He's Italian, with a clearly Italian name and, despite his many years with Hewlett-Packard in California, an Italian accent. So Sebastiano Tevarotto is allowed to use this metaphor for a significant change he sees in the telecommunications market.
"The telecommunications world is moving from spaghetti to lasagne," he says. Er, sorry? What is that again?
Lasagne, he says. The architecture in telecommunications is being horizontalized, because of a move to open standards. This is allowing operators to pick and choose between competing suppliers, instead of being locked into one that uses proprietary systems.
He likens the proprietary approach, where one company supplied everything throughout the system, to spaghetti. "And spaghetti architecture has an opex that is unbearable," he says.
Well, maybe this metaphor isn't as meaningful as it might be, so let's leave the pasta alone and get back to talking about the industry as it is, and as it is changing. Tevarotto is the vice president and general manager of the division of Hewlett-Packard that sells systems to telecoms companies — network and service provider solutions, HP calls it — and from there he can take what he calls "the 30,000 feet view".
From this high viewpoint, he can see that "there is a pretty significant change in the marketplace — which is convergence", says Tevarotto. There is also a new dimension, covering content, including entertainment, application and services, he adds. "They take advantage of the new infrastructure."
But let's take a step back for a moment. What does Tevarotto see as HP's main offering to the industry, and what is this about industry standards versus proprietary standards?
Capex and opex pressures
"We are in a position to best understand the telecom providers on their journey," he says. "It's a concentration on the journey and the understanding of today's issues — the capex pressure, the opex issue, the future challenges, the ability to design a plan to get from where they are today to where they will be tomorrow."
And where will they be tomorrow? They are trying to evolve from a reliance on proprietary architectures to open standards, he says. This will "really make them flexible, scalable and with modular solutions that are interoperable".
HP's main relationship in its search for industry standards is Intel, the chip maker, which is helping HP "in its quest to evolve from the proprietary nature of networks to the open standards that the networks need to implement in the future". It is, says Tevarotto, "an IT-like concept, allied to the network environment, implementing architectures that do not lock in any form to any of the suppliers, including Hewlett-Packard".
Intel processors with Linux
The idea is that HP will base its products on Intel's Itanium processors, running under a carrier-grade version of the Linux operating system, and they will "displace all of the more traditional platforms" that are found around the telecommunications industry — including some that Tevarotto describes as "home-grown developments", created within operators for their own purposes.
"We want to replace the leaders of the past with a true open platform," declares Tevarotto. In the past "there was always a lock-in proprietary feature", he adds. "In the proprietary world there is some element of complacency. In the open standards world you can't be complacent. Speed and agility become critical success factors. We are deeply committed to open standards."
And what can operators expect as a result? Services will be delivered in a layered approach, he says — hence the lasagne metaphor. "The objective is reducing the cost."
That will have considerable impact on the industry and its customers, he points out. "In this industry prices have usually been firm or increased, but now prices are going down," he says, suggesting that cuts in the range of 30-50% are possible because of competition. "Some companies are leaner than others," he says. "This will be a significant cost advantage."
Competition has benefited the industry already, he adds. "Think about the incumbents and the world they came from. We were at the mercy of incumbents, right down to getting a line. Competition has helped to move this market along at an incredible speed."
FastWeb taps into market demand
As an example of what's possible he cites FastWeb in Italy, which uses industry-standard technology to deliver advanced services to businesses and consumers. "FastWeb tapped into a market demand that existed. The company has shown a great combination of market intelligence, a consistent plan in the infrastructure, and courage."
As open standards become more accepted in the industry, does that mean HP will start to displace some of the traditional suppliers. Is it competing against some of the familiar names in the industry?
"I don't see them as competitors," says Tevarotto. "We have more areas of cooperation than of competition."
He agrees that the competitive framework used to have "enemies and allies" across the industry, "black and white". Now, he says, "there are a lot of greys" — reflecting the normal IT environment, where companies can collaborate over some contracts and compete over others. "There is a huge amount of complementarity. The traditional telecom equipment providers need to learn to operate in a world that is truly open standard, where competition is the name of the game."
Now "it is an increasingly competitive world," he says. "But no one can do everything."
HP itself works with many of the traditional names in the industry: he lists Ericsson, Nokia and Alcatel. "In the Americas Nortel is a good partner, Motorola is definitely so, and so is Cisco." Asian partners include "NEC, Huawei and Samsung", and back in Europe there are "interesting discussions with Siemens".
On the whole 50% of HP's business with the telecommunications operators comes via equipment providers as a direct channel, he says.
"In the area of new services and new content and service delivery platforms — the higher end of the market — HP will be a natural partner for service providers and a channel for equipment providers," he says. "There is still a huge amount of work to do in the network. Equipment providers will take the lead there." GTB