Corning buys Spidercloud as small cells become part of wider landscape

As the small cell market matures, there is the inevitable reshaping of the landscape. Spidercloud, the enterprise RAN provider, has been acquired by Corning, in the latest transaction uniting a DAS (Distributed Antenna System) provider with a small cell specialist.

Spidercloud will become part of Corning’s Optical Communications segment, which generated $3bn in sales in 2016. Corning hopes to grow that business to $5bn in sales by 2020.

“Wireless connectivity has become more a necessity than an amenity, and mobile operators and enterprise customers are seeking cost-effective solutions to enhance service for their users inside buildings,” said Clark Kinlin, EVP of Corning Optical Communications. “With the acquisition of SpiderCloud Wireless, we believe our combined product solutions will help drive optical convergence and enable the advantages of fiber-deep architectures within the enterprise local area network.”

Spidercloud’s most recent addition to the E-RAN platform was the Frequency Agile small cell, the SCRN-220, a single-carrier cell that can be configured in software for any of the five major US LTE bands, with channel widths of 5, 10, 15 and 20 MHz. The firm has also shown off a cell to support the 3.5 GHz CBRS band.

The shift makes sense – until recently the two technologies did not often overlap, with DAS targeting very large enterprises and venues only, but now, there are cheaper and more flexible digital DAS offerings, while small cells have moved up the food chain to address far larger deployments, often using centralized controller architectures such as Spidercloud’s. So they may compete for the same deployments – or work together, perhaps with a small cell driving a DAS to remove the reliance on a macrocell.

So it is logical for companies to want to have both technologies in their porfolios. CommScope has already added another enterprise small cell vendor, Airvana – which has a Centralized-RAN approach to providing coverage for a large premises – to its existing DAS and antenna offerings. Now its rival Corning is going the same way with the Spidercloud purchase.

This will help these specialized OEMs to retain market share despite the activities of the big vendors. Huawei and Ericsson have both made progress in the large enterprise market with their distributed radio solutions, LampSite and Radio Dot respectively. These are something of a cross between small cells and DAS, though using standard Ethernet to connect the tiny access points to the controller (which must, crucially, be a macrocell from that vendor). Nokia’s FlexiZone is an example of a more conventional small cell offering which has snapped up some of the largest contracts.

In fact, Spidercloud has done a good job of signing up larger vendors as resellers, notably Cisco and NEC, although it has also done some major large deals directly, such as with Verizon.

When Cisco announced it would offer Spidercloud’s E-RAN product a couple of years ago, it was seen as a deathknell for the company’s inhouse licensed spectrum small cell activities, which were built around its acquisition of UK start-up Ubiquisys. This month, Cisco finally confirmed that it is shutting down that product line from the end of this month, but it also said, according to a research note by analysts at Current Analysis, that it was changing its relationship with Spidercloud.

While the E-RAN supplier will still be able to sell its products through Cisco channels, the larger firm will no longer sell or rebrand the kit – although the picture remains somewhat confused, as Cisco did highlight, in its response to the report, that it was still co-developing a product for the 3.5 GHz CBRS band with Spidercloud – the latest in a series of cellular bolt-ons which attach to its Aironet enterprise WiFi access points to create ‘universal cells’.

Art King, director of enterprise services and technologies at SpiderCloud, said the relationship with Cisco was “healthy”, though it was now more of a “go-to-market” partnership since Cisco will not sell the products directly any more.

The change of emphasis may be connected to the Corning purchase, or just part of Cisco’s pulling back from licensed spectrum RAN equipment, after several attempts to find a way into that space – including the acquisitions of Ubiquisys and of SON (self-optimizing networks) company Intucell, and before that, of WiMAX mobile broadband start-up Navini Networks.

While Cisco does significant business with MNOs in the core and backbone of their networks, and in carrier WiFi, it has never managed to penetrate the closely guarded RAN fortress. Now, it does not need to, since it has the Ericsson alliance, which should allow it to target end-to-end deals with mobile operators – though concrete results have been hard to see so far. Presumably one factor in Cisco’s decision to end sales of licensed small cells and backtrack from Spidercloud is to avoid competing with Ericsson’s Radio Dot and other small cell products and services.

However, Cisco had made little impact on the sector even before the Ericsson tie-up, despite acquiring some innovative approaches with both Ubiquisys and Intucell. Ubiquisys was an early mover in what became MEC, working with Intel on a companion edge processor to sit alongside a small cell; while Intucell had a very advanced approach to SON, which it called ‘cell breathing’, and which was adopted by AT&T. Cisco spent a combined $785m on the two start-ups in 2013 but was already making cutbacks in the business a year later.

“Cisco’s inhouse, licensed spectrum, small-cell business hadn’t demonstrated meaningful market momentum after years of operation,” wrote analyst Ed Gubbins of Current Analysis in the client note. “Ending the lives of these products rationalizes what had become a business in limbo.”

The official Cisco take is that the decision is part of a wider shift towards hardware-neutral, software-driven and virtualized platforms, which can work with any access points. “The small cell market did not mature as the industry anticipated, and we have recently made the decision to discontinue our licensed Universal Small Cell (USC) 8000 Series enterprise radio products,” the company said. “This decision on the radio portfolio is consistent with our Service Provider Mobility strategy to focus on software and solutions, leveraging our market-leading virtualized Ultra Services Platform.”

Despite the apparent coolness towards the Spidercloud arrangement, Cisco did highlight one product in particular which would still be strategic – the CBRS cells. It continued in its statement: “Our small cell strategy is now focused on partnerships that deliver the greatest value to our customers, such as our agreement with SpiderCloud Wireless to develop 3.5 GHz CBRS bolt-on modules for the Cisco Aironet 1572 Series outdoor access points.”