Cisco talks cloud offerings, focuses on Microsoft, Google

Cisco is talking a lot at its annual user conference, Cisco Live, but it’s not always being definitive. Cisco is said to be considering an expansion to its WebEx collaboration suite to include document authoring and management that would compete, in part, with Microsoft Office, but also with Google Docs and other online applications. Cisco also said it would be virtualizing voice and making it a cloud offering, and announced some WebEx support for private clouds, departing from its original strategy to support it only as a Cisco-hosted service.

The moves come as Cisco reorganizes its development council along more traditional lines (enterprise/commercial, service provider, consumer) and largely eliminates the high-level software group that contained the WebEx products. Cisco is shifting its original everything-hosted strategy to a hybrid-cloud model in our view, which is smart given that’s what enterprises want. The question is whether Cisco wants to be the public part of the hybrid cloud or wants to empower service providers to take that role.

The comments made by Cisco’s CTO suggest that Cisco doesn’t want to be an infrastructure-as-a-service provider but isn’t ruling out platform-as-a-service and certainly not SaaS. Cisco also indicated it was ready to meet the challenge of Google Voice and Google Wave in Unified Communication, which at least shows that Google knows that Wave and Voice are UC challenges. We wonder if Cisco might not get too diverted in a battle with Google; it would be better to simply adapt Cisco UC to work inside Wave and to integrate it with Voice using APIs.

Comcast launches multi-modal WiMax service in Oregon

Comcast has launched a WiMax multi-modal service in Portland, Ore., that lets customers use either Clearwire WiMAX or Comcast cable for Internet access at one fixed charge. An additional plan offers access to Sprint’s national 3G network.

The plan is aimed at the RBOCs’ success with smartphones in promoting their own data plans for wireless, creating a useful bundle for consumers. RBOCs are also expected to launch femtocell-based services that would directly integrate wireless and wireline. Comcast says it will follow up with similar services in other Clearwire WiMax cities.

Google Voice “UC” offers telecom-providers major angst

Google is now starting to admit new users to Google Voice, and the new offering is certainly a step that will give telcos worldwide some major angst. Google Voice is a free service that provides a single number, voicemail, free calling in the U.S., call screening and blocking, SMS alerts, email delivery of voicemail, rings on multiple phones, changes phones in mid-call, etc.

The new offering is surely a version of a unified communications product hosted on the Internet and it competes with nearly all of the telco advanced voice features. It also seems to signal Google’s entry into more traditional services. What the business model for this will be is very hard to say, but the offering certainly puts pressure on telcos to come up with a better (which is to say ANY) service-layer strategy.

Nortel passes; competitors should heed warning

Now that it’s pretty clear that Nortel is gone, the inevitable “what went wrongs” are multiplying. We’ve heard they didn’t innovate, now we hear that they weren’t supposed to. In truth, you can never game the outcome of changes in behavior that it’s too late to make.

Any company, to be successful, has to make its customers successful. There are a lot of paths toward doing that; some rely on innovation and others on integration or being a cost leader. Any company can pick one, but that’s the rub. You can’t pick none, or pick them all. Nortel never had a strategy, it only had a set of tactics to address this or that silo. At a time when “convergence” is the byword of the market Nortel didn’t see its market as being converged, as having a single set of needs and as driven by a single set of conditions. It was, and so they missed the boat.

Cisco or Alcatel-Lucent, both cited by some as examples of what should have happened at Nortel, aren’t out of the woods yet either. The world of carrier and enterprise networking changed forever in 2008/2009 and the remaining players have yet to be tested against the new conditions. Good things, and bad things, are still to come.

Juniper/NYSE join forces on data center design

Juniper and the New York Stock Exchange (NYSE) announced a joint project to create a new ultra-low-latency data center design that the exchange will deploy in both its NYC metro and London metro data centers. This deal will be converting to Juniper’s new data center Stratus fabric in the future, to achieve a next-level flattening of the connection structure and further reduce latency.

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Femtocell deployment to test 4G pricing and ROI

Vodafone is planning to release the first European femtocell offering in about a week, using Alcatel-Lucent products. AT&T is also planning to expand its currently limited set of trials immediately, and to have a national offering in late 2009. The moves will be an important step in the evolution of femtocells, and may prove a trial balloon for the 4G deployment of femtocell technology that we’re hearing is an absolutely critical part of nearly everyone’s 4G plans.

With 4G deployment there is a need to manage total first-cost and at the same time give users a reasonable experience. Femtocells in each 4G home would give users an in-home experience with 4G as a baseline even if their own home area wasn’t yet covered by 4G cells, or was covered sparsely. If we see more with femtocells in 2009, we’ll also have a chance to see how carriers propose to price femtocell airtime: Will they discount it or make it free given that their network isn’t really being used? That will tell us a lot about whether femtocells will be a means of encouraging high-bit-rate applications at home where traffic won’t hurt the provider network, or whether providers will try to use femtocells only to get a better ROI by reducing the demand for true 4G cells.

DOCSIS 3.0 spurs cable/telecom broadband “speed wars”

There are some signs that the DOCSIS 3.0 broadband speed wars are already having an impact on the market. Both Verizon and AT&T have been boosting their broadband speed tiers in preparation for the expected pressure on speed generated by cable companies. But there’s also a general industry push to sign new customers through incentives like the FiOS free-netbook deal.

Industry data shows that almost three of every four TV viewers will stay with their incumbent operator unless there’s some exciting incentive to switch. The summer is also a good time for promoting a change; with kids out of school and the main channels in reruns, there’s more interest in premium channels and in the use of the Internet for entertainment.

A more significant marketing initiative by Verizon is an increase in the uplink bandwidth to accentuate an area where cable lags even with DOCSIS 3.0. FiOS uplink speed has doubled or more in the lower tiers of the offerings, but pushing how fast uploading content could be risks encouraging P2P, which is the form of consumer uploading most commonly used.

Private cloud management tools: Progress but insight needed

Private cloud management tools are coming into the vogue, a sure sign that there is indeed considerable interest in cloud computing (as our surveys have reported). The only concern we see for this market is a continued lack of insight into just what the concept of “cloud management” means.

In cloud computing, the critical element is the ability to use policies to assign applications to resources from the “cloud pool.” Once assigned, the applications must be monitored as though they were components of a network service, and new assets must be substituted where SLAs can’t be met. Thus, cloud management is a lifecycle process, and we’re not seeing that reflected in all of the offerings to date. We also don’t see any integration of cloud and network operations, which is critical for meaningful SLAs.

EU tackles social networking privacy regulations

European regulators have often been more aggressive and pro-consumer than those in the U.S., and now they’re looking at the privacy implications of open social network platforms like Facebook’s. Social network companies have been pushing open platforms that give third-party firms access to their users’ data. This is a revenue stream for Facebook, but regulators fear it’s a surrendering of user privacy, often without full knowledge and disclosure.

So far, the recommendations for further protection are just a part of a draft document that hasn’t been presented to the EC, but regulatory trends have been showing a significant pro-consumer, pro-privacy shift. The result may be increased difficulty in monetizing not only social networks but also other online trends like video. In the U.S., the House is also closing in on privacy legislation that may well impact social networks and behavioral targeting.

Alcatel-Lucent/HP alliance important sign in converged networking and IT

Alcatel-Lucent and HP have formed a global alliance to deliver converged network and IT strategies to service providers and enterprises, perhaps the most direct validation yet presented of the service layer trends we’ve been discussing for the last year. The alliance will include integration/management services, as well as products. It is aimed at the increased buyer interest in containing vendors involved in deals and assigning key vendors overall responsibility.

In a competitive sense, it’s aimed at both Cisco and IBM, who have been increasingly offering integrated IT/network strategies. This sort of alliance is likely to eventually lead to M&A, though we don’t think Alcatel-Lucent and HP have any mutual intentions. While this is good for the buyer and the market, in the sense that it’s responsive to strategic trends, it shows that network vendors are increasingly facing commoditization at the transport/connection layer because the action is moving up the stack.