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traditional service provider attitudes and business models. For them, this change is worrying. They fear a potential loss of control, but it’s already happened.
If everything seems under control, you're not going fast enough. [Mario Andretti.]
Edge developers are rapidly creating new services, in effect competing with traditional service provider views of owning the customer and developing new services in an orderly fashion (see our October 2007 NPI and December 2007 OTT service articles).
Why?
Because they can. An explosion has occurred in the facilities and tools (examples: AJAX, Parley, SIP) for easily creating services
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Because service providers have not stepped up to this expanded plate – it is just too much scope and not enough capital
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Because service providers remain myopic – concentrating on the familiar and lamenting the way things were
The present situation is clearly less than wonderful for Edge providers and network service providers. So how should network service providers do business with this new intelligent edge? How should edge providers and network carriers work together to service pervasive device connectivity?
Network service providers, like all other commercial companies, are subject to continuous bottom line pressure from the financial markets and investors; their clear and simple directive is to reduce costs and increase revenue. Somehow this pressure is translated into just two bipolar strategic options for surviving and prospering in this new leaner world.
The preferred option: Increase revenues by fighting the Edge providers, and become a valued-added service company, controlling all the services and endpoints connected to the network.
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The dismal option: Concede to the Edge service providers, slim down dramatically, become an efficient bit-carrier and charge for bandwidth and service specific QoS.
We believe there is a better option than either of these, which is:
Nurture the Edge providers, because the Edge is where all the innovation and incremental revenues will come from. Understand the Edge, and find out what it needs, and then together find mutually acceptable ways of charging for fulfilling those needs.
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Edge and network providers should seek symbiosis rather than engage in competitive exclusion games. |
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The growth in richness and complexity of the Edge is enabled by the expansion of capabilities and reach of the network. Edge and network providers should seek symbiosis rather than engage in competitive exclusion games.
No One is an Island: What the Edge Needs from the Network
As members of the telecom ecosystem, service providers, equipment manufactures, independent software vendors, and systems integrators, we all must discover: What does the Network have that the Edge really needs?
We hear a lot about the two sided business model as described in Simon Torrance’s Telco 2.0 project, where the service provider receives payment from media companies to deliver content and bill users for it while still charging users for access. This was taken up by the TMF who did explore what the core – the service provider systems and management – could offer to the media industry. But we still find this a simplistic business model, and it ignores an enormous amount of new activity at the Edge that is outside the control of the traditional media companies. Morphologically, this model is much the same as delivering call connectivity – but now between a media server and an edge customer.
IC/UC: Looked at from the perspective of the edge service providers of IP interactive communications (IC) and unified communications(UC), we find a rather different perspective and set of imperatives than those expressed by our friendly neighborhood network service providers. The Edge perspective, as expressed by Seamus Hourihan, who coined the term “session border control,”, now with Acme Packet, as Vice President, Marketing & Product Management:
“IC and UC services and applications will only become valuable when we can use them to reach anyone, anywhere, anytime. To paraphrase Metcalfe’s Law: the usefulness, or utility, of interactive communication equals the square of the number of users. Consequently, IC/UC must span multiple IP networks – business, residential and mobile; wireline, wireless and cable. Today’s consumers and businesses will be satisfied with—and pay money for—nothing less. Our only options for delivering this network nirvana are the Internet or the Federnet - a federation of managed IP networks.”
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