Virtualization and Digital Services To Take Center Stage in 2016

Virtualization and Digital Services To Take Center Stage in 2016 Image Credit: NetCracker

CSPs need to ensure their BSS/OSS are up to the task of next-generation, disruptive business models.

It’s that time of year again when we look ahead to what’s on the horizon for the next 12 months. And in an industry as dynamic as communications, it can be hard to pin down exactly what will capture the attention of service providers and others in the space, but it’s clear that the top candidates have one thing in common – they are all disruptive forces that will put pressure on traditional communications players to rethink their business models and ensure that their networks and supporting systems – including BSS and OSS – can support them.

These enablers of digital services will help traditional cable, wireless and fixed-line service providers finally turn the corner and become better able to compete against OTT players, content providers and other newer entrants that threaten to take market share and make traditional providers almost irrelevant.

Here’s our take on the top trends for 2016 and how they will affect CSPs:

#1: VIRTUALIZATION

Since software-defined networks (SDN) first captured the attention of network architects in 2007, network virtualization has taken off like a rocket. For the past three years, network functions virtualization (NFV) has gotten most of the hype, but both technologies together promise to deliver massive benefits – lower costs, faster time to market, new revenue streams – that any operator not already evaluating or deploying the technologies will need to step up and do so in 2016.

Until recently, NFV, and to a lesser extent, SDN, has been relegated to the lab, trial or proof of concept setting. But that’s quickly changing as CSPs get a firsthand look at what virtualization can do for them and are ramping up efforts to deploy it in a commercial setting.

But to get to the operationalization stage, operators need to ensure their BSS/OSS can handle this shift from the physical network to the virtual network and the accompanying agile and streamlined processes that follow. Complicating things further is the fact that most operators will have a hybrid environment for more than a decade as they slowly make changes to their network architectures.

Even with all of these changes – and the time, effort and money required to reach the virtualization goal – operators will continue jumping on the bandwagon in the next year.

#2: BUSINESS SERVICES

As CSPs continue seeking alternative revenue streams, one customer segment they are trying to better serve is the business segment. Though business services segment is the most profitable segment it can also be a very demanding segment. Forward-thinking operators are marrying the capabilities of cloud and mobility to offer more enhanced service to this segment. As customers today want services 24x7 from anywhere, on any device, CSPs are becoming increasingly aware that cloud mobility will be essential in serving the changing demands of their Enterprise and SME/SMB customers.

On top of their own operational issues, CSPs are also dealing with the demands of the business customers themselves. With the demand for the consumerization of IT, CSPs are being asked to provide capabilities such as separate price plans for employees’ personal use and business use and to disable certain services when a user switches from business to personal mode. And, demand of such capabilities keep increasing due to the cost saving aspect of BYOD. Depending on their own BYOD policies, businesses may be thinking that they don’t even have to purchase or support their employees’ device, saving them money per employee. In many cases, a virtual network ecosystem will make it easier for CSPs to create, deliver and monetize business services. For example, CSPs may be interested in virtualizing the network edge and customer premises in order to deliver a whole new breed of services to enterprise customers.

By relocating CPE functions into a data center, the device itself can become a standard, commoditized box that communicates with the network and delivers virtual services to customers. These can include firewall, routing, VPN, network address translation, intrusion detection and much more. Services are delivered as virtual network functions (VNFs), which run on virtual machines (VMs) on hardware and can be chained together to deliver advanced functionality. This architectural shift also allows operators to offer cloud-based services in a cloud broker model, including office productivity applications, security, data storage and more.

CSPs are definitely concentrating on the needs of the business customer as they would like to be able to offer services like enable threshold alerts, customer set spending and rich customer care options and loyalty plans. The challenge for operators is to be able to improve their business customer satisfaction by being able to have a single view of the customer. Despite these desires and others, CSPs find that complex activities such as resource optimization, service qualification and design and discovery prevent them from having optimal service fulfillment and less than desirable fallout. In order to serve their business customers better, CSPs need to streamline their siloed BSS and OSS systems and focus on BSS/OSS convergence and end-to-end service orchestration and service management capability.

Ari Banerjee,
Senior Director, Strategy,
NetCracker Technology

#3: INTERNET OF THINGS

We keep hearing that the Internet of Things (IoT) will encompass 50 billion devices by 2020 and that these devices will generate trillions of transactions, whether it’s a sensor on a lamp post that makes note of a connected car going by; devices in agricultural settings that will let farmers know details about soil and crop conditions; or health monitors that are constantly sending data for analysis. And industry experts estimate that over the next 10 years there’s the potential for $13 trillion in IoT revenues for organizations that can master how to monetize this opportunity.

The IoT will drive operators toward interesting and innovative business models, but it’ll require effort on the part of CSPs. By leveraging existing connectivity, mobility and service delivery capabilities — and investing in IoT platform features such as cloud-based data analytics, application services, rules-based engines and dynamic rating/bidding scenarios — CSPs will be well positioned to help their customers unlock new revenue opportunities and create a lucrative ecosystem that will benefit all players.

2016 Trends and Outlook Polls

#4: EVOLVING TO A DIGITAL SERVICE PROVIDER (DSP)

Operators are today at the cusp of transforming themselves into DSPs. This transformation involves digital service portfolio and capabilities required by service providers to deliver those services to end customers. Digital transformation involves focusing existing technologies or new investment in technology and business models to effectively engage digital consumers at every touch point in the customer experience lifecycle.

In order to become a DSP, operators need to completely reimagine and reinvent how their businesses should operate to connect fully with customers, in every channel — in stores, online and increasingly through mobile devices. It is now table stakes for telecom operators to undergo digital transformation and offer an integrated, omni-channel, personalized digital experience to their end customers. To successfully transition to become a DSP, operators need a delivery architecture that’s integrated, partner driven, real time, seamless, contextual, automated and analytics driven.

#5: NEXT-GENERATION MOBILE NETWORKS

LTE is already causing a fundamental rethink in how services are created and delivered, and this will only become more challenging as 5G enters the picture with its always-on connectivity, faster speeds and extremely low latency, which will enable more real-time interactive multimedia services, such as augmented reality, virtual reality and real-time online games.

We’ll see many more LTE and 5G rollouts in 2016, but operators will need to ensure their business models also take into account integration with fixed-line business and look to partnerships on all aspects of the business to capture revenue opportunities and thrive in a hyper-competitive market segment.

#6: CUSTOMER EXPERIENCE

Underpinning all of these trends is the absolute need for operators to not lose sight of the customer, and more specifically, their level of service quality, engagement, satisfaction and ultimately loyalty. And at a time when service offerings can look similar from one operator to another, the only way to stand out from the crowd is by offering a superior customer experience.

The provider that manages to do this will be more efficient, more proactive and ultimately more innovative than the competition. But to get to this point, operators will need to embrace social, mobility, analytics and cloud in order to proactively find problems, which will then lead to reduced churn, being able to launch new services and ultimately achieve significant competitive advantages.

No one can predict for sure what the New Year will bring, but one thing that’s certain is the communications industry will look very different. Along with new ways of looking at networks, creating and managing services and providing the best experience possible, operators will need to make sure they have the right BSS/OSS architecture in place in order to incubate, deliver and monetize these new technology related business models.

About The Author:
Ari Banerjee works for NEC/NetCracker as Senior Director of Strategy, responsible for strategic direction of the company enabling the company to exploit the changing market and technology opportunities. Ari interfaces with the CTO and CIOs at customers and prospects to ensure alignment of technology, products and services and provide strategic input to CTO office, product management, R&D. In his role Ari has to interface with industry organizations, standards bodies, media and analysts and run marketing and strategic partner programs for NetCracker.
Before joining NetCracker Ari led Heavy Reading's Service Provider IT (SPIT) practice which included all aspects of telecom software research. In his role Ari examined the breadth of software used by communications service providers in customer, business, service and infrastructure management. His area of focus included all aspects of BSS, OSS, SDP, API exposure, policy management, digital commerce, revenue assurance, service assurance and elements that span both the infrastructure and network software markets, such as data warehousing, analytics and business intelligence. He was actively involved in operator cloud strategy research and evaluating the impact of SDN and NFV on operator's IT systems. Prior to joining Heavy Reading, Ari was the vice president of next generation software systems at Yankee Group, leading and overseeing all aspects of their telecom software research.

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