Cisco, Juniper and Arris wrongfooted by Nokia’s cable acquisition
The lines between mobile and fixed-line networks are blurring. Operators are racing for mergers and partnerships which will allow them to support fixed/mobile and quad play services, as the profits on mobile-only services or fixed-only access disappear. Wireline companies such as cablecos are going wireless with WiFi-first activities. One of the key elements of 5G is the vision of a flexible and intelligent platform which could allocate capacity as required to individual applications or users, across fixed and wireless networks.
No surprise, then, that the mobile equipment majors have been investing heavily in offerings for converged systems, from cloud platforms to access networks. Nokia abandoned its mobile broadband-only strategy by acquiring Alcatel-Lucent with its significant fixed broadband assets, and now Nokia has taken a position in the US cable market. It plans to acquire Gainspeed, a US-based start-up focused on virtualized CCAP (converged cable access platform).
This sees Nokia not just expanding what it offers traditional MNO customers with converged systems, but targeting a new customer base. It could become a major force in the US cable industry, treading on the toes of established vendors like Cisco and Arris.
Cisco and Arris may rue the day that they did not step in to acquire Gainspeed’s patented technology before Nokia did. The CCAP market has strong growth, and is valued at around $2bn a year, with the potential for other knock-on sales. And Gainspeed sits at the cutting edge with its virtual CCAP, but brings none of the baggage of a more established player like encoding provider Harmonic – also considered a candidate for acquisition in this space following a fall in its revenues and market capitalization.
Nokia Networks will now own Gainspeed’s Virtual CCAP product line, which provides DAA (distributed access architecture) services to the cable industry. These services assist cablecos in tackling increasing strains on capacity and power usage, to support rising demand for content formats such as 4K, UHD and virtual reality.
Gainspeed has previously worked with CommScope, Netgear and JDSU, as well as integrating its virtual CCAP technology with Juniper’s MX Series 3D Universal Edge Routers and EX Series switches. Juniper, which is also an investor in Gainspeed, claimed in 2014 that the virtual CCAP architecture could reduce total cost of capacity by as much as 67%.
But it seems that, once again, Juniper may have been left in the cold. Its own close partnership with Nokia is likely to be supplanted by ALU’s switches and routers, while it has seen rivals in several areas snap up its former allies – HP Enterprise buying Aruba, for instance, or Brocade acquiring Ruckus.
Nokia’s acquisition of Gainspeed, for an undisclosed fee, will see the 70-person company join the Fixed Networks business group and is expected to complete in Q3 this year. Gainspeed has received financial backing totaling $60.77m million from investors Andreessen Horowitz, Juniper Networks, NEA and Shasta Ventures.
Gainspeed was co-founded by its current CTO Shlomo Rakib in 2012, who has played a major part in the birth of a string of companies including Terayon Communications, which went public in 1998 and was later acquired by Motorola, as well as video processor company Novafora, which went under in 2009. Rakib is considered a pioneer in the cable industry and was also a key contributor to S-CDMA (Synchronous Code Division Multiple Access) technology.
Federico Guillen, president of Nokia’s Fixed Networks business group, said: “We are very excited to have Gainspeed, the technology leader in its field, joining us. Cable is one of the fastest growing areas in our fixed networks business … Gainspeed’s Virtual CCAP perfectly complements our leading fiber access solutions for cable MSOs … it has been a leader in the broad industry shift toward DAA to handle increased bandwidth demands and support of the network transformation to all IP.”
CCAP originally emerged in 2010, aiming to push the DOCSIS CMTS (cable modem termination system) closer to subscribers, enabling cheaper and faster IP migration for operators. This means cable operators can build on the capacity of their existing HFC (hybrid fiber coaxial) networks to roll out new services while at the same time reducing power constraints and space in the head end.
Cisco and Harmonic were two important players which began steering towards virtualized CCAP in 2014, with Arris not far behind. Virtualizing IP migration emerged as an economic option, when the rate of deployment of conventional CCAP had proved slower than expected – it is a considerably complex technology that requires some hefty upfront investment. Even Comcast admitted, after conducting trials with Cisco during 2013, that deploying CCAP involved a lot more than a simple box swap.
These issues led to consolidation of monitoring and alarm systems, as well as support processes, which stimulated the CableLabs standards body, operators and vendors to switch towards distributed architectures such as SDN (software defined networking) and NFV (network function virtualization) – leading to the virtualizing of CCAP functions on shared hardware.
There still remains a place for dense centralized CCAP at premises such as businesses, hotels, college campuses and apartment buildings, where fiber will deliver pure IP to the building and the RF infrastructure will start inside.
The CCAP format was originally driven by Comcast and Time Warner Cable. It is the combination of the network server which drives QAM TV, with the CMTS which in turn drives DOCSIS connections. Almost all DOCSIS 3.1 is being delivered in CCAP format.