650 Group Blog
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In the keynote session of Huawei Analyst Summit 2021, there was a big focus on chip availability, both in prepared remarks and from questions fielded from the audience. Huawei Deputy Chairman, Eric Xu, as he has done in past years, answered questions from the audience. Huawei reiterated that it has enough B2B-focused chips, consistent with comments made one year ago today, which suggests that it stockpiled significant amounts of chips ahead of sanctions. Huawei expects to remain on US Entity List for a long time.
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We had the opportunity to speak with an exciting Internet Service Provider (ISP) called GeoLinks today. Skyler Ditchfield, the CEO, shared his thoughts on the recent spectrum acquisition from Verizon and how it will change the company’s addressable market. We think what GeoLinks has done with this spectrum acquisition is interesting because this is a medium-sized company buying spectrum from one of the world’s largest operators. The company is planning such a rapid expansion to many important broadband markets.
On March 25, 2021, GeoLinks announced that it had acquired approximately 80% of Verizon’s LMDS fixed use 29-31 GHz mmWave spectrum. This spectrum does not include Verizon’s mmWave spectrum holdings that it uses to service mobile users, so recent iPhone models that communicate with Verizon’s mmWave will continue to work as they always have. According to GeoLinks, this new spectrum increases its homes passed metric for residential to 90.6 million homes and businesses to 5.9 million businesses. Markets in which it acquired spectrum include New York, Los Angeles, Chicago, Philadelphia, Dallas-Ft. Worth, Atlanta, Houston, Washington, DC, Boston, Tampa-St. Petersburg, Minneapolis-St. Paul, Detroit, Miami-Ft. Lauderdale, Charlotte, St. Louse, Raleigh-Durham and Indianapolis, among others. With the recent spectrum acquisition, GeoLinks is expanding its footprint from a predominantly California (plus southern Nevada) to a nationwide coverage map. We asked Mr. Ditchfield what the company’s plans are for expanding to the new territories. We learned that the company is planning a “roll-up” strategy to acquire Wireless ISPs (WISPs) and small local wireline broadband companies. As these acquisitions occur, GeoLinks plans to offer the acquired companies’ customers the new, higher-speed wireless service in the new spectrum. GeoLinks plans new rounds of financing, which may come as soon as a couple of months from now. Cisco's customer event, Cisco Live (virtual), is underway, and the company made many announcements. We are emphasizing what we think are the most relevant, which include Observability capabilities, Network as a Service (NaaS), and SASE. Here is a rundown of what we learned about today. Core portfolio (includes Campus Ethernet Switches, Wireless LAN).
Security (includes Firewall, Content Security, Identity).
 Chuck Robbins, CEO of Cisco Systems at Cisco Live on March 30, 2021 In the news this week, Cisco has entered an agreement to sell HashiCorp Terraform® Cloud Business alongside its own Cisco Intersight® platform. Cisco and HashiCorp are helping enterprises accelerate application innovation, including automated management and security, across hybrid clouds. The deal helps enterprises achieve a hybrid cloud operating model using HashiCorp’s “infrastructure as code” for network provisioning and management of private data centers via Intersight. The Cisco Intersight Service for Terraform will offer a bridge to easily and securely integrate on-premises environments with Terraform Cloud Business, and enable IT Ops and DevOps teams to automate infrastructure provisioning using infrastructure as code across hybrid cloud. Why this matters? This arrangement provides flexibility to those organizations running both public cloud and private data center environments. Because provisioning can be complex across multiple clouds, customers can benefit from HashiCorp Terraform Cloud as it allows Network Operation teams to provision multi-cloud infrastructure, and manage risks for security, compliance, and operational constraints in a more automated and consistent way, and then extend provisioning into private networks/data centers. Additionally, infrastructure security for applications and services across multi-cloud environments and private/distributed data centers remains paramount for enterprises. Specifically addressed security elements in the Cisco + HashiCorp agreement include policy, SSO, and audit logging. Implementing automation tools to keep settings and policies consistent — and easily replicated— goes a long way towards ensuring data is protected to a high standard, wherever it is moving. Lastly, according to the press release, Cisco will also offer centralized support across customers’ Intersight and HashiCorp Terraform Cloud Business environments under the Cisco Solution Support program.  SONiC OS continues to be hardened for data center deployments well beyond the hyperscalers2/24/2021  SONiC has gained popularity, and development efforts accelerated throughout 2020, despite the lack of travel and face-to-face interactions from COVID-19 restrictions. 2020 saw the incorporation of more features and excitement amongst suppliers and customers. SONiC now has more advanced features and functionality and continues to be hardened for data center deployments well beyond the hyperscalers. Advanced functions like BGP and RDMA are supported. SONiC also added many hours of production traffic under its belt as we estimate over 100,000 switches running SONiC at the end of 2020. SONiC is a Linux-based open-source networking operating system with its roots in the open community and Microsoft as an original contributor. Today it has over fifty member companies and thousands of individuals contributing. It has reached a critical scale beyond Microsoft’s internal use within Azure. Increased vendor and customer contributions help increase the appeal of SONiC, and our end-user interviews indicate strong interest in several enterprise verticals, more than just the typical financial services sector. Disaggregation is a trend here to stay with customers evaluating the ASIC, physical switch, optics, and operating system separately. What was standard with full decoupling at the hyperscalers is making its way down to more traditional cloud and enterprise customers. True to its open-source Linux roots, SONiC leverages the strength of the community, is beneficial financially to vendors both large and small, and also creates an ecosystem of support and career advancement for individual member contributions. SONiC’s recent developments time well with a renewed interest in disaggregation. This is important. SONiC is being embraced not only at the system level via system vendors but at a Silicon level and in a market of millions of customers, not just a few hyperscalers. Broad-based support can make SONiC meaningful for the whole networking market. SONiC deployments increased in complexity as well. Vendors showcased SONiC working on modular switches, modular routers, as well as the disaggregated chassis. The 2020 releases and future roadmaps continue to add critical enhancements to automation and telemetry. As we look towards 2021, we see increased adoption of SONiC in Tier 2/3 Cloud providers. We expect more enterprises to move parts of their network to SONiC. More contributions from traditional enterprise suppliers and the community will create even more trust in SONiC. With the disaggregation of switch hardware from the software, we believe SONiC will also see the benefit of accelerated hardware and software development in 2021. The industry might not observe this directly because of the rapid move from 3.2 Tbps to 12.8 Tbps to 25.6 Tbps switches. Still, as switch ASICs rapidly hit the market with faster pipes, more programmability, and massive amounts of telemetry data, the industry needs disaggregation and increased development velocity to keep pace. Beyond 2021, SONiC could play a significant role beyond the data center; edge computing and networks built to support AI/ML seem like good targets, and we are closely watching developments outside the data center as well. Extreme Networks held its investor day and highlighted multiple themes. The company highlighted its Networking-focused Cloud-management capabilities, its large addressable market, how the company can benefit from the 5G market and its pivot to growth markets. CEO Ed Meyercord addressed Cloud, 5G and artificial intelligence themes. For us, we thought that Extreme's focus on 5G was new and incremental to what the company has talked about in past presentations. And, of course, Extreme's playing up its market position in Wi-Fi cloud-managed services makes sense because this trend has been growing and Extreme is ranked second. We see cloud-managed services as a continuing growth trend for the next several years and we highlight these details in our WLAN and Campus switching research programs.        Meyercord explained that as workers, data and computing become increasingly distributed, cloud-managed networking becomes critical. Meyercord cited 650 Group research confirming that Extreme CloudIQ revenues rank number two in the industry. The company cited a $26B total addressable market relating to Enterprise Networking and a $3B addressable market associated with the Service Provider market. The company cited that the 5G market is expected to benefit Extreme Networks, explaining that 80% of the Mobile RAN market will be 5G-related by the year 2025; it cited that 5G-related is a "longer-term growth opportunity". Extreme sees its next fiscal year will be at least in part driven by: (a) taking share in high-growth networking industry segments, (b) cross-selling and driving cloud-adoption (it cited 5M installed base but only 1.5M cloud installed base), (c) new product introductions such as Universal Platform and Co-Pilot Artificial Intelligence (AI).
Extreme invited Major League Baseball to its investor day. We were encouraged to hear that MLB sees that 5G and Wi-Fi 6 are complementary, as opposed to competitive. This debate about two of the main types of wireless has been very active and an important industry player like MLB confirming that it sees the two as complementary validates our own view that Wi-Fi and cellular play together well. This week, we published our Secure Access Service Edge (SASE) Forecast and Research report, a deep analysis on the market, the key players, and the opportunity that lies ahead for it. We expect SASE revenue to grow more than 500% by 2025. As a result of strong market growth, we also expect a tremendous opportunity for new vendors to stake their claim in this increasingly complex environment. As the SASE market is at a relatively early stage, many vendors are introducing new products and services to the marketplace, many of which can be considered “best-of-breed” offerings.
We think enterprises will be navigating multiple priorities, shifting between the needs of their security teams and their networking teams. As enterprises shift toward Zero Trust and SASE architectures, they are increasingly evaluating and deploying multi-vendor cloud-delivered security services, and it is not currently necessary for all the SASE elements to come from a single vendor. For example, HPE Aruba (Silver Peak) offers freedom of choice through a best-of-breed multi-vendor partner ecosystem. HPE Aruba’s approach is reinforced by the hundreds of deployments they have alongside cloud-delivered security services from partners like ZScaler, Netskope and Check Point. Enterprises working with vendors like HPE Aruba, with a multi-vendor partnering strategy, should be able to continue working with vendors they have worked with already or be able to pick “best-of-breed” systems. The news media has featured our research, and the reports have had interesting takes, for example a Dark Reading article, SASE Surge: Why the Market Is Poised to Grow, focuses on the significant growth opportunities for the market. In a briefing with Rakuten Mobile today, we learned two neat things: It is experimenting with 3GPP on satellite, and it hopes to announced a full-stack Rakuten Communications Platform (RCP) customer as early as next quarter. The company also shared some plans that it has for improving coverage to 96% by the end of the summer '21, and that it believes it has a 50% total cost of ownership advantage for its 5G infrastructure versus a traditional network operator.
So, what's so important about "3GPP on satellite?" If satellites are able to communicate with all cell phones and other cellular devices, this would mean that coverage could be enabled where we might need to have placed macro base stations. If we don't need macro base stations everywhere as satellites provide that coverage in sparse areas, or maybe even along highway routes, then a future cellular operator might be able to build its network with far fewer macro towers and rely more on a "barbell" approach, with small cells providing high throughput in busy areas and satellites providing coverage between busy areas. This would reduce demand for 5G base stations. Rakuten expects that its satellite partner, AST, may offer satellite coverage for Japan at the end of 2023 or the beginning of 2024 - that is a ways off. But, this means that in 3 or so years, the need for base stations may be considerably reduced. Also, Rakuten spokesperson, Tareq Amin, said he thinks it is possible that Rakuten may announce its first RCP customer as early as next quarter. We published about RCP in November 2020, around when the team first started making RCP known to the public. This means that a division of a mobile operator, Rakuten Mobile, may be selling its know-how, technology and services to another telecom operator, presumably outside of Japan. This is a big deal in that most operators buy from vendors and systems integrators, not from others who are in the same business as them. It is also a big deal because cloud companies like Amazon, Microsoft and Google all want to sell their cloud services to operators, too. And, if RCP gets there first, and sells its full stack (radio, core, billing, orchestration, OSS) it would represent a first-ever full stack services deal. 650 Group Interview about 60 Ghz Wireless Market and a Follow-Up about Throughput and Range1/21/2021 Yesterday, analyst Chris DePuy joined Water Tower Research analyst John Roy in a discussion about the 60 GHz wireless market. If you want to learn more about this emerging market, please listen in to this 30 minute interview about 60 GHz. During the interview, John asked Chris about how fast and far 60 GHz systems can go, and Chris cited some information from Facebook Terragraph's experiences with Fixed Wireless Access (FWA) deployments in Europe. Coincidentally, Chris received an email from Ubiquiti, an equipment vendor in the 60 GHz market, in which Ubiquiti cited recent 60 GHz results about a contest it is holding with users of Ubiquiti's new 60 GHz Point to Point (P2P) product. The results shared in this email (dated Jan 21, 2021) are stunning, with 60 GHz P2P ranges of up to 17.87 km and throughputs as high as 1.62 Gbps. 
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CHRIS DePUY
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