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3 reasons to speed legacy to next-gen network migration

It's about revenue flow. Telecom providers have three good reasons--customer demand, economics and network equipment--to speed their transition from legacy to next-gen telecom networks. Here's how to go about it.

Facing increasingly sophisticated demands from customers, telecom service providers must move to adopt new technologies that can reduce stress on their existing network infrastructure. Increasing capacity only meets a portion of customers' needs and certainly doesn't support providers' needs to drive profit as well as revenue. Service providers have to deploy technologies (i.e., service delivery platforms) to deliver applications that target customers' requirements.

Three interrelated factors—customer demand, economic reality and network equipment—provide the foundation upon which providers will build their next-generation networks (NGNs). The mix of core switches, edge routers and service nodes in NGNs must be customized to provide the applications customers want so they drive new lines of revenue and profit.

Changing customer demands

Residential customers have joined enterprises in using broadband connections to the Internet, creating a sea change in the way data-oriented applications are accessed and consumed. National demand for high-speed access and low-latency response will drive network optimization.

Clear-cut lines between personal and professional users no longer exist, as people work at home, on the road and on vacation. And with the emergence of the "always on" worker, people carry out personal tasks in their offices and professional tasks at home. Since end-user devices support personal and professional applications, service providers must also provide connections wherever users are and however they want to connect (i.e., wired or wireless). The blend of personal and professional uses leads to a "perfessional" working environment.

Service providers that optimize their networks to support perfessional end users can gain a competitive edge. End users want instant access to information, media, games, applications and each other, no matter where they are or what they're doing. And their content creators want to get their products to them in the same manner. Optimization should allow large-enterprise customers to distribute applications, content and information as quickly and efficiently as possible while allowing their customers to use it just as efficiently.

Calling for more mobility

Mobility represents an essential characteristic of the perfessional. Mobility implies choice of location, not movement or wireless connectivity. It encompasses any style of connection based on user choice and activity. Business applications may be accessed from home using wireless routers and DSL or cable modems. Personal and business tasks must be accessible from hotel rooms, airport lounges and other temporary locations via wireless and wired broadband connection to the Internet.

As applications and devices evolve, customers will discover new ways to combine them for new uses. Service providers must stay out in front of their customers' adoption curves to guarantee quality of service and reliability.

Service providers must stay out in front of their customers' adoption curves to guarantee quality of service and reliability.

H. Paris Burstyn

Calling for more data

Perfessionals want data in many forms, including music, movies and games, as well as corporate and personal applications. Whether they require streaming, transactions or interactivity, all data has to move down the pipes quickly and reliably. This demand pressures service providers to find ways to change legacy networks and adopt architectures that accommodate server farms and pipes with speeds that will exceed 100 Gbps. Networks must facilitate content providers' fast and reliable product distribution to their ultimate end users.

Economic reality

To move that way, service providers need a new equation for capital investments. On one side of the equation is profit. On the other, variables include capital investment, operational expenses, service-level agreements, access and core technology, as well as packaging and pricing. Operators'' negotiation and positioning strategies must evolve to accommodate enterprises that consume vast amounts of bandwidth. They don't want these sophisticated customers to see them as mere providers of commodity transport, so network evolution must move them up the value chain, where they can act as partners, not just vendors.

Competitive pressures

From a competitive standpoint, next-generation network infrastructure includes the hardware and software platforms that can shift providers away from price-based competition. Depending on their target customers, carriers can redefine their value propositions and position themselves as partners. Moving up the value stack from transport to applications hosting and support provides the foundation to increase margins and create competitive differentiation.

Since each service provider aims at different mixes of customers, moves to support content distribution and consumption will focus on specific customers. NGNs allow them to distinguish their capabilities from rivals' offers.

Network infrastructure lifecycles

Following the form of the classic value chain, telecommunications equipment vendors will also have to develop gear that enables carriers to move in the right direction. Perfessionals want the services, the carriers want to provide them, and equipment vendors, in turn, must meet their customers' needs.

As end users continue to adopt more sophisticated applications, carriers will face a diminishing amortization period. Just as other enterprises deal with the rapid turnover of technology, carriers will also have to adjust. No longer can they take 20 years to write off a switch.

Telecommunications equipment vendors can facilitate this change by incorporating as many off-the-shelf components as possible and using software to customize each product with individual customers in mind. High-capacity, high-reliability core and edge equipment will reach the market in a manner that enables CSPs to deploy it where it best suits customer requirements.

Transitioning core TDM switches to the network's edge and replacing them in the core with IP equipment is an extremely complex process. Just as service providers must partner with their major enterprise customers to define and meet their communications requirements, equipment vendors must work closely with their customers to define and meet their switching needs.

About the author: H. Paris Burstyn has more than 25 years of experience working to help clients design and implement creative, effective and efficient approaches to competitive situations. He founded Paris Consults to provide analysis and consulting to competitors in the telecommunications industry. His background includes positions at Yankee Group, IDC, Arthur D. Little and HeavyReading.

This was last published in August 2008

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