DCSG Strategic Prospective

By Gil Gabay 8 min read

So what is the strategic significance of Ceragon’s launch of its IP-50FX Radio-Aware DCSG and how does it address service providers’ challenges? Gil Gabay, VP Strategy and Business Development, sits with Ceragon’s CEO, Doron Arazi to get the answers to these important questions.

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Full transcript:

 

Hello everyone and welcome to the Ceragon lounge. My name is Gil Gabay and I'm the VP of Strategy and Business Development. This is a very exciting time for us here at Ceragon. We've just launched what is the first Radio-Aware DCSG, The IP-50FX, which is part of the IP-50 family of products.

Now for those of you who aren’t familiar with the term DCSG, DCSG stands for Disaggregated Cell Site Gateway, a term coined by TIP, the Telecom Infra Project. Now essentially a DCSG is a router where the hardware and software layers are separate and independent of each other as opposed to a monolithic router, and that comes with many benefits. Some of them are faster deployment, faster innovation path, and ultimately lower cost. Now today we have a very special guest with us, Ceragon’s CEO, Doron Arazi. Welcome Doron.

Hi Gil, how are you?

Good. So first let's talk from a strategic perspective. What is the significance of this launch, the launch of the IP-50FX?

Wow, this is very significant for Ceragon. It actually opens up a new addressable market, a very sizable one for us. The routing market is assessed to be at a level of $2 billion dollars by different analysts, and for us it's definitely a great opportunity to increase our addressable market.

Now, in this market today, you see a combination of what I would call legacy incumbent vendors, but you see more and more new vendors coming in with this concept of the DCSG that is already grabbing around and I'm quite confident that in the future, this concept will be able to grab even a bigger market share out of this $2 billion dollar market.

So this is a very large market that we are entering, with the disaggregation segment of it growing. But I'm sure that many of our viewers are asking themselves, why is this relevant to Ceragon?

That's quite a natural evolution for us. If we look at our traditional market, the wireless transport market, the routing capabilities has become an essential part of the solutions that are required by our customers. So obviously we should have that in our offering.

Now let's take a quick look at the bigger picture. Let's discuss the 5G network evolution. Eventually it's all about much higher capacity, much more capacity, with much lower latency, but also with much more diversity of use cases that should be accommodated by the service providers.

Which translates into two needs for the service providers in order to be able to accommodate for this evolution. One is a very efficient investment, and secondly, the flexibility of the networks being able to accommodate rapid significant changes. So all in all, when looking at the 5G evolution, it's quite obvious that something different needs to happen in order to meet these two needs.

And you now, Gil, I talked to many of our customers and they are saying a very simple thing. They are saying, "Listen, the demand for us can not happen in the pace we're expected "to execute on these 5G networks, if we don't have this evolutionary or maybe revolutionary "concept of open networks, "that will allow us for more flexibility and more cost-effective decisions."

So all in all, for us, Ceragon, we're playing in this domain for so many years, of our strategy. And together with IPI who are perceived as one of the strongest routing software players in this industry, we have come up with a very competitive solution that I believe would be very-very successful in the market. And basically we have already been acknowledged to be the leader in this domain by TIP and also by some of our customers.

So this fits very well with Ceragon's strategy of open and disaggregated networks, which of course enables, you know, best of breed approach. But let's talk specifically about our disaggregated cell site gateway, The IP-50FX. How does it address our customers’ challenges and needs?

I think that first and foremost, it enables the customers to escape the vendor lock-in they are at at this point. Let's remember, the current routing domain is dominated by two or three or four main monolithic vendors and that's it. By coming with new architecture, we are actually adding more vendors to this domain and by definition, this helps in two aspects: one is reducing costs, and secondly it's creating much higher flexibilities. Our IP-50FX accounts for both advantages, and here is why. The first one, is the fact that our solution, from pricing perspective, is very competitive and can basically be much less costly for many of the most common use cases in the routing domain.

Moreover, the fact that the customer is flexible to decide on the different parts of the product or the solution and pick and choose, by that he can actually optimize his costs even further. Now, let's talk about the additional advantage of the separation between hardware, software and application which is introducing very innovative new capabilities to the market very fast which turns into an opportunity for the customers to present new services and obviously drive higher new streams of revenues for them.

A last but not least, our Radio-Aware solution or software is even increasing the efficiency of this solution further because it provides with radio management, which is very strong, very fast to implement, and actually using the same hardware and software. So all in all, the 50-FX is coming with this very strong message of much higher flexibility, with much more efficient and cost-effective solution.

And if you add to that our, you know, flat licensing model, than this makes for a very-very attractive solution.

Obviously our intention is to come with very simple pricing models so that our customers will have no surprises in the future, and part of it is this very simple software licensing model.

Ok, sounds great, sounds like a great start for a very exciting year. So thank you Doron for joining us.

Thank you.

And thanks everyone for joining us and please be sure to check us out on LinkedIn, on Twitter, sign up for out blog. And of course meet out global experts. See you soon.

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