Back from a good few days at #NokiaIAR Global Analyst Forum in Finland. We had fantastic access to execs, product managers, and R&D. A few notes and thoughts:
Nokia *is* the leading global telecom networking vendor. The overall portfolio is impressive in many dimensions. It controls its own development and has an unrivaled end-to-end story
The company is aware most customers won't buy end-to-end, but it nevertheless believes its Future X architecture gives it a strategic advantage. By having expertise and product in-house it argues that each product area can create better solutions for best-of-breed deployments
Medium and longer-term it believes end-to-end will be the only way to really get the performance and integration that truly advanced next-generation services require.
This is the stuff Bell Labs stuff CTO Marcus Weldon talks about. E.g. device OSes will become less important because you will drive services from the network edge. This is compelling at a high-level. The obvious questions are around timing and details. Let's park that for now.
Right now the ION group (IP and Optical Networks) appears to be doing really well. Especially IP networking where the FP4 chipset investment is really paying off. It's in the sweet spot of the product cycle
Optical is lumpier (and the market is more fragmented), but nevertheless it is doing well on an annualized basis. The newish PSE3 chipset is in the product pipeline. If you want to be a top-tier networking vendor you have to invest in DSPs and optics
Had a good session on the NSP network controller/orchestrator. This is a multi-vendor, multi-layer, model-driven mediation platform for (mostly) the IP and optical layers. This is quite a new product line, so we'll see how it goes. Positions against Cisco's more established NSO
The Nokia Software group has made really a lot of progress since it was set-up a few years ago. Actually very impressive. It's now at the point where it can start to innovate faster on a common software architecture, says president Bhaskar Gorti.
The "Any Cloud" commitment by Nokia Software is especially noteworthy. This is obviously what customers want. So kudos to Nokia for reaching far outside its (initial) comfort zone.
Nokia Enterprise Networks, led by Kathrine Buvac, is on fire. 5% of revenues last year (without double counting revenues from the product groups) and growing 12% year-to-date. This includes webscale customers, but the bulk of revenue and growth is in Private Wireless Networks
Private Wireless Networks targets high-end customers in a set of key verticals. It is a fantastic example of how the end-to-end story can land commercially. Typically includes radio (mostly LTE), IP/MPLS and core networks with management software and application integration.
Private Wireless Network customers often have extreme uptime and redundancy requirements. Target is 6x9s. Demand for symmetrical performance (e.g. HD video on uplink) forces a change in network design relative to telco.
Nokia talked quite a bit about Field Area Networks for Private Wireless. It's certainly not only campuses and warehouses, but big wide-area networks as well. American utilities are the best examples.
Think Private Wireless Networks with thousands of square miles of coverage, hundreds of radio nodes, redundant transport and cores, tens of thousands of end-points, and mission-critical applications.
Interesting to note a subtle, but definite (in my view), shift in emphasis to working even more closely with telcos on Private Wireless. This is in part due to customer demand for licensed spectrum, but also I suspect a business model and telco customer relations issue.
Nokia says it doesn't want to go down-market into the channel with Private Wireless. This may change I guess, but right now it's staying at the high-end. Interesting because it also says its biggest growth challenge in this segment is scaling sales in the right way.
Buvac presented some really, really interesting and impressive customer use-cases for Private Wireless Networks. A few under NDA, so no notes. But what a phenomenally interesting market!
So on to RAN and specifically 5G RAN. It's out in the open since the Q3 results that Nokia has some issues. This is important because mobile access is Nokia's biggest reportable revenue segment (Eur 2.9 billion in Q3). There's lots to say on this another time, but for now...
First thing to say is that top management -- Rajeev Suri, CEO and Tommi Uitto, President of Mobile Networks -- dealt with it head-on and were reasonably frank about the challenges. They also gave a peak into how they are responding (more another time, perhaps)
Nokia is positioning the issue as mostly related to massive MIMO (i.e. C-band and 2.6/2.5 GHz in practice today) and mostly a problem in terms of bill-of-materials. They say there are *not* major product or feature issues. They say they have maintained market share in 5G RAN
The essence of their position is that they use too many FPGAs and therefore their costs are high relative to SOC designs and this hits margins. The new SOCs have been in development for over a year and product will arrive soon.
I know from operator contacts (not associated to the analyst event) that there is good will towards Nokia at this time. Nokia's customers want it to succeed in 5G RAN. Vodafone CTO Johan Wiberg spoke at the event. As did Ron Marquardt, Sprint and Scott Gegenheimer, Zain
Anyway, what else?... I saw a couple of really good demos (one under NDA), but missed the trip to Oulu "the home of radio" today. There seems to be lots of good stuff up there. I'm keeping an eye on other analyst timelines ;)
The virtual LTE RAN demo was impressive. Nokia showed virtual baseband with an O-RAN interface to the RU running nicely on X86 (no accelerators) in an Open Compute edge cloud chassis. I heard elsewhere Nokia has a very good virtual LTE solution so it was good to see it live.
I don't normally tweet much detail from analyst events, but #NokiaIAR seemed pretty keen for us to do so. There wasn't that much under official NDA, but of course, one uses one's discretion in deciding what to tweet.
Sharing your notes publicly on Twitter is obviously different to private notes. Let me know if it is useful. I personally prefer Twitter to Linked-in but might give it a shot over there some time as well.
