David Noguer Bau, head of service provider marketing, EMEA, at US-based vendor Juniper Networks discusses current and future trends.
Eurocomms.com: Juniper released its Q4 and 2011 results last week showing a weak final quarter but increased full year revenues. Your president and CEO highlighted weak demand from service providers – do you see this changing?
David Noguer Bau: Well what I would say is that we are still seeing interest from service providers and from my perspective the buying cycle is still healthy. Obviously there is a problem with weak economies.
Are there any wider shifts you can point to as a result?
I think the buying model is changing – consumers are still buying content but they are no longer putting service providers at the heart of the value chain. For their part, service providers are seeing growing traffic but revenues are not keeping up. Equally, the price of a megabyte is going down but the price of equipment is not. Consequently, service providers are asking for help with growth strategies and network capacity – they know that investment needs to be made.
What type of investments are service providers making currently?
On the consumer side, mobile operators are looking at optimizing video traffic because they realise that more capacity alone will not solve the problem.
What type of investment needs to be made in the future?
There is room for innovation in residential, enterprise services and data centres. On the residential side it is about content delivery networks, new service launches and partnering with OTT providers. For enterprise customers, it is all about the cloud. In data centres it is a question of simplifying and improving existing systems.
Juniper is traditionally very focused on the network – what is happening out there in the marketplace currently?
Service providers still see networks as a differentiator, but they are moving towards services such as cloud computing and those provided by OTT players.
What do they need to do to ensure the provision of these services is successful?
Telcos can differentiate in cloud, for example, by bundling the cloud with the network and providing a single SLA that offers protection for customers. For OTT services, service providers will increasingly be required to make services available to anyone who wants to pay. Consequently, I think telco-based, Netflix-like services will see a boom.
One question that continually comes up is whether networks can cope with the changes you have outlined. What is your view on this?
Networks are strong enough to cope with upcoming demand, so differentiation will come from keeping users happy. However, I would also point out that if services are provided OTT, quality of best effort internet as we know it today may change.