Full Article: Pilot 2.0 – How to activate Telco 2.0 business models quickly using legacy systems

NB A full PDF copy of this briefing can be downloaded here.

This special Executive Briefing report summarises the brainstorming output from the Pilot 2.0 section of the 6th Telco 2.0 Executive Brainstorm, held on 6-7 May in Nice, France, with over 200 senior participants from across the Telecoms, Media and Technology sectors. See: www.telco2.net/event/may2009.

It forms part of our effort to stimulate a structured, ongoing debate within the context of our ‘Telco 2.0′ business model framework (see www.telco2research.com).

Each section of the Executive Brainstorm involved short stimulus presentations from leading figures in the industry, group brainstorming using our ‘Mindshare’ interactive technology and method, a panel discussion, and a vote on the best industry strategy for moving forward.

There are 5 other reports in this post-event series, covering the other sections of the event: Retail Services 2.0, Content Distribution 2.0, Enterprise Services 2.0, Open APIs, Technical Architecture 2.0, and Devices 2.0. In addition there is an overall ‘Executive Summary’ report highlighting the overall messages from the event.

Each report contains:

  • Our independent summary of some of the key points from the stimulus presentations
  • An analysis of the brainstorming output, including a large selection of verbatim comments
  • The ‘next steps’ vote by the participants
  • Our conclusions of the key lessons learnt and our suggestions for industry next steps.

 

The brainstorm method generated many questions in real-time. Some were covered at the event itself and others we have responded to in each report. In addition we have asked the presenters and other experts to respond to some more specific points.

 

Background to this report

Sometimes new business models feel too complicated to undertake. However, new methods and technologies are enabling operators to trial new business models without having to change their existing systems or processes. This session takes, as an example, a key Telco 2.0 ‘use case’ that combines video distribution, advertising and customer data, and shows how operators could activate it fast.
 

Brainstorm Topics

  • Where to start with Telco 2.0?
  • How to minimise the cost and disruption of entering the Telco 2.0 market?

 

 Stimulus Presenter

  • Andrew Thomson, VP Global Solutions, Infonova

 


 Facilitator

  • Simon Torrance, CEO, Telco 2.0 Initiative

 

Analysts

  • Chris Barraclough, Managing Director, Telco 2.0 Initiative
  • Dean Bubley, Senior Associate, Telco 2.0 Initiative
  • Alex Harrowell, Analyst, Telco 2.0 Initiative

 

Stimulus Presentation Summaries Pilot 2.0

Andrew Thomson, VP Solutions, Infonova said that Telcos have a huge diversity of legacy networks which they are now transitioning to common IP systems, and also a huge investment in associated BSS-OSS and MIS. At the same time, the BSS-OSS processes are moving from batch-processing to real-time working.  With this complexity, transformation can only really be done in stages resulting in new and old systems coexisting. Managing this is a serious challenge.

So where do we start? There are a number of possible entry points:  New bundles; a new app store; order-to-cash; new channels:

Bundling

A non-intrusive approach to bundling; this means that  an aggregator handles the interfaces to both wholesale customers and to the retail side, fixed and mobile; it can also drive the Business Intelligence and reporting processes.

App Store

In the app store example, the aggregator is a platform acting as a proxy for multiple sources of APIs in order to drive a multi-operator, or operator multi-network, app store. It wraps the operator, or primary operating entity, and other operators in order to provide a single virtual interface for developers and multiple virtual operators for end users.

Order to Cash 2.0

Operators could create a new revenue source by using the capabilities enabled by the BONDI initiative to let customers choose services from other carriers directly from the handset.  This sounds like a threat, but by the same token you could include many other services and businesses in your own bundles. Aggregation, again, is a crucial enabler for this – someone needs to aggregate services from multiple operators

New Channels

Why not use car dealers? Bundling navigation, commications, or security tracking with the vehicle would be tremendously attractive to car dealers and end users. This then opens up a lot of other possibilities – advanced advertising and marketing, and you could deploy the full range of Telco 2.0 features in order to provide extensive customer feedback.

In summary, the latest technology applied as an external aggregator bureau is actually cheaper and quicker than legacy. This makes a wide range of new business models possible.  We think this will lead to a crisis for the systems integrators.

A question from the floor: This bureau model may further commoditise the network. How should we deal with this risk?

Andrew Thomson replied that it might have that effect. New technologies have a big effect on these things – as the presenter from Oracle said, anyone can do those complex call centre-CRM installations now.

 

Participant Feedback

Introduction

One of the recurring themes at the event was ‘where to start?’ with Telco 2.0 business models. Although many participants could perceive where operators would like to be eventually, there was much less belief or consistency in working out how to get there.

Most recognise the need for caution. C-level executives will, quite rightly, take time to buy into the idea, as will investors: proof points will be needed. And Telco 2.0 projects will need to be aligned with various other transformation initiatives, such as more moves to new OSS/BSS stacks or outsourcing of important functions. In addition, any major new programme of investment (for example in new hardware platforms, or extensive developer-centric marketing and support) is likely to be burdened by delays and much closer business case scrutiny in the current economic climate.

So, Telco 2.0 believes that quick and influential wins might be achieved via pilot projects – illustrating the power and vision of two-sided models without needing complete reinvention of overall company strategy first. As the economy picks up and executives are more inclined to take risks again, these proof-points can then be used to accelerate much larger programmes of change. Clearly, the appetite for risk will vary by operator – as will the most accessible ‘low hanging fruit’.

Audience input around piloting spanned a wide range of themes – from the technical to the organisational, and from attitudinal shifts to more specific early niches. Overall, all these elements will be important to align.

 Feedback: Technology

Some of the participants took a technical view on piloting options, looking at easing platform deployment

·         [Do pilot projects] In the cloud. [#3]

·         Had similar thoughts about combining different SDPs into one coherent system. [#9]

·         Focus on an incubator approach utilizing NGOSS and state of the art SW technology (clouds, virtualization, SOA, Web Services, open source wherever possible) so that the cost basis allows/fosters lower risk and new biz models. [#12]

o    Re 12. Encourage unconventional thought and development — break the old Telco mindset. Must use open source yes, but more than just for cost — because OS pushes the technology innovation envelope forward. [#42]

·         Expose current Telco APIs to developers through a developer portal. [#13]

·         Need OSS/BSS standards in this area to create reusable industry fabric. [#17]

·         Go to the more agile parts of your business, e.g. ISP, leverage their SDP and / if existing / their billing engine. [#20]

·         Involve third-party developer with an own market to add new features coming from network capability mash up. [#32]

·         In the cloud by not impacting own IT. [#34]

·         Define clear and normalized system boundaries. [#41]

·         Connect web scale platforms with APIs to Telco backend services and data to enable new services. Easy useful example around user location: connect Telco current user location information to Yahoo!’s Fire Eagle platform to enable mobile and PC location-based services now. [#95]

·         OSS/BSS platforms are largely the bottlenecks and can’t be used for Telco 2.0 — they are largely 2-3 generations old and take to long to rollout. [#96]

·         Biggest issue at Telco’s is cost of rolling out a service, lots of people have to be involved, and cost of failure is very high. This stymies innovation. Doing this on a low-cost platform reduces cost of trialling a service before then fully rolling out the service. [#92]

·         Build it on android. [#84]

·         Need some open APIs to attract the VAS. [#47]

·         Build a hosting environment where 3rd parties can deploy new service candidates, and provide the community tools environment for collecting feed

·         Open the API to a large amount of developer (crowd sourcing). [#50]

·         Expose Telco network capabilities in a secure and simple way to 3rd party application providers; start with essential values first, e.g. identity management and authentication. [#90]

·         See the benefit of one API and BONDI to deliver new models. [#69]

·         Normalize the data set generated by collecting wide variety of data source. [#71]

·         Use development environments which allow reuse (SOA). [#77]

·         Telcos have 100s of product catalogues holding their existing products; make sure that the product on the other side of the business models is built the same way. [#79]

 Feedback: Organisation and structure

Many comments focused on structural suggestions and solutions – which parts of the Telco organisation are best-placed to work on new business models. Telco 2.0 believes that this may vary by operator – but that there is also a risk that new turf battles might emerge as separate teams claim ownership independently. A significant proportion of respondents seem to believe that external companies or cross-industry collaborations have a greater chance of success than in-house teams.

·         Don’t do it inside the Telco, create a small JV or group. [#2]

·         Create an open source community. [#4]

·         One of two approaches: New-org or New-co. But certainly not business as usual. [#5]

·         Use MVNO’s. [#6]

·         Via MVNO. [#49]

·         Use a bureau model to aggregate and provide new services. [#7]

·         Get clear on the financial model(s). [#10]

·         Clubbing together with other Telcos to make a global community to compete with global OTT. [#15]

·         Create a new breed of service providers rather than the traditional Telco ones. [#23]

·         Get going outside of the organisation in a separate project with incentives. [#27]

·         Create an independent organisation. [#30]

·         Work with a number of partners to develop a cross industry proposition that adds customer value and that is sustainable given future innovation and running costs, and then open it to industry. [#25]

·         Form a small strategic group and leave them alone for 6-12 month. [#37]

·         Set up an internal VC company. [#72]

·         Use your labs/R&D to start in stealth mode – its just innovation. [#73]

·         Do skunk projects. [#75]

·         Get an industry body e.g. GSMA to launch a cross-operator commercial trial of simple web-based developer APIs and design detailed metrics to measure its success. [#58]

·         Form partnership with 2-3 operators and build a solution together … shared ideas, expenses and solution. [#59]

·         Has to be done ‘outside’ the Telco or it won’t move fast enough and will be constrained by legacy. [#83]

·         Enlist support from executive champion to empower a separate internal group. Ensure open access to resources/databases and allow team to innovate without partisan or corporate boundaries. Launch service to target demographic. [#85]

·         Incubators. [#63]

·         Don’t go to a big SI or consulting company, this is the old model. Go small, innovative, quick companies spend < 10k and three months to see what is possible. Be willing to move fast means breaking down the barriers which will require top down support. Kind of like BT buying Ribbit without having to acquire if you don’t have the money. [#64]

·         Create an ecosystem environment. [#67]

·         Start it inside Telcos, with Telco resources or community education projects. It’s the only way to put Telcos sharing information. Show value gained of this and it’s easier to convince them on what they have to gain. [#80]

·         Implement business models (not just advertising) based on behavioural analysis of actual use of the broadband pipe – otherwise we will always be “dumb fat pipe” Co. [#86]

·         There are several service bureaus out there but their business models foster bad technology so that you have to pay for changes. [#91]

 Feedback: People and culture

It is also already clear that human factors and behaviours will play as important a role in the early Telco 2.0 days. Changing corporate attitudes and philosophies clearly cannot happen overnight, but it appears that psychology may be as important as technology in getting the ball rolling.

·         Integrate creativity and playfulness. [#8]

·         Stop talking about it and just get on and try it. Find a simple idea and/or a small innovative to company to work with and give it a go. When you consider the business case think about how much you lose on mobile data today :). [#11]

·         Just do and get out fast if no go. [#28]

·         step1: need a strong commitment at Board level. [#24]

o    step2: work on ecosystem for trials. [#48]

§  step3: define an ‘easy to use’ app offering. [#61]

·         Being finally bold and give it a try. [#29]

·         Sidestep the AIB (a**holes in the boardroom) problem. [#38]

·         I think the perceived risk of cannibalisation is stymieing change. Education still needed. [#40]

·         Don’t be afraid to try something and get negative feedback. Be prepared to react quickly to customer feedback. [#56]

·         Ask your retail group what they fear most THEN DO IT! [#89]

·         Forget about structural limits focus on making customers passionate about you. [#54]

·         Have to develop/create environments which allow the operator to take risks (allow failure). [#88]

·         Strange how during this conference we have hardly focused on the customer, maybe time to engage with these individuals. [#74]

·         Surprise the core business. [#82]

·         How about polling the customers? [#65]

·         Need to convert business model from platform segmented to a total audience value model. [#39]

·         Invite upstream customers into a working forum with selected vendors and carriers in an open trial which publishes its findings and encourages participation from the developer community – pose a problem for the upstream customers to the developers and incentivise them to solve it in the framework. [#57]

 Feedback: Go to Market

The concept of piloting Telco 2.0 projects quickly, but on a small scale seems to have resonated well. But there was much less consistency in the precise approach to follow. Some will be cautious and find a suitable small but homogeneous marketplace, while others are looking at other ways to segment their targets or just find a set of “tame clients” to pursue first.

·         Small representative market. [#14]

·         Step by step with clear and beneficial use cases. [#18]

·         Do some very profitable cases with large companies re-engineering some processes. [#19]

·         Do a limited pilot with one pilot partner. E.g. suitable for sender pays for data models. [#21]

·         Experiment in a new geographic market, maybe in conjunction with a local tier 2/3 player. [#22]

·         Partner with IBM or Accenture & target a specific vertical enterprise market. [#31]

·         A service at a time using a bureau model. [#43]

·         Do the proof of concept first. [#44]

·         Work with selected companies and trial, then develop a case study and show the value to other industry sectors. [#45]

·         Focus on a vertical; build on use cases and then move on to the next. [#55]

·         Conduct a small-scale pilot with a key strategic customer to understand the benefits and consequences of the new business model. Make sure that the business model experiment is aligned with a new customer business model. I’m specifically talking about Enterprise customers here which will use telecom services as a fundamental enabler for deliver their own industry sector-specific services. [#51]

·         Find ‘tame’ customers, e.g. universities with telecoms expertise. [#93]

·         Build a service with some friendly ‘captive’ internal customers e.g. your own employees or small subsidiaries or departments. [#78]

·         Identify a customer / segment and work with them / it to generate the solution. Be prepared that some of the solution can be provided outside of the Telco. [#76]

·         Do a small user experience pilot and ask your kid to trial it. [#81]

·         Same approach as piloting new radio technologies – find somewhere small & isolated to try first, e.g. like an island territory or similar, with ring fenced local operations. [#60]

·         Focus on how Telco can add value in new verticals like healthcare or auto. [#87]

·         Create an option play in an adjacent market and test the model in that domain. Do it with non Telco people. [#66]

·         [Get] feedback from early users. [#62]

·         We already do a pilot with tom-tom. They get our anonymized mobile location data and are able to derive traffic density and jam information from that. Tom-tom paid for the platform and a recurring fee. [#70]

 Feedback: We’re all doomed, doomed!

Although there were also some defeatists (or at least, humorists) who talked about Internet players and suggested that if you can’t beat ’em, then why not join ’em?

·         Just wait, and let Apple do it for you :). [#26]

·         Acquire Amazon. [#36]

·         Turn outside like BT buying Ribbit. [#46]

o    Yeah but BT will destroy Ribbit. [#52]

·         Talk to Google. [#68]

Lessons learnt & next steps

The main take-out from this session is that there is no single clear path. The feedback yielded dozens of suggestions, many of which make sense on a standalone basis. The appropriate options for any given operator will clearly depend on its specific circumstances – fixed vs. mobile, tier 1 vs. tier 2, national vs. international, age & capability of OSS, maturity of existing API and Telco 2.0 programmes, and numerous other criteria.

However, one theme came out strongly throughout the event: do something quickly. There is insufficient time to pursue the usual protracted Telco timescales for research and deliberation. This means that areas with long lead times – such as government projects – are typically unsuitable. Some target industries are also experiencing lengthening sales/decision cycles in the recession – these are also not optimal for pilots.

Instead, focusing on sectors or groups capable of making quick turnarounds – with easy measurement of success/failure – are paramount. Web-based companies are often the most flexible, as are some academic institutions. There may also be a geographic dimension to this – countries with low regulatory burdens, or where it is unusual to have projects stuck for months with lawyers, are attractive for piloting purposes.

Working alone may be fastest, but collaborating with other operators is likely to be more effective in demonstrating validity to the Telco 2.0 concept.  Balancing this natural tension will be important in the near-term.  Gathering a small collection of operators together to work on tightly defined projects seems sensible as these can morph, over time, into larger scale activities with a larger ecosystem.

The Telco 2.0 Initiative is happy to work with any individual operators looking to identify early options. But some general short-term guidelines include:

  • Get a credible senior (board member) executive to sponsor activities in this area – preferably the CEO. Don’t try and build something without this support as a new business model will never succeed with the will to change at the top;
  • Realistically assess the likelihood that the corporate culture and systems will sustain ‘maverick’ Telco 2.0 operations. If it can, it is probably worth setting up an in-house group to work closely with relevant IT and operational units to select pilot areas and capabilities. But be honest with yourselves – if this will get mired in bureaucracy and politics, first seek an alternative approach outside the main business;
  • Where possible, avoid trials which need software or devices to be ‘hard-coded’ as making changes to beta versions is difficult and distribution issues will limit adoption. Instead, using the web or browsers as an interface enables any changes to be made on the server-side, on an ongoing basis;
  • Web-based trials have another advantage – multiple versions of the same underlying service can be developed in parallel, enabling project managers to see immediately what works and what doesn’t, by comparing feedback from separate groups of customers;
  • Perform an audit of current Telco 2.0-type initiatives across the whole company. Highlight any apparent duplication of effort, and predict any likely areas of tension or internal competition as early as possible. This is not trivial – in-fighting can kill projects quickly;
  • Assess and contribute to relevant industry-wide collaboration projects- GSMA OneAPI, OMTP BONDI, etc. Send representatives to developer meetings of competitors or peers elsewhere in the world, or in adjacent technology markets;
  • Look for any internal groups that could themselves act as early clients for new service propositions. It is easy to be blind to the obvious: if communications-enabled business processes are valuable, why not communications-enable your own processes first?

In this case, it is difficult for Telco 2.0 to suggest long term actions – these are obviously dependent on the results of the earlier pilot projects!

Full Article: Technical Architecture 2.0 – On-Demand Networks & OSS-BSS, User Profiles, Enabling Services

NB A full PDF copy of this briefing can be downloaded here.

This special Executive Briefing report summarises the brainstorming output from the Technical Architecture 2.0 section of the 6th Telco 2.0 Executive Brainstorm, held on 6-7 May in Nice, France, with over 200 senior participants from across the Telecoms, Media and Technology sectors. See: www.telco2.net/event/may2009.

It forms part of our effort to stimulate a structured, ongoing debate within the context of our ‘Telco 2.0′ business model framework (see www.telco2research.com).

Each section of the Executive Brainstorm involved short stimulus presentations from leading figures in the industry, group brainstorming using our ‘Mindshare’ interactive technology and method, a panel discussion, and a vote on the best industry strategy for moving forward.

There are 5 other reports in this post-event series, covering the other sections of the event: Retail Services 2.0, Content Distribution 2.0, Enterprise Services 2.0, Piloting 2.0, Open APIs 2.0, and Devices 2.0. In addition there will be an overall ‘Executive Summary’ report highlighting the overall messages from the event.

Each report contains:

  • Our independent summary of some of the key points from the stimulus presentations
  • An analysis of the brainstorming output, including a large selection of verbatim comments
  • The ‘next steps’ vote by the participants
  • Our conclusions of the key lessons learnt and our suggestions for industry next steps.

 

The brainstorm method generated many questions in real-time. Some were covered at the event itself and others we have responded to in each report. In addition we have asked the presenters and other experts to respond to some more specific points.

 

Background to this report

The implementation of new ‘Two-Sided’ Telecoms Business Models has major consequences on telco network architecture. Perhaps most importantly, data from separate internal silos needs to be aggregated and synthesised to provide valuable information on a real-time basis. Key process interfaces that enable new services must be made available to external parties securely and on-demand. Network and IT functions must start collaborating and function as a single entity. Operators need to migrate to a workable architecture quickly and efficiently; vendors have to support this direction with relevant new product offerings and strategies.

Brainstorm Topics

  • What are the implications of adopting 2-sided business models on telco technical architecture?
  • What does the roadmap to a Telco 2.0 architecture look like?
  • As the network becomes more intelligent to support smart phones and App Stores, what are the most important investments for telcos?
  • What are the priority areas for transformation to enable new services?
  • Why are user profiles so important for telcos?

 

Stimulus Presenters and Panellists

  • Werner Vogels, CTO, Amazon.com
  • Richard Mishra, Director, Strategy and Standards, Amdocs
  • Alireza Mahmoodshahi, CTO, COLT
  • Paul Magelli, Head, Subscriber Data Management, Nokia Siemens Networks
  • Michel Burger, Head, Service Architecture, Vodafone Group

 

Facilitator

  • Thomas Rambold, CEO, DESS, Associate, Telco 2.0

 

Analysts

  • Chris Barraclough, Managing Director, Telco 2.0 Initiative
  • Dean Bubley, Senior Associate, Telco 2.0 Initiative
  • Alex Harrowell, Analyst, Telco 2.0 Initiative

 

Stimulus Presentation Summaries

Technical Architecture 2.0

Thomas Rambold, Associate, Telco 2.0, presented on the end of clearly defined services – we now face thousands of segments, and no distinction between ”just voice” and ”just data”. Broadband means that I can simultaneously be an Amazon user, a father, and many other things. Distinctions between enterprise and consumer services, private and public, have changed.

This implies much greater complexity in the customer relationships; the Over-The-Top (OTT) players have struggled to get their arms around the total relationships. Carriers have identified Fort Knox on the diagram (customer and network data management) as somewhere they can excel.

The walled garden is no longer sustainable. OTT offerings are already growing fast and, when they start using Telco APIs in earnest, this will accelerate. We need to link these services with customers – the carriers are the only actor capable of acting as a broker between the API users on the one hand, and the full suite of customer data (residing in ‘Fort Knox’) on the other. It is vital to be on-demand, if not necessarily truly real time. You can’t make people fill in forms to start a service – authentication, sign-on and billing and payment need to be automated.

Paul Magelli, Head, Subscriber Data Management, NSN: ”Would you be happy letting a Telco do data mining on you that you wouldn’t tolerate from the Government?”

Currently we are struggling to bridge the gap between the network and the OSS/BSS systems.  We simply can’t get the on-demand response we need.  So now we’re merging telco and IT organisations together, analysing the telco and IT environments, trying to get them to work together, in concert, and react faster.

The service delivery environment; a year ago, this would have been a big SDP from a traditional telco vendor. But now the services have moved out to the network – into the cloud, into mash-up environments, on to native applications on devices. It’s increasingly challenging to make these services useful and timely and to guarantee security and privacy across all these domains.

 

Service Value Management, Amdocs’ vision for next-generation services

Richard Mishra, Director, Strategy and Standards, Amdocs, said we are living in interesting times: We face sophisticated customers, exotic delivery platforms, and a recession!  Perhaps we need to revisit core values, get back in the box and think more deeply. Revisit the core strengths and disciplines of operating a carrier-grade telecoms network (but not retain the bad attributes).

There is constant talk of service, even by the TM Forum back-office people, who are never seen from outside the Telco. But the next step after resource deployment is, inescapably, fulfilment. And with all this talk of service, what about the shareholders?  Finally, having created the service, spent the capex, and deployed, you need assurance – monitoring service performance against the performance you offered the customers.

We’re working with ever-increasing interdependence between infrastructure, service, consumer and enterprise applications, and devices. This needs diagnostics and monitoring for all these levels, and careful management of the consumer experience.

Our Full Service Provider Integration Framework provides tools for continuous improvement as defined in the left half of eTOM; covered by contracts designed to match. In our deployment in Atlanta, we used this and special tools we developed for the carrier Ethernet network. We didn’t try to recreate the special capabilities there; but we did subject it to the traditional disciplines of managing a carrier network.

As a rule, Telcos no longer customise stuff; we can’t make our own SDH management tools any more, notably for reasons of intellectual property. So it’s now a question of assembling agile value chains from many other vendors, components and sources.

 

Building Trusted Relationships

Paul Magelli, Head, Subscriber Data Management, Nokia Siemens Networks said that customer data plays a key role in Telco 2.0…but does it exist? Is there enough available in our networks?

Nokia Siemens is working on the following assumptions:

1.     A multitude of business models;

2.     Broadband connectivity everywhere;

3.     5 billion subscribers;

4.     Applications all migrated onto the Internet.

This implies that successful applications and services will be information- and subscriber-centric.

Richard Mishra, Head, OSS Strategy and Standards, Amdocs: ”Data will become a treasured part of the business model.”

We really need rich profile information – profiles are what we say about ourselves. It’s clear that there is enough information, but can we get at it? 76% of respondents in our survey think it’s the most important issue; 86% think it’s important for network development.

Consider a use case in banking. To improve contact with customers, we need to know things like: is the customer available? Interested? Is it a good time to reach me? Is this the best way to reach me? Is this the right language? For this, we need the ability to do real-time subscriber profiling as well as historical data analysis.

But it’s more complicated than that. Current data isn’t enough – time series is really important. It is surprising that operators recognise this but haven’t done very much to solve it. Only 14% have real-time data analysis. And identity is more complicated than that – people have multiple devices, multiple SIMs, and multiple identities. Privacy is another big issue. Permission is frequently abused; there is a huge generation gap in attitudes around what constitutes privacy, and the legislation is very different between different jurisdictions (and usually lags the market).

If we could provide a single point of access for managing your identity…huge opportunities await. But it’s crucial to resolve the privacy issue by giving customers control of their own data.

 

Building the business-grade cloud

Alireza Mahmoodshahi, CTO, Colt asked how much do our customers know about cloud computing? Not much, he said, we’ve done well in clouding their minds. He gave a short brief on COLT; its origins in the City of London, its European fibre network, its large enterprise customers.

There is a framework for ICT; the Telco at the bottom, providing dark fibre, bulk data and voice. Then, above that, data centres and IT infrastructure like hosting, co-location, network operation. Then a vast range of applications specific to tasks run on top of that.

Not many operators are enamoured with their position at the bottom of the stack…

…on the other hand, it’s hard to find anyone who can replace the things that Telcos can do. Most clouds don’t offer any kind of SLA, so critical transactional services can’t use them. Traditional clouds are on the left of the diagram, similar to IT infrastructure. Operators don’t want to be penned into the low-value bottom right: they need to push up and left to escape. Meanwhile, clouds tend to have no SLA for the sector from the cloud to the end-user, and not necessarily between the enterprise and the cloud: there are too many participants to provide an SLA covering the whole thing. So the opportunity for the Telco cloud is to provide end-to-end SLAs.

The crucial development to enable business-grade clouds is to virtualise all elements of the system. Then, control priority for applications running on them. This is achieved by queuing them through a COLT-patented policy scheduler; this despatches tasks to a pool of virtualised servers, themselves providing a pool of threads.

Then we set up the API/SDK third-party access to the platform to empower the applications developers. If you want to do this you need to control QoS and also application-layer dispatching across the entire system; carriers are probably the only actors who can offer this.

 

Participant Feedback

Introduction

The fragmented and sometimes opposing views of the audience in the feedback (and voting) are not new or surprising. It is a key indication for service providers and operators that changes are overdue and must be taken seriously. It also demonstrates the complexity of current silo’d approaches, and the inability of a single company to change this. Despite this complexity, operators will have to focus investment on strategically important projects, particularly during these difficult financial times. Such an approach will give us the chance to reduce complexity and reduce operating costs. Most importantly it will enable operators to produce agile technical architectures with the required flexibility to meet customer demands.

 

Feedback: grounds for optimism

The technical architecture session produced some significant levels of optimism from the audience….

·         Promise of new future. [#5]

·         Some real applications of Telco 2.0 model. [#6]

·         Good ideas for large enterprise and government segments. [#12]

·         Triggers my thinking and confirms my assumption. [#15]

 

Feedback: …and cynicism

…albeit tempered with a degree of cynicism about the validity of the examples cited

·         We don’t know when we will get there. [#9]

·         Still industry jargon driven. [#17]

·         All seemed to be a bit ‘defensive’ of legacy models and were more oriented to Telco 1.0. [#18]

o    Re 18 good point. 90% of large carrier environments could not move to Telco 2.0 due to restrictive contracting structures with their existing OSS vendors. To add to the pain, they usually don’t have their source code so they don’t really control their destiny (especially if outsourced). [#43]

·         Mostly still talk, no examples on the ground yet. [#20]

·         Still very much 1.0 and technology driven, to view user and real new business model. [#44]

·         Unfortunately human beings are not compliant to marketers Telco use cases ;-). [#46]

o    46; Telco use cases are uninformed by real data. [#49]

·         Would it be better to define what to do and where to go, before arguing potential obstacles and potential regulatory matter before the idea has started? [#62]

 

Feedback: Customer data issues

In particular, the subscriber data management model seems aspirational, if trust issues can be resolved. However, there were a lot of questions wondering whether Telcos’ use of customer data would be either as accomplished – or consumer-friendly – as Internet-based players like Amazon’s. There also appears to be a debate brewing over whether or not Telcos’ customer data is “better” than that of web players’.

·         Single customer data ‘vault’ from Nokia/Siemens is a great idea; doubtful any carrier brand has the consumer trust to pull this off-more likely for VeriSign, Symantec or someone else. [#25]

o    25 – I agree. There also needs to be reciprocity. I want to be able to authenticate on an operator network with my Facebook ID or similar – or with another operator’s identity. [#33]

·         Very illustrative presentation about profile, profiling and identity. [#39]

·         Nokia Siemens idea seems good, but how can they guarantee that the customer data go to a trustworthy person? The bank manager of today could be the disgruntled laid-off employee of tomorrow selling the data illegally to somebody else. For my part, I rather trust my voice mail box for everybody to leave a message. [#48]

o    48 no business has succeeded by arguing that innovation were dangerous to its established business paradigm. [#51]

·         Give customers even little incentives and they willingly hand over their data. [#63]

·         In France this week a guy spent a night in jail for receiving a SMS whose content was considered ‘security threat’ ….trust????? [#60]

·         Any examples of where operators have offered services using the subscriber profile mgt capabilities discussed by NSN? [#10]

·         In the NSN subscriber profile example, to which extend are the subscriber data exposed to 3rd parties, and by which standardised approach? [#35]

·         For the NSN concept, do we first need a regulatory framework for ‘identity portability’ so that we can churn ID providers? [#37]

·         Why as a user can I not hold my data and share it with who I want, if it is so valuable why don’t I charge for it as well? [#47]

o    Re: 47 THAT IS THE IDEA! The idea of the 2 sided biz model (IMHO) is that your data is valuable. You should sell it by allowing the operator to monetize it with 3rd parties then ‘pay’ you through reduced service charges and greater service coverage/offerings. [#55]

o    47, in a sense you do. You get better products 0n Amazon by giving product feedback; on Blyk you get free minutes and data in exchange for insight and data. Payment from users is not always monetary (it is sometimes data and information) and, likewise, payment to users for their ‘data’ will not be monetary but through increased value. [#61]

·         Further to Werner’s question of who owns the data — who do operators give access to sensitive data? Would customers like it if they know that the carrier may allow their BSS vendors to manage call information or data event records? Do carriers have access to the source code to verify integrity of mission critical apps? [#52]

·         Private information is valuable. Why do not think share the value of private date with the consumer? [#56]

·         Today – what percentage of Amazon’s data it collects is used to improve user experienced and increased engagement + purchasing? [#59]

·         Access to data for Telco 2.0 is regional/legal/societal dependent. Operators need a good PR effort to allow opt in for customers to fuel the two sided revenue model. [#66]

·         Maybe there could be a bureau operator that can abstract the customer and all related data on behalf of the operators … where people that are willing to be Telco2.0 involved can opt in. [#68]

·         Bravo Werner. Telcos need to think about the customer first. What Telcos facilitate the option for customers to send data to 3rd party for monetization opportunities? [#69]

·         Isn’t Telco 3.0 a free connection to the network in exchange for shared consumer behaviour data? [#71]

o    71 could see Google trying this in 5 years time if the cost of Telco network is driven down sufficiently. [#75]

·         People are scared by poor data sunk into Telcos that they have no control over. When is data opening up to cleansing going to happen? [#73]

o    Re: 73 the data is already there. [#76]

 

Feedback: the cloud

There was plenty of interest in the COLT presentation on the Cloud…. but also plenty of cynicism again

·         Colt just showed what Telco 2.0 is all about. That model enables innovation thru cost reduction and state of the art architectures. Why don’t operators run their back office in a similar approach? [#13]

·         Is Colt’s cloud real yet and have COLT sold anything yet? [#16]

·         Bravo Colt. If it exists it is a model as it should be. They sign up for the SLA and they lay forth a bed of enablement. [#19]

·         If Colt has that architecture in operation, they should be running the back office for other Telco operators. [#34]

·         Relative to Colt’s view – what about Salesforce.com who seems to have pulled this off on their own. [#29]

·         Does COLT use its own cloud services? [#38]

·         Where the incentive is for existing OSS vendors who have long terms managed services contracts to innovate and move to Telco 2.0 architectures (e.g. SaaS) like Colt? [#28]

 

Feedback: COLT vs Amazon

… although whether COLT’s vision (or Amdocs’) is as advanced as that presented by Amazon was doubted

·         Amazon ‘eats’ their own cooking (their cloud) and COLT? [#14]

·         What is colt’s business model (price structure) and how does this differ from Amazon? [#8]

·         How does Werner really feel about legacy telecom operator back office Telco environments? [#30]

·         How does Amdocs view Colt’s model? [#23]

·         How would Amdocs view Colt and Amazon models? Seems much difference with their approach. [#7] 

 

Feedback: Carrier-grade – what is it worth?

But do end users really think “carrier grade” is important as the operators? Will they pay a premium for it?

·         I’ll believe in ‘carrier grade’ when enterprises can get SLAs for mobile coverage. [#45]

·         Is carrier grade not shifting now that many users have several alternative means to perform a communication? [#57]

·         Seems the industry still have major problems in freeing themselves from network drives. [#22]

·         Carrier interoperability and collaboration could solve many network issues. [#24]

·         From what I can gather there has been talk about all this for some time. Based on this the Telcos have failed to transform while other companies have. Surely Telcos will change too late to take any true advantage of the possible opportunities that exist today and other companies will take advantage. Why don’t Telcos focus on their core competence – the network? [#36]

o    36, for the simple reason that the value of the network itself is in continuous decline. Got to look elsewhere – make money because they own network not through the network itself. [#42]

·         These arguments are the same ‘net head’ vs. ‘bell head’ arguments that occurred in the late 90’s. How do we resolve the issues? Telcos clearly are behind and are insisting on making everything ‘carrier grade’ at extraordinary costs? Doesn’t seem very 2.0, does it? [#41]

 

Feedback: crucial enablers

There were also various other comments about the enablers of the two-sided platform, and the consequences of personal device proliferation:

·         Cascading SLA’s is old stuff, nothing new. [#50]

·         XaaS is very valid a concept, and so is cloud computing/storage/network, but these are two different things – XaaS may or may not be using cloud principles and technologies. [#65

·         Simplification of capabilities available for third parties. [#27]

·         What is the highest priority issue for Telco 2.0 enabling architectures that does not exist today? [#21]

·         OPEN standards vs. licensed software? [#32]

·         5 B user…. 5o B devices….customer data from all these!! [#26]

·         How many people have more than one mobile device? 5 are extreme. [#31]

o    re31 – in Europe, probably about 1.4 mobile devices per person, and >2 in Italy. Verizon in the US has suggested that ultimately 4+ is not implausible. [#40]

 

Participants’ “Next Steps” Vote

Participants were asked “How well current industry activity around technical architectures supports the development of Telco 2.0 business models?”

  • Very well – the industry is shaping up well for delivery and new business models.
  • Good start but more needs to be done – major building blocks are missing.
  • Lost cause – the industry will never deploy the capabilities for new business models

Lessons learnt & next steps

Since the development of broadband access, the Internet world has recognised that customers can have many, dramatically different roles and attributes, needing specific functionality, preferences, and user profiles. Operators are in a unique position in that they have a fuller picture of customers than any single website or retailer or service provider. Several have already recognised this, and a number of vendors are offering scalable platforms which claim to be in line with the current EU legislation on data protection.

Marc Davis, Chief Scientist, Yahoo! Mobile: ”Data is to the information economy as money is to the economy. But there is a missing infrastructure – because there’s no user interface for this data and what is the equivalent of a bank for this data – who looks after it?”

But as well as user profile data, the 2-sided business model requires on-demand response from the network infrastructure. It will not matter whether it is the network or OSS/BSS/IT element that is breaking down – customers won’t care, they will just find the situation unacceptable. Both the network and IT elements must work together to deliver this. Operators are moving in that direction organisationally and structurally.

Telco 2.0 expects that this will result in new implementations of control & monitoring systems such as Resource & Service Control Systems (RSC). As services are the key business drivers, the opening up of the walled gardens is changing the service delivery platforms quite rapidly, as most new applications are centred around apps stores, mash-up environments, XaaS environments, and smartphone Web browsers, etc. which do not demand a traditional SDP or SDF. In addition, enabling services are becoming an essential element in operators’ core products. These enabling services will, in the future, allow operators to monetize their network assets.

These enabling services need a framework, which is highly flexible, agile and responsive, and integrated with the features defined by NGMN. While not all these points are implemented yet, there is increasing understanding at the operators, upstream service providers, and regulators that this new phase, opened up through the 2-sided business model, represents a historic opportunity for all members of this ecosystem.

Marc Davis, Chief Scientist, Yahoo! Mobile: ”What if we had new, industry standard terms of service under which users owned their data?”

Before the technical details can be finalised, of course, business models need to be scoped. However, the major technical areas discussed above are focal points for technology development. In the short term, Telcos should:

  • Build up a logical semantic database as preparation for database integration;
  • Include migration from 2G and 3G and backwards compatibility in LTE tenders;
  • Prepare a user profile database;
  • Reduce the number of OSS/BSS systems;
  • Develop real-time responsiveness in OSS/BSS systems;
  • Separate the control and data planes, separate services from transport;
  • Implement and deploy an RSC system as a multivendor abstraction layer. 

In the longer term, operators will need to:

  • Integrate the network and IT elements of the on-demand infrastructure;
  • Set up a full user profile with privacy protection and more granular information;
  • Integrate provisioning, activation, network and bandwidth management, and policy enforcement;
  • Recognise that Web-based service environments will overtake the SDP;
  • Develop a collaborative approach to multi-vendor app stores.