NSN’s CEO has recently suggested that the telecom sector will consolidate with only three major players remaining; Ericsson, Huawei and NSN. I think that vision of the future is a tad self-serving in terms of the players, but I think that it is very clear that somewhere around three players is what we could expect to see if the industry can’t find better feature differentiation. If Alcatel-Lucent wants to make the cut here, it definitely needs to make Application Enablement work, and it’s frustrating to me how close itis to that, and yet how far. But it’s not atypical with service-layer strategies in the big vendor space. Nobody has it right there.
One might ask where this consolidation would leave Cisco and Juniper, the other big players in the IP layer at least. That’s another area where NSN’s comments oversimplify. In operator trends toward procurement zones for buying, we’re seeing an attempt to create a market where a single giant vendor with a full product line can’t dominate everything.
The operators would like innovation, particularly with respect to the service layer, and they can’t get it by having everything collapse into a single giant commoditized space. But if the specialty guys like Cisco and Juniper can’t make a case in the service layer, then they can’t defend their narrower position in a commoditizing market. Thus, we could see the NSN “vision of three” being right, even if the three turn out to be different names than expects.