Ericsson is a keen HetNet proponent and the Swedish networking giant has just launched a commercial trial of what it calls the City Site “integrated solution” in Nanning, the capital of China’s Guangxi region, alongside China Mobile. The four-meter-high (13-foot) package includes a standard Ericsson base station in this case, along with an integrated multidirectional antenna.

The “Omni Antenna” in question is rather short-range (up to a couple of hundred meters) and relatively close to the ground, which fits in nicely with what Ericsson is trying to achieve here: network densification, a central tenet of HetNet architecture.

HetNets will need to involve not only a variety of cell sizes and types – from macro-cells to pico-cells to Wi-Fi offload points — but also cells at different levels and layers, in order to solve the challenges presented by specific locations. Tall buildings are a challenge when you’re trying to serve thousands of people on street-level, and this kind of thing may be part of the solution.

But densification isn’t the only thing that’s going on here. Ericsson’s City Site design also allows add-on modules for video ad screens, clocks, touchscreen real-time information displays and so on. The company told me this could “provide high performance broadband coverage together with fulfilling a city’s needs for de-clutter, aesthetics and add-on applications like information or advertising.”

This is a good indicator of how we can expect to see our ever-increasing mobile broadband requirements change the cityscapes around us. I’m not sure it really amounts to de-cluttering, though — ads aside, there’s something to be said for discreetly sticking cells on lampposts and other existing street furniture.

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The deal is focused around 600,000 smart meters in Sweden. But E.ON is one of the largest power and utility companies in the world and operates in 30 countries with 26 million customers, so clearly its a relationship with a lot of potential.

Ericsson competes with GE, Siemens, ABB and others to sell software, services and hardware to utilities and power companies. Increasingly utilities and power companies are interested in buying more data analytics tools as their networks are becoming IT networks that need to monitor, digest, and analyze data to run more efficiently. As global electricity grids add more clean energy (solar panels and wind turbines), and energy storage (battery farms), better data analytics and predictions tools will also be needed to keep the grid stable.

Some of the power gear vendors are turning to the big data startup leaders for partnerships around the latest analytics. For example, earlier this week Siemens announced that it’s working with data warehouse veteran Teradata.

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Amazon CEO Jeff Bezos

In his annual letter to shareholders (PDF) on Friday, Amazon CEO Jeff Bezos, reiterated his company’s rage to update features and functions (and then cut prices) on Amazon Web Services.

According to Bezos, AWS which he characterized as a “clear example of internally driven motivation” put out 159 new features and services in 2012 and cut prices 27 times since launching 7 years ago. (Frankly, 27 sounds like an undercount to me, but he’s the boss.)

He also touted Amazon’s commitment to enterprise customers. Amazon has

“… added enterprise service support enhancements, and created innovative tools to help customers be more efficient. AWS Trusted Advisor monitors customer configurations, compares them to known best practices, and then notifies customers where opportunities exist to improve performance, enhance security, or save money. Yes, we are actively telling customers they’re paying us more than they need to. In the last 90 days, customers have saved millions of dollars through Trusted Advisor, and the service is only getting started. All of this progress comes in the context of AWS being the widely recognized leader in its area – a situation where you might worry that external motivation could fail. On the other hand, internal motivation – the drive to get the customer to say “Wow” – keeps the pace of innovation fast.”

The lastest tidbit for enterprise users was this week’s addition of support for Microsoft Hyper-V support in Amazon’s Storage Gateway. For more on Bezos’ letter, here’s  PaidContent’s Laura Hazard Owen’s take.

Bezos’ letter comes at a time when more observers question whether AWS really is the low-cost option when it comes to non-variable (inelastic) production workloads — as opposed to development and test jobs — but that’s a quibble. Until one or more of the OpenStack crowd or, more likely, Google Compute Engine, hits its stride, AWS remains the public cloud to beat.

OpenStack: the ABM (Anyone But Amazon) alliance?

The OpenStack crowd is getting larger. This week — barring last minute delays at Monday’s board meeting — Juniper Networks and Ericsson — should be aboard the OpenStack Foundation as Gold members, as GigaOM reported Friday. Both companies were already sponsoring companies but board membership brings a bigger financial contribution and presumably more influence. With them in the fold and especially after VMware joined last summer, it’s become easier to list which vendors are not in the OpenStack ecosystem than those who are. And that list would be Amazon, Google, Joyent, Microsoft and Oracle.

OpenStack, when it was born more than 3 years ago was an attempt by Rackspace and NASA to build an open-source alternative to Amazon in the public cloud and to prevent VMware from leveraging its virtualization lock in enterprise data centers into the cloud. The effort, as measured by by third-party vendor support has exploded since then, especially after Rackspace turned over the reins to the OpenStack Foundation two years ago. Since then the floodgates opened with HP, IBM, Red Hat, Cisco, Dell, joining younger companies — like Cloudscaling, Nebula, Piston Cloud (see disclosure) on the effort. Let’s see, that would be Amazon, Microsoft, Google, Oracle and Joyent. Or as Joyent CTO Jason Hoffman quipped — giving his company top billing OpenStack would be the “Anybody but JAMOG” alliance.

Piston Cloud updates

Perhaps seeking to beat the rush that’s bound to come next week at the OpenStack Summit, Piston Cloud (see disclosure) brought out Release 2.0 of its OpenStack cloud, or as InformationWeek called it “OpenStack on a stick.”

According to Informationweek:

“The customer sets a few configuration parameters on the cloud key memory stick, then inserts it into the USB port of a top-of-rack’s Ethernet switch. The system loads into the Linux server space of the switch, discovers the servers in the rack, and configures them into a system with virtual machine provisioning, pooled storage and networking and cloud management.”

Disclosure: Piston is backed by True Ventures, a venture capital firm that is an investor in the parent company of this blog, Giga Omni Media. Om Malik, founder of Giga Omni Media, is also a venture partner at True.

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Both companies are already corporate sponsors but have applied to join the foundation itself and their applications will be voted on on Monday, according to the agenda for Monday’s OpenStack board meeting. That meeting kicks off the annual OpenStack Summit in Portland, Ore. A Juniper spokeswoman confirmed that company’s application. Ericsson could not be reached for comment.

Update: Mats Karlsson, VP of architecture and process for Ericsson, said the company brings an understanding of networking and telecom  to the table.  Stockholm-based Ericsson had already decided to offer OpenStack-based  services because it liked the open-source ecosystem and sees tremendous traction. The company has services in beta now with commercial roll-out slated for early 2014

Juniper and Ericsson are already corporate sponsors of the open-source cloud effort, but joining the foundation will give them them a seat on the board. the chance to win a seat on the board. It  also requires a funding committment of between $50,000 and $200,000. (The formula is pegged to company revenue per the OpenStack wiki.). Each of the eight top-tier Platinum partners –  AT&T; Rackspace IBM, HP, Nebula, Red Hat, SUSE, and Ubuntu — pony up $500,000 per year and must commit to a three-year tenure.

Other Gold members — the total number is limited to 24 companies — include Juniper rival Cisco Systems, Cloudscaling, Dell, Intel, Mirantis, Piston Labs(see disclosure), VMware and others.

Talk at the summit will no doubt focus on how  new features and functions of the Grizzly release of OpenStack can bring value to customers. Folks will especially be watching for new customer stories. Most of OpenStack’s case studies to date revolve around tech companies —  HP, Intel, Cisco/Webex — all of which are building OpenStack implementations for their own use or which they they want to sell. Now, with Grizzly being the seventh major release of code, it’s time to show OpenStack traction in the world beyond the tech bubble.

This story was updated at 8:45 a.m. PST with Ericsson comment.

Disclosure: Piston is backed by True Ventures, a venture capital firm that is an investor in the parent company of this blog, Giga Omni Media. Om Malik, founder of Giga Omni Media, is also a venture partner at True.

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The deal should go through in the second half of the year, the companies said in a statement on Monday. According to a separate blog post by Yusuf Mehdi, strategy head at Microsoft’s interactive entertainment division, the sale will allow Microsoft to “commit 100 percent of its focus on consumer TV strategy with Xbox” – bear in mind that the next-generation Xbox is expected to be unveiled in the coming months.

Mediaroom is a telco-oriented, customizable IPTV platform that should be a good fit for Ericsson, a company that already sells networking equipment and services – including IPTV equipment and services – to telcos. There are more than 40 existing Mediaroom customers, including AT&T (who brands it as U-verse) and Deutsche Telekom (Entertain). According to the statement, Ericsson will have a market share of over 25 percent if the deal goes through.

As is customary for such sales, the deal will be subject to regulatory approval in various countries. Microsoft’s Mediaroom division employs 400 people, who are based in Mountain View, California.

According to Ericsson SVP Per Borgklint, “future video distribution will have a similar impact on consumer behavior and consumption as mobile voice has had”, and the transferring staff that coming with the platform will give Ericsson “senior competence and some of the most talented people within the field of IPTV distribution”.

Here’s an excerpt from Mehdi’s post:

“We are proud of the world-class engineering and business achievements within Mediaroom. They have a rich history of driving innovation in IPTV. As early pioneers, they built the infrastructure to stream video on limited bandwidth, and today they enable multiscreen entertainment experiences for pay TV subscribers. Mediaroom has contributed to the evolution of TV and powers 22 million set-top boxes today in 11 million subscriber households.

“With the sale of Mediaroom, Microsoft is dedicating all TV resources to Xbox in a continued mission to make it the premium entertainment service that delivers all the games and entertainment consumers want – whether on a console, phone, PC or tablet.”

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The report quotes unnamed “people with knowledge of the matter” as saying the two companies are in talks over the potential sale. Neither company would comment on the report when I asked them today, but the idea of the sale is perfectly plausible.

Mediaroom is a customizable platform that is mostly bundled by telcos, who want to take on more traditional TV service providers with their broadband services — customers include AT&T, Deutsche Telekom and Telus. As it also comes with DVR capabilities, Mediaroom is in some ways a competitor to TiVo .

According to Bloomberg’s source, Microsoft wants to focus more on delivering IPTV through its Xbox consoles. Swedish networking equipment vendor Ericsson, meanwhile, is all about servicing its telco customers, so the addition of Mediaroom to its lineup would make a lot of sense. The company could integrate the software with its existing IPTV managed services and systems integration portfolio – in February, Ericsson said it had signed 240 IPTV contracts with various service providers.

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With STMicroelectronics having indicated back in December that it wanted out of its chipmaking joint venture with Ericsson, and with Ericsson having politely declined to buy the half it didn’t already own, it was only a matter of time for ST-Ericsson. The question was how it would go, and now we know the answer: perhaps predictably, Ericsson will take on the modem side of the business and STMicro will take on other existing products as well as some of the manufacturing facilities. The rest will be shut down.

As for jobs, around 1,800 employees and contractors will transfer to Ericsson (mostly in Sweden, Germany, India and China) and around 950 to STMicro (mostly in France and Italy). Approximately 1,600 employees are likely to find themselves without a job – 50-80 of them in Germany and 400-600 in Sweden.

Former ST-Ericsson CEO Didier Lamouche announced his resignation a week back and, according to Monday’s announcement, his replacement from 1 April will be current COO Carlo Ferro. Ferro won’t be in place for long, though, as STMicro and Ericsson said they expected the breakup to be completed during the third quarter of the year.

Ericsson chief Hans Vestberg said his company saw a great future for the “thin modem” side of ST-Ericsson (the term refers to multimodal, low-power modems that draw their intelligence from the associated mobile application processor), which Ericsson will now run as a standalone business:

“Ericsson continues to believe that the thin modems hold a strategic value to the wireless industry. With this move Ericsson will create a highly focused ‘thin modem only’ operation — an area in which both parents have invested significant amounts to establish industry leading technology and intellectual property. Initial customer contacts give support to the belief that our modems will meet the requirements of the manufacturers in the rapidly growing smartphone and tablet market.”

ST-Ericsson had been hemorrhaging money for many quarters. Indeed, it had never been profitable since being established in 2008, but it was particularly damaged by the negative fortunes of its big two customers, Sony-Ericsson (now entirely a Sony affair) and Nokia, which used ST-Ericsson chips in its low-end phones but never adopted the NovaThor system-on-a-chip (SoC) platform for its Windows Phones, as ST-Ericsson claimed it would back in 2011. Nokia’s Lumia handsets continue to use Qualcomm chipsets, as do most other high-end smartphones these days.

ST-Ericsson had only just unveiled its latest NovaThor chipsets last month at Mobile World Congress. However, a spokewoman for Ericsson told me that these new chipsets — namely the the L8540 and L8580 lines — are being immediately discontinued. The ageing U-series, such as the U8500 that was announced in 2011 and that still powers midrange devices such as the Samsung Galaxy SIII Mini, will continue under STMicro’s auspices, she added.

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Ericsson’s figures, which came on Monday as part of an interim update (PDF warning) to its Mobility Report, suggested that the growth in mobile data usage is not slowing down. Bear in mind that the figures don’t even take into account mobile usage over Wi-Fi networks (or mobile WiMax, for what that’s worth), so the real numbers will be even greater if you’re concerned with what people do on their phones, as opposed to what type of connection they use.

Between Q3 and Q4 of last year alone, total data volumes over cellular connections increased 28 percent. Mobile broadband subscriptions also grew by about 50 percent year-on-year, between the final quarters of 2011 and 2012.

No slowdown

Now, 2012 was the year in which LTE became reality in many parts of the world, and faster downloads and uploads will usually encourage more use. That really can’t explain all the mobile data growth, though: Ericsson reckons that the number of LTE subscriptions at the end of 2012 was 57 million – way up from 14 million at the end of 2011, but still small when you look at the bigger picture. Much of this growth has to be down to the increase in subscriptions, not just the type of connectivity they use.

Around the world, there are now 4.4 billion mobile subscribers (with 6.3 billion mobile subscriptions, as one person can have more than one phone or connected devices). That’s nine percent year-on-year growth for subscriptions.

Unsurprisingly, the really big growth in mobile subscriptions these days can be found in China, the rest of Asia-Pacific, and in Africa. During 2012, China saw 30 million new mobile subscriptions, while India saw 11 million, Bangladesh 9 million, Indonesia 8 million and Nigeria 5 million:

Regarding these emerging markets, it’s been said before but it bears repeating: for many people in such areas, their mobile phone is their first computer. The opportunities here are staggering, both for those trying to hawk their services in emerging markets, and for those in such places who themselves want to develop services for local customers and perhaps even the developed world. This trend will shape the future of the web.

It’s also worth reminding ourselves that the mobile world is still not predominantly driven by smartphones – not by a long shot. According to Ericsson’s data, smartphones account for only 15-20 percent of the global installed base for cellphones, and only 40 percent of handsets sold in 2012.

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Ericsson Cloud System, which will hit availability in the first quarter of 2014, targets mobile operators in particular. It incorporates an upgraded Cloud Manager, which is Ericsson’s operations support system, alongside a new Cloud Execution Environment that’s based on OpenStack and the KVM hypervisor.

This all runs on existing Ericsson Blade System (EBS) server clusters and Smart Services Routers (SSR), and the general idea is to enable virtualized environments across the network, from the base station to aggregation nodes and business support systems.

“Cloud services need to be distributed and networks — including computing and storage capabilities — need to be elastic on an end-to-end basis,” an Ericsson statement reads. “This combination will bring a new set of capabilities that doesn’t exist today… It enables distributed cloud capabilities such as computing and storage capabilities in the network, resulting in a better experience when using cloud applications, and more efficient utilization of network resources.

Ericsson’s take on SDN is key to this approach. The company sees most people’s interpretation of the concept as overly focused on the data center, whereas it wants to push the idea of SDN as covering a carrier’s entire network, with operational and business support systems also in the mix.

The benefit, it argues, would be to make resources elastic, to cope with an application’s bandwidth or quality-of-service requirements on-the-fly. By doing so, Ericsson says, the operator can make its own business more efficient, then perhaps use freed-up resources to provide cloud compute and storage services to others.

“There are lots of advantages,” Magnus Furustam, the head of Ericsson’s Core and IMS business, told me today. “Time to market, simplifying operations, but also the innovation that is enabled. By providing a virtualization layer, you make it possible for the operator to [insert] new functionality in the network where it is needed.

“We think it’s important that this is not a disruption –- we’re not asking our operators to throw away their existing infrastructure. Based on that hardware we can upgrade that to support first of all virtualized environments, and if that is not the case we can add hardware, say a board that supports virtualized environments.”

The Ericsson Cloud System will be shown off at Mobile World Congress in Barcelona later this month, where the company will also launch a new “unified” content delivery network (CDN) system called Media Delivery Network.

The new CDN system, designed to help both fixed and mobile operators get into video delivery, combines Ericsson’s existing packet core and radio technologies with new management and service exposure layers. This will let operators do things like select the best CDN in order to optimize traffic, and cache over-the-top (OTT) content — in other words, third-party content — in order to offer the OTT content providers new guaranteed quality-of-service levels.

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