July 2000

BY SCOTT HILTON

Enough talk about broadband access, optical metro networks, lambda switching, and giga- and terabit routing. How does a service provider turn all this whiz-bang technology into high-margin, happy customers? The key is to look at what is most challenging today for consumers, content providers, and corporations that rely on the network -- and solve their problems. With this approach, one quickly arrives at a simple conclusion: Satisfy customer needs by adding value to the many packets passing through the network. To meet the communications demands of the twenty-first century, service providers will need to do more than simply "move bits faster" to survive -- and thrive.

Consumers and businesses alike are frustrated with the general lack of high-value services, and with the inflexibility and complexity associated with obtaining basic value-added services. Subscribers and providers both stand to benefit in the win/win world of network-based, value-added services that are able to satisfy the full spectrum of user needs with an enduring and versatile infrastructure. Subscribers get more cost-effective solutions and service providers get a more profitable business. And with the right approach, everyone can benefit without forklift upgrades.

DIVERSE USER NEEDS -- BUT WITH A COMMON THEME
What has occurred in voice communications is now occurring in the data network -- and will ultimately exist in a fully-converged public network for voice, data, and video communications. Consumer and business users agree on a fundamental concept: They both want the end-to-end arrangement to be "dumb" on the premises (home or office) and "smart" in the network. The reason is simple: Users want the option of trying new services without buying new equipment. And when users try a new service, they frequently get hooked and wonder how they could ever have lived without it!

Just consider how dumb the telephone has become. Once upon a time, people had "feature phones" and companies had feature-rich PBX systems. Now, except for the optional speakerphone, wireless handset, and caller-ID panel, phones are about as basic as originally conceived by Mr. Bell himself. All advanced capabilities are now available in the PSTN from the growing list of Centrex features. The very power to operate the phone itself is also supplied over the line. What could be simpler and more convenient?

The same evolution is occurring in the data and voice-over-data communications marketplace. Even applications are being outsourced today, as is evident by the advent of a new type of provider: The Application Service Provider (ASP). In the new public IP network, service providers have the opportunity to address three distinct sets of customers, with distinct service requirements.

Consumer IP Service Requirements

• High-speed, reliable Internet access;
• Bundled Internet, video, and telephone services;
• Ability to control service levels, such as class of service (CoS), in a simple manner that permits "pay-per-use" charges;
• Basic security protection for always-on services (a consumer firewall).

Telecommuter And Small Office/Home Office (SOHO) IP Service Requirements

• Seamless, secure access to the intranet and Internet;
• Logical separation of the personal and business applications operating on same physical connection;
• Business-class quality of service (QoS) and CoS;
• Robust security protection: a SOHO firewall and virtual private network (VPN).

Remote Office/Branch Office (ROBO) And Campus IP Service Requirements

• Scalable, secure access to the intranet and Internet;
• Flexible connections to ASPs, partner extranets, etc.;
• Mission-critical QoS and service level agreements (SLAs);
• Sophisticated security provisions (an enterprise LAN firewall, VPN, authentication, and so on).

Satisfying these diverse requirements, including the myriad combinations and permutations, could become quite complicated without the right architecture.

THE WIN/WIN SERVICE LAYER ARCHITECTURE
The service layer exists at the boundary between the access layer and the backbone layer. This juncture is the logical point in the end-to-end public network where any service provider (ILEC, CLEC, ISP, NSP, IXC, etc.) has an equal opportunity to deploy highly-differentiated, value-added services. Just as important, the service layer architecture also leverages convergence (voice, data, and video) without requiring it. For these reasons and more, the service layer architecture provides both tactical benefits and strategic competitive advantages.

To create an enduring win/win environment between service providers and their subscribers, the service layer requires a service platform that satisfies the diverse requirements of consumer, telecommuter, and ROBO customers previously discussed. The same service platform must also satisfy the following three service provider requirements:

• Broad customer appeal through a full set of flexible and easy-to-provision, value-added services, potentially allowing the user to self-provision any and all services.
• The service platform must have the ability to adapt to dynamic market requirements, which is best achieved by utilizing a versatile design based on virtual routing and VPNs.
• The service platform must deliver carrier-class performance and reliability, which permits CoS, QoS, and SLA guarantees to be offered with complete confidence.

In addition to these three fundamental service provider requirements, the ideal service platform remains agnostic with respect to both access (POTS, DSL, wireless, cable, etc.) and backbone (IP, frame relay, TDM, optical, or ATM) technologies in order to take full advantage of any advances in either adjacent "cloud." It also maintains compatibility with existing networks and management systems (e.g., BGP/RIP/OSPF, RADIUS, LDAP, etc.) and supports multiple business models that enable mutually beneficial arrangements among service providers, especially for wholesaling and content delivery. Finally, the ideal service platform provides a detailed accounting system to facilitate a broad range of profitable billing options (from fixed-fee to usage-based).

A SERVICE PLATFORM FOR TODAY -- AND TOMORROW
Next-generation IP service switches based on the service layer architecture are the answer to the service platform requirements. These switches are already available from many vendors, and are all engineered to deliver the same capabilities users have grown accustomed to with the PSTN: Reliability, quality, simplicity, affordability, security, flexibility, and the like.

Deployment of IP service switches begins paying off immediately with policy-based provisioning of popular value-added services. They interoperate seamlessly with existing infrastructure to preserve the investment and facilitate the integration of other service platforms. Their flexible, scalable, and extensible designs permit "pay as you grow" expansion into new markets and new services, including VoIP. And despite the wealth of value-added services enabled by these powerful switches, they still meet the high-throughput, low-latency requirements of a business-quality network.

One major advantage of an IP service switch is extensible design, which can be optimized for its strategic location in the public network. Service providers can deploy a switch configured with a "bare bones" feature set, and then add capabilities to meet evolving customer demand. For example, basic tunnel termination and authentication, which appeal to a broad range of users, would be a natural "bare bones" feature set. More advanced VPN features (tunneling, encryption, and authentication) can be added as demanded by the subscriber base. And as the list of VPN customers grows, QoS and SLA performance-guaranteed services can be added.

The IP service switch also makes it possible for service providers to respond to market changes in ways previously unimaginable. For example, service providers regularly expand their presence to new service areas. An incumbent provider that already has a presence in an area could choose to compete directly or, alternatively, might consider wholesaling ports -- with or without value-added features -- to the new service provider. With wholesaling arrangements, service providers can prevent the erosion of profits resulting from a downward, price-cutting spiral into commodity-level competition.

CONCLUSION
Customers will increasingly demand more from the network, and savvy service providers are beginning to take advantage of this growing opportunity. Already, business customers are gravitating toward those service providers who offer highly differentiated, value-added services. Just as important, the typical customer -- both new and old -- will remain loyal to the service provider who offers a clear growth path to new, more powerful capabilities. As customers migrate to managed services, and as the PSTN and public data networks converge into a more unified global infrastructure, the many advantages of the service layer architecture will become clear. There is no need to wait any longer to reap the rewards of a network-based service offering when the service platform for this promising future -- the next generation IP service switch -- is available now.

Scott Hilton is director of product marketing at Spring Tide Networks, where he has responsibility for the product management and strategic positioning of the company's IP Service Switch product line. Spring Tide is a developer of carrier-class network equipment that enables service providers to offer new revenue-enhancing, value-added IP services. For additional information, visit the company's Web site at www.springtidenet.com.

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