Tellabs bets on a content-aware routing platform

OVUM VIEW

Summary

On September 27, 2011, Tellabs announced its SmartCore 9200 series edge router platform. With the 9200, Tellabs is looking to extend its portfolio “up the stack” from mobile backhaul and the packet core to application management in a developing service core. The 9200 is critical to Tellabs’ efforts to restore revenue lost in the transition of mobile backhaul networks to IP/Ethernet and to support new services related to analytics.

Tellabs has built a strong financial foundation with its past market success, but the company has fallen a step behind in technology (its legacy router platforms do not support 40 and 100GE, for example). In addition, mid-size vendors like Tellabs face an uphill battle at many carriers that increasingly rely on the scale and end-to-end solutions available from the largest global vendors. In response, Tellabs is aggressively investing (25% of 2Q11 revenue) in current platforms and in next-generation platforms like the 9200 to provide competitive technology.

Tellabs bets the farm on the SmartCore 9200 platform

Just one year ago, the 8800 multiservice router produced more revenue for Tellabs than any other product. That changed when AT&T, Tellabs’ largest customer for the 8800, started to deploy Alcatel-Lucent and Cisco products as it transitioned from TDM and ATM in its mobile backhaul network to IP/Ethernet. As a result, Tellabs’ North American revenue declined sharply. The company announced layoffs last July, saw its margins fall, and lost market share in a growing IP/MPLS edge market segment (see Ovum’s “Market Share Alert: 2Q11 SP Switching & Routing,” August 2011, OT00061-020). While the company continues to invest in its current products, it is betting on the SmartCore 9200 to support its future business opportunities in application management and analytics in mobile and fixed networks.

The SmartCore 9200 supports service intelligence at the edge with immense processing power and capacity

The SmartCore 9200, available in early 2012, will support edge router functions with two-, four-, and 14-slot chassis options. The platform has backplane capacity to support up to 1Tbps of bandwidth per slot (for a total of 11Tbps in the largest chassis). The SmartCore 9200 will support a single-port 100GE card on initial release, still a little behind competitors like Alcatel-Lucent and Huawei, which will have two-port 100GE cards. SmartCore 9200 series platforms are populated with redundant switch cards and what Tellabs calls SmartCards. The distributed processing architecture of the SmartCards provides the real power of the platform. Each SmartCard has multiple computing resources (processing cores) to provide traffic processing, control, and seven-layer content-aware compute functions. SmartCards support virtualization, enabling multiple router instances within a single network element (a virtual router function), for example. Late in 2012, Tellabs will add support for analytics and video optimization functions to the platform, and in 2013, will add support for mobile packet core functions.

Tellabs is using SmartCore 9000 series products to enhance its ability to sell carrier services

Tellabs produced just 15% of its revenue, and 10% of gross margin, from services in 2010, a result that is typical for tier-2 infrastructure vendors. As part of its strategy to move “up the stack” in serving the broadband Internet market, Tellabs is looking to increase its participation in the high-margin services business by moving along the path of application performance management. To that end, in 2Q11 the company launched its Insight Analytics service. This service takes network, marketing, and customer experience data and generates reports to enhance carriers’ business performance. Insight Analytics uses the DPI capability of 9000 series platforms to provide a network probe function, although it can also operate with third-party probes. The existing SmartCore 9100 mobile core platform can be configured as a stand-alone analytic probe, while that capability is built in to the SmartCore 9200. With its Insight Analytics services Tellabs will again be going head-to-head against large tier-1 vendors. Alcatel-Lucent’s AppGlide Video Analytics service, its 9900 Wireless Network Guardian for mobile networks, and Ericsson’s Analytics Suite are moving in the same direction.

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