Category Archives: Telecom

What’s Next?

Yes, it is a big deal! Microsoft is acquiring the Nokia handset business for $7.2 Billion. I have lots of reactions to this. Some minor and obscure, and others not so.

First, Microsoft (MSFT) is clearly committed now to a hardware strategy! WOW! Think about its 35+ year history of software and just OMG. Ok, sure it has nearly always sold MSFT branded mice and other minor add-on hardware for PCs. And earlier this year they introduced the SURFACE tablet in an effort to create a greater market interest for Windows8. But now MSFT is solidly entering the mobile device market, not just as a software platform provider but selling and marketing a full range of handsets and smartphones. I hope MSFT knows they have a lot to learn!

Ok, some of you are asking who is Nokia (NOK)?, and why is their handset business worth such a fortune? Well, until Apple (AAPL) entered the mobile phone business not so long ago (it was only 2007), Nokia was the #1 high-end handset vendor globally with 35% market share. They never had the same impact here in the US as they had in Europe and elsewhere. But when I was a director within Lucent’s Mobile Applications business (2001-2004), it was the Nokia handsets that had the features we wanted to use with our experimental and demo applications. Of course, Nokia didn’t make CDMA handsets, only GSM and early 3G/UMTS devices at the time, so it didn’t always work out for us (being Lucent, i.e. direct competitor with Nokia’s network equipment). Instead, we often ended up trying to use HP devices (with clucky PCMCIA cards – remember those?). Does anyone even remember HP making mobile devices? Noooo, me either…

So Nokia had a great device platform for its time. Often running neck and neck with that other innovative handset company – RIM, better known for their Blackberry – the first smart-ish phone; and similar to Apple, with a highly proprietary architecture. What RIM missed (very very sorely, now) was the move to allow mass creation of 3rd party applications (which I advocated for as early as 2002 – someday I’ll pull out my presentation from the 3GSM World Congress in Nice that year, and the following year as well). Nokia and RIM tried this, but too late. Both these handsets businesses are now on serious down swings. It will be interesting if MSFT can do something to save it; and save itself too, given that highly successful and powerful handheld devices have seriously limited the future of the PC… (Aside: I don’t think Google has learned very much, as yet, from its own acquisition of a handset business on a serious down swing…)

Then perhaps, of even more interest to some of you (i.e. ALU employees/retirees/shareholders etc.), is what will Nokia do with its cash windfall? That is, after they pay off the debt to Siemens…?

Everybody Smile!

Ok, everyone, today at around 5:30pm (Eastern Time) today be sure to lookup and smile! Really, really big!

Our picture is being taken by the Cassini spacecraft from orbit. And not Earth’s orbit, but from the orbit of Saturn, which is currently approximately 898,500 million miles (1.446 billion kilometers) from Earth. Therefore it will take the light from our shinny faces over 80 minutes to reach the camera (which is taking a mosaic picture of Saturn and all its rings, while Earth ‘just happens’ to be in the background). For more detail and interesting things about this, see this JPL blogsite.  Ok, yes, we (the whole Earth) will actually be less than one pixel of the final picture, but at least in my opinion we have lots of reasons to be smiling:

  1. In other space news, Luca Parmitano (pic above) is fine!, after having to cut short a planned 6.5 hour EVA (spacewalk) on Tuesday. While performing maintenance outside the International Space Station, his spacesuit started leaking (no, not leaking air, but) water internally, and he was having difficulty seeing, hearing (his headset shorted out), and even breathing due to more than a liter of water accumulating in his helmet.
  2. The global telecom industry seems to be through the worst of the current wave of cutbacks. Much is stilled needed to return to a fully sustainable business, but the pathways and impacts of the transition to IP should now be clear to most everyone.
  3. The US government (though not Congress, as yet) seems to finally get that global climate change requires more and serious action!
  4. The DRBC has again delayed permission for fracking in the Delaware River watershed. And while some people will be getting less money due cancelled drilling leases, there’s hope that this glorious area will stay a great place to live and retire to, and that our drinking water will remain clean and pure.
  5. Our own solar PV system has completed one year of operation, and we had overall a net positive production of electricity over what we actually consumed. We’re cashing a small check from our utility for the excess that they purchased from us!

Lastly, of course, it’s FRIDAY! And the current heat wave will be breaking tomorrow! So only one more night of sleeping with the windows fully open, but while it’s still 78-80F in the house!

Hope you too have good reasons to be smiling this summer. Stay cool, everyone! – Jack

Re-re-re-re-replanning Alcatel-Lucent

Last week, Michel Combes, the new CEO at ALU announced his plan (of all things “The Shift Plan”) for saving the company and returning it to positive cashflow in the next 2.5 years. Now, where did I hear this before? Oh, that’s right every prior CEO since the Alcatel and Lucent merger/acquisition (and a few of those more than once). What’s different about this plan? From the outside, it’s hard to know… But I can identify some of the things that are similar to all the prior plans:

  • Focus the portfolio and R&D spending on ‘next-gen’ stuff
  • Get out of certain non-profitable markets
  • Reduce SG&A via layoffs
  • Sell (or license) some things
  • Swap certain managers and re-structure
  • Leverage innovation for the future
  • Leave a long runway before results are expected

So what makes Michel et al believe this time will have different results? (Remember this mis-attributed definition of insanity?)  Of course, other than this time, I’m no longer an employee and have a lot less riding on it (though, I’m still a shareholder and a participant in their retiree medical plan). I’m not so self-absorbed to believe that my leaving will make any(!) difference… but, still, I have one piece of advice!

Certainly, the challenges faced by the company are huge. But decision-making and then sticking with those decisions are what’s required, if your title includes “manager” (or any form thereof). In my view, it’s the latter part (specifically ‘sticking with the consequences’) that’s been the critically missing part. All prior plans required actions that were painful, often quite painful, whether to embedded internal interests, to important customers, to certain governmental bodies, or just to the self-image of the company (and its employees). But that’s where the (re-)plan would die: the inability to withstand pain for long enough. It requires much more than a quarter, or even a year. To me, it seemed, just when some positive things were likely and soon, we’d fall back on poor behaviors and try to re-live ‘the good times’ again. Then a quarter or two later, there’d be another missed set of numbers, and yet another re-plan to be announced. My advice to Michel, and especially to all my friends and ex-co-workers (whether ‘manager’ or not): please, have some “stick-to-itiveness” this time!

The pains of change (maybe more than you personally can withstand, yes) will be worth it afterwards! I’ve changed to become more sustainable, so can you! – Jack

When Building with Straw, Beware of Pigs with Strong Lungs

Sorry to have been off-line for so long, but AT&T has no service where Mary Anne and I attended a week-long workshop on straw bale building techniques. Blue Rock Station is Jay and Annie Warmke’s home and farm (llamas, goats, chickens, fruits and veggies, but no longer any pigs!) in rural eastern Ohio. They, plus instructor Aaron and summer interns Michelle and Jina, had us working on multiple phases of three current building projects. We learned very hands-on about rammed earth foundations using old tires, framing with straw bales, sealing with cob and lime plaster finish coats, plus the nice artistic touches of glass bottle widows, built-in shelving, and using broken ceramics to create mosaics. We got very dirty and very tired, but had a great time! We learned a lot, and met many wonderful people (staff and fellow attendees) who are likely to become long-time friends!

IMG_3386

Perhaps, not so surprisingly, Jay and I share a passion for solar energy. He’s the current vice-president of Green Energy Ohio, who I had just learned about last month at the ASES conference. More surprisingly, it turns out Jay was previously the executive director of BICSI, so we had good time reminiscing on the heydays of the telecom industry. Then about 13 years ago Jay and Annie decided to “chuck the whole corporate way-of-life” and moved to Europe for 3 years. They then decided to return to their roots in rural Ohio, where they had previously purchased their dream property: a 38 acre abandoned farm and ex-logging camp on a south facing ridge overlooking a beautiful aspen-oak-maple forest valley. They built their earthship home themselves, and have been farming, writing books and teaching to spread the word to others ever since. Their message is much more than about straw bales or green building techniques. It’s about living sustainably while living richly (and without much money). A great life lesson, especially for me, with my recent exit from nearly 30 years of corporate life and currently searching for my best path forward — Argh! That’s definitely corporate-speak, so I guess I’m not fully weaned as yet!

Thanks to all! – Jack

Tried to replace the PSTN lately?

A great challenge for the current US wireline telephone companies is how to replace the voice telephone network (aka Public Switched Telephone Network or PSTN), build up over 80+ years by the Bell System and its progeny. Same concern applies to the cable companies that built their own version of voice service networks over the past 20 years. Though these have different origins, they share the issue of technology obsolesce (with increasing risk of outages, and higher on-going expenses), all while voice revenues are declining; making the business case for replacement extremely difficult. Over the past 29 years I’ve seen multiple attempts at replacement strategies and many different business justifications.

I had someone argue the first “PSTN replacement” was actually the installation of the SS7 network during the 1980s, which removed inter-office signaling from in-band (where it could be and was hacked!) to an out-of-band separate data network using X.25 technology (actually SS6 did this first, but was not fully deployed). If so, then this was the last “successful” replacement! Every attempt I know of since then has ‘failed’. First there was Integrated Services Digital Network (ISDN), which had a strong start in the late 80s, but has only had long-term success at the interface between public and private switches (PBXs). The residential form of ISDN, known as the Basic Rate Interface (BRI), re-used the existing twisted pair of cooper wires, yet was capable of carrying two digital voice channels and a very low bandwidth 16kbps switched data channel (2B+D). The voice channels could alternatively be used for 56kbps data as well. At the time there were no browsers, no webservers; mostly just FTP, email and private BBSs.  This was long before the World Wide Web became the runaway application of the Internet. In the 90s when the WWW came to be, ISDN BRI was not up that task and was quickly forgotten.

A really massive attempt to replace the PSTN was the Pacific Bell Consumer Broadband Network, which I was involved in from 1993-1996. The plan was to supply 500,000 homes in California (and elsewhere) a combination of voice, data and TV services, based on an exciting (to me, the engineer) mix of technologies from the telco world, but using cable’s hybrid fiber coax architecture. The big issue, though, was that it required running new fiber to each neighborhood and new cable drops to each of those houses. All that digging up of streets, or even stringing aerial, is disruptive and expensive. Being California, there were regulatory issues too (this was pre Telecom Act of 1996). But the final nail was when the Internet started to become a big deal [remember those dialup 56kbps modems?], but the data capabilities were based on ISDN…so this one failed too.

Not long after that the cable industry started deploying broadband cable modems to carry IP-based data, and the telcos followed with Digital Subscriber Line (DSL) services (and later, with IPTV using an upgraded DSL service). The key for both of these was that the implementation was scalable and an incremental overlay on the existing networks (coax or twisted pair), rather than a voice network replacement. No massive digging up of the neighborhoods. Well…, except for Verizon’s FiOS where the fiber is brought to every house directly using PON technology. That’s still a lot of digging, and a lot of expense to put electronics with a backup battery in every home. And so, having already deployed its most economical neighborhoods, Verizon has discontinued any further plans to grow the FiOS coverage areas. Interestingly though, FiOS still carries voice services via the same old Class 4/5 POTS switches in use since the late 1970s and 80s [their plans for IMS still pending].

Most recently? Look at the offer from Verizon Wireless (and AT&T also) to have the wireless network provide voice connectivity for your home phonesets, for only $20/month (on par or cheaper than most basic wireline services), … added to your existing mobile smartphone service, of course.

So what are the takeaways here?

  1. The Bell System (R&D by Bell Labs) did many things well. And that equipment has lasted. Yet, I also have to say, that won’t carry the telcos much longer…
  2. Data has been a growing theme in all these network changes. It’s clear that data (with video via that data) service is now the primary residential service. Not voice, nor linear TV. [It’s also clear that Bell Labs was spectacularly not good a predicting consumer demand for data services!]
  3. Incremental change is a lot easier than wholesale replacement, both in technology and economically. Don’t try to shallow the whole thing in one gulp; cut it up into smaller chucks, especially ones that can be justified in other ways…
  4. Mobile networks are taking over… at least for the 98ish% of the US population area where 4G will be fully built out. [And I didn’t discuss VoIP, except via implication…]
  5. Economically, it’s all about the bundle!, regardless of whether measured in lines, ARPU or RGU!
  6. And lastly, it’s also about moving away from heavily regulated domains [but we’ll save deeper discussion of that topic for a future post].

Jack

Do you GIS?

I have come to the belief that Geographical Information System (GIS) is the next Excel – i.e. a tool that will become indispensable in everyday life, and most especially to an engineer.

My first exposure to GIS was in the mid-1990s. On a project for PacBell (now AT&T, again), we were building a revolutionary new, fully integrated Operational Support System (OSS) for their ‘new’ network that was going to replace POTS throughout California (I’ll write more about that project sometime soon). But we didn’t get very far with GIS then. A decade later, when Mary Anne was hired to teach Environmental Science at Ramapo College, one of the courses they wanted her for was GIS. She didn’t know much at the time, but with her background in CompSci, she dived in and learned it. She’s been teaching it semi-regularly for nearly 10 years, and continues to do so now at Georgetown. Last year, while on the Wi-Fi project that I mentioned last week, a super talented RF Engineer on the project came up with an analysis methodology using GIS tools. It is a really powerful way to analyze lots of data (and present it geographically), and greatly helped our clients to decide where and how much to build out their networks. I have always been intrigued, but never had the time to learn GIS myself – that is, until now.

I have had a great deal of fun these past 8 weeks, following along on some of the projects Mary Anne’s students are doing this semester (e.g. tromping through a remediated wetlands with a GPS recorder), plus diving into the textbook that she teaches from. I’ve learned a great deal, though somewhat specific to ArcGIS version 10 from ESRI, the company that has most commercialized GIS technology (and is still privately held!). If you’re interested, I recommend “Understanding GIS – An ArcGIS Project Workbook” by Harder, Ormsby and Balstrøm, and published by ESRI. They include a DVD of the software with a limited license and a reasonably complex project to work on over its 9 chapters. It includes discussion of the ‘fun’ parts of any technology project, such as uncertain or changing customer requirements (noooo, I’ve never had that challenge), how to make an analysis easily repeatable and flexible, and even a whole chapter on creating the presentation with the results of analysis. It is a little overly scripted for me, but that likely makes it easier to teach to a general audience (without a computer software background).

When I was a young engineer and anxious to get that first promotion, I looked closely at what others were doing when they got promoted. In those days, business skills were still rare in Bell Labs/AT&T Network Systems, and were ever more important than prior to the 1984 Divestiture. So I focused on developing those more (a.k.a. I turned to the ‘dark side’). For me, that included a rotational program into our sales force (more about that sometime, too), and then coming back to a role in product management. It was there, that I first started using Excel regularly. I developed spreadsheets to track our budget verses actual expenses, our software R&D capitalization/amortization schedule, another for our sales opportunity funnel and revenues, and then put it all together in a product-specific income statement. At the time my peer product managers had no similar insights into these details, as very limited financial information was computerized (and mostly on mainframes). But I could run all kinds of ‘what-if’ business cases or probability assessments, and see the profitability impacts instantly. Since then I’ve used Excel for lots of non-financial things too: engineering performance modeling, net zero energy (NZE) analysis, requirements tracking, contact lists, uncountable charts for presentations, weather analysis, and even a game or two. In 1992, I got that first promotion, and I have always attributed it to my abilities with Excel, bridging technology with business skills. But now that I’m learning GIS, I am wondering, how does an independent consultant earn a promotion…? 😉

WiFi RF Engineering? (not an April’s Fools question)

After the tech bubble burst in 2001, I joined the Lucent Wireless Networks organization as the systems architect and engineering director responsible for 3G data applications. I had a really great group of engineers fighting hard to create the wireless world we actually have today – everything mobile data. And yes, I do mean fighting; because at that time the core power base within the organization was made up of RF engineers, those who had invented the first cellular networks during the 1980s (and earlier), plus their apprentices. They were all *real* engineers, with a deep understanding of the theory, math, technologies and challenges in designing and building cellular wireless network equipment. In meetings they were always devolving into discussions of link budgets, dB, hertz, and erlangs. I was mostly a software and systems engineer; yes, with a strong background in outside plant and voice (aka POTS) networks, but I was a foreigner in their domain, for sure. I suspect a few of them would intentionally take conversations into the deep technical details to a) impress their boss, b) let the one VP, who was an RF engineer himself, take the lead in the conversation, and c) avoid any discussion of the economics or business sensibility of an idea. Well, I learned fast that to thrive in that organization I needed to speak, or at least understand, RF engineer-ese.

In this time frame, Wi-Fi was just getting serious standardization and the PCIMCIA card was its most common form factor; the same form factor as the first 3G data devices. Perhaps that was the cause of the anti-Wi-Fi bias that developed in those RF engineers. Or maybe it was due to only being for short range data transport, and *not at all* related to the cellular business of voice service. But more likely, I suspect, it is Wi-Fi’s use of unlicensed spectrum (after all, you can’t calculate performance when there are multiple indeterminate variables in the RF link budget). So what did naïve Jack do? I became an advocate for fixed mobile convergence and “dual-mode voice service” over Wi-Fi and cellular data, using IMS as the enabling technology… And not long thereafter I moved on to Lucent’s professional services organization.

I smile a lot now, ten years later, with all mobile data devices having built-in Wi-Fi, the industry producing integrated Wi-Fi picocells and implementing of mobile data offload onto Wi-Fi. AT&T and Verizon each have many 10,000s of public Wi-Fi access points in operation for their subscribers’ use. The FCC is adding more free unlicensed spectrum for Wi-Fi to use. And I spent last year working with several of the major US cable operators on their massive outdoor Wi-Fi network RF designs and deployments. Of course, IMS technology is still struggling in wireless networks and the few dual mode services that have commercially launched don’t use IMS. But at least three of the best engineers that worked for me went on to found their own, or to work at, small cell and/or Wi-Fi startup companies (Meru, Ubiquisys, Airvana). They and many others have made it happen, not me. No regrets here.

Who Knew?

One of the greatest frustrations in my career has been the struggle for acceptance and commercial deployments of IMS (IP Multi-media Subsystem) in telecom networks. I started work on the ALU version of IMS with our software release 0.1, 0.2 and 0.3 – which were never intended to see the light of day beyond a lab. But we wanted to get the full requirements process engaged and the development team initialized in the right frame of mind. This was late 2002, when I was director of systems architecture and engineering in Lucent’s Mobile Applications Services Delivery. The initial IMS standards (Rel 5) from 3GPP had barely had time to dry, and had already started significant enhancement/revisions (still occurring). Yet many of us shared the strong conviction that moving voice services from the very optimized, but inflexible implementation that was then common in 2G technologies (and beginning initial deployments in 3G) would be the pathway to an explosion of new services and applications offered by mobile network operators, taking advantage of these new high speed mobile data networks that 3G enabled. We all remember what  happened to the wireline ISPs (Internet service providers),.. They had been reduced to only providing a “simple” point to multipoint IP data transport service for a fixed monthly fee, but with constant demand for higher speed (bandwidth) and capacity (data volume). Where was the money for future network investment going to come from, if not from an explosion of new services/applications? How would mobile operators make money once the inevitable influx of these non-operator (aka over-the-top) applications started coming available over mobile networks? Well, at the time, IMS was our answer!

Ten years later, and no 3G network that I know of has implemented IMS as a replacement for its voice core network. Yes, there have been a few supplemental voice services (e.g. push to talk), and several video or other data services implemented using IMS. I worked on a couple of those… None that I know of were commercially successful; though I’m glad the RCS effort continues to show some progress! Using 4G/LTE technology, MetroPCS is still the only US mobile operator with a commercial Voice over LTE implementation using IMS (not ALU’s). And that implementation may not survive the pending acquisition by T-Mobile (sounds vaguely familiar to another wireless IMS implementation that I worked on…). Verizon’s VoLTE implementation has yet to launch, nor any offering from AT&T.

So where is today’s largest IMS commercial implementation? It’s in wireline voice networks, e.g. over 2 million subscribers on just one US implementation. It is most ironic that the first two releases of the IMS standards didn’t include significant support for these wireline networks!! And we’re still waiting for that explosion of mobile operator applications… Oh, wait, I just received notification of some new appls for my iPhone… …uh!

New Leader at Alcatel-Lucent

Last week, Alcatel-Lucent announced a new CEO, Michel Combes, to be effective on April 2nd. Indeed, as the press coverage has highlighted, Mr. Combes will have plenty of challenges in this job. But ALU is in need of someone like Michel, that’s for certain. It turns out I once had a call with Michel, when he was the recently named leader of Vodafone across Europe, and we in ALU were trying to figure how best to position our Services offers. At the time Vodafone was struggling with its operational model of having each country build and run independent networks and local operations staff, with a fairly thin set of marketing, network roaming assets, and supplier relationships as the only things in common across these different entities. I was the chief architect for the ALU Professional Services division and this meeting was arranged by our sales team with just the three of us on the call. The goal was to figure out a path forward to help Michel to transform Vodafone to be a more centralized operation, and able to leverage much more from common investments in the future. I don’t remember that much about Michel, or much of what we talked about. I just remember being frustrated afterwards that we had little hope of making progress with Vodafone at that time.

Michel’s new challenges are not that much different from back then. Elsewhere there is plenty of coverage and comment about ALU’s cash flow challenges. And the financial markets didn’t particularly like his announcement (ALU dropped 5% relative to the NASDAQ on Friday). Yet, I think it’s good they are hiring someone with a French background and political savvy. As when he was CFO at France Telecom, Michel will need that when it comes to figuring out how to work through the governmental/regulatory and social challenges of ALU’s French and European workforce. I also think Michel needs to re-assess the value and direction of the Services business within the company’s portfolio. Nokia-Siemens reported that about half their 2012 revenues are from Services. Ericsson grew their global Services business by 16% in 2012 to be nearly 45% of their total revenues. Even within ALU, Services has been the second most reliable business for revenue growth (with the IP division leading) and the best business group percentage operating income in 2012 (though still not the >30% it needs to be). Yet in the re-organization effective this past January, ALU’s independent Services unit was disbanded and mostly melded into each of the product units. Yesterday at MWC, the CEO of NSN certainly slapped down his gauntlet in challenge too.

I wish Michel Combes the best of luck with these challenges, and I hope he can find a path to financial recovery and a successful Alcatel-Lucent. In the meantime though, I will explore my own separate path forward as an independent services professional… Wish me luck!

Another story of my naivety

I started work for Bell Labs in May 1984 at Whippany a very naïve 21 year old. My first officemate was an older lady named Martha, who had survived the male dominated culture there for decades before I showed up, had been programming in C since the language existed and had only recently been promoted to the title of Member of Technical Staff (MTS), which I had been given on Day 1. I was (I thought) a hotshot computer programmer, ready to take on the real world (or at least all of telecom)!  Our boss, a gentleman also named Jack, was an orthodox Jew (with which I had no prior experience what so ever), had just recently been promoted to supervisor, but had huge patience and the fabulously rare skill (including, most of all, in me) of listening before speaking. His boss and the head of Artificial Intelligence Systems Department was a noble woman named Fran, who also had long fought and succeeded in the Bell Labs culture. Yet, unlike some other executives that I would work with, Fran ran her department with a soft and steady hand.

I remember a conversation with Jack in his office sometime after I had been there for more than a few months, where we were talking about the naming of things. Not material things, but like the names of work projects, and software modules, etc. I don’t remember the specifics of this conversation, but I do remember making the most ridiculous complaint that we should only be using the word “program” when meaning to refer to software code. And that using “program” to mean a work project or series of projects was too confusing. I was so naïve! Yet, Jack took my ‘suggestion’ without judgment or saying anything of what he must have been thinking…

Later when I had other bosses, I figured out quickly how much of a good thing I had in those first few years. Martha took me under her wing and taught me how to survive and thrive in the corporate culture and coached me through the soft-side of things. Fran and Jack created a safe place to take risks and gave me opportunity after opportunity to perform. After some mildly successful projects, positive customer feedback, my participation in a one year rotational program onto one of our sales teams, and several years of significant experience, Fran was the one to promote me to supervisor (tech manager) before I turned 30 (the ‘test of success’ at the time). I grew, was less naïve and definitely learned a lot during the time I associated with the AI Systems Department and all the very smart people there. But from Martha, Jack and Fran, what I learned most, was how to work with people, of all types, as well as upwards and across management. You made me a better person! Thank you! And I am certain that those that later worked for and with me have also benefited greatly! Doubly thank you!