Summary Bullets:
- Ciena can now promote Blue Planet as an independent automation solution which can assist operators to create new services, automate service orders, and reduce O&M complexity.
- Separating Blue Planet’s priorities from those of Ciena’s equipment business, packet and optical transport, enables it to better address multivendor network transformation opportunities.
Ciena noted in its Q4 2018 financial reporting that several mega trends were affecting its business: an increased need for greater bandwidth and what it termed ‘adaptive automation.’ In a recent (February 2019) blog post, the company announced its intent to form a separate independent operating division focused on providing intelligent automation solutions. A key question is: why establish a separate operating division for Ciena software and services?
A recent GlobalData report confirmed Ciena’s observations that as operators adopt virtualization and cloud technologies, they needed to create digital services on a real-time basis and automate the service creation and assurance processes. Ciena’s BP software suite addresses key automation issues and has been recently enhanced through several technology and human resource acquisitions; however, being tied to the company’s packet and optical business somewhat mutes a multivendor focus and perhaps limits its attractiveness in network transformation projects not based on Ciena gear. The move to establish Blue Planet as a separate division helps alleviate this concern.
An additional benefit is the stated ability of the division to make continued investments to capture a larger share of the digital transformation market, which is expected to grow significantly over the next several years. As operators face the challenges of a rapid transformation in the face of skills and technology gaps, an end-to-end solution such as Blue Planet can reduce time to market. Investments needed to broaden customer appeal may require new features and capabilities that may or may not directly benefit Ciena’s hardware sales.
Operators are also seeking vendor solutions that can be tailored to their unique requirements, having strong, viable business and technology partners which can accommodate new use cases, if needed. Ciena is a recognized leader in optical transport and a significant player in Ethernet solutions, which provide it with the funding and sustainability needed in a vendor partner.
However, during 2018, traditional software competitors have also ramped up their service fulfillment and orchestration solutions to automate and scale operator digital services and accelerate the ‘time to market’ (TTM) of new offerings. Also, open source industry initiatives such as Open Network Automation Platform (ONAP) and Open Digital Architecture (ODA) are gaining acceptance and influence in addressing operator fulfillment and orchestration demands. The service fulfillment and orchestration market today is heavily consolidated, with top-tier suppliers dominating the market, driving pre-integration of fulfillment and orchestration processes into their solution and services packages. Ciena can apply its networking expertise, but will need to compete with established players to carve out additional market share beyond its equipment attached business.