Moving convergence from out of reach to profitable reality

Thanks to convergence, we have the remarkable flexibility to communicate via voice, video and data – separately or all at once, at home or in the office and even as we travel. It represents a unique and unparalleled channel for service delivery and for carriers it’s a seemingly straightforward concept. However, when it comes to execution, it is a potential nightmare. But it’s not all bad news. After years of struggling to find the Holy Grail – delivering converged services that customers will pay for – it is becoming a reality. At the heart of that reality is innovation and partnership. Service Delivery DilemmaFew industries face the same level of competition and the need for rapid innovation as the service provider market faces today. Communications companies and cable operators are constantly looking to develop and deliver compelling new services to stay one step ahead of the competition. Infrastructure is at the core of the dilemma, where it’s most difficult to integrate services. Multiple partners mean different architectures to integrate and real challenges around how to bill for services. Today, service provider networks consist of two basic layers: the network layer (usually IP) and the network control layer, which is moving to IP Multimedia Subsystem (IMS). Because most carriers recently upgraded their network layers, they’re not eager to make more changes that could jeopardize the stability or uptime of their networks. Instead, they are seeking network control layer tools that will enable the integration of disparate partner systems so they can deliver tomorrow’s hot new service to customers before their competitor. But with cost constraints and the pressure to do more with less, they can’t afford to "rip and replace" and are looking for simple ways to utilize existing technologies. Strategically, the best way to achieve value from current infrastructure is to loosely couple partner systems using technology based on Web services technology called service delivery platforms. This technology enables software and hardware components of core service provider networks to communicate with each other, extending existing technology and infrastructure investments. And service providers around the globe, including Bell Canada, France Telecom, BT, AT&T and Celcom Malaysia, are turning to solutions such as Microsoft Corp.’s Connected Services Framework (CSF) for help. While IMS provides core functions within the network that help drive a diverse range of compelling Web services, a software-powered network such as CSF helps operators create, aggregate, deploy, and manage those services. As a layered solution, each leverages the other’s strengths to provide seamless connectivity across wired and wireless networks and among network operators, and to link that capability to the world of Web-based applications and services. The result is the ability to easily create and deliver different Web-based services on existing IP-MPLS infrastructure – an infrastructure where partners can plug and play their applications quickly and easily, which are then integrated with the carrier’s billing system. Additionally, services can be categorized into composite services and meshed with the operations (OSS) and business (BSS) support systems. This simplifies the complexity of delivering value-added services behind the scenes and enables service providers to quickly respond to the demand for new services. With this level of support, carriers can overcome back-end challenges and concentrate on delivering the most comprehensive and competitive communications on the market. But this still requires investment and today’s carriers are unwilling to take it on by themselves. For converged services to truly succeed, new business models are needed. Enter uncharted territory with a strategic partnerSo where does partnership fit into all of this? The reality is that for today’s communications service provider to remain competitive, it must keep its costs as low as possible. The old adage that you have to spend to grow doesn’t always sit well with shareholders who are seeing their dividends dwindle. Strong partnerships that deliver win-win benefits are the only way to get ahead in a world where capital expenditure budgets are shrinking. When evaluating service delivery mechanisms, carriers need to think about how to share the risks and the rewards. New revenue-share models are being introduced and explored, and often they are the best way to test out new services and learn where the true revenue will be derived. Something Old, Something New, Something PersonalizedIn addition to having a software-powered platform that enables the simple creation and delivery of converged services, as well as a revenue-sharing business model, another critical success factor is to deliver what the market wants. Customers, both consumer and business, have high demands for converged services. They want each of their devices (PC, smartphone, TV, etc.) to be able to act as their communication and entertainment centre. And often it’s different devices at different times, in different places – a smartphone while traveling for business, a TV for home. But even more than that, they want a customized experience. For a new service to succeed, it’s got to be something customers will pay for. For example, TV service by channel instead of by package, streaming radio stations that play your favorite jazz tunes, and mobile content services providing the results of the World Cup, are indications of the level of personalization required to gain new customers and new revenue from current subscribers. One of the most economical and profitable ways for service providers to deliver new services is to leverage one piece of content and deliver it in multiple formats. A clip of last night’s winning home run can be delivered online or via mobile device as a video, but can also be stripped of video and downloaded as an audio clip or turned into a text message. However, the true home run for service providers lies in partnering with companies who have existing services, with existing customers. Consider the following example: Tim and Bob are each watching IPTV at home. With Windows Live Messenger, Tim can see that Bob is watching Formula One and switches his channel to watch Formula One with picture in picture, while also watching the news. As buddies on each other’s Messenger lists, both can see that they’re online and watching the same program, and after a few minutes, decide they can do better than the pros. So, Tim calls Bob via VoIP and invites him to play Project Gotham Racing 3 on Microsoft Xbox Live. And with picture in picture, they can still keep an eye out for the Formula One results. With CSF, they’re both playing Xbox, are talking to each other via VoIP and are watching IPTV, and all services are connected to the carrier’s billing system. Over time, the service provider can leverage CSF and web services to expand the options available to Tim and Bob by bringing on new partners, such as a merchandising partner to appeal to their Formula One interests. The opportunities are endless. Here and NowThe opportunity for converged services is massive and thankfully, it’s no longer just a pipe dream. With the help of software-powered platforms to simplify the back-end, the ability to create, deliver and bill for converged services is now a reality. We’re now embarking on the future of anytime anywhere information, communication and entertainment with simple billing - which is good news for carriers and for customers. As service providers continue to leverage software-powered networks and utilize new service-enabling technologies, execution is simplified and profits are amplified. Michael Weening is Microsoft Canada’s director, communications sector.

Moving convergence from out of reach to profitable reality

News | July 24, 2006

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