Editor's Note: This holistic SearchTelecom.com series, Service delivery platforms: Changing the networking paradigm, telecom-industry consultant Tom Nolle looks at how SDPs fit into next-generation network architecture and the business advantages they provide for carriers.
Using software-based service delivery platforms (SDPs) to host service components and support advanced service creation techniques can allow network operators to improve the speed at which their services are deployed and validated.
Customer information can be used to make services more relevant and is a unique property of the user's individual relationship to the network operator.
Tom Nolle, President, CIMI Corp.
SDPs also enable providers to gain access to emerging opportunities that are often addressed by the over-the-top model by providers without the advantage of being able to guarantee network performance.
The same tools can also provide operators with good differentiators relative to over-the-top offerings. That differentiation is important to sustaining profits in new service areas and countering the effects of the lower capital investment typically required for over-the-top services. Why? Because the alternative to feature differentiation is price differentiation and eventual commoditization.
Embracing the quality of service (QoS) opportunity
Quality of service (QoS) is one area where network operators have always sought differentiation. In many ways, though, QoS is the most difficult form of service differentiation to validate. The problem is that the almost-universal service that buyers experience with the Internet has created a tolerance for best-effort performance.
Popular over-the-top Voice over IP (VoIP) services frequently experience significant variations in voice quality linked to problems with variable delay and packet loss. Yet these services remain popular. Buyers are often willing to roll the dice on QoS, falling back to an assured model only when best-effort solutions aren't good enough. This makes it difficult to secure a meaningful price premium for QoS.
Regulatory policy can be problematic with QoS, as well. The "net neutrality" movement has made it difficult to create premium handling options within the framework of the Internet because policies often prohibit handling or expediting based on traffic type or partner site. It's hard to predict how far these factors might go in the future; for that reason, it's best to create feature differentiation beyond QoS. Fortunately, the SDP model offers many opportunities for this.
Moving from QoS to "quality of experience"
Taking QoS just a small step further and moving to quality of experience (QoE) can make a difference. Most best-effort services are not supported in the technical sense. As a result, many network operators have already learned that they can profitably sell technical support even for non-network elements like PCs.
Integrated lifecycle management, created by combining service logic and service management, is essential in assuring operations economy of scale. Integrated lifecycle management can allow a service provider to deploy customer care as a service, creating both a direct revenue opportunity and a differentiator.
In this context, QoS can be positioned as a way of further reducing support costs by decreasing the number of support incidents, providing a valuable differentiator as well.
But in the move to QoE, operators must first address what the experience is, which means addressing how features beyond simple connectivity can be exploited. By relying on transport and connection, QoS isn't fighting operator disintermediation; it is only changing the terms of an exchange that still leaves someone else in control of the user's service.
If the Internet provides an open connectivity model, then simply exploiting connectivity isn't enough to create differentiation. The key lies in stepping beyond connectivity to the creation of service value through the optimal mapping of connectivity tools to consumer and business needs. This kind of value is available both on a per-service basis and across the boundaries of traditional services.
Weaving customer preferences into service creation
Knowing the customer -- including needs, behaviors, characteristics and preferred tools -- is clearly a part of maximizing average revenue per user (ARPU) and is therefore a business goal. But it is also a technical goal and a critical element in service value differentiation for network operators.
Operators have critical information about users, the relationship between users and their communications services, the status of users on each available channel, and so on. All of this information can be used to make services more relevant, and all of it is a unique property of the user's individual relationship to the network operator.
The most valuable differentiators are likely to come from exploiting symbiosis among the services, through the fact that services are built on common tools. Not only can SDPs that support the framework for the key common service elements of identity, presence, location and demographics exploit these to create differentiated services, they can use the common framework of feature creation and orchestration to combine elements of multiple services into a single cohesive service framework.
Presence, or the receptivity of a user to communications, is an example of something valuable both on a single-service level and across services through symbiosis. Knowing that a given user is on the phone is obviously important with regard to how other incoming calls to that phone should be handled. It might also be valuable to determine how calls to the same user's cell phone should be handled. The same is true for instant messaging (IM) or email. If all of the information from a user's repertoire of services is centralized in a single repository, then every service for that user can draw on the repository and magnify its value to the user by doing so.
Interweaving information to create differentiated services
Services that interweave information from all available sources are clearly more valuable. Just as important, they are "sticky" and more easily differentiated based on quality and availability. A simple voice service over IP may have zero cost and may therefore be preferable to making expensive calls, because the option to fall back to high-quality reliable public voice service exists.
This kind of IP voice service will therefore bleed revenue from an operator's traditional voice services. But if the operator can present a set of features and capabilities beyond simple voice services that the user relies on, then the service is unique, and basic over-the-top voice can no longer supply the same experience.
These service-based value-adds are also critical when moving out of voice services into messaging or even content. Much of the focus of SDP discussions has been on voice services, but that is not because SDPs can't provide other service types. Voice is critical because it's the most personal service ever consumed. By providing strong voice support, operators build their service information resource pool and validate new features and capabilities in other service areas.
So, fundamentally, a service delivery platform is more than a server, because the SDP service model is more than an overlay. SDPs support focusing all network assets on the totality of the user's experience -- the most critical element in QoE and the surest path to revenue and profit success.
About the author: Tom Nolle is president of CIMI Corporation, a strategic consulting firm specializing in telecommunications and data communications since 1982. He is a member of the IEEE, ACM, TMF and IPsphere Forum, and the publisher of Netwatcher, a journal in advanced telecommunications strategy issues. Check out his SearchTelecom.com networking blog, Uncommon Wisdom.