Network Transformation Leads to Suppliers' Business Transformation

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Network Transformation Leads to Suppliers' Business Transformation

By Paula Bernier, Executive Editor, TMC  |  November 02, 2016

Transformation: It’s a word communications and networking companies use frequently these days. But typically these entities use the term to describe what’s happening – or what they wish to happen – at their customers, as organizations leverage new technologies to improve their businesses.

In the process, however, infrastructure solutions providers are going through something of a transformation of their own, and it doesn’t always follow a long-term, well-orchestrated plan.

Just take a look at what’s been happening at Ericsson and Hewlett-Packard (News - Alert) Enterprise.

As I wrote in this space in the June issue, Ericsson this summer announced plans for a new organizational structure. The new organization, which went into effect July 1, is aligned around type of customers and type of business and includes five business units and one dedicated customer group for Industry & Society.

“We will create a leaner, more fit-for-purpose organization, to cater for the needs of different customer segments and to faster capture market opportunities. As 5G, the Internet of Things, and cloud drive the next phase of industry development, the time is just right to make these changes,” Hans Vestberg said at the time.

However, shortly after Ericsson (News - Alert) disclosed its plans for the reorganization it came out with another announcement: that Vestberg, the company’s long-time president and CEO, had left the company.

According to IHS Technology, Ericsson is the leader in the telecommunications outsourcing services space, which was worth $69 billion in 2015 and is poised to reach $76 billion by 2020. Following Ericsson in this category are Huawei (News - Alert), HPE, IBM, and Nokia Networks.

Speaking of HPE, the company in August blogged that Manish Goel of its storage business and Bill Hilf of HP Cloud have left the company. Both men held the titles senior vice president and general manager. Goel has been replaced by Bill Philbin. Mark Interrante is now leading the cloud effort.

HPE also is moving its Helion OpenStack and Helion CloudSystem businesses into a new Software-Defined & Cloud Group, which Ric Lewis will lead, within the Enterprise Group. Lewis was previously the senior vice president and general manager of converged data center infrastructure.

These are only the most recent changes in leadership for HPE’s cloud effort. Two years ago Marten Mickos was named head of HPE’s cloud effort, following the company’s Eucalyptus acquisition, but was replaced by Hilf within months, Fortune reported.

Here are a few of the other recent changes at HPE:

• In late June, HPE announced plans to align its sales team into a single organization led by Peter Ryan.

• In May HPE spun off its enterprise services businesses into a new entity co-owned by CSC.

• Last year HPE was split off from its parent company HP.

Some of the recent changes at HPE may have been prompted by the fact that Telefonica recently dropped the company as the lead technology provider and systems integrator for its UNICA network virtualization program. Telefonica later named Ericsson as its partner.

“The decision to ditch HPE and start the process again, confirmed to Light Reading by the Spanish operator, shows just how hard it is going to be for large telecom operators to find partners that can fulfill their requirements and help build an open, non-proprietary next generation network,” according to a Dec. 24 piece.

In addition to being one of the largest telecommunications companies in the world, with a significant presence in 21 countries and a customer base of 341 million, Telefonica has been a pioneer in NFV. In fact, Diego Lopez of Telefonica was recently elected the new leader of the European Telecommunications Standards Institute’s NFV group, which is credited with bringing the concept of network functions virtualization into the telecom world’s collective consciousness. Lopez replaces Steven Wright of AT&T’s (News - Alert) strategic standards division in the U.S., who recently concluded his two-year term as the group’s chairman.

AT&T and Telefonica are among seven leading telecommunications operators that founded the ETSI (News - Alert)-based NFV group back in November of 2012. Since then, things have moved quickly – in telecom terms – toward standardization and adoption of network functions virtualization. The group is preparing to come out with Release 3 of its specifications, and it’s created various related working groups to address such things as NFV management and orchestration (also known as MANO) and interoperability (through the newly established Solutions, or SOL, work group).

Edited by Stefania Viscusi