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Feature Article
April 2002


Open Service Creation � Are Carriers Ready?

BY CRAIG FORBES

Experts can debate all day long about whether the divestiture of �Ma Bell� and the Telecom Act of 1996 have benefited consumers of telecom services, but there is no disputing the fact that they have changed the dynamics of the industry and the behavior of its biggest players. Since 1996, we have seen hundred-year-old companies attempting to improve their customer focus and their own images as technology leaders. IP was the first battle cry, then convergence, and most recently, the epitome of customer focus: �open service creation.�

From both the technological and market awareness standpoints, the service creation space has matured enough for us to start distinguishing the hope from the hype. Just how ready, willing, and able are Telecom�s �slow-moving giants� � or even their younger and supposedly more nimble challengers � to revamp their business and network plans by adopting profitability models based on truly open service creation?

WHAT�S IT GOING TO TAKE?
Since the term has many subjective meanings, let�s define �service creation� for the purposes of this article as the ability for both service providers and third parties � external developers, integrators, or customers themselves � to dynamically create, deliver, and/or consume services. Most important, the driving force behind carrier and customer investment, service creation increases the ability of both providers and consumers to profit from services tailored to user needs.

For users, this means the ability to self-serve more bandwidth on demand, to adopt new features and applications at will � no making appointments for technician visits � and at its most advanced, dynamic service creation will let users define and deploy their own innovative services. In short: Freeing customers to focus on their core businesses without having to worry well in advance about the enabling technologies. For carriers, empowering customers to use network facilities to solve their own business problems holds the promise of limitless new revenue streams, increased customer loyalty, and dramatically improved service margins.

Not all �service creation� solutions are created equal. Technically speaking, a comprehensive platform includes broadband aggregation, subscriber management, IP services, and other broadband service creation components with fully integrated business support systems. True, open service creation reaches from the customer interface � a Web portal or other secure connection � to control of bandwidth allocation and delivery, which may include aggregation platforms, routers and switches, and finally to billing and other business support systems.

Until recently, providers have been justified in saying they were hamstrung by piecemeal approaches and lack of vendor interoperability. But comprehensive vendor solutions, and perhaps more importantly, multi-vendor forums such as the Service Creation Community are addressing these issues. Essentially, the ball is back in providers� courts to begin deployment. There are some lab trials, and despite the huge paradigm shifts entailed, early signs are that established carriers are factoring deployments of service creation platforms into near-term business planning.

Predictably, it�s going to be a long and winding road, fraught with some formidable hurdles.

MOVING BEYOND MINUTES
With the onset of competition, and the Internet, service providers started struggling to adopt new business models based on delivering practical applications as opposed to primarily marketing flat-rate, �always on� bandwidth such as private lines. It�s been a slow go, and some analysts now believe that carriers� very survival depends on accelerating the transformation. Telechoice President Christine Heckart has stated that within the next few years service providers must not only lower costs of delivering services 20 percent per year, but also start moving away from static models. It�s time to take the plunge and trust that more flexibility will translate into more �minutes� or other unit of revenue.

With dynamic service creation, carriers will face the issue of suddenly being in the design business as never before, something they will need the help of vendors and other third parties to get comfortable with. The shift will also necessitate new sales and marketing strategies, and cooperative forums where carriers take active roles in working with partners ranging from developers and platform vendors to other providers and customers themselves.

Technologically, service creation is equally daunting. It will require carriers to open up access to their networks and back office systems as never before, and to begin sharing at the edge.

SHARING THE HALLOWED EDGE
For a while, the migration to service creation-based business models will largely entail enabling consumers to self-provision greater speeds and feeds for applications such as video conferencing and multicasting. In these scenarios, a customer might go to the providers� Web site and �order� more bandwidth for a given time period.

Sounds easy, right? It isn�t, because even this seemingly simple transition of control to users affects the entire network and business operations.

Basically, there are three ways to use bandwidth services to create additional value in a network. The first is to create different tiers of available bandwidth; the second, to offer throughput guarantees; and the third is to offer QoS guarantees. Bandwidth services may be combined with other service layers such as the network or service aware layers to create additional value in networks or among applications.

It is important that service creation platforms offer an interface structure that can accommodate these bandwidth service offerings. A service provider must be able to define their bandwidth offerings in terms of the guaranteed minimum bandwidth, maximum allowed bandwidth, accounting requirements, and the relative granularity of the offering. The granularity could be defined on a per-subscriber, per-protocol, per-destination, or per-flow basis. The service creation platform should offer the structured interface in a standard and open fashion. Several options exist, including XML, CORBA, and SNMP.

Offering bandwidth services in a structured fashion on open interfaces allows service providers to more easily integrate the service creation platform into their existing management, provisioning, and BSS models, and to rapidly turn up new bandwidth services.

Beyond Basic Bandwidth
Even a seemingly simple bandwidth-oriented application, requiring no actual development or service �creation,� employs a multilevel service creation model that entails formidable back-end integration. Now, if we fast-forward to the onset of full-blown service creation where business users are developing, or commissioning development of custom applications running on provider networks, now we�re talking some serious interoperability issues for the provider.

To customers, it must appear that they are driving the network and controlling the bandwidth layers via point-and-click mechanisms. For higher-level value-added services more advanced layers of the service creation model come into play. For example, ASP services involving network-based software such as CRM services or back office manufacturing systems not only require software hosting but actual bandwidth guarantees, QoS, and security.

A New Breed of Vendor Relationship
Providers will clearly need to foster new vendor relationships. From the service provider�s point of view, a big plus of open service creation is the promise of liberation from vendor development and delivery schedules. In the narrowband world, carriers are used to investing in multi-million-dollar Class 5 switches only to have to go back to the vendor and pay steep licensing or development fees every time a demands a new service. Worse yet, they have to subjugate themselves to the vendors� delivery schedule. But on the positive side, service providers could proceed for the most part with confidence that neither their Class 5 switch nor the switch manufacturer was going anywhere any time soon.

Now, open service creation promises to free service providers not only from vendor development constraints, but also from the risk of having the vendors sell the new services, once developed, to the competition. But service creation platform vendors must prove they can deliver.

Skeptics could hardly blame providers for being a little gun shy on deploying unproven next-generation infrastructures. Straight off, there�s the fact that many equipment suppliers in the space are untried start-ups and migrants from other next-generation spaces such broadband aggregation. In some cases, the technologies of next-gen vendors repositioning themselves into the service creation space have already failed to scale, integrate, or deliver the promised economic benefits expected.

THE TRUE MEANING OF �OPEN�
There is also the issue of how the new model will work. Providers could be no better off than before if after deploying the basic service creation architecture they still have to pay the service creation platform vendor to enable open access to different layers. Already, some vendors� pricing packages call for investments of $75,000 to $100,000 for basic CORBA licenses needed to get started and additional costs to open deeper levels of the platform, such as the network management and element management layers, a pricing model not unlike the pay-as-you-go Class 5 switch model. To rightly be considered �open,� a service creation platform should be based on a publicly described set of programming interfaces that enable unlimited access to 100 percent of the platform without charging for additional features.

PROFITABLE EVOLUTION
All of these factors, and the current financial climate in telecom add up to one reality: The evolution to service creation-based business models must take place soon, and it must transpire more smoothly than most introductions of next-gen technology to date. Obviously it won�t happen without a few complications along the way, and carriers that have proven change-resistant despite regulatory and competitive threats may find themselves at a profound disadvantage in not having weathered their share of Charlie Brown-like deployments.

Because this time there is literally little margin for error.

Craig Forbes is vice president of marketing at net.com. net.com offers open, non-proprietary service creation platforms. These platforms are designed to enable service providers to achieve long-term profitability by adopting a new business model based on service creation. A global networking company, net.com pioneered the concept of multiservice networking and today is a leading innovator of service creation. For more information, visit www.net.com.

[ Return To The April 2002 Table Of Contents ]



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