as VP and GM of Dell Networking will be assumed by Tom Burns, who comes directly from Alcatel-Lucent, where he served as president of that company’s Enterprise Products Group, which included voice, unified communications, networking, and security solutions.

Dell has the cash to make other acquisitions to strengthen its hand in private and hybrid clouds, and we should expect it to do so.  The company would have more cash to make those moves if it were to divest its PC business, but Dell doesn’t seem willing to bite that bullet. 

That would be a difficult move to make — wiping out substantial revenue while eliminating a piece of the business that is a vestigial piece of Dell’s identity — but half measures aren’t in Dell’s long-term interests.  It needs to be all-in on the enterprise, and I think also needs to adopt a software mindset. As long as the PC business is around, I suspect Dell won’t be able to fully and properly make that transition. 

Amazon-RIM: Summer Reunion?

Think back to last December, just before the holidays. You might recall a Reuters report, quoting “people with knowledge of the situation,” claiming that Research in Motion (RIM) rejected takeover propositions from Amazon.com and others.

The report wasn’t clear on whether the informal discussions resulted in any talk of price between Amazon and RIM, but apparently no formal offer was made. RIM, then still under the stewardship of former co-CEOs Jim Balsillie and Mike Lazaridis, reportedly preferred to remain independent and to address its challenges alone.

I Know What You Discussed Last Summer

Since then, a lot has happened. When the Reuters report was published — on December 20, 2011 — RIM’s market value had plunged 77 percent during the previous year, sitting then at about $6.8 billion. Today, RIM’s market capitalization is $3.7 billion. What’s more, the company now has Thorsten Heins as its CEO, not Balsillie and Lazardis, who were adamantly opposed to selling the company. We also have seen recent reports that IBM approached RIM regarding a potential acquisition of the Waterloo, Ontario-based company’s enterprise business, and rumors have surfaced that RIM might sell its handset business to Amazon or Facebook.

Meanwhile, RIM’s prospects for long-term success aren’t any brighter than they were last winter, and activist shareholders, not interested in a protracted turnaround effort, continue to lobby for a sale of the company.

As for Amazon, it is said to be on the cusp of entering the smartphone market, presumably using a forked version of Android, which is what it runs on the Kindle tablet.  From the vantage point of the boardroom at Amazon, that might not be a sustainable long-term plan. Google is looking more like an Amazon competitor, and the future trajectory of Android is clouded by Google’s strategic considerations and by legal imbroglios relating to patents. Those presumably were among the reasons Amazon approached RIM last December.

Uneasy Bedfellows

It’s no secret that Amazon and Google are uneasy Android bedfellows. As Eric Jackson wrote just after the Reuters story hit the wires:

Amazon has never been a big supporter of Google’s Android OS for its Kindle. And Google’s never been keen on promoting Amazon as part of the Android ecosystem. It seems that both companies know this is just a matter of time before each leaves the other.

Yes, there’s some question as to how much value inheres in RIM’s patents. Estimates on their worth are all over the map. Nevertheless, RIM’s QNX mobile-operating system could look compelling to Amazon. With QNX and with RIM’s patents, Amazon would have something more than a contingency plan against any strategic machinations by Google or any potential litigiousness by Apple (or others).  The foregoing case, of course, rests on the assumption that QNX, rechristened BlackBerry 10, is as far along as RIM claims. It also rests on the assumption that Amazon wants a mobile platform all its own.

It was last summer when Amazon reportedly made its informal approach to RIM. It would not be surprising to learn that a reprise of discussions occurred this summer. RIM might be more disposed to consider a formal offer this time around.

Tidbits: Cuts at Nokia, Rumored Cuts at Avaya

Nokia

Nokia says it will shed about 10,000 employees globally by the end of 2013 in a bid to reduce costs and streamline operations.

The company will close research-and-development centers, including one in Burnaby, British Columbia, and another in Ulm, Germany. Nokia will maintain its R&D operation in Salo, Finland, but it will close its manufacturing plant there.

Meanwhile, in an updated outlook, Nokia reported that “competitive industry dynamics” in the second quarter would hurt its smartphone sales more than originally anticipated. The company does not expect a performance improvement in the third quarter, and that dour forecast caused analysts and markets to react adversely.

Selling its bling-phone Vertu business to Swedish private-equity group EQT will help generate some cash, but, Nokia will retain a 10-percent minority stake in Vertu. Nokia probably should have said a wholesale goodbye to its bygone symbol of imperial ostentation.

Nokia might be saying goodbye to other businesses, too.  We shall see about Nokia-Siemens Networks, which I believe neither of the eponymous parties wants to own and would eagerly sell if somebody offering more than a bag of beans and fast-food discount coupons would step forward.

There’s no question that Nokia is bidding farewell to three vice presidents. Stepping down are Mary McDowell (mobile phones), Jerri DeVard (marketing), and Niklas Savander (EVP markets).

But Nokia is buying, too, shelling out an undisclosed sum for imaging company Scalado, looking to leverage that company’s technology to enhance the mobile-imaging and visualization capabilities of its Nokia Lumia smartphones.

Avaya

Meanwhile, staff reductions are rumored to be in the works at increasingly beleaguered Avaya.  Sources says a “large-scale” jobs cut is possible, with news perhaps surfacing later today, just two weeks before the end of the company’s third quarter.

Avaya’s financial results for its last quarter, as well as its limited growth profile and substantial long-term debt, suggested that hard choices were inevitable.

Lessons for Cisco in Cius Failure

When news broke late last week that Cisco would discontinue development of its Android-based Cius, I remarked on Twitter that it didn’t take a genius to predict the demise of  Cisco’s enterprise-oriented tablet. My corroborating evidence was an earlier post from yours truly — definitely not a genius, alas — predicting the Cius’s doom.

The point of this post, though, will be to look forward. Perhaps Cisco can learn an important lesson from its Cius misadventure. If Cisco is fortunate, it will come away from its tablet failure with valuable insights into itself as well as into the markets it serves.

Negative Origins

While I would not advise any company to navel-gaze obsessively, introspection doesn’t hurt occasionally. In this particular case, Cisco needs to understand what it did wrong with the Cius so that it will not make the same mistakes again.

If Cisco looks back in order to look forward, it will find that it pursued the Cius for the wrong reasons and in the wrong ways.  Essentially, Cisco launched the Cius as a defensive move, a bid to arrest the erosion of its lucrative desktop IP-phone franchise, which was being undermined by unified-communications competition from Microsoft as well as from the proliferation of mobile devices and the rise of the BYOD phenomenon. The IP phone’s claim to desktop real estate was becoming tenuous, and Cisco sought an answer that would provide a new claim.

In that respect, then, the Cius was a reactionary product, driven by Cisco’s own fears of desktop-phone cannibalization rather than by the allure of a real market opportunity. The Cius reeked of desperation, not confidence.

Hardware as Default

While the Cius’ genetic pathology condemned it at birth, its form also hastened its demise. Cisco now is turning exclusively to software (Jabber and WebEx) as answers to enterprise-collaboration conundrum, but it could have done so far earlier, before the Cius was conceived. By the time Cisco gave the green light to Cius, Apple’s iPhone and iPad already had become tremendously popular with consumers, a growing number of whom were bringing those devices to their workplaces.

Perhaps Cisco’s hubris led it to believe that it had the brand, design, and marketing chops to win the affections of consumers. It has learned otherwise, the hard way.

But let’s come back to the hardware-versus-software issue, because Cisco’s Cius setback and how the company responds to it will be instructive, and not just within the context of its collaboration products.

Early Warning from a Software World

As noted previously, Cisco could have gone with a software-based strategy before it launched the Cius. It knew where the market was heading, and yet it still chose to lead with hardware. As I’ve argued before, Cisco develops a lot of software, but it doesn’t act (or sell) like software company. It can sell software, but typically only if the software is contained inside, and sold as, a piece of hardware. That’s why, I believe, Cisco answered the existential threat to its IP-phone business with the Cius rather than with a genuine software-based strategy. Cisco thinks like a hardware company, and it invariably proposes hardware products as reflexive answers to all the challenges it faces.

At least with its collaboration products, Cisco might have broken free of its hard-wired hardware mindset. It remains to be seen, however, whether the deprogramming will succeed in other parts of the business.

In a world where software is increasingly dominant — through virtualization, the cloud, and, yes, in networks — Cisco eventually will have to break its addiction to the hardware-based business model. That won’t be easy, not for a company that has made its fortune and its name selling switches and routers.

U.S. National-Security Concerns Cast Pall over Huawei

As 2011 draws to a close, Huawei faces some difficult questions about its business prospects in the United States.  The company is expanding worldwide into enterprise networking and mobile devices, such as smartphones and tablets, even as it continues to grow its global telecommunications-equipment franchise.

Huawei is a company that generated 2010 revenue of about $28 billion, and it has an enviable growth profile for a firm of its size. But a dark cloud of suspicion continues to hang over it in the U.S. market, where it has not made headway commensurate with its success in other parts of the world. (As its Wikipedia entry states, Huawei’s products and services have been deployed in more than 140 countries, and it serves 45 of the world’s 50 largest telcos. None of those telcos are in the U.S.)

History of Suspicion

The reason it has not prospered in the U.S. is at primarily attributable to persistent government concerns about Huawei’s alleged involvement in cyber espionage as a reputed proxy for China. At this point, I will point out that none of the charges has been proven, and that any evidence against the company has been kept classified by U.S. intelligence agencies.

Nonetheless, innuendo and suspicions persist, and they inhibit Huawei’s ability to serve customers and grow revenue in the U.S. market. In the recent past, the U.S. government has admonished American carriers, including Sprint Nextel, not to buy Huawei’s telecommunications equipment on national-security concerns. On the same grounds, U.S. government agencies prevented Huawei from acquiring ownership stakes in U.S.-based companies such as 3Com, subsequently acquired by HP, and 3Leaf Systems. Moreover, Huawei was barred recently from participating in a nationwide emergency network, again for reasons of national security.

Through it all, Huawei has asserted that it has nothing to hide, that it operates no differently from its competitors and peers in the marketplace, and that it has no intelligence-gathering remit from the China or any other national government. Huawei even has welcomed an investigation by US authorities, saying that it wants to put the espionage charges behind it once and for all.

Investigation Welcomed

Well, it appears Huawei, among others, will be formally investigated, but it also seems the imbroglio with the U.S. authorities might continue for some time. We learned in November that the U.S. House Permanent Select Committee on Intelligence would investigate potential security threats posed by some foreign companies, Huawei included.

In making the announcement relating to the investigation, U.S. Representative Mike Rogers, a Michigan Republican and the committee’s chairman, said China has increased its cyber espionage in the United States. He cited connections between Huawei’s president, Ren Zhengfei, and the People’s Liberation Army, to which the Huawei chieftain once belonged.

For its part, as previously mentioned, Huawei says it welcomes an investigation. Here’s a direct quote from William Plummer, a Huawei spokesman, excerpted from a recent Bloomberg article:

“Huawei conducts its businesses according to normal business practices just like everybody in this industry. Huawei is an independent company that is not directed, owned or influenced by any government, including the Chinese government.”

Unwanted Attention from Washington

The same Bloomberg article containing that quote also discloses that the U.S. government has invoked  Cold War-era national-security powers to compel telecommunication companies, including AT&T Inc. and Verizon Communications Inc., to disclose confidential information about the components and composition of their networks in a hunt for evidence of Chinese electronic malfeasance.

Specifically, the U.S. Commerce Department this past spring requested a detailed accounting of foreign-made hardware and software on carrier networks, according to the Bloomberg article. It also asked the telcos and other companies about security-related incidents, such as the discovery of “unauthorized electronic hardware” or suspicious equipment capable of duplicating or redirecting data.

Brand Ambitions at Risk

The concerns aren’t necessarily exclusive to alleged Chinese cyber espionage, and Huawei is not the only company whose gear will come under scrutiny. Still, Huawei clearly is drawing a lot of unwanted attention in Washington.

While Huawei would like this matter to be resolved expeditiously in its favor, the investigations probably will continue for some time before definitive verdicts are rendered publicly. In the meantime, Huawei’s U.S. aspirations are stuck in arrested development.

To be sure, the damage might not be restricted entirely to the United States. As this ominous saga plays out, Huawei is trying to develop its brand in Europe, Asia, South America, Africa, and Australia. It’s making concerted advertising and marketing pushes for its smartphones in the U.K., among other jurisdictions, and it probably doesn’t want consumers there or elsewhere to be inundated with persistent reports about U.S. investigations into its alleged involvement with cyber espionage and spyware.

Indulge me for a moment as I channel my inner screenwriter.

Scenario: U.K. electronics retailer. Two blokes survey the mobile phones on offer. Bloke One picks up a Huawei smartphone. 

Bloke One: “I quite fancy this Android handset from Huawei. The price is right, too.”

Bloke Two: “Huawei? Isn’t that the dodgy Chinese company being investigated by the Yanks for spyware?

Bloke One puts down the handset and considers another option.

Serious Implications

Dark humor aside, there are serious implications for Huawei as it remains under this cloud of suspicion. Those implications conceivably stretch well beyond the shores of the United States.

Some have suggested that the U.S. government’s charges against Huawei are prompted more by protectionism than by legitimate concerns about national security. With the existing evidence against Huawei classified, there’s no way for the public, in the U.S. or elsewhere, to make an informed judgment.

Alcatel-Lucent Banks on Carrier Clouds

Late last week, I had the opportunity to speak with David Fratura, Alcatel-Lucent’s senior director of strategy for cloud solutions, about his company’s new foray into cloud computing, CloudBand, which is designed to give Alcatel-Lucent’s carrier customers a competitive edge in delivering cloud services to their enterprise clientele and — perhaps to a lesser extent — to consumers, too.

Like so many others in the telecommunications-equipment market, Alcatel-Lucent is under pressure on multiple fronts. In a protracted period of global economic uncertainty, carriers are understandably circumspect about their capital spending, focusing investments primarily on areas that will result in near-term reduced operating costs or similarly immediate new service revenues. Carriers are reluctant to spend much in hopeful anticipation of future growth for existing services; instead, they’re preoccupied with squeezing more value from the infrastructure they already own or with finding entirely new streams of service-based revenue growth, preferably at the lowest-possible cost of market entry.

Big Stakes, Complicated Game

Complicating the situation for Alcatel-Lucent — as well as for Nokia Siemens Networks and longtime market wireless-gear market leader Ericsson — are the steady competitive advances being made into both developed and developing markets by Chinese telco-equipment vendors Huawei and ZTE. That competitive dynamic is putting downward pressure on hardware margins for the old-guard vendors, compelling them to look to software and services for diversification, differentiation, and future growth.

For its part, Alcatel-Lucent has sought to establish itself as a vendor that can help its operator customers derive new revenue from mobile software and services and, increasingly, from cloud computing.

Alcatel-Lucent CEO Ben Verwaayen is banking on those initiatives to save his job as well as to revive the company’s growth profile. Word from sources close the company, as reported first by the Wall Street Journal, is that the boardroom knives are out for the man in Alcatel’s big chair, though Alcatel-Lucent chairman Philippe Camus felt compelled to respond to the intensifying scuttlebutt by providing Verwaayen with a qualified vote of confidence.

Looking Up 

With Verwaayen counting on growth markets such as cloud computing to pull him and Alcatel-Lucent out of the line of fire, CloudBand can be seen as something more than the standard product announcement. There’s a bigger context, encompassing not only Alcatel-Lucent’s ambitions but also the evolution of the broader telecommunications industry.

CloudBand, according to a company-issued press release, is designed to deliver a “foundation for a new class of ‘carrier cloud’ services that will enable communications service providers to bring the benefits of the cloud to their own networks and business operations, and put them in an ideal position to offer a new range of high-performance cloud services to enterprises and consumers.”

In a world where everybody is trying to contribute to or be the cloud, that’s a tall order, so let’s take a look at the architecture Alcatel-Lucent has brought forward to create its “carrier cloud.”

CloudBand Architecture

CloudBand comprises two distinct elements. First up is the CloudBand Management System, derived from research work at the venerable Bell Labs, which delivers orchestration and optimization of services between the communications network and the cloud. The second element is the CloudBand Node, which provides computing, storage, and networking hardware and associated software to host a wide range of cloud services. Alcatel-Lucent’s “secret sauce,” and hence its potential to draw meaningful long-term business from its installed base of carrier customers, is the former, but the latter also is of interest.

Hewlett-Packard, as part of a ten-year strategic global agreement with Alcatel-Lucent, will provide converged data-center infrastructure for the CloudBand nodes, including compute, storage, and networking technologies. While Alcatel-Lucent has said it can accommodate gear from other vendors in the nodes, HP’s offerings will be positioned as the default option in the CloudBand nodes. Alcatel-Lucent’s relationship with HP was intended to help “bridge the gap between the data center and the network,” and the CloudBand node definitely fits within that mandate.

Virtualized Network Elements in “Carrier Clouds”

By enabling operators to shift to a cloud-based delivery model, CloudBand is intended to help service providers market and deliver new services to customers quickly, with improved quality of service and at lower cost. Carriers can use CloudBand to virtualize their network elements, converting them to software and running them on demand in their “carrier clouds.” As a result, service providers  presumably will derive improved utilization from their network resources, saving money on the delivery of existing services — such as SMS and video — and testing and introducing new ones at lower costs.

If carriers embrace CloudBand only for this reason — to virtualize and better manage their network elements and resources for more efficient and cost-effective delivery of existing services — Alcatel-Lucent should do well with the offering. Nonetheless, the company has bigger ambitions for CloudBand.

Alcatel-Lucent has done market research indicating that enterprise IT decision makers’ primary concern about the cloud involves performance rather than security, though both ranked highly. Alcatel-Lucent also found that those same enterprise IT decision makers believe their communications service providers — yes, carriers — are best equipped to deliver the required performance and quality of service.

Helping Carriers Capture Cloud Real Estate 

Although Alcatel-Lucent talks a bit about consumer-oriented cloud services, it’s clear that the enterprise is where it really believes it can help its carrier customers gain traction. That’s an important distinction, too, because it means Alcatel-Lucent might be able to help its customers carve out a niche beyond consumer-focused cloud purveyors such as Google, Facebook, Apple, and even Microsoft. It also means it might be able to assist carriers in differentiate themselves from infrastructure-as-a-service (IaaS) leader Amazon Web Services (AWS), which became the service of choice for technology startups, and from the likes of Rackspace.

As Alcatel-Lucent’s Fratura emphasized, many businesses, from SMBs up to large enterprises, already obtain hosted services and software-as-a-service (SaaS) offerings from carriers today. What Alcatel-Lucent proposes with CloudBand is designed to help them capture more of the cloud market.

It just might work, but it won’t be easy. As Ray Le Maistre at LightReading wrote, cloud solutions on this scale are not a walk on the beach or a day at the park (yes, you saw what I did there). What’s more, Alcatel-Lucent will have to hope that a sufficient number of its carrier customers can deploy, operate, and manage CloudBand to full effect. That’s not a given, even if Alcatel-Lucent offers CloudBand as managed service and even though it already sells and delivers professional services to carriers.

Alcatel-Lucent says CloudBand will be available for deployment in the first half of 2012.  At first, CloudBand will run exclusively on Alcatel-Lucent technology, but the company claims to be working with the Alliance for Telecommunications Industry Solutions (ATIS)  and the Internet Engineering Task Force (IETF) to establish standards to enable CloudBand to run on gear from other vendors.

With CloudBand, Alcatel-Lucent, at least within the content of its main telecommunications-equipment competitors, is seen as having first run at the potentially lucrative market opportunity of cloud enabling the carrier community. Much now will depend on how well it executes and on how effectively its competitors respond to the initiative.

The Carrier Factor

In addition, of course, the carriers themselves are a factor. Although they undoubtedly want to get their hands around the cloud business opportunity, there’s some question as to whether they have the wherewithal to get the job done. The rise of cloud services from Google, Apple, Facebook, Amazon was partly a result of carriers missing a golden opportunity. One would like to think they’ve learned from those sobering experiences, but one also can’t be sure they won’t run to prior form.

From what I have heard and seen, the Alcatel-Lucent vision for CloudBand is compelling. It brings the benefits of virtualization and orchestration to carrier network infrastructure, enabling the latter to manage their resources cost-effectively and innovatively. If they seize the opportunity, they’ll save money on their own existing services and be in a great position to deliver range of cloud-based enterprise services to their business customers.

Alcatel-Lucent should find a receptive audience for CloudBand among its carrier installed base. The question is whether those Alcatel-Lucent customers will be able to get full measure from the technology and from the business opportunity the cloud represents.

Google Move Could Cause Collateral Damage for RIM

In a move that demonstrates Google’s willingness to embrace mobile-device heterogeneity in the larger context of a strategic mandate, Google today announced that it would bring improved mobile-device management (MDM) functionality to its Google Apps business customers.

No Extra Charge

On the Official Google Enterprise Blog, Hong Zhang, a Google software engineer, wrote:

“Starting today, comprehensive mobile device management is available at no extra charge to Google Apps for Business, Government and Education users. Organizations large and small can manage Android, iOS and Windows Mobile devices right from the Google Apps control panel, with no special hardware or software to manage.

In addition to our existing mobile management capabilities, IT administrators can now see a holistic overview of all mobile devices that are syncing with Google Apps, and revoke access to individual devices as needed.

Organizations can also now define mobile policies such as password requirements and roaming sync preferences on a granular basis by user group.

Also available today, administrators have the ability to gain insights into mobile productivity within their organizations, complete with trends and analytics.”

Gradual Enhancements

Google gradually has enhanced its MDM functionality for Google Apps. In the summer of 2010, the company announced several basic MDM controls for Google Apps, and today’s announcement adds to those capabilities.

Addressing the bring-your-own device (BYOD) phenomenon and the larger theme of consumerization of IT amid proliferating enterprise mobility, Google appears to be getting into the heterogeneous (not just Android) MDM space as a means of retaining current Google Apps business subscribers and attracting new ones.

Means Rather Than End

At least for now, Google is offering its MDM services at no charge to Google Apps business subscribers. That suggests Google sees MDM as a means of providing support for Google Apps rather than as a lucrative market in its own right. Google isn’t trying to crush standalone MDM vendors. Instead, its goal seems to be to preclude Microsoft, and perhaps even Apple, from making mobile inroads against Google Apps.

Of course, many VC-funded MDM vendors do see a lucrative market in what they do, and they might be concerned about Google’s encroachment on their turf. Officially, they’ll doubtless contend that Google is offering a limited range of MDM functionality exclusively on its Google Apps platform. They might also point out that Google, at least for now, isn’t offering support for RIM BlackBerry devices. On those counts, strictly speaking, they’d be right.

Nonetheless, many Google Apps subscribers might feel that the MDM services Google provides, even without further enhancements, are good enough for their purposes. If that happens, it will cut into the revenue and profitability of standalone MDM vendors.

Not Worrying About RIM

Those vendors will still have an MDM market beyond the Google Apps universe in which to play, but one wonders whether Microsoft, in defense of its expansive Office and Office 365 territory, might follow Google’s lead. Apple, which derives so much of its revenue from its iOS-based devices and comparatively little from Internet advertising or personal-productivity applications, would seem less inclined to embrace heterogeneous mobile-device management.

Finally, there’s the question of RIM. As mentioned above, Google has not indicated MDM support for RIM’s BlackBerry devices, whether of the legacy variety or the forthcoming BBX vintage. Larry Dignan at ZDNet thinks Google has jolted RIM’s MDM aspirations, but I think that’s an incidental rather than desired outcome. The sad fact is, I don’t think Google spends many cycles worrying about RIM.

Nicira Downplays OpenFlow on Road to Network Virtualization

While recent discussions of software-defined networking (SDN) and network virtualization have focused nearly exclusively on the OpenFlow protocol, various parties are making the point that OpenFlow is just one facet of a bigger story.

One of those parties is Nicira Networks, which was treated to favorable coverage in the New York Times earlier today. In the article, the words “software-defined networking” and “OpenFlow” are conspicuous by their absence. Sure, the big-picture concept of software-defined networking hovers over proceedings, but Nicira takes pains to position itself as a purveyor of “network virtualization,” which is a neater, simpler concept for the broader technology market to grasp.

VMware of Networking

Indeed, leveraging the idea of network virtualization, Nicira positions itself as the VMware of networking, contending that it will resolve the problem of inflexible, inefficient, complex, and costly data-center networks with a network hypervisor that decouples network services from the underlying hardware. Nicira’s goal, then, is to be the first vendor to bring network virtualization up to speed with server and storage virtualization.  

GigaOM’s Stacey Higginbotham takes issue with the New York Times article and with Nicira’s claims relating to its putatively peerless place in the networking firmament. Writes Higginbotham: 

“The article . . . .  does a disservice to the companies pursing network virtualization by conflating the idea of flexible and programmable networks with Nicira becoming “to networking something like what VMWare was to computer servers.” This is a nice trick for the lay audience, but unlike server virtualization, which VMware did pioneer and then control, network virtualization currently has a variety of vendors pushing solutions that range from being tied to the hardware layer (hello, Juniper and Xsigo) to the software (Embrane and Nicira). In addition to there being multiple companies pushing their own standards, there’s an open source effort to set the building blocks and standards in place to create virtualized networks.”

The ONF Factor

The open-source effort in question is the Open Networking Foundation (ONF), which is promulgating OpenFlow as the protocol by which software-defined networking will be attained. I have written about OpenFlow and the ONF previously, and will have more to say on both shortly. Recently, I also recounted HP’s position on OpenFlow. 

Nicira says nothing about OpenFlow, which suggests the company is playing down the protocol or might  be going in a different direction to realize its vision of network virtualization. As has been noted, there’s more than one road to software-defined networking, even though OpenFlow is a path that has been well traveled thus far by industry notables, including six major service providers that are the ONF’s founding board members (Google, Deutsche Telekom, Verizon, Microsoft, Facebook, and Yahoo.)

Then again, you will find Nicira Networks among the ONF’s membership, along with a number of other established and nascent networking vendors. Nicira sees a role for OpenFlow, then, though it clearly wants to put the emphasis on its own software and the applications and services that it enables. There’s nothing wrong with that. In fact, it’s a perfectly sensible strategy for a vendor to pursue.

Tension Between Vendors and Service Providers

Alan S. Cohen, a recent addition to the Nicira team, put it into pithy perspective on his personal blog, where he wrote about why he joined Nicira and why the network will be virtualized. Wrote Cohen:

“Virtualization and the cloud is the most profound change in information technology since client-server and the web overtook mainframes and mini computers.  We believe the full promise of virtualization and the cloud can only be fully realized when the network enables rather than hinders this movement.  That is why it needs to be virtualized.

Oh, by the way, OpenFlow is a really small part of the story.  If people think the big shift in networking is simply about OpenFlow, well, they don’t get it.”

So, the big service providers might see OpenFlow as a nifty mechanism that will allow them to reduce their capital expenditures on high-margin networking gear while also lowering their operational expenditures on network management,  but the networking vendors — neophytes and veterans alike — still seek and need to provide value (and derive commensurate margins) above and beyond OpenFlow’s parameters. 

With Latest Moves, HP Networking Responds to Customers, Partners, Competitors

Although media briefings took place yesterday in New York, HP officially announced new networking  products and services this morning based on its HP FlexNetwork Architecture.

Bethany Mayer, senior VP and general manager of HP Networking, launched proceedings yesterday, explaining that changing and growing requirements, including a shift toward server-to-server traffic (“east-west” traffic flows driven by inexorable virtualization) and the need for greater bandwidth, are overwhelming today’s networks. Datacenter networks aren’t keeping pace, bandwidth capacity in branch offices isn’t where it needs to be, there is limited support for third-party virtualized appliances, and networks are straining to accommodate the proliferation of mobile devices.

Quoting numbers from the Dell’Oro Group, Mayer said HP continues to take market share from Cisco in switching, with HP gaining share of about 3.8 percent and Cisco dropping about 6.5 percent. What’s more, Mayer cited data from analyst firm Robert W. Baird. indicating that 75 percent of enterprise-network purchase discussions involve HP. Apparently Baird also found that HP is influencing terms or winning deals about 33 percent of the time.

The Big Picture

Saar Gillai, vice president of HP’s Advanced Technology Group and CTO of HP Networking, followed with a presentation on HP Networking’s vision. Major trends he cited are virtualization, cloud computing, consumerization of IT, mobility, and unified communications. Challenges that accompany these trends include complexity, management, security, time to service, and cost.

In summary, Gillai said that the networks installed at customer sites today just weren’t designed to address the challenges they’re facing. To reinforce that point, Gillai provided a brief history of enterprise application delivery that took us from the 60s, when we had mainframes, through the client-server era and the Web-based applications of the 90s through to today’s burgeoning cloud environments.

He explained that enterprise networks have evolved along with their application delivery models.  Before, they were relatively static (serving employees onsite, for the most part), with well-defined perimeters and applications that were limited qualitatively and quantitatively. Today, though, enterprise networks must accommodate not only connected employees, but also connected customers, partners, contractors, and suppliers. The perimeter is fragmented, the network distributed, the applications mobile (even in the data center with virtualization), client devices (such as smartphones and tablets) proliferating, and wireless LANs, the public cloud and the Internet also prominently in the picture.

Connecting Users to Services

What’s the right approach for networks to take? Gillai says HP is advancing toward delivering networks that focus on connecting users to the services they need rather than on managing infrastructure. HP’s vision of enterprise-network architecture conceives of a pool of virtualized resources where managing and provisioning are done.  This network has a top layer of management/provisioning, a layer below inhabited by a control plane, and then a layer below that one comprising physical network infrastructure. In that regard, Gillai drew an analogy with server virtualization, with the control plane functioning as an abstraction layer.

With talk of a management layer sitting above a control plane that rides atop physical infrastructure, the HP vision seems strikingly similar to the defining principles of software-defined networking as realized through the OpenFlow protocol.

OpenFlow: It’s About the Applications

On OpenFlow, however, Gillai was guardedly optimistic, if not a little ambiguous. Although noting that HP has been an early proponent of OpenFlow and that the company sees promise in the technology, Gillai said the critical factor to OpenFlow’s success will be determined by the applications that run on it. HP is interested in those applications, but is less interested in the OpenFlow controller, which it does not see as a point of differentiation.

Gillai is of the opinion that the OpenFlow hype has moved considerably ahead of its current reality. He said OpenFlow, as a specific means of enabling software-defined networking, is evolutionary as opposed to revolutionary. He also said considerable work remains to be done before OpenFlow will be suitable for the enterprise market. Among the issues that need to be resolved, according to Gillai, is support for IPv6 and the “routing problem” of having a number of controllers communicate with each other.

On the Open Networking Foundation (ONF), the private non-profit organization whose first goal is to create a switching ecosystem to support the OpenFlow interface, Gillai suggested that the founding and board members — comprising Deutsche Telekom, Google, Microsoft, Facebook, Verizon, and Yahoo — have a clear vision of what they want OpenFlow to achieve.

“If the network could become programmable, their life will be great,” Gillai said of the ONF founders, all of whom are service providers with vast data centers.

Despite Gillai’s reservations about OpenFlow hype, he indicated that he believes “interesting applications” for it should begin emerging within the next 12 to 24 months. He also said that it “would not be big surprise” if HP were to leverage OpenFlow for forthcoming control-plane technology.

ToR Switch for the Data Center

As for the products and services announced, let’s begin in the data center, seen by all the major networking vendors as a lucrative growth market as well as venue for increasingly intense competition.

HP FlexFabric solutions for the data center include the new 10-GbE HP 5900 top-of-rack (ToR) switch and the updated HP 12500 switch series.

HP says the new HP 5900 series of 10-GbE ToR switches provides up to 300 percent greater network scalability while reducing the the number of logical devices in the server access layer by 50 percent, thereby decreasing total cost of ownership by 50 percent.

Lead Time and Changes to Product Naming

The switch is powered by the HP Intelligent Resilient Framework (IRF), which allows four HP 5900 switches to be virtualized so that they can operate as a single switch. The HP 5900 top-of-rack switch series is expected to be available in Q1 2012 in the United States with a starting list price of $38,000.

It bears noting that HP typically refrains from announcing switches this far ahead of release data. That it has announced the HP 5900 ToR switch six months before it will ship would appear to suggest both that customers are clamoring for a ToR switch and also that competitors have been exploiting the absence of such a switch in HP’s product portfolio. Although the 5900 isn’t ready to ship today, HP wants the world to know it’s coming soon.

HP says its HP 12500 switch series benefits from improved network resiliency and performance  as a result of  the addition of the updated HP IRF technology. The switch provides full IPv6 support, and HP says it doubles throughput and reduces network recovery time by more than 500 times. The HP 10500 campus core switch is available now worldwide starting at $38,000.

You might have noticed, incidentally, something different about the naming convention associated with new HP switches. HP has decided that, as of new, its networking products will just have numbers rather than alphabetical prefixes followed by numbers. This has been done to simplify matters, for HP and for its customers.

FlexCampus Moves 

On the campus front, new HP FlexCampus offerings include the HP 3800 stackable switches, which HP says provide up to 450 percent higher performance. HP also is offering a new reference architecture for campus environments that unifies wired and wireless networks to support mobility and high-bandwidth multimedia applications. The HP 3800 line of switches is available now worldwide starting at $4,969.

Although HP did not say it, at least one of its primary competitors has cited a lack of HP reference architectures for customers, particularly for campus environments. HP clearly is responding.

HP also unveiled virtualized services modules for the HP 5400zl and 8200zl switches, which it claims are the first in the industry to converge blade servers at the branch into a network infrastructure capable of hosting multiple applications and services. The company claims its HP Advanced Services zl Module with VMware vSphere 5 and HP Advanced Services zl Module with Citrix XenServer deliver a 57-percent cut in power consumption and a 43-percent reduction in space relative to competing products. Available now worldwide, the vSphere HP Advanced Series zl Module with VMware vSphere 5 (including support and subscription, 8GB of RAM) starts at $5,299. The HP Advanced Services zl Module with Citrix XenServer (including support and subscription, 4GB of RAM) starts at $4,499.

Emphasis on Simplicity and Evolution

HP also rolled out HP FlexManagement with integrated mobile network access control (NAC) in HP Intelligent Management Center (IMV) 5.1 to streamline enterprise access for mobile devices and to protect against mobile-application threats. HP Intelligent Management Center 5.1 is expected to be available in Q1 2012 with a list price of $6,995.

Also introduced are new services to facilitate migration to IPv6 and new financing to allow HP’s U.S-based channel partners to lease HP Networking products as demonstration equipment.

Key words associated with this slate of HP Networking announcements were “evolutionary” and “simplification.” As the substance and tone of the announcements suggest, HP Networking is responding to its customers and partners — and also to its competitors — closing gaps in its portfolio and looking to position itself to achieve further market-share gains.

Discouraged in US, Huawei Invests Heavily in European Enterprise Push

As we watch Huawei invest heavily and ramp up for a sustained enterprise-networking push in Europe, the Chinese network-equipment provider, which made its name and fortune in telecommunications gear before expanding to mobile devices and enterprise infrastructure, remains conspicuous by its relative absence in the USA.

That’s not how Huawei planned it, of course. The company has made successive bids to establish a meaningful beachhead in the US, and each time it was turned back on national-security grounds.

Thwarted at Every Turn

There was its joint $2.2-billion takeover bid, as a minority player, with Bain Capital for 3Com, its former joint-venture partner in H3C, an acronym for Huawei 3Com. That came to naught when the Committee on Foreign Investment in the United States (CFIUS) discouraged the prospective buyers from pursuing the deal because of concerns about Huawei’s potential access to Tipping Point and 3Com security technologies. Concerns about the US government’s disposition to Huawei also torpedoed the Chinese company’s efforts to acquire Motorola’s wireless-network business and software vendor 2Wire, even though Huawei reportedly bid at least $100 million more than the successful acquirer in each case.

Since then, Huawei was warned off an acquisition of assets belong to 3Leaf, a cloud-software provider. Last, but perhaps not least from Huawei’s perspective, it has been effectively prevented from making headway in its sale of wireless base stations and other telecommunications infrastructure to America’s leading wireless operators, including Sprint Nextel.

While Huawei has made sales to smaller US service providers, it seems effectively locked out of sales to top-tier wireless operators. Understandably, that limits its growth in the US market, making displacement of incumbent vendors impossible.

Aiming for Enterprise Revenue of $7 Billion Next Year

As such, it’s no wonder Huawei looks to other parts of the world as it rolls out an aggressive plan to grow its new enterprise business to sales of $7 billion next year, from just $2 billion last year and $4 billion this year. By 2015, Huawei sees its enterprise business generating revenue of $15 billion to $20 billion.

That’s a heady growth target, and Huawei clearly is focusing on its domestic market in China, as well as emerging economies in Asia and South America, as well as strong growth in Australia and Europe, the Middle East, and Africa (EMEA).

I wouldn’t want to say that Huawei has given up on the US market — I don’t think Huawei gives up on anything — but it clearly recognizes political reality and will focus elsewhere for the time being.

For Cisco, Good News and Bad News

For Cisco and other enterprise-networking vendors with significant market share in the United States, that’s good news. The news might not be as good in Europe, where Huawei clearly is girding for intensive engagement with customers and channel partners, including those now in other camps.

Cisco obviously benefits, though it is not alone, if Huawei remains constrained or otherwise discouraged from moving aggressively into the US domestic market. Conversely, however, there is a danger that China, which seems to be influenced at least in part by Huawei and ZTE’s strategic imperatives (see recent developments in Libya), might make life more difficult for Cisco in China if Huawei’s hardships in the US persist.

Although Cisco seems to have stayed on the good side of Chinese authorities hitherto, circumstances and situations are subject to change. These developments, like so many others in a networking market that is now surprisingly fluid, bear watching.

Intel-Microsoft Mobile Split All Business

In an announcement today, Google and Intel said they would work together to optimize future versions of the  Android operating system for smartphones and other mobile devices powered by Intel chips.

It makes good business sense.

Pursuit of Mobile Growth

Much has been made of alleged strains in the relationship between the progenitors of Wintel — Microsoft’s Windows operating system and Intel’s microprocessors — but business partnerships are not affairs of the heart; they’re always pragmatic and results oriented. In this case, each company is seeking growth and pursuing its respective interests.

I don’t believe there’s any malice between Intel and Microsoft. The two companies will combine on the desktop again in early 2012, when Microsoft’s Windows 8 reaches market on PCs powered by Intel’s chips as well as on systems running the ARM architecture.

Put simply, Intel must pursue growth in mobile markets and data centers. Microsoft must similarly find partners that advance its interests.  Where their interests converge, they’ll work together; where their interests diverge, they’ll go in other directions.

Just Business

In PCs, the Wintel tandem was and remains a powerful industry standard. In mobile devices, Intel is well behind ARM in processors, while Microsoft is well behind Google and Apple in mobile operating systems. It makes sense that Intel would want to align with a mobile industry leader in Google, and that Microsoft would want to do likewise with ARM. A combination of Microsoft and Intel in mobile computing would amount to two also-rans combining to form . . . well, two also-rans in mobile computing.

So, with Intel and Microsoft, as with all alliances in the technology industry, it’s always helpful to remember the words of Don Lucchesi in The Godfather: Part III: “It’s not personal, it’s just business.”