It seems that network equipment providers (NEPs) are in a bit of a pickle.

On one hand, the financial condition of the Tier 1 NEP community is “not strong”. Some are going bankrupt and others are talking about 15-20% year-over-year quarterly revenue declines. NEP jobs are being shed by the thousands and morale and near-term optimism is thus “not strong”. It would seem that, if you’re a NEP, life sucks.

On the other hand, the underlying demand for bandwidth, mobility, and multimedia applications is robust. Weak economy or not, end-user adoption and service plan utilization seem to be moving up, up, up. Subscribers are doing what they do best – subscribing – and marketing types (like me!) are giddy with acronyms like LTE, HSPA+, and DPI. For an Operator, life is good.

So what’s a cash-strapped NEP to do? Curse the half-empty glass or cheer the one half-full?

Rue mortgages and Madoff … or figure out a way to feast on 4G?

“But launching a new development project is out of the question – we just don’t have the budget anymore!”

“There are not enough people – so let’s just extend the life of our existing proprietary platform…”

Sound familiar? These are the voices of the nay-saying crowd, of folks who may not be in-the-know about the benefits of COTS.

What’s COTS, you say? Commercial Off-the-Shelf – as in standards-based, interoperable, ready-to-be-purchased-and-deployed-today infrastructure from the likes of, oh, say, CP-TA member companies.

Here’s the deal. Continuous Computing’s research indicates that:

• It takes about 3 years for a NEP to build a complete system in-house, but
• It takes 2 years to integrate COTS building blocks

And it actually takes much less time if those COTS components have been tested for interoperability using CP-TA guidelines and tools. Even further time savings can occur if the application already exists or if the components are pre-integrated in a platform or system. Procera Networks is an excellent case study.

The math and rationale for COTS are actually pretty simple. Time has value, and experience shows that getting to market 6, 12, or even 24 months sooner via COTS generates tremendous advantages for a NEP, especially for Tier 2 and Tier 3 players.

How is this possible? Well, the NEP that focuses on application development rather than proprietary platform development needs fewer in-house resources for:

• Platform R&D
• Middleware integration
• Supply chain management
• Interoperability and regression testing
• Etc.

Since those people cost money, project profitability can be higher when sourcing COTS vs. trying to make all those pieces in-house. Why build what you can buy, especially when the telecom industry’s inexorable adoption of standards means that there is less and less value in proprietary design?

Like anything, the devil is in the details, but any one of CP-TA’s member companies would be delighted to discuss the Make vs. Buy debate at length.

NEP community, the next move is up to you.

My recommendation: Pick up the phone and give us a call!