service delivery platforms, frameworks and more

It's good when friends ask your opinion; SDP/BSS integration story

2011-04-01T16:19:00.000-07:00

A friend of mine in the telecom publishing business asked me recently what I think about SDP/BSS integration. That reminded me also that I have not written anything on this blog for a long while ... So good opportunity to put some thoughts in ink...

Integration ... a question that comes up each time we forgot to look at the bigger picture when building something - be it because we want to protect a turf or just because we could not see further.

The silo pattern of doing business is reflected all over telecom organizations: network services and business support alike. Take the example of doing business with 3-rd parties such as banks, utilities, content providers, etc. the partnership management and subsequently supporting systems such as settlement, SLA management, service access points are separated, operators ending up operating 5-10 B2B solutions. Similarly, in the quest for ringing in immediate revenue, many services have been built in silos creating at operations level a maze of integration points and access portals, and myriads of brittle lifecycle management processes.

Thinking from the perspective of many small 3-rd party Service Providers, the Time To Market, be the first to offer some new experience to the end consumer is crucial for the business. Competition in consumer space is fierce. So which consumer oriented business, pressured to gain quickly market share, has the patience and the power to work through the operational maze of a telecom operator to get to that end consumer? This is the OTT story in a nutshell. It is powered by the smart devices, by the rapid innovation in software and by the "risk takers". Despite the “dump pipe” callings it is also a good story for the operators because it finally realizes the promise of revenue from broadband investment, at much lower risk than each of the OTT players undertake in taking their services to end consumers. “Mobile Internet” Access and “High Speed Internet” Access which are successfully sold today by all major operators around the world will grow into a 1T$ business by 2015, some Internet sources say. It is the “golden pipe” strategy - realized.

With this temporary relief, operator’s attention must focus on bringing in an additional 1-2T$ in the next maybe 5 years to replace current (already decreasing) revenue from core business. There is a potential disruption looming as everything migrates to e2e IP. The price of voice will sooner or later be aligned with Skype or Google Voice and even the whole service may be replaced by new forms of communications entertained today by social networks such as Facebook or QQ/Tencent.

This need to stay relevant, which amounts to 1-2T$, is the real driver for business transformation which somewhere, sometimes will unify SDPs and BOSS. The delays we see in taking serious actions are motivated by the lack of clarity as to which strategy to embrace. For example, opening up the network to 3-rd party developers and AppStores are a good reality check on how difficult it is today to integrate a developer mind and a consumer mind through an operator mind. Revenue sharing with millions of partners, “Freemium” business models based on “in Apps” charging and multiple types of payments are costlier to realize in the telecom domain than in Internet domain; some of the enablers sit on the Service Delivery Platform side, some on the BSS side, some do not exist yet. Enough to fear this is a risky strategy.

But how about a platform for concurrent business development in many areas: service, content and application innovation, cloud/IT services, cross-industries and telco assets “mixed in”. A business models enablement platform where core assets and relationships are both exposed in ways that allow any organization (operator or 3-rd party) to create new business. A platform where there is enough flexibility and on the technical side and on the relationships management side that it becomes easy to experiment with new services or build up upon the existing services and partners. Fit into the "right for business/good value for customer" place in many value chains. This is the true meaning of the multi-sided business platform. It may be a collusion of SDP and NGBSS concepts into this kind of platform or whatever it takes to make it easily shaped by requirements from each new business model and not vice-versa (what happens today when the platform shapes the business). Flexible architecture and governance models adaptative to the context (who is upstream, who is downstream, how to create economic value in-between?) not just boxes with APIs that nobody knows what to do with. This is how I see all these platforms integrated.

Why Service Delivery Platforms are poised to become Service Providers’ most valuable assets

2009-07-09T12:19:00.000-07:00

While investments in SDPs represent a tiny fraction (less than 1%) of overall Telecom Service Providers annual investments (both Yankee and ABI estimate the annual CAPEX in this sector at around $300B) there is something really special about this type of investment: extensive enablement and high return.

The much discussed business transformation is a cocktail of goals to be lean, agile, customer focused, open to partners and developer communities, etc. These goals are neither mutually exclusive nor collectively exhaustive so they can not be addressed in silos! And they shouldn't be because each Service Provider will need a different mixture and concentration to bring him from its current situation to where it wants to be. Support for such goals lends itself to the idea of a possibly unlimited set of reusable enablers (for process automation, for data correlation across various sources, for technology independent exposure of resources, for secure and controlled access, for unified identity, etc) together with the means to quickly and easily repurpose and combine them across existing assets and organizations. This is achievable using SDP architectural concepts (horizontality, shared and standard execution environments, standards aligned development, composition, orchestration, exposure and management of services, common repository of information on services, etc) hence with no surprise we will see fragmented (hey, there is no one size fits all - this is why we further need frameworks) proliferation of SDPs not only in support of rapid creation and monetization of the "long tail" of services or exposure of capabilities (network or billing alike) to 3-rd parties but also in support of processes automation across OSS/BSS and across domains (B2B, B2C, (B2B)*2C, C2B), creation of SaaS environments and even offering Computing as a Service (CaaS).

So if the recipe is so common and simple why isn't everybody using it? Maybe they are not persuaded that the "transformation" itself is necessary but in very limited or focused areas such as increased bandwidth of access points or better communication between NOCs and Call Centers (I estimate this is the majority) or because those who try for more profound changes have a gun pointed at them to be sure that every penny put into such enablers shows either an operational cost reduction or an increase in revenues (this I estimate is the minority). For these courageous ones who want to try but know that the logical explanation above does not hold water when exposed to factual minds with short attention span, I bring the second argument to why SDPs are most valuable assets: high return.

After inventorying the 300+ SDP deployments as well as Suppliers and Service Providers plans for the next years as part of the research behind the recently published Moriana SDP 2009-2012 Analyst Report , I can assert with good approximation that there are south of $2B invested yearly in SDPs. From the samples analyzed, the average revenue from services delivered on these SDPs is $1M/day which gives an approximate $100B/year overall revenue.

Let's do the math then:
- consider the cost of goods sold (e.g. content and services from 3-rd parties) at as much as 50% from this revenue (a typical share in the content delivery chain) = $50B
- add 200% of the total cost associated with the software platform as OPEX (taking the guilt that percentually operating software platforms may be more expensive than operating hardware due to engineering skills, configurations, upgrades and continuous temptation to improve something on an open platform - in network environments OPEX is estimated at around 30% the total cost associated with the network although it depends heavily on the infrastructure vendor) = $4B
- let's add no more than 100% of the total cost associated with the software platform for marketing and selling (most of these costs will be absorbed by the network, device manufacturer or content provider anyway) = $2B

Return on new SDP asset = net income/SDP acquisition value = $(100-50-4-2)B/$2B =
11 times

CFOs please do not laugh at me yet!

Let's take a look at the "big" numbers now, those more known to the CFOs. I'll pick some numbers from the latest Gartner report on the world wide telecom market which are aligned in terms of investments in network equipment estimated by Yankee and ABI (Gartner says $353B total telecom equipment revenue in 2007 and $1.490B revenue from telecom services)

- cost of new goods needed for supporting telecom services, most probably including SDP services, for 1 year = $353B
- OPEX estimated at 30% of the new investment = $100B
- cost of selling and marketing at the same 100% of the new network infrastructure cost = $100B

Return on new network equipment asset = net income/network equipment acquisition value=$(1.490 - 353 - 100 -100)B/$353B = 2.65 times

CFOs now you can forget the laugh as your shareholders look at their investments outcomes.

I know is a very simplified calculation and argumentation - we do need the network equipment investment, the fiber to the home and 4G mobile access - but think what shifting a few billions of investment on the SDP side can yield!

I'd like to bring this analysis to the new business models supported by platforms (consisting of one or more SDPs) and delve into how the transactional activity among the parties there can impact the platform owner's profit margin on specific services. Who knows what that may reveal ...

Management World Nice 09 - what I remember

2009-06-26T21:31:00.000-07:00

By the heat of these summer days, anybody can see this post is quite late in respect to the subject. All significant activities that happened there are even virtually available if you have the chance to be a TM Forum member. So why bother?

First of all, if there was something really outstanding or controversial, I may have been incited to write about it. This means that, for what I know about the event, everything was as usual, maybe a little bit less crowded spaces.

Second comes the test of time - what do I remember after almost a couple of months? This must be what the event impressed into my memory, whether I wanted it or not. By writing about it now, I feel more objective: no pressure to report immediately as any media representative would do to get the first readers attention, no feelings of excitement and explosive new ideas and hopes after a good keynote or panel, just memory traces recounted.

TM Forum treats media well - relevant telecom analysts and freelance writers were presente and active.

"Write about the Forum and this event" asked Martin Creaner, TM Forum's CTO, it his welcome speech for the media. I just looked at Analysys Mason's Commentary on events webpage and haven't seen anything yet on this one. Maybe somebody will read my blog, then ...

The keynotes featured an interesting blend of speakers, predominantly telecom (BT, Vodafone, Orange, AT&T) but with substantial Internet infusion (Yahoo, Amazon) and a little bit of spice from the Ogivly Group. It was obvious that telecoms do not connect with their customers at the same level and to the same degree as the Internet companies do. Yahoo's "who, where, when, doing what" -real time consumer connection, Amazon's business model where "choice and low prices" drive customer experience, increase traffic to sellers and lower costs which ultimately is passed as a benefit to consumer contrasted by far with AT&T's "operations guy" who oversees costs reductions in operational environments without any indication that this can be translated into "choice and lower prices" for the subscriber, not even clear metrics for the degree of improvement in service to subscriber. And now I realize that Customer Experience is something that telecoms and TM Forum talk about a lot, lately, but I haven't heard it strong and loud from any of the Internet players. Maybe they made it seem very easy to achieve or maybe it has something to do with the value chain each Service Provider plays in: Telcos - voice so call centers, Internet players - web so online feedback and support. Two worlds apart even when they are brough on the same stage!

The Telco 2.0 initiative took the opportunity to organize a new Executive Brainstorm event in parallel which increased the value of traveling for those executives and decreased their stress on the stage as they could repeat the main ideas to the two audiences : TM Forum and Telco 2.0.
I guess most of us left these "on stage" representations asking why smart people can not get their feet on the ground and those people who have their feet on the ground ... ups ...

The vendors exhibition grounds, a little bit less crowded, was like crying "sorry, not much innovation this year"! On the main floor, from CA's "half car - half airplane: we can help you find out what it is" (who could come up with something like this?) to Accanto's "say it in one breath: Customer and Service Assurance" to feel the "experience" (of the Customer, of course) , a lot of less imaginative marketing messages and many same old products from established brands.
A nice surprise, Huawei, showing up and clear a Service Delivery Platform banner, pointing in the direction of how the many OSS and BSS-es will finally be brought together and new services deployed in operations environments, there where it is not clear yet how software can provide a service.

More advanced ideas in a couple of catalyst projects, one about margin analysis - sponsored by Swisscom and executed by Connectiva addressing segmentation at a finer detail and allowing what-if scenarios to maximize margins on bundles of services, the other about service lifecycle management - sponsored by Qwest and executed by Network Cadence and Comptel (the Axiom PSA "legacy" for those who remember that bright catalyst a coupel of years ago) and looking at a service catalog solution that can combine data and processes around service lifecycle to support any type of business model and minimize cost of service delivery per customer.

Should I dare to say that if there were some glipses of innovation they sparkled from very small companies and many of them were beyond what current TM Forum solution frameworks (NGOSS) based on eTOM, SID and management applications offer? SquareHoop with a framework to rapidly create those custom applications for product management, Connectiva with a data model and business intelligence in support of targeting customers for maximum profit, ConceptWave with a cross breed between intelligently supporting fulfillment by fixing broken orders and intelligently presenting product offerings to the customer to match their profiles, CIQUAL challenging the network focused approach of measuring what matters for a customer of a mobile broadband service or Openet adding policy management to its offering - well yes, you have the data :-) I do not remember where is policy management in eTOM and SID, maybe they are ...

I would not do justice to Wipro if I did not remember their comprehensive service offering, their project lifecycle methodology and marketing based on benchmarking against competition.

But this is pretty much what remains in my memory about this event. Looking forward to the next one!

CTIA Wireless 2009 - After ... thoughts

2009-04-27T16:39:00.000-07:00

Coming back from CTIA Wireless 2009 I felt beaten up in the struggle to bring forward good arguments for an intelligent services layer that could transform network operators from Carriers to Service Providers, give them the agility to apply the right business model for the right consumer, right on time. There was so much ebullience around 4G - on its way to making “mobile broadband similar to what fix broadband offering brings to the customer today” because Internet AppStores such as Apple’s, RIM’s and many others are there to generate more and more data traffic! Mobile data traffic will be doubling each year by Cisco's estimates, but network operators see it tripling, others even increasing 10 times! Nevertheless, a panel of 6 VP and above, executives from Sprint, Virgin Mobile, Boost Mobile, AT&T, T-Mobile and Orange labs, went completely blank when somebody asked the pertinent question: “then, as a smart device owner, whose customer am I anyway: Apple’s, Google’s or AT&T’s?” Neverminding the unanswered question, carriers have a new reason to be “busy bee building 4G, WiMaX or LTE” - btw, I learned from Clearwire’s CEO that it does not matter, “there is almost 80% compatibility”. Moreover, with so much data traffic that will be generated, there is yet another opportunity to develop new areas of network management: “policy control and Deep Packet Inspection (DPI)”! No doubts there are good reasons for this attitude. The complexity of the network, starting from the access point for broadband, increases tremendously! Think only about the fine granularity of phase synchronization that is needed to support high bandwidth wireless traffic or about the heterogeneity with which core network management has to deal due to so many vertical additions of services. And so many suppliers for all these pieces that need to come together somehow to deliver service to customer! Being able to manage this complexity called “network” is after all the pride of being a “Network Operator”! The trouble with this model and the above “broadband strategy” is that data traffic increases exponentially while revenue follows rather a logarithmic increase. Following this data "plot", time is limited until the model will become unsustainable because it will cost too much to operate the network for the amount and variety of data flows, even if the Network Carrier becomes a smart IP traffic cop and starts banishing the illegal (BitTorrent) and hurting the foe (Skype)! Only so much done for understanding what the customer wants and how much he is willing to pay or to give up, like time to watch an ad, to get that service! But if the new business models are not for network operators, what will happen then? Internet players do get them, these new business models, they need them, this is how they make money today! Will one of the big Internet players, say an AppStore owner, buy the mobile operator who runs out of money operating 4G networks because this hurts an application distribution channel? I don’t think so, no mobile operator has the global reach Internet players need and have! Nevertheless, there must be some sort of calculation that shows how to “subsidize” network operations, whoever carries their burden, to allow viral applications penetration anywhere, on any device so that everybody on the value chain/network survives. Maybe this is a version of the 2/multi-sided business models where the platform is the Device or the AppStore, not the network operator’s SDP as we all thought at the beginning of the NGN era. The network operator may be just a side that will be paid by the platform owner. And when the side is not worth it, it will be dropped for just another one. Do you see network operators competing to become the ‘preferred’ side for an AppStore so that AppStore reaches more subscribers? For me, sounds more like what is happening today. The optimistic twist now: to win in this competition network operators still need to build some form of a Service Delivery Framework so external partners can tap in without any knowledge of the network behind. The value provided in this model, be it just bit transport, must be exposed as a manageable service otherwise it will be hard to on-board it and make it a side of the real money making platform. And this could be the beginning of understanding of what we are all trying to preach here…

Paradigms and paroxysm

2009-02-01T10:54:00.000-08:00

A network operator struggling with the increased traffic from content over its broadband access realizes that working at IP level or below it is unable to deliver the expected quality of service by customer or by application so is asking: do you think that the United States Postal Office can offer you to pay a monthly fee and then allow you to send any number of any letters or packages of any size or content? What do you think?

From triple-play to double-play when the OSS/BSS transformation is just a buzz word

2008-12-10T13:22:00.000-08:00

Keith Willetts' last blog published also by Telecommunications Online Magazine is a realistic and hopefully motivating analysis of why Service Providers should continue with their operational transformation projects based on IT and creatively think forward on new generation of services.

I'm not just the broken trumpet here, I have facts in hand if you wanted to hear my story.

I have recently tried to install triple-play service in a new condo. It took 3 weeks, 4 technicians trips to my place and almost 10 calls to the call center. And all that I got was double-play for a higher price than the triple-play package I initially ordered.

All the answers as to why this excruciating experience that raises my blood pressure each time when I see the company's add for triple-play on TV, all the answers sit in the inefficiency and obsolesce of the operational processes, the same since the initial value proposition of the company, the cable TV.

One call I had with the Service Provider was specifically about this inefficiency in hope that somebody will hear me. This is when I found out out for example that the culprit is "the system"!
"The system" can not:
-track work orders unless there is one truck with one technician sent per apartment even though the intervention is on the same type and must happen at the same place!
- activate a new phone number in less than 4 days
- indicate that the signal is too low and the cable infrastructure is too old to install high speed Internet or triple play in some areas

Changing "the system" is what this OSS/BSS transformation is about. Redesigning obsolete workflows into agile business processes, rationalizing the myriad of management tools which confuse and separate organizations, putting location based services enabled PDAs in technicians hands and updating their skills to match those of datacenter technicians who beside driving a truck know how to draw cables, measure signals, plug them into boxes, have heard about IP and can even type a few encrypted commands to properly test the status of a computer or a program.

And if the skills part does not work, just surface all these service activation operations to a portal, the new generation of subscribers will know what to do with it.

Email incommunicado

2008-12-09T14:18:00.000-08:00

Have you noticed how difficult and slow is communication via email these days?

Have spammers killed this dear channel or are we just bad receivers who try to improve our email processing efficiency with tools that are not wired for our communicative behaviors?

We want to be kept in the loop and be communicative by subscribing to lists and CC-ing entire organizations but then we kill the direct channel, the simple email addressed to us by somebody whom we know either because he/she uses a different email address or because the email has been placed in an unimportant folder by the inflexible rules where we can not code “but put it into my inbox if I am the only recipient and I know this person”.

Emailing drops from the list of communications means because the decoding at the receiving end is nolonger working on the information in the body but has been transformed in the business assistant scrutinizing the envelopes coming in for her boss based on her guess and unaware of marketing tricks. Whether I do not have the right email address, the catchy subject or the shortness in expression, there is a high chance my email will not be read and my message will not reach its destination.

Mail, telegram, email, instant messaging, phone, telepresence and transcendence … by abandoning email I need to move now up on the communication scale into options that are more and more intrusive and which may obsolete textual and graphical communication when these are the best means of expressing our thoughts in an objective, persistent, linguistically rich, and hard to repudiate way.

Is there value in saving the email channel or is it already dead business?