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Friday, November 13, 2015

Cisco and Ericsson: Will the Enterprise move to Private IMS & Cellular?

A lot has been written already about the ramifications of the wide-ranging Cisco / Ericsson deal. Most industry analysts and other observers have already come up with assessments of areas of impact, effects on other vendors (eg Juniper), and the implications for various telco-network technologies such as SDN / NFV.

A fair amount of output has been interpreting the “official line” from the two vendors’ press releases and briefings, which have been a little thin on exact details of how the collaboration will evolve. Light Reading has collated a good set of opinions here, for example.

So I'm going to speculate a little - and consider what is not being mentioned so far. This is a blog post about "what might happen" - there's a lot of variables, complexity and execution risk. Caveat lector.

The story so far: Selling & integrating IP gear & cloud platforms for telcos

Looking around the web, it seems that there’s a roughly 80/20 split between analysis of telco-area implications vs. enterprise. This is unsurprising, given the early focus areas announced - the Ericsson CEO says “Initially the partnership will focus on SPs” in the release. Also, the bulk of observers who cover both companies are strongly focused on SP networks.

But my sense is that a few angles have been overlooked, especially about enterprise. I'll highlight a line in the slide-deck the companies used: "Creating leadership to address converging telco and enterprise domains".

The assumption among most people seems to be that "convergence" here is viewed only in one direction. It's assumed to mean an increasing role for telcos in managing enterprise networks and communications functions. And yes, a lot is about combined sales to/through telcos. Cisco gets to sell IP gear via Ericsson's huge SP-focused services and integration teams, and better integrate its products with the OSS/BSS domain. Going forward, the partnership can allow better network/service coverage in corporate offices, or enable assorted business cloud and IoT offers to be provided by telecom operators.

Yet "convergence" occurs when two trends meet in the middle. There's another side here: enterprises starting to adopt or manage telco-type networks and capabilities. 

But what's in it for the enterprise?

So what does Ericsson have, that Cisco can sell / add value to via its enterprise channels? And what new combined products might come from both firms' R&D labs that could be of interest beyond the reach of telcos, sold directly into the corporate domain?

I have sensed for a while that Ericsson wanted more direct business with enterprises and governments - it recognises that its addressable market for telco capex/opex (whether hardware or managed services) is limited by telcos' own growth difficulties, as well as competition from Huawei, wariness of IT players like Oracle, and the move to software-based (and sometimes open-source) infrastructure. 

It was no coincidence that last year's analyst conference in Stockholm was held partly in Volvo's premises. Or in another area I watch closely, that its WebRTC activities have involved things like online banking (see here) without a mention of telcos at all.

It's not just Ericsson. We've also seen other telecom vendors pitch to goverments, city authorities, utilities, transportation companies and so forth. There are private cellular networks intended for railways and mining operations, to e-commerce and cloud propositions, or re-use of billing/charging for utilities and smart city initiatives. Quite a few vendors also sell to "non-telco SPs", ranging from call-centre providers to (ssshhhhh!!!) big Internet firms, as well as amenity-type public WiFi implementors.

So - the question is what the joint Cisco/Ericsson initiatives might be for enterprise. The briefing deck gives some rather vague lines like "comprehensive systems integration, managed services and technical support for enterprises" as well as "cloud and data-centres" which potentially cover a multitude of sins.

Another interesting line is "Networks of the future require new design principles to ensure agility, autonomy, and security". The interesting word there is "autonomy" which means "the right or condition of self-government." For whom, exactly? For telcos, it could mean the freedom to choose between multiple vendors' platform ad 3rd-party VNFs - but I'm not convinced that's a story that Cisco and Ericsson really buy into.

My sense is that actually - and this is probably a medium-term thing rather than immediate - there are three aspects:
  • Distributed enterprise cloud platforms. This should be unsurprising given both references in the announcement, and Cisco's data-centre expertise. Ericsson SDN/NFV work could fit in here, although it's not the main focus of this post.
  • Private wireless. This includes both WiFi and potentially private cellular networks, indoor, on campuses, and perhaps for large areas or governmental applications.
  • Comms, Collaboration & Private IMS. Both partners have a lot of history in voice, messaging and video communications, not just in telcos but also deployed by businesses. Ericsson used to make PBXs but sold to Aastra in 2008. While UC, cloud and collaboration is impacting the traditional PBX/IP-PBX market, that doesn't mean that enterprises want everything delivered "as a service". Cisco & Ericsson can help both telcos' UCaaS propositions - but also help corporations take back control in-house.
It should be noted that the last two points are unlikely to be especially popular with the telecom service provider community, and would thus not be the focus of the initial SP-friendly announcement.

Private Wireless

Together, Cisco and Ericsson have a decent chance of “fixing” indoor mobile coverage, capacity and control for large enterprises. Both have WiFi assets and also small-cell exposure (Cisco especially via its SpiderCloud partnership), but the kicker here is Cisco’s footprint and understanding of the enterprise fixed LAN and security domain. 

There are two angles here:
  • Helping mobile operators "reach" deeper into enterprises to allow better in-building cellular coverage, WiFi offload/voice and (in the GSMA's dreams) run corporate wireless data connectivity as a fully-managed service. Print-over-4G....
  • Allow enterprises to better manage and run their own mobile infrastructure, most obviously in unlicenced spectrum. This could extend beyond traditional WiFi towards allowing private management of LPWAN (low power networks) for IoT, rather than using Opex-centric services like SigFox's.
Historically, one of the main problems for enterprise pico/femtocells, or use of corporate WiFi for offload and carrier VoIP, has been how these coexist with the corporate-run firewalls and in-house network management and prioritisation. Normally, telco visibility/control ends “outside” a demarcation point. Most enterprises will view outbound VPN tunnels from small cells, or external control of devices on the LAN, as a security risk. Telcos, in turn, are hesitant to offer service guarantees where they have limited ability to measure or manage performance – and will also see security issues. 

There are also various issues with security, privacy and legal liability when using a 3rd-party cloud platform for identity, data processing or storage.

There is a chance here for Cisco and Ericsson to create solutions to all these areas. The short-term headlines will probably be around better in-building cellular (competing with DAS and, implicitly, SpiderCloud) and IMS WiFi-voice support, but the longer-term vision will perhaps include:
  • Carrier-managed enterprise WiFi, perhaps in neutral-host mode to support multiple cellular operators' subscribers on the same network
  • Private corporate-run LTE-U networks, maybe using Qualcomm's MuLTEfire or something similar, for indoor or campus usage
  • Private IoT networks using both unlicenced and licenced spectrum, linked into corporate IT and communications systems directly, rather than via a service provider
  • Licenced-band cellular for non-telco organisations with access to cellular spectrum (eg public safety networks, rail/transport systems, maybe smart cities or big oil/mining companies in remote areas)
  • (Perhaps, depending on regulation) ways to enable "corporate MVNOs" 

This is all pretty speculative - and it may be that some of these concepts are a long way off, and perhaps not even fully-considered by Ericsson and Cisco themselves. (Get in touch if you'd like me to run a brainstorm workshop, guys!)
Comms, Collaboration & Private IMS

Absent from the announcement was any clear reference to communications: UC/UCaaS, IMS, VoLTE, WebEx, Spark, WebRTC and so forth are, to me, elephants in the room.
Predictable things we'll likely see include various Cisco-to-Ericsson moves, around UCaaS and WebEX linked to Ericsson's IMS. But I think that's only part of the story that will emerge.
Let's go back to that term "autonomy" from above. 
It's easier to get seduced by the idea that enterprises (and small businesses) want to get rid of their old on-premise phone systems, recognise their employees are mobile-first and BYOD-minded, and shift to some form of UCaaS platform linked to a telco network and number. Yet on the ground, plenty of enterprises either want to keep control of their own communications system, or are using 3rd-party Internet-based tools like Slack, rather than an SP's integrated proposition. 
I don't think that's going to change - many businesses prefer to keep hold of their own "phone" system, especially as it becomes part of their messaging or contact-centre or contextual-comms platform. That doesn't mean it has to be a lump of tin, or a proprietary IP-PBX platform for call control - it could be in the cloud, or using standardised software elements. It just doesn't have to be a "per-seat per-month" cost model. 
A rather surprising term I’ve heard a few times recently – mostly from folk in the IT/cloud industry – is “enterprise IMS”. It’s not an industry-standard term, but basically, it means that some large businesses want to deploy their own internal IMS-type infrastructures as communications/service platforms. These might be owned outright, managed on-site by third parties, or delivered from multi-tenant clouds in the same fashion as UCaaS today. But I think this area is one of the likely mid-term outcomes of the Ericsson / Cisco deal, if the concept comes to fruition.

Remember - PBX stood for Private Branch Exchange. We should not be surprised if the IP and Mobile equivalent turns out to be the enterprise-owned PIMS, not a "mobile PBX" run as a service in a telco network. 
It’s being catalysed by a few things:
  • Mobile and BYOD: many employees are using mobile devices for most of their business communications. But most UC/smartphone implementations are still a bit clunky, with varying UIs depending on device and especially iOS vs. Android. Having an enterprise-run IMS (and voice application) would potentially allow the CIO to regain control of the “native dialler” on a phone, especially when connected in-building. There are open questions about numbering, but they may be tractable.
  • Cloud / Open-Source IMS: A few years ago, the idea of an enterprise owning an IMS would have been ludicrous, given the costs involved. But now, with virtualisation, cost pressures by telcos wanting cheap VoLTE, the emergence of open-source options like Metaswitch Clearwater, it is becoming much more downward-scalable. PIMS is starting to look like a cost-effective option.
  • Applications: Currently pretty much the only useful IMS application is straightforward VoIP/VoLTE phone calls. That isn't enterprise-optimised - it lacks the typical PBX-type functions that are needed. There aren't really telco-IMS contact centre apps, and nonsense like RCS certainly doesn't address enterprise messaging. Having a PIMS/WebEx/Spark combination would be much more interesting. Potentially it could also be run as an operator-hosted service, but I think the real value is where it is owned outright.
  • Middleware & APIs: Where this starts getting really interesting is in the creation of integrated apps blending a corporate comms platform, with corporate IT systems. Hooking into existing software platforms for sales or field automation, line of business and so forth. Potentially this is where a combination of a Cisco/Ericsson PIMS + Tropo starts looking interest. (Sidenote: unlike GenBand with Kandy, Ericsson lacks a WebRTC PaaS)

There’s a few other angles that play in here too. Most notably Cisco's earlier partnership with Apple, which I think many have underestimated. It is likely to optimise iPhones & iPads for use with Cisco's security, WiFi and collaboration tools. I can envisage a situation where companies ditch their old desk-phones for Apple i-Devices, either BYOD or company-issued, linked to Cisco communications apps running via an Ericsson PIMS, with outbound SIP/IMS trunks if needed. Potentially this could work with virtual numbers as well - not just for the US where fixed/mobile numbers are indistinguishable, but the rest of the world where mobile numbers are from separate defined ranges. 

Having a corporate-issued mobile number, anchored in a PIMS, would make a lot of difference - ability to use SMS, better fit with assorted apps that use mobile numbers for identity or authentication, porting in/out, maybe even assigning mobile numbers to IoT objects. There's a lot of variables here, and the rules will likely vary by country.

And for a long-range view, consider Apple’s work on virtual / eSIMs added in to this. Telcos might not like the idea of virtual SIMs in phones – but an enterprise, running its own IMS, its own WiFi network, and perhaps having access to LTE-U and maybe even its own mobile network code – may not be so squeamish. There are various types and styles of enterprise MNO and MVNO that can be envisaged here, depending on local regulation, willingness of local operators to wholesale or allow roaming, or even share spectrum. I can even imagine an “enterprise MNO” being run as a managed service by Ericsson.

Who would be impacted by this? Microsoft is at the top of the list, and also the traditional mobile operators’ enterprise units which still make good margins on corporate mobile subscriptions. It also sits against the emerging Google/Android/Telcos/BroadSoft/Switch enterprise ecosystem. Avaya is left looking a bit lonely here (although it also works with Google), as are the smaller UC players like Shoretel. It possibly even makes the bizarre Mitel/Mavenir acquisition look more sensible in hindsight, although that’s still pretty baffling.

The interesting question is whether Cisco and Ericsson have actually looked closely at what they might be catalysing – or whether they are themselves likely to be as surprised by the direction of travel. Obviously there are lots of questions about execution that come first, but if things go well, there could be a game-changer afoot.

(None of this is entirely new as a concept. About 10 years ago, I did consulting for a company called Zynetix (later bought by Sonus Networks) that sold enterprise-grade cellular-core MSCs that linked to PBXs. They could allow businesses to run private mobile networks, especially when linked to pico/femtocells running in “guard band” spectrum in the UK. However it was perhaps ahead of its time, hampered by some of the practicalities such as spectrum/radio limitations, needing clunky user-experience hacks like manually selecting different networks).


The bottom line is this: the notion that ALL enterprises will outsource the bulk of their internal networking or communications functions, especially to telecoms service providers, is a comforting myth. Yes, some will - hence the rise of UCaaS for mid-market businesses, and telco-managed WiFi in places like airports or sports stadia.

But that is only part of the story.  

Some enterprises will want to continue managing networks and communications in-house (whether on-premise or in a private cloud). This will ideally expand to include aspects of mobile networks/services where possible. Expect PIMS, better WiFi, PLWPAN and maybe PLTE and PMVNO models. Others will want to outsource these functions to IT-type service providers like IBM, rather than telcos.

Potentially, Cisco+Ericsson (with a side-order of Apple) can facilitate all these different paths to the user. This might not be popular among traditional telcos, but in my view the trend is inevitable. Enterprises will re-assert their control (and sometimes ownership) of wireless/mobile networks and communications platforms, especially as they become more-integrated with business processes and applications. 

There's a lot of reasons why this partnership might fail to bear fruit. But a lack of potential exciting and disruptive opportunities in enterprise isn't one of them.

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