As mobile carriers begin to deliver complex services, a vastly increased burden is being placed on service fulfilment, inventory management and service management systems and their vendors. George Malim explores what carriers actually want from such systems and examines which types of vendors are best placed to deliver.
In the beginning, mobile carriers had it easy. They had a basic set of services to deliver in voice and SMS – the fundamentals of which seldom altered radically. The main challenges of delivering these services reliably and profitably lay in radio engineering and OSS, although critical to the management of such services, was a far less acute issue. The emergence of new services such as full-track MP3 downloads, mobile email and even mobile TV necessitates a new approach to the traditional ad hoc systems carriers have deployed to address their service fulfilment. But, against this backdrop, what do carriers actually want?
"They're really looking for systems that can allow them to be agile," says Brian Capellani, chief technology officer of Sigma Systems. "In the past, they had a relatively simple set of services to deliver but as data and content services have emerged, they've built silos. Now they need to reduce the number of systems they operate and build platforms for service delivery."
Brian Naughton, vice president of architecture and strategy at Axiom Systems, agrees; "In the mature markets, carriers are looking for service management solutions to manage emerging services – in emerging markets they're still looking for bog standard activation," he explains. "It's becoming very hard for operators to manage the bag of bits on the edge of their networks. Most European mobile operators' fulfilment stack is still based around basic activation but it is too difficult to grow generic, in-house solutions for MP3 or email servers, for example."
In a market where many services are being delivered that provide carriers only thin – or in some cases negative – margins, cost efficiency is an obvious requirement, as Sanjay Mewada, vice president of strategy at NetCracker, explains; "Traditional mobile carriers soon won't resemble traditional mobile carriers. They might be acquired or they might bundle and that puts a very different set of requirements on their systems. Further pressure comes from the need to deliver a huge number of new services that are very short-lived and need to be turned on or off very quickly or be bundled very quickly."
This view is echoed by Neil Sholay, director, telecoms market EMEA, at BEA Systems; "There's a desire for much more rapid service introduction where the service is assured from pre-built capabilities. The idea is to rapidly create services using service creation tools and carriers are looking for systems to be much more open."
Given the short lifespan of many mobile services, accelerating time to market is often seen as one of the key drivers for upgrading service fulfilment, inventory management and service management systems. "Time to market for new services is the most important driver we are seeing today," says Keith Day, director of product marketing, Cramer: Amdocs OSS Division. "Competition tends to mean that these new services have lower margins than traditional voice services, so anything that reduces the cost of fulfilment is important. Automation has an important part to play, but only if fall out rates are kept very low."
Laurie Spiegel, director of product marketing at Telcordia, disagrees and thinks automation is of prime importance. "Automation is the key to getting cost out of the business and enabling providers to roll out services very quickly," she says. "Operators have been struggling with time to market of the order of six to 18 months and also need customers to be able to order and configure their own services. It is all wrapped up in the issue of thin or non-existent margins. The numbers are astronomical so, in this market, a small profit on each service means an operator is doing very well but a small loss means its doing very badly. That thin line is critical to service providers."
Mewada, at NetCracker, agrees; "Automation is more important than time to market," he adds. "If you're able to automate, you're able to improve time to market – it's cause and effect."
In this finely balanced arena where the nature of the services that will emerge is unclear, carriers continue to face cost pressures in deploying service fulfilment systems. Consequently carriers are, depending on their priorities, seeking ‘systems in a box' and modular, open systems as a means to minimise the cost of integration as well as accelerate time to market.
"The number one need is new service introduction, so carriers can't compromise; they need a fulfilment ‘stack' that can be deployed as quickly as possible," says Cramer: Amdocs OSS Division's Day. "That means getting service-specific fulfilment processes, technology-specific technology models and device-specific device models right out of the box. But margins are also important and fragmentation in OSS eats up margin, so if this out of the box solution can also be the base platform on which the next IP service can be built, then so much the better."
Capellani at Sigma Systems, thinks out of the box systems are in demand largely because they can minimise the integration burden for carriers. "They're attracted to systems in a box because they want systems that they don't have to pay an integration tax to deploy," he said.
Spiegel at Telcordia thinks the term out of the box is slightly disingenuous; "Carriers don't really expect systems to be out of the box," she explains. "They realise these are major projects. Modular systems are very high on operators' lists because these systems need to be very flexible. Carriers are also looking for COTS (commercial off the shelf) solutions. My experience is carriers that have highly trained IT staff want them to focus on the implementation of systems not the actual development of the systems themselves. They also want to outsource some of the operations of COTS systems to third parties. The outsourced model is becoming more popular."
For Mewada at NetCracker, the market is more fragmented; "It depends on the type of carrier," he says. "Some are looking for a limited set of functionality and looking for out of the box solutions but when it comes to a higher level you typically have a situation where the carrier needs to customise or have the ability to customise. The best systems are those that provide a minimum functionality out of the box but also have the capability to be customised."
Carriers face a potentially bewildering array of suppliers in these areas. There are a plethora of small vendors, some of which lack mobile market experience, that claim to offer highly specific systems while others offer more generalist platforms. In addition, the generalist IT vendors such as Oracle and IBM are clearly committed to the OSS market having made billion dollar bets with recent acquisitions in the sector. Deciding which route to take is furrowing the brows of CxOs across the industry.
"I'd like to think the little companies will have a play in this but, unfortunately, my personal opinion is that it'll need to be the bigger players because in reality the transformation is from a circuit-switched voice mobility provider to a mobile mobile media enablement company that also carries voice – and that's a large-scale, radical transformation of carriers' business models," says Colin Orviss, co-founder and chief strategist at consultancy Logan Orviss International. "Much as carriers might like the sexy offerings the small guys have, they can't afford to do this with them and the integration tax is the reason. In addition, carriers want one butt to kick. These projects are not about changing some applications, they're about a business logic change."
Naughton at Axiom Systems, predictably begs to differ. "Smaller vendors, in terms of their technology are definitely best placed," he says. "There are a whole bunch of very rich requirements here so it will take the big vendors an awfully long time to understand and address the problems."
However, Naughton does acknowledge that this isn't an easy sell for a smaller vendor. "Go to market is a world of pain. Hardware vendors are still the biggest channel for us. The greatest problem we have getting into mobile is that the mobile guys don't understand they need to invest in this problem. They're still investing in radio kit."
For Mewada it's a case of horses for courses. "If you're not experienced in the mobile domain, you're not going to be well positioned – mobile is not the same as fixed and while some systems can port between mobile and fixed, some don't," he says. "As to whether small companies can deliver innovation, I'd say their record is mixed."
Capellani disagrees and feels that the disciplines of Cable or DSL now clearly resemble those of mobile. "There's an opportunity for smaller vendors that are agile in their development processes," he says. "Coming into mobile we see all operators needing the ability to deliver a set of technologies that are IP-based and having mobile experience isn't as big a knock in that light."
Sholay, at BEA Systems, feels no one vendor has the total answer. "COTS vendors and platform providers are best suited to delivering these systems," he says. "BEA alone – or other platform providers – can only address so much. It does require Amdocs or Convergys to step up and meet us half way. We can't answer the questions we're being asked by TeliaSonera or Telecom Italia unless we speak to Amdocs or Axiom Systems, for example."
Orviss shares a similar view. "It's a work in progress," he says. "The larger vendors are pulling together technological capabilities and looking at how to deliver business logic capabilities. They're being pushed by operators saying; ‘I need more than a bit of code.' Today, I'm not overly impressed by what I've seen. I'm seeing way too much of a technology play. Vendors need to focus on making these systems work for carriers, to be honest most vendors are weak."
And, the areas of service fulfilment, inventory management and service management need to be addressed now if carriers are to have any hope of profitably delivering the portfolio of services that will replace voice revenues. "Operators are starting to recognise the problem," adds Orviss, "but too many expect voice to continue for a long time into the future. I'm very concerned voice decline is going to hit them hard far sooner than they expect. They need to act now otherwise events will overtake them."