AvidThink

Research and Analysis

AvidThink 2024 May Newsletter

Happy June to you! In addition to Linux Foundation ONE Summit 2024 (April 30 – May 1), AvidThink headed out to two additional shows last month: RSA Conference and ONUG Spring. We have two more this month: Cisco Live! US and DTW-Ignite, before taking a break from conference travel during the US summer — we’re looking forward to that!

Is GenAI Enterprise SaaS Vendors’ 5G Moment?

While putting this newsletter together, we couldn’t help but notice public markets souring on enterprise software vendors SalesForce, UiPath, Workday. GenAI’s arrival hasn’t been that tide that lifts all boats — at least not yet. We’re wondering if GenAI is instead the enterprise software vendors’ “5G” equivalent — that infrastructure investment race that all are forced to make so they can claim to be “GenAI-powered” but doesn’t drive enough increased MRR/ARR (aka SaaS “ARPU”) to offset addtional spend. Good to know that telcos aren’t the only industry struggling, even if telcos face many more challenges than others.

Campus NaaS Report 2024

If you missed the notice a few weeks back, we launched our Campus network-as-a-service (NaaS) report! The report covers incumbent vendors and upstarts battling for a $35B+ campus networking market. Upstarts like Nile, Meter, Join, Ramen Networks, and Shasta Cloud have raised almost $500M in venture funding. Plus, when Cisco networking veterans like Pankaj Patel and John Chambers jump in, and VCs and financiers like Sequoia Capital, Sam Altman, Diane Greene (VMware founder), and Reid Hoffman (LinkedIn) pile on, it’s hard not to pay attention.

Download our report and check out the gallery at our Campus NaaS resource site.

ONUG Spring 2024 Showcase

We’d like to thank Nick Lippis and ONUG for hosting our media partner Jim Carroll (Converge Digest) and Roy at ONUG Spring in Dallas. The AI in Networking theme, along with NaaS, featured prominently. Check out our ONUG Spring 2024 showcase, where we feature thought leaders sharing views on enterprise networking.

RSA Conference 2024

If you were not one of the 40,000+ attendees at this year’s RSA Conference at the Moscone Center in San Francisco, watch Roy’s guest appearance on fellow analyst Leonard Lee’s podcast at neXt Curve, discussing critical takeaways from RSAC 2024. Huge thanks to Leonard for the opportunity!

In addition, here’s Roy’s top observations from RSAC:

  • AI Security Focus: The emphasis on AI’s impact on critical infrastructure, as highlighted by DHS Secretary Alejandro Mayorkas, underscores the importance of securing AI technologies. The formation of the DHS AI Safety and Security Advisory Board signifies a comprehensive approach to defining safe AI use and managing dual-use risks.
  • Secure by Design Initiative: CISA’s Secure by Design initiative, advocated by Director Jen Easterly and former director Chris Krebs, calls for adopting security-first principles in software development. The initiative addresses critical threats like ransomware and nation-state cyberattacks and encourages voluntary measures, litigation, regulatory actions, and legislation to motivate businesses.
  • Cybersecurity Industry Integration: The push for integration among cybersecurity vendors, driven by customer demand, aims to address challenges like tool sprawl, complexity, and talent shortages. This will drive new partnerships and co-opetitive plays. Further, these efforts are underpinned by the significant cybersecurity vendors pushing platform strategies (i.e., where they are THE platform).
  • LevelBlue Launch: AT&T Cybersecurity’s rebranding to LevelBlue, in partnership with WillJam Ventures, highlights the focus on expanding managed security services. This move will enhance global cybersecurity capabilities and leverage AT&T’s infrastructure for more significant investment and innovation.
  • Ransomware Evolution and CyberSecurity Insurance Complexity: The increased sophistication and frequency of attacks and the dilemma of data release threats pose ongoing risks for sectors like government and healthcare. Meanwhile, cybersecurity insurance’s complexities, including coverage variations, regional differences in regulation (e.g., paying ransoms is illegal in some states), and emerging niche areas like personal cyber insurance and cryptocurrency protection, highlight the need for businesses to stay educated.
  • Identity Security and Zero Trust: Managing fragmented identities and access in cloud environments requires contextual access policies and hybrid active directory systems. Zero Trust was impossible to avoid on the show floor—the term appeared more often than AI!

Other Resource Sites on NextGenInfra

  • OFC 2024 — Optical continues to be the rage, thanks to the AI boom, so educate yourself on the latest.
  • MPLS World Congress 2024 showcase — Catch up on the latest in SRv6/IPv6 and more, and remember to pretend you’re in Paris as you watch our view interviews — remember, you could have been there. And there’s always next year (26th anniversary)!

Linux Foundation ONE Summit Perspectives

Thanks to our contributing analyst, Ron Sackman (Technical Fellow at Boeing), who wrote up his impressions of the LF ONE Summit (April 30 – May 1) — take a read!

Upcoming Events

Events that AvidThink and Converge Digest will be at in May and June include:

If you’re there, give us a shout, and we can meet!

News

Below are the news items in May that caught the attention of our human, non-AI, experienced editor. There’s a surprising amount of open RAN on the dock this month — we’re not sure what that means yet.

6G

6G: An Evolution or Revolution?
AT&T’s Brian Daly questioned the industry’s strategy of tying network upgrades with the release of additional spectrum, and believes the next network evolution should leverage cloud, AI, and spectrum instead of focusing on network architecture changes.

Keysight to Start 6G Tests in California, Washington
Keysight Technologies will begin testing wireless communications in the terahertz spectrum bands (275-330 GHz), which are considered viable for 6G. The tests will occur at the company’s facilities in California and Washington.

5G

AT&T Opens 5G Network to Third-Party Developers
AT&T is opening its network to third-party app developers through its rApp app store, operated by Ericsson, which curates specialized networking apps. The operators want to create opportunities for developers to pitch their software-based networking applications, with 53 apps from 17 ecosystem partners being evaluated and 700 developers registered for access.

T-Mobile Goes for UScellular’s Spectrum, Customers with $4.4B Deal
T-Mobile will purchase 30% of UScellular’s spectrum assets, 4.5 million customers, and retail stores for $4.4 billion. UScellular will retain 70% of its spectrum and entire tower portfolio, with T-Mobile entering a long-term lease arrangement on at least 2,100 of UScellular’s 4,382 towers.

Dish CTO Serves Up Challenges, Benefits for Op’s Cloud-Powered 5G Network
Dish Network faced unexpected challenges while building its greenfield cloud-native 5G network, such as partners learning slower than anticipated and the need for heavy investments in network tools beyond existing legacy tools’ capabilities, according to CTO Eben Albertyn.

Open RAN

Open RAN Sharing in Romania with Orange and Vodafone
Orange and Vodafone are sharing multiple open RAN sites with Samsung as the sole RAN vendor in Romania, spurring a conversation about open RAN sharing being easier than traditional RAN. This development could negatively impact RAN suppliers, which already suffer from an 11% drop in RAN sales in 2023, with further declines forecasted for 2024.

Orange Takes Slow, Steady Approach to Open RAN
France-based Orange is pursuing an open RAN strategy gradually, conducting tests on its cloud-based, automated standalone 5G experimental network Pikeo and a pilot in Romania with Vodafone, Dell, Samsung, and Wind River. The company will continue to evaluate real-time and non-real-time RAN Intelligent Controller (RIC) technology.

Ericsson Invests $50M in Open-RAN Ready 5G Factory
Ericsson is expanding its Texas 5G factory with a $50 million investment to accelerate US production of massive MIMO radios and open RAN compute hardware, in addition to mmWave radio equipment. The expansion aims to meet demand from Tier 1 North American operators, including AT&T, which signed a $14 billion contract with Ericsson.

AT&T Lauds RUs, DUs, and CUs in Open RAN
AT&T’s VP of wireless engineering, Todd Zeiler, believes the future network topology will consist of centralized units (CU), distributed units (DU), radio units (RU), service management and orchestration, and near-real-time RAN intelligent controller (RIC) technology. AT&T plans for 70% of its wireless network traffic to flow across open-capable platforms by late 2026.

AT&T Progresses Open RAN Push with TIP Board Move
Rob Soni, VP of RAN technology at AT&T, is joining the Telecom Infra Project’s (TIP) board. Soni, who oversees AT&T’s infrastructure strategy, certification of related hardware and software, and contribution to global standards, believes TIP is critical to AT&T’s strategic intent.

Nvidia to Test O-RAN Kit on Its Private 5G SA Network
The FCC approved Nvidia’s bid to build a private, standalone 5G wireless network at its Santa Clara headquarters to test its products with O-RAN vendors. The network will run in the 3.7-3.8 GHz C-band spectrum and include a 5G core network, radio unit, gNB, and SA-capable devices, focusing on disaggregating Nvidia’s Aerial product with other vendors’ products.

Private Networks

Private 5G Is Making an Impact: Can Telcos Seize the Day?
SNS Telecom expects total spending on 5G private wireless networks to reach $3.5 billion by 2027, with most networks used for Industry 4.0 applications requiring high-throughput, low-latency coverage. The ultra-low latency and massive M2M capabilities of private 5G networks enable companies to forego physical wired connections, with China believed to have the most significant number of deployments.

Tesla Boasts of Private 5G Deployment in Berlin and Global Rollout Plans
Tesla has a private 5G network at its factory in Berlin that supports speedy, low-latency connections both inside and outside, allowing the company to update hundreds of cars without running fiber and power to outdoor locations. Tesla plans to deploy the technology globally.

Can Private Networking Save Nokia?
Nokia, ranked No. 1 after Huawei in the private wireless supplier market, hopes its private network business will help stem losses from its radio access network business. Analysts are mixed on whether this is likely.

Verizon Signs Neutral Host Private 5G Deal with Cummins
Verizon Business signed its first neutral host private 5G deal with Cummins, working with Ericsson to cover Cummins’ 2 million square foot engine plant in Lakewood, NY. Verizon will handle the engineering, implementation, equipment, and maintenance, while Ericsson will be the sole equipment vendor.

AI

Philippines’ Globe Telecom Establishes AI Business Unit
Filipino mobile operator Globe Telecom has created the AI Development and Enablement Group to integrate AI into its operations. The unit will spearhead AI initiatives, focusing on strategic planning, development, business integration, governance, and deployment in Globe’s business operations, service delivery, and customer experience.

AI as Force for Telco Jobs Creation Is Hard to Imagine
A Ciena and Censuswide survey found that two-thirds of telco workers believe AI will create jobs, contrary to recent moves by telecom operators who have slashed about 384,000 jobs between 2015 and 2022. The survey also revealed a preference for private (43%) and hybrid (21%) cloud infrastructure for deploying AI services on networks.

China Mobile Orders $4.3B in Servers as It Ramps Up AI Infrastructure
China Mobile spent $4.3 billion on 265,000 servers, mostly from Chinese vendors, for its AI infrastructure buildout. The operator is also building an intelligent computing center in Hohhot, Inner Mongolia, as part of its efforts to localize technology investments, with more than 85% of AI chips thought to be locally sourced.

Elon Musk’s xAI Scores a $6B Series B, Valuing Startup at $24B
Elon Musk’s AI startup, xAI, has secured $6 billion in Series B funding, valuing the company at $24 billion. xAI launched in July 2023, released its open-source chatbot Grok-1 in November, and recently announced Grok-1.5V, its first attempt at a multimodal chatbot incorporating visual information and text.

Cloud

Telefonica Moves 1M 5G Customers to AWS Cloud
Telefonica Germany is moving one million 5G customers to Amazon Web Services (AWS) cloud to reduce costs and increase scale more quickly. The operator plans to eventually have 30-40% of its 45M customers on AWS’ cloud, making it the first European operator to host its 5G core network in a public cloud.

Verizon Boasts Own Cloud Platform After Dissing Hyperscaler Deals
Verizon ruled out putting its 5G core on a hyperscaler cloud and instead built its own webscale-enabled, cloud-native platform that hosts network functions, support systems, packet data, IMS core functions, 4G LTE functions, and 5G core functions, according to SVP of network planning Adam Koeppe at FutureNetWorld Conference in London.

Google Cloud Unit Said to Lay Off Employees This Week – Report
Google Cloud reportedly cut an additional 100 employees from its “Go To Market” group in the Asia-Pacific region this week. Google has made several cuts since the beginning of the year, including laying off about 200 employees from its “Core” team earlier and moving some jobs to India and Mexico.

SASE

Combining 5G and SASE
Companies like Cradlepoint, Palo Alto Networks, and Versa Networks are combining secure access service edge (SASE) capabilities with 5G. SASE converges security with network management, and 5G is increasingly the primary connection, with 4G or satellite as the secondary.

Open Source

Walmart’s Mammoth Global Network Leverages Open Source
Retailer Walmart operates one of the world’s largest enterprise networks, covering more than 10,000 locations with over 100,000 routers and switches and 450,000+ wireless access points. Walmart leverages open-source solutions like SONiC to achieve consistent visibility, reduce operational overhead, and manage traffic and device lifecycles at scale. The company is exploring private 5G for short-term communications but sees Wi-Fi 8 as a more scalable and open long-term solution.

And we’re done! We’ll be back in early July with our June roundup. In the meantime, contact us at [email protected].