In pairing up, Ericsson and Ciena will develop software-defined networking (SDN) covering the whole of transport, from Layer 0 to Layer 3. It’s a new direction for both companies, especially Ericsson, and creates a new de facto player against the giants that have comprehensive SDN portfolios.
The partnership, which sees the companies teaming up on SDN-related R&D while Ericsson caps its own optical-networking platforms, was announced Friday with few details. But in a talk with SDxCentral, Jan Häglund, Ericsson’s head of IP and broadband, elaborated on some of the thinking behind the deal.
Optical + Routing + SDN
As we discussed before, Ciena gives Ericsson a renewed optical story. Ericsson’s optical portfolio had its good points (in a research note issued Friday, Heavy Reading analyst Sterling Perrin notes that the SPO 1400 packet-optical transport line was well received) but wasn’t going to gain market-leading traction, as Ericsson was always playing catch-up in a highly fragmented market.
Ericsson will continue to support its optical gear and will honor outstanding contracts. But any future optical work, with Ciena, won’t be applied to the Ericsson optical platforms. “What we’re doing with Ciena is very different from what we’ve done in the past” with optical networking, taking Ericsson into new directions such as putting optical processing onto routers, Häglund said.
Ciena benefits, too, because it lacked the Layer 3 piece of a Layer 0-3 puzzle. Ericsson’s SSR portfolio infuses routing into Ciena’s packet-optical strategy, putting Ciena on more even ground with Alcatel-Lucent, Cisco, and Huawei, Perrin writes.
Ciena also gains in having Ericsson as a reseller, and Ericsson will indeed be willing to sell standalone Ciena equipment, Häglund says. Ciena would get lower margins on those sales, as Perrin points out, but Ericsson has a longer reach. And as Häglund notes, Ericsson’s services footprint, where it manages networks for carriers, could open new venues for Ciena’s gear.
Given the way the pieces fit together, you might wonder if Ericsson acquiring Ciena was an option.
“Nah,” Häglund said. “The talk and the agreement were around a partnership. That’s the way forward. There’s no M&A or ownership stake.”
SDN R&D Tag Team
The companies will collaborate on R&D, though, finding ways to weave SDN out of optical transport, routing, and network management. They’ll share ownership of the results.
The other large players are likewise crafting complete multilayer SDN architectures. For Ericsson and Ciena, one key to capturing customers’ interest will be adherence to open standards. That means creating an architecture that’s not locked into the SSR 8000 routers or the Ciena 6500 and 5400 optical platforms. “The degree to which Ciena and Ericsson move down an open and standard path to SDN and IP and optical convergence will determine their level of success,” Perrin writes.
Häglund is aware of this and stressed openness both on the conference call and in his talk with us. The OpenDaylight Project and other open-source technology sources will be important to the companies’ SDN foundation, he said.