ARRIS and Harmonic move the network virtualization needle with announcements

 KAGAN

15 February 2018 20:53 GMT

By  Jeff Heynen

Yesterday, both ARRIS and Harmonic revealed important deployment milestones for their cable access products that move the industry a step closer to the full virtualization and distribution of their broadband access networks.

First, Harmonic announced that Sweden's largest cable operator, Com Hem, is in the process of deploying the vendor's CableOS converged cable access platform, or CCAP, solution. CableOS is a software-based CCAP that completely virtualizes the CCAP core, allowing operators to deploy the solution using standard, off-the-shelf servers, as opposed to the dedicated hardware used in current, integrated platforms. For Harmonic, the deal is notable because Com Hem is the first named customer for its CableOS solution. Additionally, the operator is recognized throughout the industry as a progressive one looking to maintain an edge in broadband service delivery in a highly competitive market filled with operators deploying fiber-to-the-home, or FTTH.

Com Hem is a long-time customer of Harmonic's HectoQAM and NSG Pro edge quadrature amplitude modulation, or QAM, platforms for both video and modular cable modem termination system, or M-CMTS, applications. For many years, Harmonic was the primary edge QAM partner for Cisco Systems Inc.'s M-CMTS solution. Those deployments, coupled with Harmonic's legacy edge QAM installed base could provide Harmonic with an edge during the transition to virtualized CCAP architectures, which can theoretically involve products from multiple vendors.

There are a number of reasons for cable operators to move to virtualized platforms. The primary reason is space constraint issues in their headends and hub sites. With DOCSIS 3.1 and ongoing node splits to reduce service group sizes and deliver more bandwidth, the number of DOCSIS channels operators need to deliver is outpacing what current-generation, hardware-based CCAP platforms can deliver. Additionally, adding more of these platforms, in many cases, isn't an option because operators don't have the rack space to support them.

For solutions like Harmonic's CableOS, the immediate opportunity is for cap-and-grow deployments, working alongside existing CCAP platforms to expand the number of downstream and upstream channels delivered in 2-to-4 rack unit servers, as opposed to 16 rack unit chassis. This deployment model allows operators to address high-demand systems more economically. Over time, the operator can migrate all its traffic to the virtualized platforms, which helps reduce overall power consumption in the headend or hub facility.

CableOS can function in both centralized and distributed environments. Com Hem's deployment is centralized, though the CableOS architecture can also be used alongside remote physical layer, or R-PHY, nodes in distributed architectures. This flexibility allows Harmonic to address a much larger total addressable market, or TAM, right out of the gate. According to our latest forecasts, the combined market for centralized CCAP/CCAP core and virtual CMTS, or vCMTS, revenue in 2018 will be $1.39 billion. By 2022, when distributed architectures are in full swing, CCAP core revenue is expected to drop to $302 million, while vCMTS revenue increases to $536.3 million. Of course, the biggest portion of revenue, at that point, will be for the R-PHY and R-MACPHY nodes, which Harmonic also can address with its Cable OS Pebble-1 and Ripple-1 R-PHY shelf and node products. The R-PHY/R-MACPHY node market is expected to reach $969 million worldwide by 2022.

SNL Image

SNL Image

While Harmonic is pushing the envelope with virtualized platforms, ARRIS, the market share leader in terms of centralized CCAP revenue, announced more incremental improvements to its flagship E6000 CCAP. The company announced that seven cable operators had started to roll out its Gen 2 modules for the E6000, which provide density improvements of up to 70% within existing chassis. These long-anticipated improvements allow operators to fully deploy DOCSIS 3.1 with orthogonal frequency division multiplexing, or OFDM, channels, while also setting the stage for forthcoming R-PHY deployments.

The operators ARRIS mentioned specifically include Comcast Corp., Grande Communications, TDS Telecom, WideOpenWest Inc., Austria's LiWest, Portugal's NOS and Poland's Toya. Others are certain to follow, as the Gen 2 modules are also likely to help reduce the cost per downstream channel by anywhere from 10% to 15%.

The two separate announcements highlight each company's position in the CCAP market: Though a long-time player in the cable access market, Harmonic is the upstart, looking to leapfrog incumbent CCAP suppliers, such as ARRIS International plc, Cisco and Casa Systems Inc. For it to make headway in this growing market, it must successfully convert operators to its platform by focusing on the immediate and long-term space and cost savings of its virtualized offering. ARRIS, on the other hand, wants to prolong its incumbency by making incremental improvements to its E6000.

Nevertheless, whether it is the need for virtualization or the distribution of core access network elements, the DOCSIS market is on the verge of an inflection point, with a clear shift in spending from traditional headend platforms toward a combination of CCAP core, vCMTS and R-PHY/R-MACPHY nodes. This shift provides a very rare opportunity for new vendors to gain traction in a market that has traditionally been dominated by two to three suppliers. Along with Harmonic, Nokia Corp.Huawei Technologies Co. Ltd.Vecima Networks Inc. and others all have an opportunity to establish themselves in a market expected to generate $1.9 billion annually for the next five years. Interoperability and flexibility in software design will be critical differentiators for these suppliers, as they look to unseat the incumbents.

 

Technology is a regular feature from Kagan, a group within S&P Global Market Intelligence's TMT offering, providing exclusive research and commentary.