Fifteen years ago, nearly every PowerPoint presentation about wireless had a slide predicting data traffic taking off like a hockey stick. What might have seemed overly optimistic then looks like an underestimation now.
That’s one takeaway from Cisco’s latest Visual Networking Index Global Mobile Data Traffic Forecast (2015 to 2020), which cites Maravedis’ Wi-Fi research. According to Cisco:
- Monthly mobile data usage in 2015 hit 3.7 exabytes and is track to reach 30.6 exabytes by 2020. That means 2020 traffic will be 120 times greater than in 2010.
- Between 2015 and 2020, global mobile data traffic will grow twice as fast as fixed IP network loads.
- In 2015, 51 percent of mobile data traffic was offloaded to Wi-Fi. By 2020, Wi-Fi’s share will grow to 55 percent.
- In 2015, there were 64 million Wi-Fi hotspots worldwide, including 57 million home spots, based on Maravedis’ research. By 2020, they’ll hit 432 million, of which 423 million will be home spots.
Although consumer and business applications such as video are responsible for a lot of that traffic, Cisco expects Machine to Machine/Internet of Things (M2M/IoT) applications to account for a big chunk of growth:
- Nearly 8 percent of mobile connections in 2015 were IoT. By 2020, they’ll be 26.4 percent.
- In 2020, those devices will generate 6.7 percent of all mobile traffic versus 2.7 percent in 2015.
- One type of IoT device – wearables such as smart watches – will grow six-fold from nearly 97 million in 2015 to more than 600 million in 2020.
To maximize their share of the M2M/IoT market – and the revenue that comes with it – mobile operators will need to adopt a host of emerging low-power wide-area (LPWA) cellular technologies: LoRa, Random Phase Multiple Access (RPMA), Ultra Narrow Band (UNB), Extended Coverage GSM (EC-GSM), LTE Machine Type (LTE-M) and the LTE-based Narrow Band (NB) IoT.
These proprietary and standards-based LPWA technologies will help cellular meet IoT’s price and cost requirements, which are significantly lower than those of smartphones and tablets. Without them, cellular will lose IoT market share to Wi-Fi, partly because its chipsets are so inexpensive and partly because its indoor coverage often is superior to cellular’s.
The Wi-Fi community also isn’t resting on its laurels. For example, earlier this year, the Wi-Fi Alliance launched HaLow, formerly known as 802.11ah, which uses the 900 MHz band to provide better indoor coverage. Maravedis believes that HaLow is potentially a very disruptive technology, especially with the arrival of tri-band routers that support 2.4GHz, 5.8GHz and the 900 MHz used by 802.11ah. For instance, a residential tri-band router could take traffic to and from consumer-oriented IoT devices and the home’s smart utility meter backhaul and run it over that customer’s wired broadband service. That scenario completely cuts the mobile operator out of the picture. Similar scenarios could play out in the enterprise market, too, further cutting into mobile operator revenue from IoT.
Of course, many mobile operators already own wide-area Wi-Fi networks and/or partner with Wi-Fi aggregators such as Boingo. These initiatives help mobile operators both enable and leverage the offload trend that Cisco’s VNI quantifies. Today, as much as 70 percent of international travelers often rely on Wi-Fi instead of cellular, according to the WBA’s recent “Wi-Fi Roaming Business Case” report. As the Wi-Fi community makes it easier for travelers and other people to roam on Wi-Fi, it’s not hard to see why Cisco’s 2020 forecast of 55 percent offload could be on the mark.
The bottom line is that there are plenty of business opportunities as consumers and business users increasingly shift their voice, video and data from fixed networks to wireless ones. Those opportunities also will drive cellular and Wi-Fi to both compete and cooperate.
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Ever since the mobile access network started its migration to IP, the narrative has centered on whether Ericsson, the mobile king, or IP giant Cisco, would be the winner in the new market. That made the news that the two companies are entering into a deep partnership seem shocking at first - but then completely logical.
The two companies announced on Monday that they will cooperate from development to delivery of systems for carriers and enterprise customers, and predicted a full $1bn each in additional revenue by the end of 2018, as a direct result of the alliance. They will focus their efforts heavily on cloud computing the the IoT (internet of things), and Ericsson will receive patent licence fees from its new friend. The Swedish firm also expects to save SEK1bn ($115m) a year from the deal.
There are huge challenges in achieving workable cooperation between two companies with such different approaches - Ericsson still R&D-heavy and increasingly services-driven; Cisco a sales machine focused on hardware and software, and tending to buy the new technologies it needs.
But the deal has fewer risks than a merger (even supposing that got past antitrust) and is a decisive move to preserve both partners' markets in the face of the rise of Huawei and the merger of Nokia and Alcatel-Lucent. Both companies are traditionally wary of major mergers and Ericsson resisted all pressure to follow Nokia's lead and acquire a router company like Juniper. "I don't believe in big mergers - this is by far the best solution you can get," Ericsson CEO Hans Vestberg told Bloomberg. "This is much faster and more efficient."
The wireless infrastructure business is consolidating as traditional hardware becomes a game of scale and the value shifts to virtualization and SDN, services and cloud platforms. In these areas of future growth, Cisco and Ericsson are far more complementary than they are in their traditional markets. While Cisco had little chance of penetrating Ericsson's mobile RAN fortress, nor Ericsson Cisco's enterprise IP heartland - despite strong attempts by both around the edges - they can target one another's customers with their software-oriented platforms.
Ericsson has a far more developed services offering - Cisco's structure and roadmap is still mainly product-focused, though the cloud, IoT and SDN markets will inevitably bring elements of managed services into the mix. Their strengths and weaknesses in virtualization, orchestration and SDN are different, and while Cisco has a more end-to-end approach to the IoT, Ericsson has been developing the links between a hosted cloud service and billions of endpoints.
And of course, they both have a core customer base of large service providers, though they usually sell different products to different departments. Even that is changing - as seen in AT&T's Domain 2.0 and many other operators' bids to shake up their supply chains, the providers of base stations, routers and other kit are being brought together around SDN.
Better then, to play nicely in those playgrounds than try to muscle each other to the sidelines, and in doing so, wrongfoot the other competitors, without the disruption of a huge merger or joint venture, Nokia/ALU-style. Indeed, as those two vendors spend much of 2016 working out the details of their marriage, with the aim of offering a full scale IP/mobile platform plus software, Ericsson and Cisco could leapfrog them and provide a similar combination in a simpler way.
Both partners will have the chance to squeeze rivals - Huawei for both of them, Nokia/ALU for Ericsson, Juniper, ALU and agile SDN specialists for Cisco. Even Huawei will have to look nervously at an axis which boasts $75.4bn in combined revenues in the last fiscal year and has 76,000 professional services staff.
They proclaimed their new alliance as one which would create the "networks of the future", and offer customers "the best of both companies: routing, data center, networking, cloud, mobility, management and control, and global services capabilities."
As well as offering an end-to-end portfolio, they outlined two other key goals - to create a new mobile enterprise platform based on a "highly secure technology architecture for seamless indoor/outdoor networks", which would presumably tap into Cisco's WiFi and Ericsson's LTE and 5G work; and the acceleration of platforms for the IoT.
Among the details of the deal are commitments to create reference architectures and products;
systems-based management and control; a broad reseller agreement; and collaboration in key emerging market segments. Also, a combined team will start work on a joint initiative focused on SDN and virtualization.
They will cross-licence each other's patent portfolios - they have a combined 56,000 patents, though clearly the weight is towards Ericsson, which will receive the revenues from the agreement. They will also discuss Frand (fair reasonable and non-discriminatory) policies.
Vestberg said in a statement: "Foremost, we share the same vision of the network's strategic role at the center of every company's and every industry's digital transformation. Initially the partnership will focus on service providers, then on opportunities for the enterprise segment and accelerating the scale and adoption of IoT services across industries. For Ericsson, this partnership also fortifies the IP strategy we have developed over the past several years, and it is a key move forward in our own transformation."
His counterpart at Cisco, Chuck Robbins, said: "With the pace the market is moving, the successful companies will be those who build the right strategic partnerships to accelerate innovation, growth, and customer value … We have worked with Ericsson during the last year on developing a strategy for future industry leadership, and can start executing together today."
The firms secured public support from the CEOs of key customers including Vodafone and AT&T, welcoming the potential to accelerate innovation in the integration of wireless and IP, and the move to the IoT.
And Roger Gurnani, chief information and technology architect at Verizon, summed it all up, saying: "This global partnership has the potential to reshape the industry."
BY CAROLINE GABRIEL
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As outgoing CEO John Chambers hosted his last Cisco Live annual conference, it was fitting that the centrepiece of the event was virtualization. The somewhat abrupt timing of Chambers' retirement indicated that he felt the giant IP company was at an important turning point, which made it the right time for a change of leadership.
The move, by carriers and enterprises, from physical to virtual networks and towards software-defined networking (SDN) will define the next few years in Cisco's core business and decide whether it remains in the dominant position which Chambers, despite recent turmoils, carved out for it.
As part of a broad set of SDN announcements, Cisco executives spent some time focused on operators, saying that their progress towards virtualization was more rapid than many had expected. It was anticipated that carriers would largely confine their first-wave efforts to relatively discrete platforms like the packet core, but in fact, according to Kelly Ahuja, Cisco's SVP for the service provider business, they are actually trialling virtual network functions, as well as SDN, across a wide range of elements, including firewalls, load balancers and VoLTE infrastructure.
"Most operators are telling us - look, my network is a chaos, an IT construct is a chaos. Virtualized chaos is still chaos, so what you got to do is show me what value these things can add for me," Ahuja said.
In that context, Cisco is focusing on one of the areas with the greatest potential to turn virtualization into gold for operators - virtual managed services, which provide the ability to support large numbers of third party offerings, from flexible MVNOs to corporate customers' services. "Business customers are where we're starting to see most relevant application and deployment of that," Ahuja said, according to SeekingAlpha.
Building platforms to support large numbers of customers' and MVNOs' offerings is a key commercial goal of AT&T's Domain 2.0 SDN program. Cisco is working with the US carrier, and with rival Verizon, on their SDN projects, which are among the most advanced in the telco world. This will cheer investors, who have been concerned at signs that Cisco might start to be squeezed out of its central position in the infrastructure of AT&T and other major customers.
The first wave of Domain 2.0 vendors announced by AT&T indicated the disruptive effect SDN could have on its supplier roster, and included Metaswitch, Tail-f and Affirmed Systems, and excluded Cisco, (though Cisco subsequently hit back by acquiring Tail-f). Verizon, which recently announced its own SDN program, has stuck with traditional partners in phase one and will add specialists and start-ups later - its key vendors are Cisco, Alcatel-Lucent, Nokia, Ericsson and Juniper. These large companies will create the framework architecture and the interface specifications, and Verizon's first targets are the relatively low hanging fruit of SDN - the data center, packet core and IMS.
To help bolster its position in the carriers' SDN roadmaps, Cisco is steadily adding to its platform, and says it now supports 15 virtual network functions for telcos. In a long list of announcements at Cisco Live, the most carrier-focused were additions to the Border Gateway Protocol (BGP) EVPN. This is targeted at service providers and it has now gained a Virtual Topology System (VTS). For operators requiring a programmable fabric, VTS adds the ability to provision and manage a VXLAN, based on BGP EVPN, as a software overlay across Cisco Nexus switches. (VXLAN is a proposed protocol for running a virtual network on existing Layer 3 infrastructure, and an important tool for allowing operators and enterprises to migrate gradually to SDN, without sacrificing hardware investments.) VTS will support any virtual switch that supports the BGP protocol.
Cisco first introduced BGP EVPN on the Nexus 9000 switch early this year but it is now being extended to the Nexus 5600 and 7000 families, and to the modular Nexus 9500. However, the Nexus 1000v does not yet support BGP.
While programmable fabric will be important to large carrier SDN programs, some smaller ones may use the more pre-packaged Cisco offering, Application Centric Infrastructure (ACI), which is mainly targeted at enterprise customers and the SDN 'mass market'. New extensions to the fabric software include extensions to support integration with Microsoft Azure; plus a plug-in for VMware vCenter plug-in; an ACI toolkit for simplified network provisioning; and a 'stretched' fabric that can extend from 30km to 150km over DWDM, pseudowires and dark fiber for multi-site data centers.
Cisco also announced two Nexus 3000 Series switches based on merchant silicon. The Nexus 3232C is a 32-port 100G switch based on Broadcom's Tomahawk chipset, while the Nexus 3264Q is a 64-port 40G variant. Both will ship in the third quarter with prices starting at $35,000. They indicate another disruptive aspect of SDN - the shift towards hardware which is more commoditized in design, openness and, of course, price. That in turn will drive vendors like Cisco, which have relied heavily on ASICs designed inhouse, towards the economics of merchant silicon, boosting providers like Broadcom.
By Caroline Gabriel, Research Director, Maravedis-Rethink
The latest R&D project in 60GHz spectrum comes from Samsung, which can transfer a 1Gbyte movie in three seconds. However, as the speed wars heat up in WiFi, all these data rates are going to need backhaul support, an issue Broadcom and others are seeking to address through new Ethernet standards.
The race to break speed records in WiFi is almost as intense as it is in cellular, and Samsung is a prominent name in both. The Korean firm has been demonstrating ‘5G’ prototypes hitting gigabit speeds, but WiFi can support even higher data rates, and the company says it has achieved up to tenfold increase on current speeds.
In both WiFi and cellular R&D, the key to blistering speeds is usually the combination of techniques such as advanced MIMO, with high frequency spectrum. Samsung says it has developed a version of WiGig (the WiFi-like standard for the 60GHz band) which boosts the current maximum theoretical data rate for a consumer device fivefold – and in terms of real world average speeds, the gap is 10 times.
The prototype system enables a 1Gbyte movie to be transferred in under three seconds and uncompressed high definition video to be streamed in real time. Like other next generation WiFi efforts, Samsung says its technology removes the gap between theoretical and actual speeds, and of course it will hope that its breakthrough will give it an influential position in emerging standards, as well as differentiation for its own future products.
“Samsung has successfully overcome the barriers to the commercialization” of the 60GHz WiFi technology, claimed Kim Chang Yong, head of a Samsung R&D center, in a statement. “New and innovative changes await Samsung’s next generation devices, while new possibilities have been opened up for the future development of WiFi technology.”
Amid rising competition in its heartland smartphone business, Samsung is investing in R&D in many areas which could extend its business model, including software and media platforms, enterprise platforms and cutting edge infrastructure for ‘5G’, which is expected to include technologies derived both from LTE and WiFi. The first products to be targeted with 60GHz WiFi are likely to be audiovisual home and mobile media devices, telecoms infrastructure and medical systems, said Samsung.
Samsung’s rivals are all working on enhancing WiFi for higher speed and better quality of experience in future. For instance, Huawei recently demonstrated 10Gbps connections in conventional 5GHz spectrum.
However, the faster WiFi gets, the more challenging its backhaul issues will be. With that in mind, Broadcom, HP and Cisco are drumming up interest in dramatically speeding up gigabit Ethernet, to keep up with the pace of change in WiFi.
The two giants claim there is a growing need for standard physical layers running at 2.5Gbps and 5Gbps, to fit between the current Gigabit Ethernet standard and the high end 10Gbps platform. The standard would cover ranges of 100 meters over Cat E twisted pair cabling, so that changes to cable infrastructure would not be required as they would for 10Gbps and above.
The main reason is the rapid increase in the speed of WiFi. Enterprise and hotspot WLANs are adopting the latest 802.11ac iteration, and its gigabit speeds are threatening to drown the access points’ wired Ethernet backhaul links.
The two companies are proposing the formation of a study group within the IEEE 802 effort, focused on a Next Generation Enterprise Access Base-T PHY. This will get its first hearing at the IEEE 802 plenary in San Antonio, Texas on November 3-6. The initiators of the would-be study group are Yong Kim, senior technical director at Broadcom, and David Law of Hewlett-Packard, chair of the 802.3 working group, and Cisco has also lent its support.
They say in their invitation: “This is a call for interest to initiate a Study Group to explore the need for one or more new Ethernet speed(s) between 1Gbps and 10Gbps over balanced twisted pair cabling. We believe there is a market need, driven by IEEE 802.11ac wireless access points, to support higher than 1Gbps Ethernet rates at a 100m reach. Higher performance end devices like desktop and laptop PCs, as well as other enterprise applications for Ethernet, will also benefit from the new data rates provided by this work.”
John D'Ambrosia, a Dell fellow and veteran of Ethernet standards efforts, told EETimes there was significant interest and the study group was likely to be approved. "I wouldn't be surprised to see a dual-rate effort come out of this," he commented.
There is also work going on far higher up the Ethernet performance scale, in the area which feeds into Carrier Ethernet and mobile backhaul platforms. A de facto standards alliance was formed in July to look at 25G and 50G Ethernet, but the IEEE quickly responded with its own study group, focused on the same data rates, a few days later. These different efforts highlight the diversity of applications for Ethernet these days, requiring a faster development cycle and a wider variety of speeds. "People have removed the barriers of traditional 10x Ethernet upgrades,” said d’Ambrosia.
Meanwhile, Ethernet PHY specialist Aquantia is getting in early, and in time-honoured fashion seeking to create a technology in advance of an IEEE standards effort, which could then form the basis for that standard. Its new AQrate range supports 2.5G and 5G rates over 100m of Cat E twisted pair cable. The 28nm parts are based on Aquantia's existing 10G Ethernet PHY, which is in production and work in conjunction with FPGAs and IP from Xilinx.
Trapeze acquisition has not delivered, now Juniper looks to chase Cisco by signing number two enterprise WiFi player
Aruba's enterprise WiFi access points and switch/controllers will be integrated with Juniper's routers and switches to fill gaps in its wired/wireless portfolio. In this respect, there is a gaping gulf between Juniper and Cisco.
The former hoped that its acquisition of another enterprise WLAN player, Trapeze Networks, in 2010, would help it chase the market leader. But Trapeze proved too little too late - it had only 2.2% market share in 2010, and under Juniper's control has remained stuck in the same place in the league tables, seventh, that it occupied four years ago (or may even be below that, according to Dell'Oro calculations).
There have been persistent rumors that Juniper would sell off or close down its Trapeze product line, though it says it will, for now, continue to supports its own access points and controllers, and its RingMaster and SmartPass management and security systems. Mike Marcellin, SVP of strategy and marketing at Juniper, said the firm would honor its roadmap commitments, though it is notable that the firm has not yet announced upgrades to the new 802.11ac gigabit WiFi standard, unlike Aruba and others.
The Aruba alliance does not just cover cross-marketing, but joint development, which makes it strategically significant. The partners plan API-level integration of their products to enable unified management, visibility, policy and security enforcement across wired and wireless infrastructure, while Aruba's platform offers contextual data on users, devices, apps and location.
The smaller firm's portfolio will certainly give Juniper a more convincing WLAN product, but more importantly, will enable it to pitch its core wireline switches and routers into enterprises which prefer Aruba for wireless, and those which are shifting to a network management approach that is mobile-centric, not driven by wireline.
For its own part, Aruba adds another big-name channel to similar deals already in place with Alcatel-Lucent, Brocade and other switch/router makers. In this way, it is creating a broad reach for its product in the converged enterprise space, without having to develop its own wireline offerings, or expand its direct sales efforts dramatically.
There will be three phases in implementing the pact, according to a company blog post by Jonathan Davidson, SVP and general manager of Junipers campus and data center business unit.
"Phase 1 will integrate Aruba and Juniper network management applications, allowing customers to use a common set of tools to manage Juniper wired switches and Aruba WLAN equipment," he wrote.
"Phase 2 will see the integration of policy orchestration, including the definition and deployment of network access rules across Juniper and Aruba networks. The company's plan to employ a common policy language based on user, device, application and location for network-wide consistency. Phase 3 will enable the integration of wired and wireless data planes through a published interface on the Juniper EX series switches and MX series routers. This will enable the Aruba WLAN system to directly interface with Juniper switching platforms, optimizing the network data plane for wired/wireless convergence."
Juniper has been signing a range of partners with complementary portfolios to improve its ability to target wireless and mobile enterprises and carriers. Most important is an expanding alliance with Nokia, pairing Juniper's carrier switches and other core infrastructure with Nokia's mobile broadband platforms.