This Tues Cisco announced their new addition to the CRS family of core routers – the CRS-3 – billed as a 322 Terabit Router.  This means it has over three times the capacity of the CRS-1 which has a maximum system capacity of 92 Tbps.  A large percentage of the announcement was spent convincing us that the world needs a 322Tbps router – drawing on data from Cisco’s Visual Networking Index.  Nobody’s arguing with Cisco on this point.  Mobile data, video content, web-attached toaster, blah, blah blah – we get it.  However, just as nobody is actually going to transmit the entire contents of the Library of Congress over the Internet in four minutes (although we will all sleep better knowing that they could), no one is going to string together 72 23 inch chassis, each three feet deep and over six feet high, to achieve the parlor trick of the 322 Terabit router.  I’m not saying that we’ll never need a 322Tbps core router.  I’m just saying that when we do – it’s not going to be delivered by the CRS-3.  Let’s look for a moment at the CRS-1 – the 92Tbps router.  Introduced in 2004, the CRS-1 also requires 72 racks to build out to its full 92Tbps capacity.  However, while Cisco is keeping tight-lipped on this subject, Yankee Group believes that the vast majority of CRS-1s to be 1-5 chassis systems and we know of no systems over 10 chassis.  By the time Cisco customers moved into the double digits of chassis – Cisco introduced the CRS-3 which could deliver three times the speed per chassis.  In 3-5 years when CRS-3 implementations are, at most, in the low double digits – Cisco will introduce the CRS-5 or 7 or whatever catchy name the company comes up with. That leaves us with the existential question of: Is a router really 322Tbps if nobody ever implements the full configuration?  It does, certainly, allow Cisco to boast the highest capacity core router.  Juniper Networks currently boasts the highest capacity, currenlty shipping, core router on a per-chassis basis with its T1600, supporting 1.6Tbps in a single, half-rack chassis.  With the introduction of a 100Gbps slot, the CRS-3 will support support 4.5Tbps per (full rack) chassis.  Juniper is expected to introduce a 250Gbps slot in 2011.  Will the CRS-3 begin production shipment before Juniper ships the 250Gbps per slot systems?  Probably – we expect Cisco to be able to claim fastest per chassis system for up to 12months, after which Juniper will reclaim that title until Cisco ships a 250Gpbs slot. 

But enough of speeds and feeds.  The most intriguing aspect of the announcement for me was the introduction of Cisco’s Data Center Services System (DCSS), linking information about the network with data center intelligence in order to improve overall performance and customer experience.  The Network Positioning System (NPS) capability of the DCSS uses layer 3-7 network information to load balance content across multiple data centers and provide the best path to that content.  The Cloud VNP for IaaS capability uses information from both the CRS IOS-XR network operating system and the NEXUS NX-OS for the data center to achieve the “pay-as-you-go” promise of cloud computing from a compute, storage and network perspective. It locates needed compute and storage resources and balances the workload to relieve strained resources.  Sounds great – I’ll be looking forward to seeing implementations of these capabilities. They are certainly what are needed to achieve the cloud computing end-game.  These solutions currently depend upon Cisco in the network with the CRS and Cisco in the data center with Nexus.  In my conversation with Cisco they hastened to emphasize that they are working in the standards committees to craft standard versions of the protocols involved – ones that they hope will look a lot like Cisco’s.  Knowing how the standards groups work – we would not expect to see anything out of the IEEE or the IETF for at least 18 to 24 months.

So, kudos to Cisco marketing – they surely know how to get us all to listen.  But the bottom line from my perspective? -  a lot of hoopla, some slight-of-hand, and what looks to be some cool software – which is, after all, what Cisco is best at.

Over a fun breakfast last week, I chatted with John Bruggeman, CMO of Cadence, the electronic design automation firm. Just back from Mobile World Congress in Barcelona, I was talking about the battles in the mobile revolution.

John says there are three significant battles still underway in that sector that have do-or-die stakes for the businesses in the actual battle: the mobile operating system (Nokia, Google, and Microsoft — the latter making another run at it with a rethought Windows Mobile), the mobile device platform (the usual handset suspects, Apple, and possibly some daring consumer electronics players), and the prevailing semiconductor architecture — which he sees as boiled down to a question of whether high-performance Intel processors make inroads against the widely used low-power ARM architecture.

Who’ll win that third battle, I asked. The ARM platform has a massive lead in the mobile space, its core IP going into the processor for virtually every handset sold in the world. “Intel is smart, has loads of cash, and knows this is a long-term game,” said John. “Over the next 5 years, they will co-exist. Beyond that, these two worlds — low-power handsets and high-performance portable computing — bleed together. The devices following that time period won’t be about fast web page refreshes; they’ll be about transactions, making fast hits on cloud-based data. When that happens, our mobile devices will want both low power and performance.” Given the time parameters involved, he doesn’t count out Intel’s push to take its desktop/laptop dominance into the smaller more diffused computing domain.

From that topic we wandered over to one that’s a new favorite of mine: that 2010 is the year that mobility as a business issue rises to the boardroom. My logic goes like this:

1. The commercialization of the Internet first hit businesses as an external, largely superficial change, in which they essentially stapled websites to their existing operations.
2. But the subsequent maturation of Internet computing compelled those same businesses to pull the net throughout their activities, affecting supply chains, marketing and sales, manufacturing, and virtually every other function in the company.
3. The mobile revolution has begun similarly. Most major enterprises at this stage have now begun to create mobile experiences for their customers (although, as Carl Howe’s reports on mobile web experiences establish, at widely varying levels of quality)
4. The diffusion of the impact of mobility will be no different than that of the Internet. Thus, corporate board members should begin considering how strategically their enterprises’ leadership is thinking about mobility. How else will governance insure that the business is pushing the leverage of connectivity into every nook and cranny of its operations?

Today's version of a mobility officer

John bought it — and he took the thinking a couple of steps further: ”The first automation of business in the 20th century happened with the advent of mainframe computing. The central information systems function arose then. The re-automation of business, driven by desktop computing, pushed IT further out into the business and, organizationally, led to the rise of the CIO. What you’re talking about — the rise of mobility as a strategic issue for businesses — will mean that we’ll see the rise of a Chief Mobility Officer.”

Fascinating idea, and one Yankee Group will pursue in a research report over the next few months with Josh Holbrook taking the lead. But beware: John followed his prediction of the emergence a new type of corporate CMO with this one: “Sadly, many businesses who take this step will put a networking guy in the job. What they’ll need will be an imaginative business person, someone who’s able to look at all the activities of the business and re-think them completely.”

Because of my current research interests, most of my meetings at MWC 2010 in Barcelona were about mobile broadband and in particular, the crunch that network operators experience as usage soars.

At his press conference, Ericsson’s CEO seemed to breeze by the issue in a “Brave New World” speech (why do these always remind me of films from the 1939 New York World’s Fair?). But it came up in meetings with the rest of his company and with every other vendor I met with from Tier 1 network vendors (Alcatel-Lucent, NSN, Huawei), to OSS vendors (Amdocs, Comverse, Convergys, Telcordia), to mobile backhaul vendors (RAD, Cambridge) and of course with Femtocell vendors (Airvana) and specialists like Allot. It was the “elephant in the living room” in a Telecom TV panel discussion I did on WiFi and it even came up in a discussion with over-the-air TV chip maker Telegent who proposes their solution as a way to off-load streaming TV traffic from the mobile network.

In every meeting the following question either arose naturally out of the discussion or I forced the issue and asked it directly:

Are dongles (mobile broadband modems) or smartphones to blame for the problem?

Hardly surprising that the answers were almost equally balanced between the one and the other i.e. both are to blame. But depending on the country, the principal blame will lie ether with smartphones or with dongles.

In developed markets like North America and Western Europe, the blame lies with smartphones. Sometimes it is bad protocols or bad settings and so sometimes just a software refresh by the device manufacturer gets things under control. But most of the damage is done by apps that constantly poll the network for new information. As the king of the app ecosystem, the Apple gets singled out but the issue isn’t the iPhone per se but the types of applications advanced smartphones like the iPhone encourage users to install.

In emerging markets like Latin America or Eastern Europe or developing Asia Pacific, the issue is dongles. Lack of adequate fixed broadband and heavy marketing by mobile operators mean that 3G wireless connections are increasingly the primary means of accessing the internet in these countries. As I have written elsewhere, that means the devices are stationary instead of in motion, connected for long periods of time instead of just for brief dips into an app or for a quick search and they are often used for heavy video or even peer-to-peer traffic. To state the obvious, this is not the kind of use-case the 3GPP standards bodies had in mind.

The solutions are many but they basically boil down to variations of the following

1. Optimization of device protocols
2. Traffic shaping and prioritization
3. Pricing schemes beyond flat-rate that encourage economic use of mobile broadband
4. Off-loading fixed-use case traffic to fixed networks
5. Waiting for LTE

Of these only “Waiting for LTE” is anything more than a stop-gap, a way to slow down traffic growth and hope that LTE arrives before the seemingly inevitable crash of 3G networks.

Windows Phone 7 Series home screen

Microsoft announced its new take on its Windows Mobile OS today at Mobile World Congress, christened Windows Phone 7 Series (I’ll abbreviate it WP7S for convenience; see a demo here, Microsoft Silverlight required). Despite my enjoyment of my present Phone, I’m really pleased and excited to see this.

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The rumors of a Motorola dismemberment plan have sprung anew with a Wednesday article in the WSJ.  Everyone, get your axes ready – either to grind or to hack off your favorite piece of the Moto beast.  The latest round of speculation points to the possibility of Motorola combining their handset and set top box divisions to build a new integrated future. Of course, speculation also exists pointing to the potential spin-off of these units.  Who are all these unnamed speculators anyway?  Whether it is to sell them off or create competitive advantage, the merger of the two units raises some interesting prospects.

If Motorola can come up with a workable structure to blend its mobile device unit with its set top box unit, then that new combined group would hold tremendous promise to integrate consumers’ digital media in an exciting way.  That combination would certainly attract the interests of companies like Huawei, Asus and others looking to gain more prominent market positioning in the mobile and CE industries.  Of course, if Motorola could do that easily, it wouldn’t be looking to dismantle itself and sell off the valuable morsels to the highest bidder.  So while I think the combination of the two units is a fine notion at a high level, the fact remains that Motorola has failed to integrate its two most important business groups in any significant way and will have to undergo major cultural and organizational changes to realize that vision. Back in early 2007, I met with then CMO of Motorola, Casey Keller, at a trade show to discuss media integration and device interaction between mobile handsets and set top boxes.  Keller shared the view that Motorola held the strongest potential hand in the business to do that, but was facing an anemic mobile device pipeline (how many ways can you sell a RAZR, after all?) and new levels of challenge on the set top box side as well.  So, vision took a back seat to triage and the more important task of stopping the bleeding, but execution proved to be elusive.  From YE 2006 to YE 2009, Motorola’s annual device sales dropped by approximately 65%.

Three years later, the Motorola device group is showing solid signs of rebirth with its recent line-up of smartphones architected around the Android platform.  The new expanding portfolio leverages Motorola’s greatest recent advance: the highly customized Motoblur experience that presents users with all their social networking and primary apps in a single view.  If this concept catches fire, it provides an interesting potential roadmap for Motorola to upgrade its set top box experience to include similar capabilities for social networking but, perhaps more importantly, media sharing among a consumer’s multiple devices.  With its massive share of the North American set top box market, Motorola holds a unique hand of assets and partners.  Cable companies have been desperate to extend their relevance beyond the TV and laptop and a set top box that easily interacts with mobile and CE devices, integrating digital media could be just the trick.

But the window of opportunity for this integrated approach is limited, so, Motorola, god speed. As Jeff Goldblum famously said in Jurassic Park, “Life, uh, finds a way.” In the consumer media world “life” is the idea of acquiring, enjoying and moving media on any device you want, whenever and anywhere you want.  Consumers are already experimenting with this in many forms.  Whether it is the game station, laptop, media gateway, transcoders, mobile apps, etc, consumers have a huge selection of ways to get media from A to B, but few are terribly satisfying from either a user interface or device compatibility basis.  This leaves Motorola with some wiggle room to merge the set top box business and mobile device unit to generate a new integrated vision of consumer media.  The vision will need to be both technical and cultural to bridge the gaps between the two business units, which share nothing beyond a company brand.  But with proper execution, such an approach could save set top boxes and the Motorola brand from being another set of fossils on the anywhere evolutionary path.

In a scenario that seems destine for a made for TV movie, Motorola reportedly is contemplating a new version of its spin off plan. The Wall Street Journal reported today that instead of spinning off the Home and Networks Mobility division from its handset group, the company is looking at continuing the auction of its wireless networks lines while creating a new publicly traded entity comprised of handsets and set-top boxes.
On the face of it, the combination of set-tops and handsets seems almost nonsensical. The former exists as a cozy effective duopoly with Cisco Systems–at least in the U.S.–is largely proprietary to every cable operator’s specifications, tends to stay in place for years and is as sexy as vanilla ice cream. Handsets are squarely in the consumer electronics camp where design and looks plays major roles.
But putting set-tops and handsets in the same group absolutely makes sense when we look to the future and in particular the future of the set-top. Set-top boxes are under increased pressure to start looking and acting like CE devices. And indeed many have been writing the obituary for the old cable converter for the better part of a decade.
I don’t necessarily believe the set-top is near extinction. However, its greatest threat is in fact coming from the CE community. While one can debate the relevance of stand alone devices such as a Roku or forthcoming Boxee box, increasingly gaming consoles and Blue-Ray players are taking on the same functionality as set-tops. Additionally, connected TVs have the same potential through are not being initially positioned as such. Regardless of the product, the end result is likely to force set-top box vendors to start thinking like CE vendors.

Star Walk iPhone app on iPad

Based on all the details Wednesday, I’ve written an iPad analysis report that clients should be able to dive into later today. The bottom line: no matter how much you may think Apple ran its hype machine this week, the iPad will be a force to be reckoned with. Why? Because Apple has a unique vision for Anywhere devices and the marketing muscle to back it up. If you have comments or disagreements after reading it, please send them.

Meanwhile, a number of questions and objections to the iPad have popped up online, and given that I’m one of only about 500 people who has used an iPad for a half-hour or so, I thought I’d repond to them here. So without further ado:

Isn’t iPad just a big iPod touch?

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I’ll be publishing a detailed analysis for clients about the Apple iPad and its effect on connected devices (i.e., it’s a big deal) in the next day or so. I have also posted photos that I took of the press, VIPs, and tablets we saw today for those who are interested.

However, I also had some takeaways from the event that fell somewhere between the immediacy of my tweets and the detailed analysis mentioned above. As I look toward the iPad shipping in late March/early April, I see some changes coming. Specifically:

• iPad will knee-cap the netbook market. Despite the millions of units sold, netbooks deliver a lousy user experience; in fact, some netbooks have return rates of 33% or more simply because of that poor consumer experience (see the October 2009 Yankee Group report, Little Netbooks Can Sink Big Brands for details). Unless you’re an analyst or other traveler who has to spend much of your time writing, iPad will be a better investment. Oh, netbooks will survive, but they’ll be in the traditional race to the bottom of the price ladder, while Apple scoops up all the profits from the segment. Said another way, if you know that a device like the iPad will be available, why would you ever buy a netbook?
• Consumers will struggle with whether to buy the 3G iPad. iPad is the archtype Anywhere device: its broadband connection and its links to networked apps and content are what make it special. But given that adding a 3G connection adds more than 26 percent to the iPad’s purchase price, consumers will have trouble deciding whether it is worth it, even before the prepaid broadband connection.
• Prepaid iPad broadband will win over consumers. Apple’s announcement of AT&T’s mobile broadband pricing for iPad just told the consumer world that they are paying too much for mobile broadband on postpay plans. Most of the rest of the world already has some sort of prepaid mobile broadband; it’s just a matter of time before the U.S. gets with the program.
• iPad represents the beginning of the end for the PC desktop metaphor. Windows, mice, title bars, and open-save dialogs have been mainstays of PCs for more than 25 years; in fact, the introduction of the original 1984 Macintosh made them cool. Yet the iPhone and iPad use none of the software elements of these 1980s, opting instead for a full-screen multi-touch experience that makes smarter use of screen real estate. Once someone figures out how to integrate multitasking with multi-touch (10/GUI perhaps?) without dramatically increasing the consumer’s cognitive load, consumers may well decide that these graphical elements no longer serve any useful purpose and finally let them die a natural death. At the very least, they are unlikely to ever be cool again.

ANYWHERE the book talks a lot about a future with many more connected devices than those we know and love today. So when I signed our book deal at the beginning of last year, I said it would be a terrible irony if we couldn’t ensure that the book would come out both in hardback and e-book versions simultaneously.

And that was the plan… but e-book publishing is still a bit new and a few technical hiccups stood in the way.

No surprise that I had to withstand a few gentle gibes during our webinar last week, when a few of you pointed out immediately that the Kindle version wasn’t on offer yet.

But as of this weekend, the Kindle version is now available from Amazon. Kudos to McGraw-Hill for pushing this through. We had a quick look at it Tuesday; while you sacrifice a few of the chapter opening graphics, it’s all there and quite readable.  How very Anywhere.

Just in time for Yankee Group’s e-reader forecast, coming out later today!  More ANYWHERE e-book developments are in the works; I’ll post more on this later.

Now that CES is a week behind us and I’ve had some time to put my thoughts together and recover from the dreaded CES flu, I’ll be writing a few blog posts on three big CE products/trends that garnered considerable attention during the show:

1. Connected Cars
2. eReaders
3. 3D-TVs

 I’ll start with a short post on connected cars, as this is really the first year where they received standout coverage: Over 380 in-vehicle technology exhibitors graced CES’ floors this year, Ford CEO Alan Mulally delivered a keynote, and a CEA press release issued before the show claimed that sales of in-vehicle technology topped $9.3 billion in 2009. Yes, you heard correctly, $9.3 billion.

A number of players will profit when more technology finds its way into our cars. Some statistics presented during the show highlight just how much network operators, automotive companies and legislators stand to win. Take a look:

• Network Operators: Demand for voice and data carriage in connected cars will open up a new market for network operators. On average, over 26 million hands-free calling minutes are purchased each month by OnStar subscribers. Alcatel-Lucent’s ngConnect Program prototype also demonstrated what LTE data plans will do for in-car streaming media.
• Automotive Companies: In-vehicle technologies are driving automobile purchases more than many analysts had anticipated. 32% of Ford buyers indicated that Sync was critical or important in their purchase decision when buying a car. What’s more, 70% of customers who participated in Sync demos across the country indicated that they are more likely to buy a Ford vehicle.
• Legislators: Legislators concerned with driver safety will be pleased with some statistics from Nuance, a speech recognition solution provider. Analysis of driver eye movements shows us that drivers keep their eyes on the road 200 to 300 percent more when using speech rather than manual input for tasks like music selection.

Given the diverse set of players in this emerging market, Yankee Group is including a number of questions on connected cars in its updated Consumer Survey. As data begins to come in, expect to see a publication on the subject in the near future.