NBN has 'accelerated urgency' for Telstra: Juniper Networks CEO

The arrival of the NBN has instilled a sense of 'urgency' in Telstra, Juniper Networks global CEO Rami Rahim has said, with the telco racing to become a services provider rather than simply a connectivity solution.
Written by Corinne Reichert, Contributor

The National Broadband Network (NBN) has increased the need for Telstra to provide services rather than simply being a connectivity provider, according to Juniper Networks global CEO Rami Rahim.

Calling Telstra "one of our most important customers", Rahim told ZDNet that the partnership is more necessary than ever in order for Telstra to differentiate itself as a service provider in a world where NBN will provide ubiquitous broadband by 2020.

"I think the NBN situation down in this country has only accelerated the urgency for Telstra to become a next-generation service provider," Rahim told ZDNet.

"It's not just about network connectivity anymore, and so for that reason that partnership's just going to be extremely important."

Speaking during the launch of Juniper's new Sydney OpenLab on Wednesday morning, the chief executive explained that value is not in connectivity anymore; it's in services provided over the top of it, and all telcos need to move in that direction.

Rahim said Juniper's partnership with Australia's incumbent telco -- which has also seen former Juniper CFO Robyn Denholm join Telstra as its COO in December -- has resulted in the two working closely together towards this through a system of "co-creation".

"[Telstra] has been our largest telco partner down here. We're very strategically aligned, we are in a mode right now of working in a co-creation type of environment where we're defining products together, and I really like Telstra's vision in terms of their understanding of what's going to make them successful," Rahim told ZDNet.

"This concept of co-creation has taken our partnership to a whole new level. It's not a traditional vendor-customer relationship. This transformation, what we have learned towards cloud service delivery models, is as much about skill set as there is about technology, so engaging in very strategic level where ... engineers on both sides know each other on a first-name basis and are developing products as if they're part of the same company," Rahim added.

"I would say that that's kind of the level of interaction we enjoy with most of our most strategic partners, and I would put Telstra in that category."

Seeing cloud networking as "the biggest trend facing our strategy as a company", Rahim said Juniper is striving towards being the number one provider of cloud infrastructure for cloud providers, telcos, and large enterprises -- and is doing so through its software-defined networking (SDN) controller Contrail, which it purchased back in 2012; its switching business, which he said grew at 40 percent year over year in the first quarter of the year; and the underlying datacentre portion of that switching business, which is growing even faster.

Juniper also announced in August that it would be acquiring silicon-photonics technology developer Aurrion to bolster its optical networking technology; announced plans in December to acquire cloud management startup AppFormix; acquired cloud provider BTI Systems in January last year; and formed a collaborative partnership with Lenovo on datacentre systems last year.

"We're investing in new technologies both in hardware and optic and in software to continue that leadership position going forward," Rahim said on Wednesday.

"We believe because of the relationships that we have with our telcos, we can help them leverage what I believe to be the goldmine they sit on -- their networks -- to transform into becoming the next-generation cloud providers.

"All telcos are moving in that direction, and I think the combination of our relationships with them, the credibility and the trust that we have with them, coupled with the technology and the learnings that we get from interfacing with the cloud customers, give us the ability to help them make that transformation better than anybody else."

While network function virtualisation (NFV) is the most important thing telcos can focus on at present, rather than becoming direct cloud providers, Rahim added that cloud connectivity is the underlying enabler of this.

"I don't think that the name of the game for any telco is to get into the infrastructure-as-a-service market where Amazon, Azure, and other providers enjoy tremendous scale. But I think the promise of cloud for a telco is to achieve the same level of service agility -- so their ability to release new services at a much faster clip," he said.

"[NFV] is really what it's about, but NFV depends on cloud infrastructure. You need the orchestration, you need the automation capabilities, to first develop the new services and then roll them out at a much faster pace."

Rahim told ZDNet that Juniper is working with all tier one telcos in the APAC region -- and added that Australia is ahead of the curve in cloud adoption according to all the enterprises, cloud companies, and telcos he's spoken to and worked with.

Rahim's comments followed similar remarks made by Telstra head of innovation and former Nokia CEO Stephen Elop, who last year said NBN has given Telstra "the gift of urgency".

"AU$2 to AU$3 billion of profit are going to disappear from Telstra in the next few years. Those are big numbers anywhere in the world," Elop said in September.

"I look at that as a gift. It is a gift of certainty and urgency. There's no ambiguity that Telstra must be thinking aggressively, investing aggressively, and moving forward aggressively to define its future, because that is really going to happen and it's really going to change."

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