May 2001

BY ROBERT BROWN

Ever since David beat Goliath with some gumption and a well-practiced slingshot, intelligence has played an increasingly important role in battles once fought exclusively by brute strength. One thing has remained constant over time -- when conditions on the battlefield change, an army must be prepared to move to where it is most needed. The telecommunications industry is a case in point.

When Congress passed the Telecommunications Act in 1996, service providers, keen to take advantage of the huge demand for services networks, popped up everywhere. And almost immediately, service providers began to successfully win customers and billions of dollars in capital funding. So just as the word "network" became part of the popular lexicon, service providers and equipment manufacturers began fighting an uphill battle with an increasingly overburdened and congested last-mile or access network. They dealt with it the only way they could -- by adding more and more bandwidth.

But the battlefield is changing.

TIME TO REGROUP
This past fall, funding for emerging service providers, next-generation carriers and vendors began to dwindle with dramatic results. Consumer demand is shifting quickly from straightforward bulk data to integrated voice and data, and from pure bandwidth sales to customized services. Consumers are no longer satisfied with high-speed Internet connections alone -- they want streaming video, point-and-click calling, pay-per-use bandwidth, and online gaming, all uniquely tailored to their individual requirements with customized service-level agreements.

Market Research Group (MRG) says, "Demand for pure bandwidth has changed into the demand for smart networks as the industry realizes that adding raw backbone capacity is not enough." Yet delivering converged services from the core network to the end user is virtually impossible with today's access network. Consumers want services; the network still delivers just bandwidth. Brain, not simply brawn, is needed to win this war. And increasing network intelligence at the customer premises is a smart way to gain the edge in the battle.

RECOGNIZE THE OPPONENT
The main impediment to integrated services delivery is the access network. While the core has been fortified in the last five years with major investments and build-outs, the access network has been left to languish. As a result, cost-per-bit is highest in this last mile.

To combat the bottlenecks upstream and downstream, current solutions add more and more disparate pieces of equipment (switches, routers, and gateways), fatter pipes, and larger switching fabrics to deliver more broadband services and guarantee better QoS. These are relatively "dumb" elements that route and deliver traffic -- not services. And, the core manages a large number of elements and heavy volumes of traffic at once, resulting in inefficiencies across the entire infrastructure.

This is "pretend" QoS -- intentional over-provisioning in an attempt to guarantee quality and throughput. But this approach increases network complexity; more elements require additional provisioning. Adding new subscribers means investing in expensive equipment and extensive provisioning before the subscriber base is large enough to support such an investment. The real chink in the armor is that the over-provisioned network doesn't support services -- it doesn't even recognize them.

ESTABLISH FRONT-LINE INTELLIGENCE
Often, the most effective solutions to a giant problem are the simplest. The best way to simplify the network is with intelligent elements. In particular, smart integrated access devices (IAD) can free the access network to do what it does best: serve individuals and interpret their unique services for the core. A smart IAD equips the customer edge of the network to handle customer demands.

It manages the bulk of subscriber management to the customer edge. This effectively reduces the investment to support additional subscribers; extending a system is as simple as adding another smart IAD.

Because it resides at the customer edge of the network, a smart IAD gives end users control over their services. They can connect to and switch between multiple networks over a single broadband connection -- on demand. They can choose the level of quality for a particular service -- a high-end provider for streaming video and an economy provider for surfing the Web, for example. And they can pay for what they've selected, and nothing more.

Service providers can sell services by allocating discrete bandwidth to individual end users and enforcing these services through bandwidth management techniques. They can also bill for these services based on guaranteed bit rates.

SURROUND AND CONQUER
While increasing IAD IQ is a clever first move, service providers can gain ground through more control over what goes on across the access network -- by surrounding and conquering it with intelligence.

Book ending the access network with intelligence at two strategic points -- where the access network meets the end user and where it meets the service provider's first point of presence -- makes the entire access network, and not just the customer edge, services-aware.

This approach allows the access network to efficiently carry out its role as mediator, balancing functionality and costs, and alleviating core bottlenecks. It further streamlines the network forces, reducing the burden of operation, management and provisioning.

More importantly, a services-aware network with distributed intelligence gives service providers control over what goes on in the access network. It is the secret weapon to enabling a mass-customized battle plan.

MASS-CUSTOMIZED SERVICES
Mass-customization refers to a new business model that gives end users complete control over provisioning their own services and service providers the ability to deliver and bill for those services. Service providers can focus on developing customized services for specific vertical markets -- hospitality, legal, medical, and financial, for example -- thereby generating new sustainable revenue streams.

With a services-aware network, end users need only choose which services they want and when. Furthermore, service providers can turn up converged services of all kinds to diverse markets with differentiated billing -- without incurring the extensive operational costs normally associated with deploying services over the access network. It is a business model that holds the greatest potential for service providers who want to capture market share, reduce customer churn and sustain high margins.

WISE WIN
Without a completely new way of approaching the existing access network infrastructure, embattled service providers face certain defeat. High costs of equipment and resources have led service providers into an unprofitable business model of reselling leased lines -- of competing on commodity bandwidth.

The results are crippling -- service providers continue to report gross margin losses and are suffering from tumbling valuations. They need a brave new way of conquering what is quickly becoming a large and menacing opponent.

Service providers can no longer survive on bandwidth alone. They need to deploy brain, not just brawn, at the customer edge if they are to beat the network giant. The blueprint for victory lies in a simple and intelligent approach to the access network with a smart IAD and an edge equipped to manage customer demand. 

Robert Brown is a senior system architect at Sedona Networks, a developer of end-to-end solutions designed to resolve the challenges of the access network to make the mass-customization of services possible. 

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