| QUESTION & ANSWER |
IP transformation: Wide impact on telecom network management |
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By Kate Gerwig
22 Apr 2009 | SearchTelecom.com |
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IP transformation remains a major topic of service provider conversation in terms of how to best increase network efficiency and revenue, but transformation is a multi-pronged effort taking place on the network, product portfolio, systems and business process levels. And where carriers are in their own transformation process influences where they go from here, particularly during a global recession.
Looking directly at these issues, the TM Forum is getting ready for Management World 2009 in Nice, France, with a conference aptly named Strategies & Tactics for Tough Times. President and CTO Martin Creaner and I played 10 questions about what's on the minds of service providers as they try to make complete an upbeat network transformation in a downbeat year and head to the Riviera to sort out network management issues. What are service providers' main concerns this year?
Martin Creaner: Service providers are focusing on transformation, but there's transformation at the network level, the systems and software level, the product portfolio level and the business process level. So when people talk about transformation, you have to check to see what they're really interested in.
Have most carriers completed their IP network transitions?
Creaner: Lots of companies have put major network transformation projects on hold, but the ones who had already started are finishing. The business cases for major network transformation programs have to be approved much more rigorously, and some companies are reassessing them. So the recession isn't stopping people, but it is making them look more at transformation more carefully
Have some carriers put transformation on hold?
Creaner: Not everybody has IP transformation underway. A lot of people who were talking about major IP core network transformation a year ago are still talking about it, largely due to the economy. But those who have started, can't really stop. It's like having a tiger by the tail.
What was the expectation in transitioning to one IP network?
Creaner: A number of companies adopted an attitude that the purpose of transformation is to offer the exact same portfolio of products but in a more efficient way -- that was the design goal. That is being revised. in terms of where they can offer. The purpose of network transformation is to reduce cost but also to increase flexibility and offer a new portfolio of product.
What kinds of services are carriers considering for their new portfolios?
Creaner: Content is obviously an incredibly wide ranging word, and in terms of new services that take advantage of existing services – above and beyond new types of content delivery -- using that content in inventive ways is essential. One example is the whole application store approach, particularly in the mobile world. That's all content.
WAN optimization is another type of new service. A number of companies are looking at how to develop new products that are tied into the uses being made inside the business unit and capitalize on network capabilities.
The whole cloud approach of providers pushing not only their applications but their capabilities into the cloud and allowing other people to use those capabilities I think is the next exciting level of people talking about the network as a service or a platform as a service. That's the next level of transformation we're seeing.
We've heard about cross-network services for years, but are carriers really interested in doing it this time?
Creaner: Service providers are more open to the concept than they used to be. If you look at cloud-like services, the TM Forum's IPsphere program is creating the protocol for how you syndicate the network capabilities of multiple service providers, so any one of them can offer an end-to-end virtual private network solutions using syndication services. The carriers working on this in the TM Forum include Telus, Telstra, Telecom Italia, France Telecom and others.
How about services that open network operations to third parties?
Creaner: Other companies are looking at how they expose their core capabilities, including their billing and authentication systems to third parties who can use them to deliver their own services. So there are two different aspect of the cloud: One is the syndication of services between providers, and the other is single providers exposing the core capabilities to third parties and getting paid for it. For example, if AT&T decided to exposes billing or location systems to third parties, you an imagine people selling pizza delivery would be able to plug in to those services. There's a whole range of services that could happen in that scenario, and service providers could have a small piece of the action in that delivery process.
Are carriers concerned that they could lose control of their customers?
Creaner: If you look at the unhealthy state of services in terms of profitability and growth potential, providers realize they have to do something. Most providers are waking up to the fact that control is a complete illusion anyway. They don't have the control any more, so why not try to get back in the game by exposing some of their capabilities to others.
How do service providers become part of the new content revenue chain?
Creaner: The amount of music and games delivered over common networks, fixed and mobile, is growing, and the service providers get nothing out of it. They have to become more important because people have found they can deliver content without service provider in the value chain. Service providers need to win back that business by talking to third parties about how much they're spending on billing and how much they could save if they purchased a provider's billing service. They could talk about offering a business better location or authentication services. If they do that, service providers will be back in the game.
Are service providers making enough money in media?
Creaner: In terms of the whole media value chain, we're beyond proof of concept and into how this can make a significant dent in a service provider's annual revenue. But right now, these $20 billion companies are making about $100 million in revenue from media. They need to be up to a billion, with media creating between 5% and 20% percent of their revenue.
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