“I’m incredibly excited about the possibilities of Nuage and its ability to support the technological leadership that is our entry into the enterprise space,” Suri said Sunday, during Nokia’s media event at Mobile World Congress.
As Nokia’s $16 billion acquisition of Alcatel-Lucent rumbled into motion, analysts following software-defined networking (SDN) worried about the fate of Nuage Networks. The Alcatel-Lucent subsidiary wasn’t a huge piece of the deal in terms of dollars, but it was a solid SDN entrant that thrived by being independent of its parent company. The concern was whether Nokia would let Nuage keep that independence.
So far, the signs have been positive. Nokia’s executive lineup keeps Nuage under the auspices of Basil Alwan, the executive running IP and optical networking. And the Nuage brand name is remaining intact, even as Alcatel-Lucent’s is being retired.
“The mandate for Nuage continues, but with deeper pockets,” Nuage CEO Sunil Khandekar told SDxCentral at MWC later in the week.
It’s interesting that Nuage is being considered a help to Nokia’s enterprise ambitions. Most of Nuage’s announced wins have been with service providers. But Nuage has been making inroads into large-enterprise accounts, Khandekar says. Spanish bank Grupo Santander was one, announced in October.
“We have done quite well, considering we didn’t have any footprint in the enterprise,” Khandekar says. By contrast, top competitors Cisco and VMware — with their Application-Centric Infrastructure (ACI) and NSX, respectively — are giants of enterprise networking.
Nuage ended 2015 with 50 customers and 100 pilot deployments, Khandekar says.
Another probable new direction for Nuage is the Internet of Things, which is an obsession for Nokia and for everyone else in telecom. Nuage’s role in that IoT world wouldn’t be much different from what it does in the data center. Network virtualization would form the “connective tissue” between elements in a distributed architecture. “You still want these distributed functions to logically appear as one,” Khandekar says.
History Doesn’t Repeat
Suri’s stance on Nuage is important because he’s gotten a lot of questions as to whether parts of Alcatel-Lucent are going to be sold off. Nokia had gone through trouble and expense to divest itself of units such as optical networking and broadband access. Alcatel-Lucent, of course, brings those businesses back into Nokia.
On Sunday, Suri insisted that Nokia isn’t going to just flip those businesses. For Alcatel-Lucent, they are established franchises — whereas for Nokia, those businesses had hopelessly small market shares. The company’s new philosophy is to stick to technologies where it’s got a chance at a leadership position.
“If you’re at 2 percent of scale, there’s no way you can get to 20 or 30 percent,” Suri said.
The merger does have to involve some cutting, though, because Alcatel-Lucent and Nokia have areas of overlap, particularly in wireless. The merged company has already made its choices as to which products from each portfolio will get emphasized, said Suri.