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Issue of December 2002 
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Tech Update: Itanium 2
Putting its chips on Telecom

While the telecom industry goes through hard times, Intel surprises us by actively pursuing this vertical. It thinks it can repeat the success it enjoyed in the desktop and enterprise server space. The game plan and strategy remains the same. Can Intel succeed? by Brian Pereira

"We feel that telecom operators are fast moving towards standard building blocks, says R. Ravichandran,

Around the world, particularly in the US and Europe, the Telecom players are going through a rough patch. Wireless operators are wondering how they will recover huge investments in telecom infrastructure, as competition fuels further price cuts for subscriber services. Telco giants like Ericsson are slashing their workforce in a bid to stay afloat. Yet Intel, which sees lot of opportunity for standard server building blocks in verticals, has chosen to focus first on Telecom. Its Enterprise Platform Group will take Intel architecture to platforms for Telecom industries.

"So far there have been proprietary architectures in the Telecom space (non-Intel architecture), and we know the telecom players, be it the carriers, the telecom equipment providers, the ISPs or xSPs, would need to extend their infrastructure—that presents significant play for Intel Architecture. This is the first vertical Intel has got into in terms of creating platforms for specific industries," says R. Ravichandran, Intel's Asia Pacific Regional Marketing Manager, Enterprise Platform Group.

OPPORTUNITY
Despite the slump in telecom markets, Intel remains convinced that there is a lot of opportunity in the telecom vertical, for a number of reasons.

For one, telecom players are increasingly moving away from proprietary solutions and adopting horizontal, industry-standard and non-proprietary solutions. Using standard building blocks is a way to cut costs. Intel has already proved itself in the desktop and enterprise server space, as a provider of industry standard solutions. Those offering proprietary architectures (like RISC) have gradually adopted Intel architecture.

And Intel sees the same thing happening in telecom, so don't be surprised to hear announcements about it forging partnerships with Nokia, Ericsson, Motorola etc. Traditional telecom players, who are into circuit switching, may eventually relent and adopt Intel's standard building blocks.

"We feel that telecom operators are fast moving towards standard building blocks. They are moving away from proprietary architectures because they need to bring in new services due to competition. If they rely only on one vendor they are not going to be successful," says Ravichandran. "Building blocks offer flexibility and modularity, thereby allowing service providers to offer new services and yet keep costs within control."

Already Intel has made a move to bring about a standard operating system for telcos. The Intel Communications group is considering Linux.

"Intel has taken standard Linux and identified the requirements to make it more ruggedized. We have submitted this to the Open Source Development lab. CGL is another initiative in this direction," says Ravichandran.

Intel is known for creating industry standards by developing ecosystems. This creates demand for horizontal solutions, thereby reducing market share for proprietary solutions. Here's how Intel has done this in the past.

Intel developed its desktop and enterprise server platforms on the basis of price/performance. It also offers customers a choice of solutions, as several vendors have adopted Intel architecture. Also, Intel has a broad ecosystem—lots of software vendors writing applications. Now Intel is hoping to replicate all this for telecom. For instance, it is hoping that telecom application vendors (billing software, VoIP software etc) will port their applications to Intel platforms.

Another reason why Intel is pursuing telecom is growth in traffic.

"The reason why we are going after the telecom space is very clear. Internet growth or traffic growth continues despite the slowdown. Yes, headcounts and R&D budgets are reducing, but it does not imply that the market is declining. Traffic is continuing to grow, which means they (telecom players) need to put in more infrastructure. Customers are demanding new services (data and voice). And if the telecom players continue to use proprietary solutions, they are going to have major problems," says Ravichandran.

Intel is also optimistic about telecom as it envisions the formation of a unified network in future. There will be mobile networks and people will be accessing these using PCs, PDAs, cell phones—though the airwaves or broadband Internet connections.

CHALLENGES
But Intel is treading new ground and despite its strong technical expertise and years of experience, it faces a number of challenges.

For one, telecom infrastructure has traditionally been the fiefdom of giants like Lucent Technologies, Alcatel, Ericsson, Nortel Networks, Motorola and others. It could take several years for Intel to grab market share from these giants, who have a solid technical foundation and lots of experience in this area.

Secondly, Intel will have to do a lot of re-engineering on its products to create electronic components for carrier-grade equipment—which is different and more ruggedized than enterprise servers and enterprise networking equipment.

Carrier-grade equipment must be designed to work in extreme environments—at high altitudes or low temperatures; it should be dustproof and corrosion proof; it should also be able to withstand high temperatures (in case there's a fire in the server room), and even vibrations caused by earthquakes.

There are two industry certifications to check if the equipment is really up to this. All Telecom equipment must pass stringent tests and should be NEBS (Network Equipment Building Specification) or ETSI (European Telecom Standards Institute) compliant.

Though Intel has lots of technical expertise in semiconductor manufacture, it is playing on a different field this time (Telecom) and has much learning to do.

Thirdly, Intel and its OEM partners (HP and IBM) have to contend with rival Sun Microsystems, which is a strong player in the carrier grade server space. Sun's offering here is the Netra server. Presently HP and IBM offer carrier grade servers based on Intel architecture.

Intel purports to beat Sun using the price/performance card. Intel claims that IBM and HP telco servers (based on Intel architecture) have overtaken Sun servers on the performance front (SPECint2000 and SPECweb99 benchmarks). Also, Intel asserts IA telco servers cost 40 percent less than Sun's Netra 20 servers.

But competition will increase as new players (like Nokia) enter the field. It has taken years for Intel to establish itself in the enterprise server space. But Intel won't have so much time to reenact this in the telecom space.

OTHER VERTICALS
Besides Telecom, what could be the next vertical for Intel to pursue? Intel offers solutions to numerous industries, but these are standard commercial grade servers and network solutions. Take Healthcare for instance. Intel has set up a division called the Proactive Health Research group, to look at how computing can be used in the healthcare industry. This division will find new platforms for products like tablet PCs and portable video players. The division will also take existing technology and use it to help senior citizens live more comfortable lives.

Ravichandran says Intel is not going to do significantly different engineering for hardware in other verticals, at this point of time.

"Other verticals like Power, Medical etc are contended with standard, off-the-shelf building blocks. These verticals do not need completely different engineering from a hardware point of view."

Brian Pereira can be reached at brianp@networkmagazineindia.com

 
     
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