Wednesday, July 20, 2016

AT&T and Orange Reach SDN + NFV Agreement

AT&T and Orange agreed to collaborate on open source and standardization initiatives that will accelerate the standardization of software-defined networking (SDN) and network function virtualization (NFV).

Specifically, the two companies agreed to collaborate in the following areas:

  • Make customer premises equipment (CPE) and services truly universal by creating common specifications for premise-based devices, allowing them to work in different NSP environments and with different network function software providers.
  • Streamline the onboarding process for virtual network functions (VNFs) by introducing common guidelines and templates that will mature the VNF provider ecosystem and make VNFs more plug and play.
  • Develop standardized APIs that will enable SDN architectures from different NSPs to interoperate with each other, making deployment of virtualized network services and functions faster and easier.

“We’re committed to defining a framework that will accelerate the adoption of SDN. Driving the industry toward a standardized approach will reduce the cost and complexity created by proprietary implementation of equipment in the network and on the customer premise,” said Roman Pacewicz, Senior Vice President, Offer Management and Service Integration, AT&T Business Solutions.

“Everyone benefits when network services and functions are designed around a common ecosystem that is delivered on open platforms. Innovation can happen faster and more easily, and this model will also help improve reliability and security,” said Didier Duriez, Senior Vice President, Global Solutions, Orange Business Services.

Google Activates Oregon Cloud Data Center

Google announced the activation of its Oregon Cloud Region (us-west1) data center.  The region initially includes three offerings: Google Compute Engine, Google Cloud Storage and Google Container Engine, and features two Compute Engine zones to support high availability applications.

The company said initial testing shows that users in cities such as Vancouver, Seattle, Portland, San Francisco and Los Angeles can expect to see a 30-80% reduction in latency for applications served from us-west1, compared to us-central1.

In addition, Google launched two new Machine Learning APIs into open beta and expanding our footprint in the United States.

Verizon Launches NG-PON2 Lab Tests

Verizon is set to begin testing NG-PON2 (next generation passive optical network) equipment at its Innovation Lab in Waltham, Mass.

Starting this month, Verizon will begin initial testing with equipment from Ericsson (in partnership with Calix) and ADTRAN. Testing will focus on several features of NG-PON2, including tuning performance, ability to carry residential and business services on the same platform, and interoperability and conformance testing to meet Verizon ONT specifications.

“When it comes to NG-PON2, ADTRAN and Ericsson/Calix have developed new designs and some novel, yet different, approaches that put them at the forefront of the industry,” said Vincent O’Byrne, Ph.D., director of network planning for Verizon.

NG-PON2 is expected to support up to 40G of total capacity and up to 10G speeds per customer, both upstream and downstream, over a single fiber – a tenfold increase over some of the current speeds in the industry.  Last year the ITU-T (International Telecommunications Union Telecommunications Standardization Sector) approved NG-PON2 specifications, paving the way to establish NG-PON2 as the next step in PON technology.

Verizon Completes 10G FTTP Trial Using NG-PON2

Verizon has completed a test of a 10 Gbps technology on its fiber-to-the-premises network.

Field testing of the NG-PON2 technology was completed recently from Verizon’s central office in Framingham, Mass., to a FiOS customer’s home 3 miles away as well as to a nearby business location. This followed extensive testing in Verizon’s laboratories in Waltham, Mass.

A new optical line terminal (OLT) installed in the Verizon central office generated four wavelengths, each capable of operating at 10G/2.5G. Later versions are envisioned to support the same download and upload speeds of 10G/10G per color. One test transmitted the NG-PON2 signals over a fiber serving live GPON customers proving that the network can simultaneously deliver GPON and NG-PON2 on the same fiber. The trial was conducted with a NG-PON2 equipment system from Cisco and PT Inovação.  The technology will have the system capacity to grow to 40-80 Gbps as the market demands.

Verizon said upgrades on its FTTP network will begin when commercial equipment is available to support business services such as switched Ethernet services. The company plans to issue a request for proposals later this year for the purchase of hardware and software for the new NG-PON2 platform.

“The advantage of our FiOS network is that it can be upgraded easily by adding electronics onto the fiber network that is already in place," said Lee Hicks, vice president of network technology for Verizon. "Deploying this exciting new technology sets a new standard for the broadband industry and further validates our strategic choice of fiber-to-the-premises.”

Intel's Data Center Revenues up 5% YoY

Intel reported second-quarter GAAP revenue of $13.5 billion (up 3% YoY), operating income of $1.3 billion, net income of $1.3 billion and EPS of 27 cents.

“Second-quarter revenue matched our outlook and profitability was better than we expected," said Brian Krzanich, Intel CEO. "In addition, our restructuring initiative to accelerate Intel’s transformation is solidly on-track. We're gaining momentum heading into the second half. While we remain cautious on the PC market, we’re forecasting growth in 2016 built on strength in data center, the Internet of Things and programmable solutions.”

In a conference call, Krzanich said data center revenue grew 5% year over year, cloud services providers grew 9%, comm service providers grew 10%, and enterprise was down 1%. He said Intel continues to gain share in network infrastructure, including for SDN and NFV.

Q2 Key Business Unit Trends:

  • Client Computing Group revenue of $7.3 billion, down 3 percent sequentially and down 3 percent year-over-year
  • Data Center Group revenue of $4.0 billion, up 1 percent sequentially and up 5 percent year-overyear
  • Internet of Things Group revenue of $572 million, down 12 percent sequentially and up 2 percentyear-over-year
  • Non-Volatile Memory Solutions Group revenue of $554 million, down 1 percent sequentially and down 20 percent year-over-year
  • Intel Security Group revenue of $537 million, flat sequentially and up 10 percent year-over-year
  • Programmable Solutions Group revenue of $465 million, up 30 percent sequentially. Note the comparable period did not include $99 million of revenue as a result of acquisition-related adjustments.

Qualcomm Posts Revenues of $6 Billion, up 4% YoY

Qualcomm reported revenue of $6.0 billion for its fiscal third quarter ended June 26, 2016, up 4% YoY and up 9% sequentially. Net income (GAAP) was $1.4 billion, up 22% YoY. EPS came in at $0.97.

“We delivered strong results this quarter, with EPS well ahead of our guidance based on meaningful progress with licensees in China,” said Steve Mollenkopf, CEO of Qualcomm Incorporated. “Our chipset business is also benefiting from a strong new product ramp across tiers, particularly with fast growing OEMs in China. We are executing well on our strategic priorities, and we remain confident that our focused investments in 5G and other advanced technologies will create a strong foundation for long-term earnings growth.”

Qualcomm reported 201 million MSM device shipments during the quarter, down 11% from a year earlier.

Why did SoftBank offer £24.3 billion (US$32.4 billion) in cash to acquire ARM Holdings? - Part 2

 In part 1 of this article we considered some of the given reasons for the ARM bid and whether the new ownership would be positive, neutral or negative for ARM given Softbank’s record at Sprint.  Here we look at recent M&A activity in semiconductors and consider some salient points concerning SoftBank’s charismatic Chairman Masoyoshi Son.

For comparison - A String of Recent Mergers for Semiconductor Companies

SoftBank's acquisition of ARM also continues the on-going consolidation in the semiconductor business.  Although SoftBank is not a player in semiconductors and in that sense is not contributing to the further consolidation of the industry into just a few houses, investment bankers representing ARM would surely be familiar with current valuations and the desire to match smaller players to larger buyers.  Bigger seems to be better when it comes to silicon companies.

In March 2015, NXP Semiconductor agreed to acquire Freescale in a stock swap value at $16.7 billion (including Freescale's debt).   The deal created the largest supplier of semiconductors for the automotive industry and the No.1 supplier of general microcontrollers (MCUs).

In May 2015, Avago Technologies agreed to acquire Broadcom in a deal valued at $37 billion ($17 billion in cash and $20 billion in Avago shares).  This merger created the third largest global semiconductor company with strong presence in wired infrastructure, wireless infrastructure, enterprise storage, ASICs, PHYs, Ethernet switching silicon and set-top box silicon.  The new company has an annual revenue of approximately $15 billion.

In January 2016, Intel completed its acquisition of Altera, a provider of field-programmable gate array (FPGA) technology, in a deal that was valued at $16.7 billion when it was first announced six months earlier.  Altera now operate as a new Intel business unit called the Programmable Solutions Group (PSG).  Its portfolio includes its Stratix series FPGAs with embedded memory, digital signal processing (DSP) blocks, high-speed transceivers, and high-speed I/O pins. Altera's Arria system-on-chip solutions integrate an ARM-based hard processor and memory interfaces with the FPGA fabric using a high-bandwidth interconnect. These devices include additional hard logic such as PCI Express Gen2, multiport memory controllers, error correction code (ECC), memory protection and high-speed serial transceivers.

In November 2015, Microsemi Corporation consolidated its offer to acquire PMC Sierra for $9.22 in cash and 0.0771 of a share of Microsemi common stock, representing an enterprise value of $2.5 billion.

In June 2016, Cavium agreed to acquire QLogic for $1.36 billion in stock. QLogic, which is based in Aliso Viejo, California, supplies Fibre Channel Adapters, converged network adapter for the Fibre Channel over Ethernet (FCoE) market, Ethernet adapters, iSCSI adapters, and ASICs.  The company has design wins for next generation Ethernet (10/25/50/100Gb) and Fibre Channel (16/32Gb) platforms.

In March 2016, Cisco agreed to acquire Leaba Semiconductor, a venture-backed fabless semiconductor company, for $320 million in cash and assumed equity awards, plus additional retention based incentives. Leaba, which is based in Israel, specializes in networking semiconductors.  The company is in stealth mode and has not announced any products.

Through this string of mergers, we see that enormous consolidation is underway in the semiconductor industry and that given its prominence in the field, we can surmise that ARM must have been the subject of many proposed deals.  It would have been expected to see ARM paired up with developers of switching silicon, RF chips, or fast memory.  The SoftBank acquisition therefore is incongruous.

SoftBank’s Charismatic Chairman

When trying to assess the rationality of this bid it is worth noting that Masayoshi Son has never been easy to characterise. He is certainly a long way from being an investor in the calm mould of Warren Buffett or Bill Gates and does not have a flawless history in the investment business. During the dotcom boom Son bought almost anything that moved and ended the decade with the unenviable reputation of having lost more money than any other entrepreneur in history i.e. about $ 70 billion Son has a risk-aggressive and maverick personality and is inclined towards making massive and unusual bets on trends and companies that usually result in either colossal successes like Ali Baba or huge failures like Vodafone KK --therefore normal financial yardsticks cannot be easily applied to his decisions --since almost by definition he is working on an unique perception that almost no one else shares. As an example of Son's unpredictability, a few weeks ago Nikesh Arora the ex-Google executive most people thought was certain to succeed Son left his job abruptly after Son changed his mind and decided he was too young to retire which indeed at under sixty years he certainly is.
Masayoshi Son's abiding interest in humanoid robotics should be also noted.

In February 2015, SoftBank acquired 95% stake in Aldebaran Robotics SAS, a decade-old robotics developer based in Paris that, in collaboration with SoftBank Mobile, created Pepper, a humanoid robot with four microphones, two HD cameras, a 3-D depth sensor, a gyroscope in the torso, touch sensors (head and hands) six lasers, and a touch-screen display.  The big advancement with Pepper is its attempt to understand its physical environment and interact with humans on an emotional level. Following the buyout, Bruno Maisonnier, founder and CEO of Alderaban, stepped down and was replaced by Fumihide Tomizawa.

Several thousand early versions of Pepper were shipped in late 2015.  Full commercial release of Pepper is expected shortly in Japan. An active third-party develop program is underway.

Earlier this year, various company activities in this sector were consolidated under SoftBank Robotics Holdings Corp, based in Tokyo and with offices in France (formerly Alderaban Robotics), U.S., and China.

In March 2016, SoftBank and Microsoft announced a partnership to create a next-generation cloud-enabled robot using “Pepper” — SoftBank Robotics' humanoid robot — and Microsoft's cloud-based Azure IoT Suite. The idea is to build a humanoid robot for the retail industry to serve customers in person.  This version of Pepper will use Microsoft's Surface Hub large-screen collaboration device, its Surface 2-in-1 devices, and data repositories in the Azure cloud, such as inventory systems, AI assistance from Cortana, and the Microsoft Translator application.

In January 2016, SoftBank announced plans to offer a version of the Pepper humanoid robot to the enterprise market that would integrate cognitive capabilities of IBM's Watson.   The Watson-powered Pepper would try to make sense of a range of social media, video, image and text inputs. IBM said it will give clients access to Watson APIs and various pre-packaged applications.  The hospitality industry is target for the partners.

On June 21st 2016, SoftBank reached a deal to sell its 84% stake in Supercell Oy, a developer of mobile games based in Helsinki, Finland, to Tencent Holdings for approximately US$10.2 billion. SoftBank owned the controlling stake in Supercell since 2013, but let the business operate as an independent company with its own unique culture and independent team of developers. The proceeds from the sale will be used for the ARM acquisition.

Verizon Lands GSA Networx Contract Extensions

The U.S. General Services Administration awarded extensions to Verizon for contracts held by the company under the agency’s Networx program, which U.S. federal agencies can use to procure network and communications services from Verizon until the government transitions to a new, comprehensive solution-based contract, Enterprise Infrastructure Solutions, or EIS.

The Networx contract extensions feature a one-year base period and two one-year options. Following are the contracts held by Verizon that the U.S. General Services Administration recently extended.

  • Networx Universal: Extended to March 2020, Verizon’s Networx Universal contract was set to expire in March 2017.The contract was originally awarded in March 2007.
  • Networx Enterprise: Extended to May 2020, Verizon’s Networx Enterprise contract was set to expire in May 2017. The contract was originally awarded in May 2007.

“The technology landscape is shifting dramatically and federal agencies require access to advanced communications, IT and security solutions to enable their digital government initiatives to streamline operations, boost employee productivity, and enhance the delivery of citizen services,” said Michael Maiorana, senior vice president of public sector markets, Verizon Enterprise Solutions. “We are appreciative of the long-standing collaborative relationship we have forged with the GSA and our newly extended Networx program contracts will help ensure that we continue working together to enable federal agencies to deliver on their mission commitments in the U.S. and around the globe via reliable and secure network services for years to come.”

Etisalat Deploys Affirmed for Mobile Core

Etisalat has successfully on-boarded its first virtualised telecom function using Affirmed Networks' virtualised Evolved Packet Core (vEPC) solution.

UAE-based Etisalat made its first live LTE data and voice calls on its NFV telco cloud platform in April this year.

The vEPC will be used to deliver broadband and voice services for both mobile and fixed users, in addition to providing advanced connected car and Machine-to-Machine (M2M) services.

F5 hits Revenue of $497 Million, up 3%

F5 Networks reported revenue of $496.5 million, up 3 percent from $483.7 million in the prior quarter and 3 percent from $483.6 million in the third quarter of fiscal 2015.

“During the third quarter, F5 delivered solid revenue growth and strong earnings despite a relatively challenging spending environment,” said John McAdam, F5 President and Chief Executive Officer. “The Americas and Asia Pacific both contributed strong sequential revenue growth, while EMEA revenues were down from the prior quarter against the backdrop of the UK's referendum to withdraw from the European Union.

“Reflecting steadily increasing deployment of our products in public and private cloud environments, software sales continued to grow as a percentage of overall product revenue. Our expanding footprint in public and private clouds also contributed to sequential growth in sales of our security products during the quarter.”

F5 Names Ben Gibson as Chief Marketing Officer

F5 Networks named Ben Gibson as its new Chief Marketing Officer and Executive Vice President, reporting to the CEO.

Gibson most recently was Chief Marketing Officer at Veritas, where he led a global team of marketing professionals and spearheaded that company’s rebranding efforts following a spin-off from Symantec. Prior to Veritas, Gibson spent five years as Chief Marketing Officer at Aruba Networks. Before joining Aruba, Gibson spent five years at Cisco Systems, most recently as Vice President of Data Center/Virtualization Marketing.

Riverbed Expands R&D in Bangalore

Riverbed Technology opened a new global Research and Development facility in Bangalore, India. The new center will be the largest Riverbed R&D facility outside the U.S..

The company said it intends to expand its engineering team in the region three-fold over the next several years.

The Riverbed India R&D Center will be led by Kartik Subbanna, Vice President of Engineering, reporting to US-based Vineet Abraham, Riverbed’s Senior Vice President of Engineering.