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30 July 2020

No more Mr. Nice Guy – Vecima’s Gainspeed buy takes fight to DAA big boys

Just as cable operators are increasingly shifting into wireless domains, one of the world’s largest suppliers of wireless equipment – Nokia – has decided to sell some of its pioneering cable assets to industry veteran Vecima Networks, a name we have associated more recently with pushing the trend of private and hybrid CDNs.

Only last year, Canada-based Vecima told Faultline that the DAA market wasn’t growing nearly as fast as expected – bemoaning the complexities of multi-vendor environments inherent in Distributed Access Architecture (DAA) for bogging down deployments. At the time, Vecima referenced its ongoing DAA work with one “very large” North American cable operator customer – leading us to believe Vecima’s acquisition of Nokia’s Gainspeed business this week was influenced by this one North American cableco giant.

Comcast was our initial suspect, although that looks in doubt now given its commitment to Harmonic’s CableOS (which Comcast actually helped develop) for the virtualization of network components spearheaded by DAA. Cable operators buying into uncertified products is arguably another factor for the slower than expected progress of DAA deployments, but that’s a contentious story for another day.

Regardless of whether this is Comcast, or Cincinnati Bell, or some niche Canadian cableco, the strategy makes sense looking at the technology portfolio and market trends. Vecima is acquiring the entire Nokia Gainspeed technology portfolio for an undisclosed sum, including DAA assets with support for Flexible MAC DAA nodes for HFC networks and DOCSIS Provisioning of EPON (Ethernet passive optical network) nodes for FTTH. Interestingly, a DAA video engine is included in the deal, a feature that emerged to play a key role in cable migration towards distributed operation where the PHY is located at the edge of an operator’s network. Nokia hasn’t exactly screamed about its DAA video engine from the rooftops, but it looks to be a significant addition to Vecima’s content delivery arsenal.

The way we see it, Vecima has found a way to address a fundamental problem in the cable industry which boils down to the critical nature of building cross-functional teams. We have heard numerous cable execs lament the exclusion of video engineers in the broadband DAA deployment process with often disastrous implications – setting operators back months. Creating harmony between the DOCSIS guys, the HFC guys, the ethernet guys, the IP routing guys, and the video guys is equally as crucial as having the right technology in the first place.

So, a newly beefed-up Vecima has inherited some pretty renowned technologies. Gainspeed has gained a reputation as a groundbreaker in virtualizing cable network components, with its virtualized CCAP (Converged Cable Access Platform) helping operators slash capex spend on physical broadband equipment. Perhaps most importantly, this emphasized how cable operators required network virtualization infinitely more than telcos, and the likes of Arris and Casa Systems soon followed suit with their own cable virtualization innovations.

That said, Nokia claims the timing is just right to transition its cable portfolio to Vecima, and it could well be right, as our opening gambit suggested. This is evidenced by cable industry titans either exiting cable, as Liberty Global has in Europe, or entering wireless, as Canadian cable operator Cogeco has recently with its push into fixed wireless – allowing it to expand into rural areas where building fixed line infrastructure is realistically never going to happen.

Going against the grain of its normal bar-setting standard for technology, the US is actually well behind the curve here. In Europe and Canada, operators with fingers in both cable and wireless pies has been a common theme for many years, while the trend is relatively new in the US. Comcast, Charter Communications and Altice USA have all entered the wireless space in recent years, with Charter looking the most aggressive of the three, particularly in fixed wireless, where it is using 5G spectrum and CBRS spectrum to extend the reach of broadband and video services into non-fixed areas.

However, a recent Vecima customer has gone the opposite way. Ohio-based telco Cincinnati Bell upgraded its video platform earlier this year using Vecima’s MediaScaleX platform, enabling integrated OTT content, cloud DVR, start over TV, catch-up TV and unified search. This is built on what Vecima calls a hyperconverged platform – a way of optimizing all elements of storage and compute components to work together on a single commodity appliance from a single vendor. More interestingly still, Cincinnati Bell has deployed G.fast equipment in its broadband network, and Faultline voiced at the time of the deal, back in February, that Vecima’s own DOCSIS 3.1 portfolio could be in line for a switch out job at Cincinnati Bell.

The acquisition of Gainspeed also aligns with Vecima’s ambitions to transition from hardware to software. Its Concurrent arm – the scalable storage and CDN caching company acquired by Vecima in early 2018 – has been focusing on software-only transcoding. Here, Concurrent has been emphasizing cloud computing, while Vecima has been driving the private and hybrid CDN angle. It argues that instead of optimizing for single-customer delivery over a managed network, a public CDN must balance demand, which brings bandwidth limitations. Of course, public CDNs do not exclusively deliver video, with these networks handling a whole host of web content and other traffic, meaning the technology cannot exclusively optimize for video the way a private or hybrid CDN can, despite what some CDN suppliers claim.

By buying Nokia’s Gainspeed division, Vecima has sent a serious message to the likes of Harmonic, CommScope, Teleste, Casa Systems, Cisco, and even Huawei. But while Vecima’s existing Entra DOCSIS 3.1 DAA platform was all about combining the newest technology with operational improvements, highlighting interoperability with CCAP and CMTS cores from these very vendors, we can’t envisage Vecima continuing this friendly streak.