T E C H N O L O G Y B U S I N E S S R ES E AR C H , I N C .
TBR EVENT PERSPECTIVE
Ericsson embraces openness and
standardization for SDN and cloud but
must address commoditization
Ericsson North American Industry Analyst Forum
Silicon Valley, Calif.
Sept. 25–27, 2013
Chris Antlitz (email@example.com), Analyst, Networking & Mobility Practice
Michael Soper (firstname.lastname@example.org), Analyst, Networking & Mobility Practice
Ericsson demonstrated that it is a leader in small cells and a credible contender in SDN and cloud by showcasing a
variety of unique innovations related to these product areas, such as the Radio Dot System, at the annual Ericsson
North American Industry Analyst Forum in Silicon Valley, Calif. Ericsson stressed that the key to success in the
industry hinges on openness and flexibility toward innovation rather than the traditional siloed, proprietary
approach. TBR believes that Ericsson’s decision to play an active role in the shaping of open standards in the ICT
realm is necessary for the company to stay relevant in the rapidly changing marketplace, despite the fact that open
standards make product differentiation more challenging and may impact profits. The industry is heading toward
open standards to foster innovation and accelerate implementations of new technologies, and those vendors that
embrace this shift and adapt their business models accordingly will stay competitive. Ericsson is covering all its
bases through its association with OpenDaylight (SDN), ONF (OpenFlow), OpenStack (Cloud) and NFV
(Virtualization) as well as other industry organizations.
Ericsson’s Radio Dot System was well received and, though there is a long time to market and some limitations in
feature set, the device provides Ericsson a much needed gateway into the indoor access market. However, the Dot
will go up against strong competition, such as Alcatel-Lucent’s lightRadio, SpiderCloud Wireless and other
alternative in-building solutions, all of which are commercially available today. Ericsson’s decision to passively gain
exposure to the enterprise by leveraging its service provider customers as resellers is wise because it will avoid
conflicts of interest with its customers while still increasing its addressable market. Ericsson is also focused on SDN
and cloud exclusively for operators, indicating that the vendor will remain dedicated to its traditional customer
base rather than make a big move directly into the enterprise market.
Though Ericsson is making marked progress preparing for these industry shifts and has some products available for
commercial deployment this year, such as its SDN controller, the biggest wildcards remain what operators will
invest in and how these technologies will ultimately impact their business models and those of their suppliers.
An assortment of Ericsson executives and experts, including some members of senior management from corporate
headquarters in Sweden, took the stage at the company’s annual North American Industry Analyst Forum, which
was held at the Hyatt Regency Hotel in Santa Clara, Calif., and Ericsson’s Silicon Valley campus. The event aimed to
educate the analyst community on innovations being created in Ericsson’s R&D labs and to provide Ericsson’s take
on where the telecommunications industry is headed and how the company will play an integral role in the rapidly
evolving mobile ecosystem.
Key topics covered included innovations in radio, which featured the new Radio Dot System, how to use OSS/BSS
and media to monetize network infrastructure, and how SDN and cloud are creating a paradigm shift in core and IP
networks. Enhancements within many product domains were also covered, including radio access, mobile core and
edge, but the interdependence of technology domains was an underlying theme, which speaks to the increasing
convergence between network and IT. For example, Ericsson demonstrated how using SDN and cloud functionality
within a heterogeneous network can enable huge gains in efficiency and flexibility.
Impact and Opportunities
Ericsson’s ultimate goal is to make the entire network programmable
Taking networks to the next level in flexibility and scalability, and enabling them to maximize limited spectrum
resources requires a new approach to architecture. Ericsson’s engineering teams are rallying around this cause and
embedding programmability to features the company is virtualizing, and to its Service Provider SDN and cloud core
Ericsson can differentiate in “open source everything” by leveraging its services business
With hardware and now software, due to increased incidence of standardization and open source, becoming
increasingly commoditized, Ericsson can soften the blow and thrive by leveraging its services organization.
Specifically, Ericsson can leverage its growing consulting & systems integration arm and layer in its managed
services expertise to help operators design, plan, optimize and manage new network architectures. Ericsson can
also play an integral role in helping operators migrate networks and manage legacy assets while customers make
these technology transitions.