VanillaPlus Magazine Apr/May 2011 Edition
Europe, Middle East and Africa's leading magazine on BSS, OSS, telco revenue assurance and fraud management, for CSPs and Network Operators
A P R I L / M A Y 2 0 1 1 SU F PA 10 PP RA GE IN LE UD SI M D EN E T V O L U M E 1 3 I S S U E 2 DRIVING PROFITS FOR EMEA'S C O M M U N I C AT I O N SERVICE PROVIDERS TALKING HEADS Telcordia OSS chief minimises risks with 'managed evolution' approach to transformation PRODUCT CATALOGUES Think big, start small and move quickly MANAGED CLOUD SERVICES Can the cloud ever be trusted? THE iPAD OPPORTUNITY Time to dare to be different CUSTOMER EXPERIENCE What should you prioritise? THE OVER THE TOP THREAT The fight back starts here PLUS! News � Comment � The Contract Hot List Video Previews � Diary � Clocking Off! C O N T E N T S 13 TALKING HEADS Bill Wanke, head of Telcordia's OSS division IN THIS ISSUE EDITOR'S COMMENT Less really can be more for OSS/BSS vendors. NEWS Company, Industry, Product and Contract News plus the People News column. CONTRACT HOT LIST Major contracts awarded globally and the latest company news. TALKING HEADS Bill Wanke, who leads Telcordia's OSS division, shares his vision of how to keep operators running fast and lean through providing next generation OSS systems. EXPERT OPINION: ENTERPRISE PRODUCT MANAGEMENT Ernest Margitta says optimising the customer experience is critical. PRODUCT CATALOGUES Mark Dye investigates why so many operators have had deployment problems. EXPERT OPINION: CLOUD-BASED SERVICES Cyril Doussau de Bazignan explains why CSPs are well positioned. CAN THE CLOUD BE TRUSTED? Gareth Kershaw explores how far is too far when it comes to cloud. 4 5 12 13 18 PRODUCT AND SERVICE CATALOGUES 16 18 20 22 22 CAN THE CLOUD BE TRUSTED? EXPERT OPINION: CUSTOMER EXPERIENCE 24 Offering the right choices to customers is the key, write Christoffer Andersson and Chris Yeadon. THE iPAD OPPORTUNITY FOR OPERATORS Jonny Evans says operators must dare to be different. EXPERT OPINION: THE OTT THREAT Operators have more advantages than they realise, argues Scott Stonham. VIDEO PREVIEW: HOW TO WIN IN THE CLOUD Jack Zubarev and Knut Aasrud discuss their forthcoming VanillaPlus video. EXPERT OPINION: DATA MIGRATION Judi Gill takes on the data migration challenge. 26 28 30 31 41 CLOCKING OFF! VIDEO PREVIEWS: AUTODISCOVERY & CLOUD 32 Jay Borden and Doug Bellinger preview their upcoming VanillaPlus video on automated discovery of network equipment and Andy Waterhouse previews his video on cloud computing. EXPERT OPINION: THE CONVERGENCE OF BSS AND POLICY Alice Bartram says there is light at the end of the bandwidth pipe. 33 VIDEO REVIEW: REVENUE GENERATING PRIORITIES 34 David Heaps listed his five top tips for operators in a recent VanillaPlus video that is now live at www.vanillaplus.com VIDEO REVIEWS: 4G QoE & DATA MONETISATION Paul Gowans and Anandan Jayaram discuss the highlights of their videos now live at www.vanillaplus.com EXPERT OPINION: SERVICE CONVERGENCE Doug Zone examines the merging of telecoms and utilities offerings. DIARY Where to go and what to see VIDEO PREVIEW: DIFFERENTIATED SUBSCRIBER EXPERIENCE Patrick Joggerst previews his video on differentiated subscriber experience. CLOCKING OFF! Mark Dye says it's now hip to be square and muses on the operator incentives of the future. 35 Telcordia, a global leader in the development of mobile, broadband and enterprise communications software and services, enables Communications Service Providers (CSPs), enterprises, suppliers and governments to successfully deploy innovative and advanced services that help its clients realise operational efficiencies, drive revenue and maintain a competitive edge. Telcordia has globally trusted expertise in software and services to meet the needs of customers and partners, including, consulting, next-generation OSS, network and application interconnection, service delivery and charging solutions, industry research and new technology development. Telcordia is headquartered in Piscataway, N.J., with offices throughout North America, Europe, Asia, Central and Latin America. www.telcordia.com 36 40 40 41 VANILLAPLUS APRIL/MAY 2011 3 C O M M E N T Can operator consolidation create greater opportunity for vendors? The last couple of months have seen several large acquisitions in the operator market. AT&T has bought T-Mobile USA from Deutsche Telekom and in the fixed line market Level 3 has bought Global Crossing. This type of consolidation activity is slated by analysts to continue and intensify over the coming years and will see the number of companies in the operator market radically slim down. EDITORIAL ADVISORS George Malim, Editor: VanillaPlus John Aalbers, chief executive, Volubill Dan Baker, Research Director, Technology Research Institute Martin Creaner, president, TM Forum Andreas Freund, VP Marketing, Orga Systems GmbH Louis Hall, chief executive, Cerillion Technologies Barbara Lancaster, president, LTC International For the supplier community that presents a threat. A market composed of fewer, yet larger, companies presents a smaller number of sales opportunities, although many vendors see that, or at least publicly claim to see that, as an opportunity because those customers that remain will be far larger. However, in reality only a few of those opportunities will exist and they are unlikely to offset the threat for more than a handful of vendors. Larger companies will exert their purchasing power to drive down prices paid for systems and solutions. Even those that don't consolidate through formal M&A are starting to look at their purchasing practices. Deutsche Telekom and France Telecom, already together in the UK mobile market through Everything Everywhere, have announced plans to undertake around 10% of their purchasing through a new joint venture by the fourth quarter of this year. The companies expect to save approximately 1.3bn as a consequence. That 1.3bn will come almost exclusively at the expense of vendors. In addition, the march to LTE looks to be taking a different path to previous network technology upgrades. In Russia, for example, five of the country's operators are to network share for the technology. That's brought down the number of target customers for vendors from five to one. Should we be worried? Probably not. This is a fairly well-worn industry cycle and as the established operator sector consolidates, lithe new entrants will come to market. They will refresh and renew the customer base. Network sharing also is double-edged from the supplier point of view, especially in the VanillaPlus market. Yes, there will be fewer big network builds in markets where sharing is allowed but in others, like the UK, it will be forbidden by regulators and the status quo will remain in place. In addition, I take the view that sharing creates massive complexity in the back office which will require sustained investment in management systems to overcome. In those cases, less really will be more for OSS/BSS vendors. George Malim Gaby Matsliach, general manager, BSS Product Line, Comverse Pat McCarthy, VP of Global Marketing, Service Delivery Solutions, Telcordia Simon Muderack, COO, Tribold Olivier Suard, Marketing Director, Comptel Mac Taylor, CEO, The Moriana Group Chris Yeadon, director of Product Marketing, Ericsson Doug Zone, chief technology officer, MetraTech VanillaPlus is distributed free to selected named individuals in EMEA who meet the Publisher's terms of Circulation Control. If you would like to apply for a regular free copy supplied at the Publisher's discretion visit www.vanillaplus.com If you do not qualify for a free subscription, paid subscriptions can be obtained. Subscriptions for 6 issues cost �99.00 worldwide (or US$150 / EUR125) including post and packing. VanillaPlus magazine is published 6 times per year. � Prestige Media Ltd 2011 All rights reserved. No part of this publication may be copied, stored, published or in any way reproduced without the prior written consent of the Publisher EDITOR George Malim Tel: +44 (0) 0208 292 4036 email@example.com ASSOCIATE EDITOR Mark Dye Tel: +44 (0) 0208 251 8908 firstname.lastname@example.org DIGITAL EDITOR Nathalie Bisnar Tel: +44 (0) 1732 808690 email@example.com BUSINESS DEVELOPMENT DIRECTOR Cherisse Draper Tel: +44 (0) 1732 897646 firstname.lastname@example.org BUSINESS DEVELOPMENT MANAGER Mark Bridges Tel: +44 (0) 1732 897645 email@example.com SALES EXECUTIVE Lydia Harris Tel: +44 (0) 1732 897648 firstname.lastname@example.org OPERATIONS DIRECTOR Charlie Bisnar Tel: +44 (0) 1732 844017 email@example.com PUBLISHER Jeremy Cowan Tel: +44 (0) 1420 588638 firstname.lastname@example.org DISTRIBUTION UK Postings Ltd Tel: +44 (0) 8456 444137 CIRCULATION Circdata Tel: +44 (0) 1635 869868 PUBLISHED BY Prestige Media Ltd. Suite 28, 30 Churchill Square Kings Hill, West Malling Kent ME19 4YU, UK Tel: +44 (0) 1732 844017 DESIGN Jason Appleby Ark Design Consultancy Ltd Tel: +44 (0) 1787 881623 4 VANILLAPLUS APRIL/MAY 2011 C O M P A N Y N E W S Ericsson and Microsoft partner for CRM Ericsson has announced it is to partner with Microsoft to provide an integrated billing and CRM solution for operators but it's a struggle to understand what's in it for whom since the Christoffer partnership is nonAndersson: Deal exclusive. Under the complements agreement, a version systems of Microsoft's integration Dynamics CRM 2011 capabilities offering, that has been adapted for the business needs of telecoms operators, will be pre-integrated with Ericsson's BSCS iX billing solution � the formerLHS product line. So far so good, but the term pre-integrated can cover a multitude of sins and many monolithic vendors would argue that, if an operator wants to truly minimise the number of supplier relationships it has, there are other vendors that offer far more preintegrated functions in a single package. For Microsoft, the attraction is clear. It has found it a challenge to gain traction in the telecoms sector and Ericsson, with its large operator customer base, is an apparently ideal partner. Perhaps significantly, Microsoft revealed the partnership to VanillaPlus under a press embargo at Mobile World Congress 24 hours before the official announcement was due, only for Ericsson to publicise the news a few hours later. That suggests the Swedes are the senior partner in this relationship. Microsoft itself appears to have shifted strategy, as Dmitri Lozdernik, industry director telecoms, within the Communications Sector at Microsoft, told VanillaPlus: "Our strategy is to work with the partner ecosystem and enable momentum to deliver to our partners," he said. "The strategy is to build a vibrant partner ecosystem." "With Ericsson, the intent is to build a very wide BSS portfolio offering not just billing but also CRM," added Lozdernik. "There will be joint go to market and the solution is owned and developed by Ericsson with Dynamic CRM completely embedded in the product. If you look at Ericsson, it could have hired 200 engineers and built its own CRM, it could have acquired a CRM company like Epiphany, for example, or it could have recognised that Microsoft has invested US$10bn each year in innovation. Why build instead of partnering?" Lozdernik's counterpart at Ericsson, Christoffer Andersson, vice president of Billing and Customer Care, said: "It will strengthen our OSS and BSS portfolio offerings. This solution will complement our strong systems integration capabilities in a multi-vendor environment to provide our customers with integrated end-to-end CRM solutions based on best-of-breed packages." N E W S U P D AT E Tollgrade Communications in $137m sale to VC firm Venture Capital firm Golden Gate Capital is to acquire Tollgrade Communications, the network service assurance solutions provider for approximately $137m. Under the terms of the deal, Tollgrade shareholders will receive $10.10 in cash per common share. "For our shareholders, the agreement provides full liquidity at a price within 1% of Tollgrade's three-year high closing stock price reached on 16 February 2011," said Ed Kennedy, president and chief executive of Tollgrade. "For our customers and employees, the proposed transaction provides a bright future for Tollgrade." Tribold and Practiv reveal partnership for Enterprise Product Management delivery in APAC In response to the increasing demand for Enterprise Product Management (EPM) for Communication Service Providers (CSPs) in the Asia Pacific region, Tribold and Practiv have formed a partnership which will bring Tribold's EPM solution to the region. Charles Shrimpton, chief executive, Practiv, said that EPM was playing a key role for CSPs in achieving and maintaining market position and increasing efficiency in the areas of marketing, operations, network and finance. "Tribold was an obvious partner for Practiv because of their Tier-1 customer base, their presence in the region, maturity of the Tribold EPM product, and particularly the leadership in the CSP community demonstrated through Tribold's activities in the TM Forum standards and specification processes," he explained. Simon Muderack, Tribold CEO and founder, added, "This partnership provides CSPs in the region the unique opportunity to access the recognised global leader in Enterprise Product Management software through a local partner with leading implementation and hosting capabilities as well as an intimate knowledge of the regional market." Metaswitch acquires Colibria for enhanced instant messaging Metaswitch Networks, a supplier of infrastructure and applications to network operators, which has been increasingly targeting the mobility market, is to acquire Colibria, a provider of enhanced instant messaging, presence and network address book solutions. The acquisition adds to Metaswitch's recently launch Thrutu service, an in-call content sharing experience that enables users to impulsively exchange information during a mobile call. Available as a branded platform for operators, Thrutu addresses the operator imperative to introduce new services rapidly and compete with threats from over-the-top service providers in the long tail. "Operators have quickly come to realise that it is time to turn up the heat on their over-the-top competitors," said Metaswitch CEO, Kevin DeNuccio. "The way people communicate is evolving from just voice and text to a new, richer set of social interaction and contextual calling services. Metaswitch is in the middle of this transformation, helping service providers address these demands and putting their brand front and centre in the new communications experience." Sponsored by: www.orga-systems.com VANILLAPLUS APRIL/MAY 2011 5 I N D U S T R Y N E W S NEWS IN BRIEF Almost half of smartphone users blame operators for service issues Figures from Juniper Research predict the amount of mobile data traffic generated by smartphones, featurephones and tablets will exceed 14,000 petabytes by 2015. That's equivalent to 18 billion movie downloads or 3 trillion music tracks. Yet, while operators will be required to deal with that level of traffic, users continue to blame them for service issues on smartphones even though many service issues have nothing to do with network capacity or traditional carrier network performance indices. A recent survey conducted by Harris Interactive on behalf of service quality assurance vendor Empirix, found that nearly half of users experiencing problems blamed their mobile service provider for issues encountered. Worryingly, 86% of respondents surveyed in the US and UK reported experiencing smartphone service issues while using multimedia applications. In Germany, the situation was little better with 77% saying they suffered similarly. "The proliferation of mobile devices has created unparalleled use of new services and applications on smart devices, frequently causing a strain on service provider networks," said Bob Hockman, director of product marketing at Empirix. "When consumers feel this strain, the initial reaction is dissatisfaction, which quickly turns into blame. Mobile providers often do not realise that consumers are judging them based not only on broader mobile application offerings, but more so on whether the application works as advertised, every time. Without consistent, high-quality connectivity, carriers make themselves susceptible to disenchanted customers and lost business." "Customers no longer tolerate just `ok' service; whether it's the ability to quickly download a video or update their Facebook status, users expect the network to work well all the time," he added. "From pre-deployment testing to ongoing networking monitoring, endto-end quality assurance is critical to enabling providers to get their network right and keep it right." Have the leading operators discovered a Google WAC? Mobile operators are one tiny step closer to fighting back against the dominance of the OTT app stores. At Mobile World Congress, the mighty forces of Vodafone, China Mobile, Orange, Verizon, Michel Combes, Telefonica, Korea CEO Vodafone Telecom and Sony Europe Ericsson aligned to proclaim that the Wholesale Applications Community is open for business. The collection of mobile giants, who form the spine of WAC, announced the availability of the WAC 2.0 specification, which supports HTML 5 web applications that can draw in data from a devices' contacts book, calendar and orientation. WAC 3.0, which will be available in September 2011, will allow developers to unlock backend network assets including in-app billing and user authentication. At the same time, Ericsson announced that it has created the first WACcompliant white-labelled app store for Norwegian operator Telenor, while Telefonica's Frigo applications community, which will go live in seven countries later this year, will also be WAC compliant. IBM also announced that it has introduced a new cloud-based whitelabel app store which is WAC compliant. "There were 5.2 billion mobile apps downloaded worldwide in the last year, resulting in 1.1bn in revenue," said Vodafone Europe CEO Michel Combes highlighting just how important the area is becoming. "But we think customers want choice over which app community they choose and WAC is a new era of industry actually working together to achieve a common goal." Can the cloud be trusted? Yes, says Comarch and others As Incumbents face cost, complexity and other challenges in bringing legacy billing systems up-to-speed for use in the new communications age, outsourcing of these systems to third-parties operating in the 'cloud' is emerging as a viable option for cash-strapped and timepoor providers seeking a quick fix. Most recently, VoIP/video calling firm fring has inked a deal with Comarch in which the latter firm is offering cloudbased billing services to support fring's new fringOut service, which enables lowcost calls to landlines and mobiles over its network. Billing counts in VoIP. Krzysztof Kwiatkowski, BSS product manager at Comarch, explained that the system needed to deliver a geographically distributed service capable of scaling to different devices, different vendors and different operating systems. Like many in the cloud-based billing sector, he says his systems can be assembled with "very short implementation time" and at much lower cost than developing in-house converged B/OSS systems. Comarch has other deals in the pipeline, he says. This, however, is no one horse race. Convergys director Tony Jackson thinks operators "must look beyond internal resolutions and recognise the potential of a hosted billing solution." He told Vanilla Plus he has seen his hosted billing solutions reduce time to market for new systems from as many as 270 days to as few as four days. Bill accuracy and bill processing time also benefit, he says. Gordon Rawling, director of EMEA Marketing, Oracle Communications, also sees unified billing as the direction the market is heading in. "As a result of implementing a unified billing system, CSPs will be able to radically improve their time to market for the delivery of new services and products, lower operational costs and improve their levels of customer service," he said. Sponsored by: 6 VANILLAPLUS APRIL/MAY 2011 www.orga-systems.com P R O D U C T N E W S Timico brings mobile device management to SMB market In a move underscoring how service providers are increasingly using the cloud to bring large enterprise-grade functionalities to the SMB market, UK business-to-business ISP Timico has announced the formation of a Mobile Internet Service Provision (MISP) unit to address demand for device management of smartphones and tablets by businesses. The company has partnered with Sybase to bring the SAP-owned vendor's Afaria service to SMBs. Sybase Afaria provides businesses with a single administrative console to centrally manage, secure and deploy mobile data, applications and devices. The proliferation of employeeowned devices, in particular iPads and iPhones, being brought into the workplace is a key concern for organisations from security and corporate data protection perspectives. "The partnership with Sybase enables our SMB customers to confidently embrace ISP and cloud technologies and services, while having complete peace of mind that company data is safe and secure," said Trefor Davies, CTO of Timico. "When you consider the [UK] Home Office statistics released in 2010 suggesting that in 2009, 228 mobile phones were reported stolen every hour, the security of personal devices brought into the workplace is clearly a problem." The Timico service is device operating system agnostic and can manage all the main vendor types including Apple's iOS, RIM, Android and Windows Mobile 7. N E W S U P D AT E Anritsu enables testing of High-Speed HSPA and wireless devices using simultaneous 64QAM and MIMO Anritsu has introduced a software option for its MD8480C WCDMA/GSM Signaling Tester that enables testing for the latest WCDMA/GSM devices supporting simultaneous 64QAM and MIMO. The release builds on existing WCDMA/HSPA support in the MD8480C, ranging from Release 99 to Release 8, as well as previous introductions of the market-leading DC-HSDPA option, and a full line-up of HSPA+ Release 7 options. The MX848001E-17 Simultaneous 64QAM/MIMO option enables the MD8480C Signaling Tester to conduct protocol-based testing on new WCDMA/GSM wireless devices that incorporate this feature. Simultaneous 64QAM/MIMO offers network operators and consumers 42 MB/s download speeds similar to DCHSDPA, with the advantage that spectrum is conserved through use of a single 5 MHz channel rather than the two channels required for DCHSDPA. With this option, the MD8480C now supports all W-CDMA data rates, from 12.2 kB/s voice calls to 42 MB/s data calls, including new category 17, 18, 19, and 20. Wade Hulon, vice president and general manager, Anritsu, said: "We are proud to be able to offer support for both 3GPP evolutionary paths LTE and HSPA+. This new software option for the MD8480C underscores our commitment to support industry test requirements for the HSPA+ path, as data rates advance to 4G rates. We look forward to supporting further advances of HSPA+, as data rates trend even higher to support consumer demands for high-speed data." Comverse enhances Mobile Internet Hub with policy-aware congestion control system Comverse has enhanced its Mobile Internet Hub product with its PolicyAware Congestion Control solution. The system is claimed to strengthen an operator's ability to maintain a highquality user experience by detecting degradation in the subscriber's quality of experience and implementing optimal policies dynamically based on a broad range of network conditions and subscriber characteristics. DPI (Deep Packet Inspection), Video Optimisation, QoS modifications and Wi-Fi offload are key tools in proactively applying a range of congestion control actions. "Mobile operators are bracing for phenomenal mobile data traffic growth in the coming years," said Clare McCarthy, principal analyst at Ovum. "To address advanced use cases like congestion management, it is critical for operators to adopt a proactive approach that integrates detection, policy and enforcement. An effective congestion management solution with DPI and video optimisation capabilities puts operators in a position to alleviate the load on network capacity while delivering an excellent user experience." Linking smart detection and dynamic policy decisions with effective congestion control actions enables enforcement of congestion policies based on multiple parameters: congestion severity level, traffic or device type, time of day and subscriber data plan. Real-time measurements and smart traffic heuristics facilitate identification of congested cells and heavy users; optimal congestion control policy is then efficiently enforced with pinpoint accuracy where needed -- utilising DPI, video optimisation and QoS modification capabilities. Lionel Chmilewsky, senior vice president, head of customer facing group at Comverse, said: " The Policy-Aware Congestion Control solution can make a world of difference to both consumers and operators,"Users enjoy an excellent data experience regardless of network type and status; operators meet user preferences and needs, boost network efficiency and reduce costs and churn as they prepare for the increasingly huge role that the mobile internet will be playing in their future success." Sponsored by: www.orga-systems.com VANILLAPLUS APRIL/MAY 2011 7 C O N T R A C T N E W S NBN appoints IBM prime integrator in $200m OSS/BSS deal NBN Co, the Australian government's multi-billion dollar nationwide broadband network, has appointed IBM prime systems integrator of the network's operational and business support systems. The deal, worth an estimated $200 million over the next three years will see IBM deliver systems to enable retail service providers using the wholesale NBN network, to order new services, report faults and perform service qualification checks via businessto-business interfaces and/or portals. An NBN spokesperson told VanillaPlus that IBM is the prime systems integrator and will partner with NBN to deliver an end-to-end solution. IBM will work with five subcontractors to deliver the operational and business support systems. The subcontractors are Planwell, Eirtech, Accenture, AlcatelLucent and BMC. Steve Christian, NBN's head of network operations, explained the rationale behind appointing a prime integrator. "This is a unique opportunity to implement these support systems without having to contend with the challenges of legacy systems," he added. "We will carry out this project by means of an integrated team of providers all working together." David Murray, IBM Australia's general manager for the NBN project, told VanillaPlus how IBM will manage the contract. "IBM has end to end responsibility for the OSS/BSS solution," he said. "IBM has an outcomes-based agreement with NBN on both end-to-end performance levels and within that scope of work there are subcontractors in IBM's prime contract who will help IBM deliver on that. The five subcontractors to IBM are all contracted to provide services to fulfil various components of the full scope of an OSS/BSS." Murrey confirmed Accenture will perform a component of network planning and Alcatel-Lucent will perform a component of fulfilment. N E W S U P D AT E CommuniGate Systems renews Zoznam messaging partnership CommuniGate Systems, a provider of carrier-grade hosted, SaaS or cloudbased unified communications solutions, has announced that Slovak web portal, Zoznam.sk, has renewed its partnership with the vendor to power the portal's messaging applications. Zoznam specialises in Slovak internet website search and is the second most popular portal in the country. The vendor's CommuniGate Pro solution enables Zoznam to manage 80,000 emails per day and more than 30 terabytes of attachments. "Reliability and scalability are crucial in delivering quality services to our customers," said Branislav Stepanek, head of IT at Zoznam. "The platform has proved to be both incredibly reliable and very cost-effective." Scott Stonham, vice president of marketing at CommuniGate Systems, added; "We've been working with Zoznam since 2006 and its local reputation for quality, reliability and service is impressive. We're delighted to be supporting its growth with powerful, reliable messaging solutions." Vodafone Germany selects Amdocs OSS for 4G LTE network rollout Amdocs has announced that Vodafone Germany has selected its OSS software to support the rollout of its 4G LTE (long term evolution) mobile network. Vodafone Germany is the country's leading integrated communications company, serving more than 40 million customers with products and services for mobile communications, fixed network, data and broadband internet. The Amdocs OSS solution offers Vodafone Germany automated LTE network planning and rollout processes to speed network deployment at reduced operating costs. In addition, the solution offers Vodafone Germany complete and accurate visibility of its network assets. With an accurate view of its network capacity at any given time, as well as future planned network resources, Vodafone Germany will be able to plan for current and future network changes. Oracle to extend Colt's cloud-based services with RODOD provisioning automation Colt Technology Services has gone live with a new Rapid Offer Design and Order Delivery (RODOD) solution from Oracle, enabling it to extend cloudMark Leonard, based services CIO, Colt already on offer to enterprises through its Infrastructure-as-a-Service solutions. RODOD allows Colt to rapidly automate the provisioning of combined cloud and network services as a single integrated solution, thereby improving user experience and full order lifecycle visibility with supporting enterprisegrade service level agreements (SLA). With Colt owning 19 data centres and fibre networks connecting 38 major European cities, the company already had the infrastructure in place to support businesses with secure highperformance cloud services. What it lacked was the ability to swiftly launch new services to market free of the complexity associated with deployment and integration. The new solution, which was deployed within six months, allows Colt to use automated processes to deliver cloud services to enterprise customers in a matter of hours rather than weeks, according to Mark Leonard, CIO, Colt. "It's fundamentally about agility, is a differentiator and to be honest I think it's one that customers will come to expect more in the cloud world as it's about ondemand by nature," he said. "For our customers, the ability to dial up or down their usage in a fully automated sense where they can manage their own environment gives the ultimate in flexibility." Sponsored by: www.orga-systems.com VANILLAPLUS APRIL/MAY 2011 9 P E O P L E N E W S Welcome to our regular Jobs column, brought to you by Kineticom, sponsors of People News Mobile World Congress in Barcelona already seems so far away, but what a great event it was. I was impressed by the vast array of new tablets, smartphones, applications and services being released to the market. I am a fan of Sony Ericsson's Xperia Play and I loved LG's Optimus Pad which looks and feels great and the 3D video capability is very clever � but do I really need a 3D mobile? Jason Bandy MACH promotes Morten Br�gger to chief executive officer - Dubois to leave MACH, the provider of hub-based mobile communication solutions, has appointed Morten Br�gger as CEO. Guy Dubois, the company's previous president and CEO, will leave the company on 30 June, 2011 but will continue to serve the company as a non executive board director. Morten Br�gger I reckon that by the time I work out exactly which handset suits my needs best � and I finally make my mind up � a whole new range of funky products will arrive and I'll be back to square one. I was fascinated to learn about the growth in phone e-wallet technology � maybe it will help reduce the queues for a coffee at MWC 2012! 4G is coming and if the analysts are correct, we're all in for a busy couple of years! On the talent front it seems that most vendors and systems integrators expect to grow their workforce this year and envisage a general increase in demand for staff. I noted particular needs for experienced pre-sales consultants, product managers, testers, RF engineers and network assurance consultants. If it's difficult for me to choose a smartphone, selecting an equipment vendor or choosing the right support software to optimise a network must be enormously complex. Recruiting the right people is also a time consuming challenge that requires a lot of thought and consideration. The vast array of choices at MWC reminded me how important it is that my team here at Kineticom must work even more closely with our clients to really understand their talent needs and the decision making process. We need to meet a far greater percentage of candidates to gain a true understanding of who they are and how they can contribute to our clients. At the same time we must continue to use the latest technology to aid us in our quest, but not to cut corners in providing the level of personal understanding that ensures that we remain great matchmakers. If you want to accelerate your career development, my team and I would be delighted to hear from you. Jason Bandy, director, Kineticom Ltd. Jason.Bandy@kineticom.co.uk Tel: +44 (0)845 370 2900 Mobile: +44 (0)7500 013084 www.kinetiom.co.uk Dubois, who successfully piloted the sale of Cramer Systems to Amdocs before joining MACH, is to assume the CEO role at banking software specialist Temenos in July. Br�gger, a former TDC executive, who is currently chief commercial officer at MACH, has had a long and successful career in the telecommunications industry internationally. His previous roles include chief operating officer at MACH as well as at TDC subsidiary Sunrise and as a senior vice president within TDC. In his current role, he has successfully transformed the MACH sales force into a best-in-class global sales team and positioned MACH as a leader in the outsourced mobile operator roaming, interconnect and mobile messaging market. Br�gger said: "I am both honoured and excited to have the opportunity to lead MACH, an innovative and customer focused company that is a world leader in its field. I am looking forward to building on MACH's achievements by delivering on its strategy of product innovation, growing its client base and continuing to offer outstanding customer service. We have a great business that is strategically positioned at the heart of the fast growing and changing world of international telecommunications. The company is committed to creating and delivering the best solutions for its customers around the globe." Convergys appoints Aaron Payne vice president EMEA for Technology Sales & Solutions Aaron Payne has joined Convergys as vice president EMEA, Technology Sales & Solutions. In his new role, Payne will set strategic direction for Technology Sales & Solutions across EMEA and lead both its direct and channel sales teams to drive incremental revenue. Prior to joining Convergys, Payne held a number of senior roles across a variety of global technology companies including Polycom, Avaya, and Siemens, and has more than 26 years' experience in technology sales management. "I am glad to be joining an innovative and expanding company like Convergys," said Payne. "The investment Convergys is making in the EMEA region is exciting and I look forward to leading the team and identifying new market opportunities - whilst revamping the existing go-to-market strategy to deliver growth into new whitespace markets." 10 VANILLAPLUS APRIL/MAY 2011 P E O P L E N E W S Pawel Kleczek joins Clarity to spearhead European expansion Clarity, the Sydney headquartered provider of telecoms management software, has appointed Pawel Kleczek as vice president of business development for central and eastern Europe. Kleczek joins Clarity from Comarch, where he spent the last 11 years, with his most recent role being a sales director in the Telecommunications Business Unit. Prior to this, Kleczek held senior roles with other telecoms based software houses, including NGS Sp. z o.o and System 3000 Sp. z o.o. Kleczek will be responsible for Clarity's expansion into the Central and Eastern Europe markets. He brings a wealth of experience and industry knowledge to the role with an extensive telecommunications knowledge base spanning technical consultancy, project management and sales. Kleczek holds an MSc in Computer Mechanics from Krakow University of Technology. Jon Newbery, CEO of Clarity, commented: "We are delighted to welcome Pawel to Clarity with his outstanding background in this market and the communications sector. His business development experience will be a valuable resource for Clarity as we continue to build strong relationships with customers such as VIVACOM, in this fast developing region." Kleczek added: "I am excited about working with such an innovative and well respected company. Clarity has an excellent value proposition for its customers, providing them with much needed solutions to reduce cost and complexity in their operations. I'm convinced that the market is ready for these solutions, and I look forward to engaging with both new and existing customers." "Syniverse is continually integrating new capabilities to help our customers stay ahead of industry trends and subscriber demands, and Patrick's deep experience in mobile solutions will help us achieve this goal," said Jeff Gordon, chief operating officer of Syniverse. "Patrick's depth of knowledge serving mobile operators makes him a valuable addition to our team as we work to advance industry solutions for messaging interoperability and network evolution via IPX to 4G, LTE and beyond." "I am very pleased to be joining the Syniverse team," said George. "This company has a stellar reputation that is unmatched in the industry, and I look forward to helping make mobile work in new ways for Syniverse and its loyal customer base, and prospective customers around the globe." Ray Tierney becomes Oxygen8's CEO Ireland Oxygen8 Communications, a global mobile, voice and billing specialist, has appointed Ray Tierney as CEO of its Irish business. Tierney, formerly sales director for Ireland, will be responsible for further developing Oxygen8's position as a provider of mobile marketing and business communications solutions to leading blue-chip and media companies, in addition to government agencies in the Irish market. Specifically, he will be focusing on expanding Oxygen8's professional services revenue stream which it offers in conjunction with its platform technology and global billing capability. Tierney will also continue in his role in assisting Oxygen8's international market expansion into new territories, which has so far included Canada and over 12 countries across Europe. Commenting on his appointment Tierney said: "I am very excited to be taking on the role of CEO for Oxygen8 in Ireland and I believe that there are some fantastic opportunities to expand our operations in this market and beyond. As a variety of industries continue to embrace the digital marketplace, Oxygen8 Communications is ideally positioned to provide the technology, knowledge and creative ideas to help companies realise a return on investment from their interactive communications strategies." Syniverse appoints Patrick George as senior vice president Patrick George has joined Syniverse as senior vice president of Global Solutions. In this role, George will principally focus on leading strategic programmes designed to drive business optimisation for customers with an emphasis on Europe, the Middle East, Africa, India and Asia. Patrick George George joins Syniverse from BICS (Belgacom International Carrier Services), where he most recently held the position of senior vice president, marketing and product management, and brings more than 15 years of experience serving mobile operators and key members of the communications ecosystem. P E O P L E N E W S VANILLAPLUS APRIL/MAY 2011 11 C O N T R A C T H O T L I S T VanillaPlus Hot List: April 2011 / May 2011 The Hot List below shows the companies informing us of recent contract wins or product deployments. If your contract is not listed here email the details to us now marked "Hot List" <email@example.com> Vendor(s) Aito Technologies Acision Amdocs Amdocs Alcatel-Lucent Bridgewater Systems Broadhop Evolving Systems Experian Fortinet Great Lakes Data Systems Link2One MACH Motive On Demand Group Openwave Systems Oracle Redknee Synchronica Tektronix Teligent Trend Micro & Radialpoint Tribold We Do Technologies ZTE Client, Country Ucell, Uzbekistan Telef�nica, Latin America Vodafone, Germany Vodafone, Germany OpenNet, Singapore Mobily, Saudi Arabia Saudi Telecom, Saudi Arabia Claro, Brazil KPN, Netherlands SFR Business Team, France Wave Broadband, USA Orascom Telecom, MEA Yoigo, Spain STC, Saudi Arabia A1 Telekom Austria, Austria Wataniya Telecom, Maldives Colt Technology Services, Europe Viacloud, UK Claro, Panama Verizon Wireless, USA Telmob, Burkino Faso Virgin Media, UK Internet Solutions, Africa Turkcell Group, Turkey Tiscali, Italy Product / Service (Duration & Value) Customer experience analytics Messaging OSS for LTE Mediation 8 OSS/BSS Solution Policy control Policy service deployment Dynamic SIM allocation Fraud detection Managed security services PC-based billing and provisioning Roaming hub services Wholesale roaming solution Customer experience management Video on demand services Traffic mediation and application performance management Rapid Offer Design and Order Delivery Billing, rating, settlement, customer care IM solution LTE monitoring Messaging platform upgrade Managed internet security Enterprise Product Management Business assurance IMS network Deployed 2.11 2.11 2.11 3.11 2.11 2.11 3.11 4.11 3.11 3.11 3.11 4.11 3.11 3.11 3.11 3.11 3.11 2.11 1.11 2.11 1.11 3.11 2.11 4.11 2.11 NEWS IN BRIEF Comptel and Volubill both separately combine with Sandvine for real-time policy management and policy enforcement Volubill and Comptel have both announced the completion of interoperability testing with Sandvine, a provider of network policy control solutions for fixed and mobile operators, to create a best-of-breed solution enabling network operators to understand the network traffic required to deliver more dynamic and contextualised data service plans. The new fully tested and pre-integrated solution, which meets 3GPP Diameter Gx and 3GPP Diameter Gy protocol requirements, allows operators to rapidly put in place a real-time policy enforcement and policy management engine with proven capabilities. John Aalbers, CEO Volubill, explained that the company is focused in delivering solutions that enable network operators to take advantage of the mobile data services revenue opportunity. John Aalbers, chief executive, Volubill "By delivering an interoperable solution that optimises 3GPP standards, we can help network operators to better understand network traffic behaviour and to use that information to improve the personalisation of subscriber services and pricing plans while enhancing customer quality of experience," he said. Comptel has completed interoperability testing of policy control and charging solutions to enable operators to better manage and monetise mobile broadband services. The tests demonstrated how policy and charging rules managed by Comptel Control and Charge could be enforced in the network by Sandvine's Policy Traffic Switch based on real-time inspection of the network traffic. "We are happy to have successfully completed interoperability testing with Sandvine, the market-leading Network Policy Control provider," said Simo Saaskilahti, senior vice president, products and solutions, Comptel. "We are confident that our combined policy control and charging solution will create real added value for our customers--and have, in fact, already witnessed it through a joint use case in the Middle East." 12 VANILLAPLUS APRIL/MAY 2011 H O T L I S T T A L K I N G H E A D S Realising the potential of telecoms through next-gen OSS As telecom networks grow in complexity and sophistication, and new technologies emerge, Telcordia continues to place its bets on delivering the highest standard of next-generation OSS and service delivery for global communications service providers (CSPs). Bill Wanke runs Telcordia's OSS business, helping to keep the world's largest operators running fast and lean. He was previously responsible for Telcordia's service delivery business, so he has an excellent knowledge of a broad range of service provider challenges and responses. Here, he shares that with VanillaPlus. VanillaPlus: Everyone recognises that Telcordia has a unique position in supporting the operations of the US RBOCs, thanks to its lineage from Bell Labs. But to what extent has that evolved due to the demands of next generation, mobile and non-US business? Bill Wanke: It's true that Telcordia is best known within the OSS market for its support of the US RBOCs. That support extends back even further than the formation of Telcordia, more than 25 years ago. Historically, that's given Telcordia a unique insight into running large-scale telecom operations. The need to operate efficiently, at scale, is a constant requirement that Telcordia was addressing on Day One, and continues to address today in all sorts of new ways. But those businesses have been continuously changing, in response to new technologies and market opportunities. Telcordia has steadily evolved, in three main areas: first, within the RBOCs themselves; second, beyond the domestic US market; and third, within the wireless market. The RBOCs have continued to grow and invest in new technology, especially in IP and fibre. Some of Telcordia's largest initiatives last year were for supporting next-generation programmes for the RBOCs. Their scale represents a huge advantage for them, but also it means the potential for huge expense. The cost of errors and inefficiencies gets magnified. It's critical that they can achieve consistency in their processes for new offerings. This includes getting it right from planning and engineering of their networks in the field to assuring services once they are deployed. The RBOCs have been extremely successful in doing that. We've continued to work on ensuring that our systems reach across multiple generations of technology to ensure economies of scale. Over time, mergers and acquisitions by the RBOCs have created new requirements to understand how best to manage operation and systems change as well as how to achieve synergies `against the clock', balancing quick wins against long-term sustainability. Our core expertise has proved to be very repeatable. Beyond North America, deregulation and economic change has created new, large market players with RBOC-sized challenges, and Telcordia is rightly regarded as an expert in those situations. Our Consulting group has been working in the Middle East and Europe focused on establishing coherent and efficient operations for large CSPs. Similarly, we've seen our NextGen OSS portfolio embraced by global service providers looking for complete OSS coverage. Finally in the wireless space, we are experiencing considerable growth and adoption. This is being driven by a series of factors. Mobile broadband "There are a number of critical hurdles, such as scalability, availability, reliability, security, authentication and privacy that must be addressed before there is enough industry adoption to make the cloud truly economically viable" VANILLAPLUS APRIL/MAY 2011 13 T A L K I N G H E A D S "What's been has driven whole raft of network upgrade made possible already will be taken for granted � everything needs to programmes, impacting not only the mobile access network, but also the backhaul network. Now, we're seeing network and service development programs happening much more in parallel, rather than in series. The best example of that is what we're doing in support of our customer Telenor in Norway. become easier to Telcordia today continues to expand its global use; seamlessly providers addressing the most complex OSS mobile; cheaper; challenges. and more reliable" VP: There is a perception that the OSS sector is now more or less stably fragmented. What are the significant new opportunities for Telcordia? How does Telcordia stand out? footprint serving critical needs of service getting to market first cannot override the need to sustain high growth rates. That means automation. What is continuing to change, though, is the scope of that automation. There is now a greater drive to automate across the enterprise, say between engineering and marketing departments, and even across collaborative business partners. How can an operator streamline the process of interacting with third-party application developers to drive high-value services? That's the focus of a project where we're working with Portugal Telecom and Microsoft, to be showcased at the upcoming TM Forum Management World event in Dublin. Now that a good proportion of telecom operations have been automated, our customers are looking again at the parts that have been more difficult to automate, such as enterprise service design, for example. VP: Does cloud have a silver lining, and if so � does OSS get the benefit of it? BW: We're trying to move the industry beyond the hype around cloud services. There are a number of critical hurdles, such as scalability, availability, reliability, security, authentication and privacy that must be addressed before there is enough industry adoption to make the cloud truly economically viable. CSPs can help overcome those hurdles, and OSS will be a key enabler to creating confidence in the cloud. We see the provision of cloud services as requiring a much more direct interface into the OSS, bypassing the traditional front-facing systems to provide a kind of brokering capability between players in the cloud value chain. That is an exciting possibility, since it may genuinely turn the OSS into a profit centre, a value-creator, rather than a cost centre for a business. That would be a huge change. VP: To what extent are service providers still pursuing strategies of rapid transformation? BW: CSPs still want the benefits of the transformation that was promised a few years ago. However, at that time and increasingly so now, most were pursuing more incremental programmes of change, versus large-scale change. Programmes driven by a key metric, such as cutting the IT systems estate by 90%, found that the process of transformation was very difficult to drive from a high-level management position. The changes required BW: OSS really isn't a single market. While there are common functional requirements, and some degree of standardisation about how they are described, there are many more differences than similarities between buyers of OSS. Beyond a certain point, you're into quite fine but critical details of operations and services, policies and priorities. And an understanding of those is something that Telcordia has in spades. With our breadth, the continuous emergence of new problems to solve definitely offers opportunities for Telcordia, especially as those problems can be at any level � from new commercial models right down to modelling new LTE devices, or new ways to enhance the customer experience. The level of complexity will jump dramatically with personalised services and wide, open supply chains. IP on its own doesn't solve that problem. In fact, it may add to the problem by opening doors to new and over-the-top players � for example, content providers � and may add to operations and OSS challenges. But that's the sort of complex, multi-dimensional problem we thrive on. We're good at dealing with the complexity that others struggle with. VP: To what extent is automation still a primary focus of service providers and their OSS, relative to the simple need for speed? BW: Increased automation remains a top priority as a strategy to reduce or avoid increasing costs, as well as ensure a high-quality customer experience. CSPs recognise that the rate of takeup of new services can be extremely fast, but 14 VANILLAPLUS APRIL/MAY 2011 down in the operations level have taken longer to make, and in some cases, CSPs have found a viable alternative to `rip and replace' in the form of federation of platforms, a staged migration, or ring-fencing systems to prolong their value but steadily reduce their cost. For transformation, rather than going `all in' � to use a poker reference � on a large-scale project, Telcordia has long proposed a `managed evolution' approach, in which we identify both the changes needed to systems and processes, and the optimal way to make those changes over time. To continue the poker analogy, you make smaller bets, thereby lowering your risk. And the goal is to reduce transformation risk and keep the business running while still delivering incremental changes and benefits. It's an approach that holds a lot of appeal for CSPs that value pragmatic, rather than dogmatic, change. Some carriers have also experienced a sort of `enforced transformation' as a result of mergers and acquisitions. That's a whole different scenario, but has lots of the same characteristics: assessing current operating processes and systems, evaluating the options, looking to reduce complexity, gaining operating synergies and consistency across businesses, and delivering customers a better experience. Those are all things Telcordia knows how to manage well. VP: Telcordia has been talking a lot about the potential of telecom recently. What does that mean, and how does Telcordia help realize it? BW: A lot of our projects are still about applying new ideas � technology and services as well as business models. And they are driven by national and regional initiatives and emerging territories. What's been made possible already will be taken for granted � everything needs to become easier to use; seamlessly mobile; cheaper; and more reliable. The potential of telecom really is about enabling economic growth, more fulfilling business and personal relationships, more fun, as well as empowering a better response to unforeseen events. Despite our passion for technology and complexity, it's important from time to time for us to keep sight of why we do what we do in the industry. Telcordia really is all about helping our customers and their customers to realize the potential of telecom by making operations faster, slicker, and smarter. VANILLAPLUS APRIL/MAY 2011 15 ENTERPRISE PRODUCT MANAGEMENT EXPERT OPINION: Build the product experience by using product management to enhance customer satisfaction The Communication Service Provider (CSP) industry is currently awash with talk about the importance of optimising the customer experience. The customer experience is considered to be a key area of differentiation, and delivering a good customer experience as essential for those CSPs who wish to retain existing customers and attract new ones from rivals. Ernest Margitta explains how that starts with optimising the product experience. To truly optimise the customer experience, there is a vital dependency on optimising the product experience. The product experience is what underpins a satisfying customer experience: the products are what drive a customer to engage with a service provider; the diversity and attractiveness of offers and services are what generate additional revenue; and the quality and consistency of the use of those products is what keeps the customer loyal. Ultimately, the customer experience is substantially defined by the customer's interaction with the CSP's products, from purchase to delivery, to use and to payment. At the same time, communications products and services are no longer static, long-lived or few in number. CSPs are increasingly defined by the products they offer and, to stay competitive and deliver against customer expectations, they must manage and refresh a complex and dynamic product portfolio. And to add further pressure, the increasingly competitive CSP market requires that service providers closely monitor how their products are performing, so that they can make better commercial and strategic decisions and continually evolve their product strategy. The business challenge behind the experience comes down to a basic premise: what should I be selling to my customers and what do I need to do to effectively deliver and manage that? So the successful retailers that deliver on customer experience are the ones adept at product management and at understanding the relationship between customers' wants and needs and the products designed to fulfil them. However, delivering on this targeted style of customer management on a large scale is only possible through an `industrial' � or automated and scalable � approach to designing and managing products; not through the `artisan' � or labour-intensive � approach we commonly see throughout the industry. The central role of product in the customer experience When we consider what the customer experience actually involves we quickly discover this is a rather more complex question than it first appears. It encompasses far more than just customer service or customer service channels, as important as these are to the customer experience. Rather it is defined by the sum of all the touchpoints a customer has with a CSP. There are in fact a wide variety of touch points that together create the customer experience. The common element throughout an end-to-end experience, as Figure 1 shows, is the product: the product is being offered, sold, provisioned, used, billed for or enquired about at a given touchpoint. The lure of a particular product offer is often what attracts a customer to a CSP in the first place. How these products perform in terms of delivering against the customer's evolving wants, needs or desires contributes substantially to customer satisfaction, retention, lifetime spending and support costs. The author, Ernest Margitta, is vice president of marketing at Tribold Why the product experience needs to be explicitly managed The central role of product in the customer experience makes it essential that CSPs have explicit control over the entire end-to-end lifecycle of products, as well as having accurate and timely insight into how these are performing operationally, commercially and from the customer's point-of-view. However, delivering this level of insight is often far from trivial, since the concept of `product' is 16 VANILLAPLUS APRIL/MAY 2011 experience: direct losses (such as higher operational costs and billing errors) are spread over a number of operational areas, while indirect costs � such as opportunity costs or suboptimal competitive positioning � are notoriously difficult to quantify. Alternatively, the upside of such an approach can be more easily quantified and even proven. By simplifying and explicitly managing the product in a single enterprise product catalogue, CSPs can deliver enormous benefits including lower costs, greater commercial and operational agility, and increased customer satisfaction. Investments aimed at improving the customer experience will be undermined if CSPs do not also invest in better product management, since the product experience is such an integral part of the customer experience. Likewise enhancing product management also complements investments made in business intelligence and analytics, as it supports a 360� view of products, enabling CSPs to monitor and optimise their performance. The importance of the product to a successful commercial strategy, and to the customer experience, means that CSPs now urgently need to consider how they manage their products so as not to risk undermining both their strategic goals and investments. The proliferation of CSP products, the increasing velocity of product rollout, the speed of change and decreasing product lifespans mean that CSPs need to centrally and explicitly manage products. Figure 1 The central role of the product in the customer experience fragmented throughout the order-to-install-tocash-to-care process. Moreover, the proliferation of CSP products, the increasing velocity of product rollout, the speed of change and decreasing product lifespans mean that CSPs need to centrally and explicitly manage products. It is now broadly recognised that using a common reference of product information throughout the selecting, buying, using, paying and customer care phases holds the key to centralised control and effective management. And with the product portfolio central to running the business itself, the requirements are obvious: a product management strategy that delivers simplification and accuracy; standardisation with flexibility, reliability and low cost. Delivering this type of centralised product management not only optimises the product experience, but also increases operational efficiency in a wide range of processes and supports greater commercial agility. The benefits of delivering a better product experience Understanding, and ultimately managing, the key role that the product plays in the customer experience delivers a wide range of commercial, operational and customer benefits, as shown in Figure 2. Making the case for such an approach can be challenging, however, if trying to quantify the total losses as a result of a sub-optimal product Figure 2 Benefits derived from better product experience management VANILLAPLUS APRIL/MAY 2011 17 P R O D U C T A N D S E R V I C E C ATA L O G U E S future e h in th Fait of terms grail in have holy as the and s, why wing it the busines ith product s. e vie sw som pon epor t With pact u any problem ark Dye r M tial im m ents. poten rs had so ploym perato atalogue de o ec ser vic It stands to reason that better management of product and service catalogues not only enables operators to understand what's happening with their business, but also buys them time. By rolling out products faster and being able to offer sophisticated bundles they can quickly adapt to changing market conditions, shaving those all-important costs and increasing their chances of profit in the process. Joanna Gray, Convergys: Phased approach brings benefits That fear of transformation and the perceived impact upon existing processes and product stovepipes are the very reasons that Osborne suggests departmental level adoption � for product and service catalogues rather than entire organisational change � led from the front with long-term thinking. "Also, the definition of legacy is not stable, it remains very budget- and time-critical," he adds. "So, strategies that allow wrapping and reuse of legacy infrastructure into new catalogue driven models are very attractive ones, allowing them to realise some of the architecture paybacks without the need to write off previous investments." As Ernest Margitta, vice president of marketing at Tribold, explains: "Early deployments were hampered by suppliers who did not, and still do not, specialise in product and service catalogue systems." Margitta believes this left many operators disappointed and disillusioned with the results they received. "The key challenge is to ensure the business takes ownership for the programme," he adds. "At our more successful customers like Qwest and Sky the businesses are directly engaged from the outset in driving funding, requirements and involved in the delivery." Margitta says Tribold's customers have achieved between 45 and 75% cost reductions and some, like Qwest, have enjoyed a 5% revenue uplift or $125m in increased revenue per year. Impressive figures mean operators have been spending time looking at the root cause of their issues, weighing up complete transformation It's a no-brainer really. So, why have there been so many issues around the deployments of such solutions and have operators been wearing rose-tinted glasses where some forms of technology are concerned? Perhaps so. According to Simon Osborne, vice president of Comptel's fulfilment product business unit, challenging traditional concepts and architectures with any new technology often meets with resistance and the fear of change. "This is especially the case when the concepts cross departmental boundaries and return on investment is not clearly understood," he says. "Catalogue strategies, including many proof of concepts, were often used to challenge existing programmes and served as an example of an alternative approach, but rarely the preferred approach." Osborne says that a very common roadblock for adoption was the need for organisational transformation of the structure and process of existing product and service management. "This typically resulted in a lack of belief that it would ever happen or that the benefits could be ever realised," he says. Ernest Margitta, Tribold: Early deployment hampered by non-specialist vendors 18 26 VANILLAPLUS APRIL/MAY 2011 projects versus incremental enhancements, according to Fareed Khan, executive director of Product Management and Marketing at Conceptwave. "A catalogue deployment is revolutionary and transformational in many ways," he says. "It will change the way the business and technical departments and systems function and for this reason operators are taking their time in ensuring that the requirements and architecture phases are done right." Joanna Gray, product manager for Product Catalogue Management at Convergys, agrees: "This phased approach brings benefits to the operators in a gradual manner however once all B/OSS systems are integrated, the benefits are huge," she says. "Being able to create a new product offer in minutes versus weeks or in some case months." Judi Gill, marketing director for Clarity, adds that most product and service catalogues are now being built in conformance to industry standard data models, such as the TM Forum's SID to meet the long-term challenges of the industry. "However existing applications such as CRM and billing, that need to use the product and service data, may represent it differently in their own data models," she explains. "What can be implemented as a simple change in a product catalogue may generate multiple new products in another system � all needing careful end-dating, version management and so on. Magnify this by the number of systems and variations in place at most service providers and this becomes a formidable challenge." Khan thinks that's because of failures in the past. "We have seen a few operators fail with large transformation projects," he adds. "Hence, they are choosing more of a modular incremental approach. This is to manage risk, investments and also provide iterative deployments showing progress." Khan says that the key with a modular approach is to ensure that the product and service catalogue � or the master catalogue � selected is able to interface easily with their existing and future systems. "Many vendors that do not have a good integration framework with good integration experience have failed at delivering a core catalogue that will service many CRM and B/OSS systems," he adds. Even so, Osborne says that Product and Service Catalogues remain one of the most innovative and exciting OSS/BSS developments in recent years. "When you look at the investments being made in holistic networks, service marketplaces, self-bundling, self-care, cloud services and smart devices, and the need to personalise processes to recognise the customer's service context, Catalogue initiatives create huge potential for creating differential in the market," he adds. "If you combine this with the push towards real-time for all OSS/BSS functions there is a very real possibility that the traditional OSS/BSS boundaries and architectures of the last 20 years will be completely redrawn." For Margitta, that's critical. "This is the holy grail in terms of impact to the businesses that adopt and the tremendous enlightenment that customers can benefit from," he adds Margitta. "However, it is achievable. Just think big, start small and move very quickly" This phased approach brings benefits to the operators in a gradual manor however once all B/OSS systems are integrated, the benefits are huge" VANILLAPLUS APRIL/MAY 2011 19 CLOUD-BASED SERVICES EXPERT OPINION: Surviving the market transition to cloud-based services A fundamental shift is taking place in the way corporate IT equips employees with innovative collaboration or business solutions. While much has been written about the many ways in which cloud computing is changing the IT world, one thing is for certain � it offers enterprises the capability to disturb their respective markets with innovative services or new business models, writes Cyril Doussau de Bazignan. Having access to technologies and services on-demand without large up-front investments in infrastructure provides the enterprise with an unprecedented agility to respond to the technology demands of new and changing market opportunities, enabling them to more fully concentrate their resources on core business initiatives. The author, Cyril Doussau de Bazignan is product marketing director at InfoVista As IT spending is shifting from traditional IT to cloud-based services � both internal and external private clouds, an opportunity exists for communication service providers (CSPs) to solidify their market positioning and increase revenue. By offering cloud-based infrastructure and applications as part of their service portfolio, CSPs can augment their addressable market among large enterprises, which value cloud services for the economies of scale they provide or the possibility they offer to quickly create and roll out new services. In addition, the cloud self-service capabilities present a significant opportunity to offer new verticalised Software as a Service (SaaS) products to small and medium-sized businesses. Product innovation is the key Achieving success with a cloud-based service portfolio requires CSPs to differentiate their offerings by rapidly developing and launching true product innovations. As with all new and evolving market opportunities, timing is everything as those offering the first successful services will gain the largest market share. Apple's introduction of the iPad offers an instructive example of a successful product introduction and fast achievement of market leadership. Apple was first to successfully redefine the tablet market with its innovative user interface, enabling customers to easily access thousands of applications almost instantly and from any location. And Apple, by introducing a second version in the year following the initial launch, did not allow others to catch up. In doing so, some would argue that it cannibalised sales of the original iPad. However, this aggressive product innovation roll out secures Apple's position as the dominant player and leaves potential competitors with no breathing room. Service providers that take this lesson to heart and demonstrate similar product leadership will have the upper hand in the new markets that are open for cloud-based services. CSPs that launch cloud services will be able to differentiate themselves from their competition by offering a portfolio of services � such as unified communications, virtual private networks, compute and storage as a service, positioning themselves as the only provider of connectivity, communication and IT services for the modern corporate. Operational excellence Product innovation may attract initial customers, but CSPs' operational excellence strategy will ensure customer retention over the long-term. Unfortunately the cloud-based self-service environment � where customers directly and immediately purchase, augment or discontinue online and on-demand services through a customer portal � presents significant challenges for CSPs, often requiring a radical transformation in OSS 20 26 VANILLAPLUS APRIL/MAY 2011 capabilities. These challenges include: � Assuring specific large enterprise applications' needs in the dynamic and elastic cloud paradigm � Measuring and reporting on service levels in a multi-tenant virtual environment � Managing a large elastic cloud inventory composed of virtual and physical infrastructure components � Addressing evolving standards for interoperability � Automating the instant resource allocation required to enable on-demand and selfservice activation and deactivation of services To support their operational excellence strategy, CSPs will find it necessary to rethink their OSS since failure to tackle each of these challenges and operational constraints will make it difficult to manage a cloud service portfolio effectively, inhibiting the ability to capture the revenue opportunity that cloud services present. While CSPs must focus time and energy on gaining some momentum by quickly capturing and provisioning new customers, a successful long-term strategy will require them to integrate performance assurance as the next step of their product rollout. Performance assurance � an essential component The right performance assurance solution is a critical component in enhancing and differentiating cloud services, providing the needed visibility into the infrastructure, applications, and service levels. It allows the cloud organisation as a whole to make decisions based on the same information, enhancing coordination and efficiency and ultimately driving faster time to market. Several industry initiatives are worth following such as the Enhanced Cloud Service Management (UCaaS) catalyst at Telemanagement Forum's (TMF) Management World in Dublin � May 2011. By following TMF best practices and principles, Cisco has partnered with British Telecom and industry- leading OSS vendors to demonstrate a cloudbased collaboration offering for CSPs. The catalyst demonstrates a proof of concept for ensuring the successful delivery, end-to-end performance and monetisation of a cloudbased Cisco TelePresence service. It should interest any CSPs willing to bring cloud services to the next level by leveraging an OSS ecosystem that offers the required service activation, performance assurance and billing mediation capabilities. Another important consideration is whether the OSS empowers personnel across the various organisational functions. In a large transformation project of this kind, empowering people to easily use and share the tools and processes in place is also essential for success. For example, engineers in the network operations center (NOC) should have access to tools that enable them to create innovative dashboards for real-time monitoring on an entire service chain with custom key performance indicator (KPI) based thresholds. But having that capability will be further enhanced if these dashboards can be instantly shared with their colleagues, CSP executives and even customers. Gaining from the transition to cloud-based services The disruptive possibilities of a modern cloudbased IT will continue to drive the adoption of external private cloud services. And with critical IT infrastructure and business applications being moved off-site and entrusted to the cloud, reliability of connectivity and application performance � along with security � will continue to be the dominant criteria in choosing a cloud service provider. With the proper quality of service (QoS) guarantees and end-to-end SLAs, CSPs are well-positioned to capitalise on the growing cloud services demand from organisations viewing IT as a strategic asset. Having the right end-to-end infrastructure and application performance assurance solution will secure service adoption and allow market leadership through operational excellence. "A successful long-term strategy will require CSPs to integrate performance assurance as the next step of their product roll-out" VANILLAPLUS APRIL/MAY 2011 21 C A N T H E C L O U D B E T R U S T E D ? Trust clouds the issue There seems little doubt that the cloud is now here to stay. But what benefits can operators realise by migrating key functions like billing skywards? Indeed, can the cloud even be trusted when it comes to such mission critical carrier services, asks Gareth Kershaw? With users everywhere sticking their heads � and their budgets � in the clouds, managed cloud services like online billing are fast becoming an attractive option for carriers. But are they a safe, sensible one? "There is great potential and benefit in `going cloud'," comments Sakari Palko, principal of Technology Strategy for Business Solutions at Nokia Siemens Networks. "But technological advancements are still needed both in cloud infrastructures and in telecom applications to fully leverage clouds in telecom. Present cloud solutions don't, for example, support five-nines (99.999%) availability and requirements for very low latency, which are pre-requisites in telecom-grade systems designed to support real-time applications. Five-nines translates to a total downtime of about five minutes in an entire year � an outage benchmark many cloud service providers would not even recognise in their service level agreements (SLAs)." It is a view echoed by Tony Jackson, director of Telecoms Solutions at Convergys, who says that while the upside is obvious � "taking control of billing and revenue services on behalf of customers represents an excellent opportunity to secure new revenue by offering differentiated service provision and billing" � the challenge in doing so is "not insignificant." "As multiple `cloud' access points are created and with potentially complex ecosystems of suppliers and customers, operators must be able to carefully and cleanly segment how numerous parties are billed to create the best revenue opportunity," adds Jackson. "Surgical yet efficient billing is critical to extracting the best value from cloud services. In addition to the 22 VANILLAPLUS APRIL/MAY 2011 challenges of the `private', operator-controlled cloud, it is important to recognise the challenges facing operators in terms of the `public cloud' � the kinds of cloud services that anyone can buy and use. The issue for operators here is that they have no control over the infrastructure and won't get any commitment to SLAs regarding availability and performance. The conclusion here is that the public cloud infrastructure is not quite ready for something as critical as carrier billing, but private clouds � where the operator has control of the infrastructure � certainly are." The network itself also has to be a major consideration, argues Justin Fielder, CTO of Easynet Global Services. "Without a robust, well-managed network to join end users to the applications and data in the cloud, companies risk missing out on many of the benefits the cloud model promises. Telecoms CIOs can't afford to overlook their own networks. No matter how sophisticated the business is, if end the users don't see the benefit of the cloud in terms of convenience and flexibility, the telco won't see the benefits it expects either." The advantages are undoubtedly compelling however; the shift cloudwards having the potential deliver huge benefits to both service providers and customers according to Shahar Yaacobi, product marketing manager for Revenue Management at Amdocs. "Providing real-time cloud services management capabilities, increasing pricing transparency and quality of service parameters, and allowing flexible pricing schemes, changes not only the way end users consume services, but also their perception of the added value gained," he says. "As an example, a customer receives an email or SMS, in real-time, notifying him that he's about to reach his service usage limit and he is also prompted with a promotion, offering him to upgrade his cloud service package at discounted rate. This customer has higher visibility of his current usage status, can better manage his resource and budget, and enjoy the confidence derived by the elasticity of the cloud offering, combined with the flexibility of pricing and charging options." This expansion in offerings made possible by the cloud will broaden the customer's freedom of choice and of control and, most importantly, boost their confidence in the service provider. "The higher the end user's confidence is, the quicker is the move to intensive adoption of cloud services models and the direct effect on operator's revenue increase," he says. Lee Essex of eBilling and analytics provider, CTI Group believes that other factors � higher bandwidth, network quality guarantees, increased storage capacities, power saving and green credentials � are also helping turn the cloud into "a viable, and in many ways preferable, alternative to traditional systems." Balance, says Drew Rockwell, CEO of MDS, is critical. "The key for operators thinking about moving into the cloud is to not put all their stock into it. By just putting services into the cloud, operators can retain control while also providing attractive targeted offerings, services and packages and improving the overall customer experience." Recent research commissioned by MDS has found that a massive 49% of IT and telecoms managers are not being supplied with billing analytics services that enable a clear view of their telecoms spend and Rockwell argues that represents a huge potential market for operators. "By developing billing service packages for the cloud, operators have the potential to provide a more flexible, interactive view of customers' entire telecoms estates, enabling businesses to see telecoms usage on demand including mobile, fixed-line, broadband and wider IT services," he says. "Services in the cloud will also enable easier analysis of bills, making it far less time-consuming for businesses to separate personal and business calls for VAT purposes." "Of course there are risks associated with the cloud surrounding the potential security of data; potential for leakage between enterprises and cloud service providers," he points out. "It is key to have visibility and control of SLAs between the parties agreed up front." Justin Fielder, Easynet: CIOs can't overlook their own networks Lee Essex, CTI Group: Cloud can be a viable alternative Drew Rockwell, MDS: Opertators can retain control Tony Jackson, Convergys: Challenge not insignificant VANILLAPLUS APRIL/MAY 2011 23 CUSTOMER EXPERIENCE EXPERT OPINION: Making your customers transparent: They key to delivering the next generation customer experience In a recent Frost and Sullivan poll, 96% of communication service provider executives agreed that their organisation needs to undergo transformation. This is especially true for OSS/BSS where, for many providers, their IT environments no longer reflect business reality. The question therefore becomes not whether such transformation is required, but one of what to prioritise, write Christoffer Andersson, vice president, and Chris Yeadon, director of product marketing, Billing and Customer Care � Ericsson. Given this choice, certain providers will opt to respond to increased competition, in particular from the new `over-the-top' internet-based market entrants, by fully exploiting some of their most valuable, but hitherto underutilised, core assets such as network and customer intelligence to provide the optimum customer experience. Christoffer Andersson: Offer the right choices flexibility from their provider, most prominently in the choice and range of permutations of services available to suit their lifestyle. For example, one user might pay a premium for all YouTube traffic to be flat rate, while another prefers to control the download speed being paid for. Offering the right choices can be achieved using insights gained through Business Intelligence (BI) and analytics. These make it possible to customise offerings based on location and usage, mobile device characteristics, and even to provide advertising that is targeted, relevant and actually perceived as a valuable service, instead of being an irritant. Even the traditional bill, when delivered in this context, can become a logical and targeted advertising and promotional tool. If providers can supply this kind of high-context personalised service, consumers will increasingly demand more. Multi-play providers today offering fixed, mobile, broadband and TV may become service aggregators extending their portfolio to include utilities such as gas, electricity and water in their one-stop offerings. Over time, this gives the provider the advantage of an increasingly loyal customer base, less churn and potentially a much greater share of the consumer's wallet. Unlocking the core assets So how can OSS/BSS deliver this next generation customer experience? The data residing in OSS/BSS systems represents perhaps the single most valuable asset that a Consumer expectations and demands Ideally, we know that each OSS/BSS should reflect the requirements of the business environment, but how many existing support systems really do? Network advancements, new handset device technology, and high speed ubiquitous connectivity all have the potential to transform lifestyles and how business is conducted. We need only to look at the convenience and mobility provided by mobile broadband, or devices such as the Amazon Kindle to see how day-to-day life and habits are being changed. Customers are increasingly dependent on communications, however they increasingly take for granted the intrinsic value of connectivity. Therefore providers will be challenged to include greater personalisation, context, simplicity, choice and control in the services they offer and the billing and support they provide, in order to add any value to their customers' experience. The ability to understand what a specific customer wants or needs is central to resolving this, as the consumer demands complete Chris Yeadon: User habits are changing 24 VANILLAPLUS APRIL/MAY 2011 provider possesses and which, leveraged in the right way, has the potential to transform the customer experience and the dynamics of their relationship with the provider. The challenge facing providers is to transform their OSS/BSS architectures in a way that enables them to identify, transform and analyse this data and make it available in an intuitive form to the various customer facing channels, such as customer support, sales and marketing. Business Intelligence and analytics can unlock the providers' knowledge, for example, of how to identify and maximise value from their most valuable and loyal customers, predict behaviour such as churn and decide which products and services to offer. Customer Care Agents (CCAs) are in a great position to up-sell but need the right, non-intrusive information to give the customer a premium feeling and hence increase the probability to add value. With BI and analytics designed specifically for telecom applications, the CCA will be able to answer questions such as what, when, where, why and how customers are � or are not � using certain services so they can better understand, anticipate and influence customer behaviour to maximise revenue. Increasing customer transparency Customer Relationship Management (CRM) is concerned with providing as holistic and transparent a view of the customer as possible and optimising a relationship which is intended to be developed over time. Or as motivational speaker Patricia Fripp puts it: "You don't close a sale, you open a relationship, if you want to build a long-term successful enterprise." For a provider, the aim is to offer as much actionable information as possible to the customer facing channels in order to provide the most personalised and relevant experience possible. To this end, a common IT objective is to integrate their charging and billing systems with CRM in order to obtain a fully holistic view of the customer. But the next generation CRM system should not only offer a holistic view of the customer but also of the experience the customer has had with their provider. From an OSS/BSS perspective, this could include integration of device management applications to enable verification of device settings against reported customer problems, and if necessary over-theair reconfiguration. This could include the integration of applications that provide intelligence about the customer's network performance experience, as predictive analytics based on this can accurately determine an individual customer's propensity to churn. Rendering OSS/BSS functionality and data in an intuitive and actionable format within a common CRM environment is what will truly enable this next generation customer experience. Imagine if a complaining customer could telephone their provider, and be directly connected with a CCA, without having to navigate through an IVR or voice-recognition menu. Based on computer-telephony integration, the CCA knows exactly who they are, the services they subscribe to, their payment behaviour and complaint history, but moreover their propensity to churn or their priority based on the analysis of their probable life-time value. This additional intelligence could help a CCA quickly verify, diagnose and solve the customer's real grievance. More importantly, fast and satisfactory problem resolution could be transformed into an opportunity, whereby a potentially high spending customer is offered an attractive retention package or included in a future targeted marketing campaign. All this can be performed as a closed loop interaction, without traditional recourse to second line technical support and the consequential customer frustration. Shaping the next generation customer experience The opportunity to shape a next generation experience based on increased transparency of the customer is therefore very powerful. The potential integration of OSS/BSS application functionality and data along with predictive analytics concerning service, loyalty and churn could offer a completely superior customer experience. Yesterday's CRM systems lacked this telcospecific integration and the deep insights possible from combining valuable, but underutilised, OSS/BSS data with device management, revenue management and analytic systems. Next generation CRM solutions will incorporate these insights, fully exploiting the customer transparency revealed using business intelligence and analytics, to lower churn and leverage the up-sell, thereby empowering the service provider of the future to shape this winning next generation customer experience. Fast and satisfactory problem resolution could be transformed into an opportunity VANILLAPLUS APRIL/MAY 2011 25 T H E I PA D O P P O R T U N I T Y F O R O P E R AT O R S It's time for operators to dare to be different The iPad age is about data, certainly, business evolution, probably, and customers, definitely. Customer needs are also changing. A one-size-fits-all offering appears ever so dated in an era easily defined as a time when smart device owners know `there's an app for that', no matter how niche the need. New models are required for operators to make the most of the opportunities, writes Jonny Evans. Apple, first with the iPod, then the iPhone and now the iPad has changed the face of the communications sector. Who would have thought or foreseen the architect's PC maker doing that in 1995? Few is the likely answer. Nevertheless, partly because of the Cupertinobased device-maker's activity, data traffic grew 159% in 2010 according to Cisco Systems. The equipment vendor also reports that mobile video will account for 52.8% of 2011 data traffic. Consumption isn't going to decline, either. Analyst firm Juniper Research predicts mobile data traffic will reach 14,000 petabytes by 2015 � that's 18 billion movies or three trillion music tracks. Owen Cole, technical director EMEA at F5 Networks, acknowledges the scale of the transformation the industry is going through."Over the last few years, Apple has taken a fresh look at portable data and caused a mobile revolution," he says. Even so, today's consumption levels are only the thin end of the wedge. When Apple, Google and others launch cloud computing services, data traffic won't just be for entertainment � it will be mission critical. Visual Network Systems director Matthew Tucker thinks a move to cloud-based systems will be a business opportunity for operators to reach detailed service level agreement (SLA) deals with business users to underpin such services. Operators "want to move up the stack, offering hosted services customers can then use," he says. As it is, Acision's Steven Van Zanen says: "Existing network resources will not be able to keep pace with the consumer demand for mobile data and the emergence of new `mobile connected devices'." Operators must manage this traffic and meet these rising consumer expectations in a way which is both sustainable and profitable. John Dunne, CTO of Intune Networks warns: "The iPad is just the start... eventually the carriers will hit a financial wall, built on an outdated architecture in their networks with plans based on flat fee billing." Technology deployments and offloading traffic makes sense as part of the response, but optimising existing services is better. "What do people want from their services? Are there different groups of people who want different things?" asks Gordon Rawling, director of EMEA marketing, Oracle Communications, who believes the problems can be managed by focusing on customers first. "Customer care needs to be thought of in a different way." For Van Zanen: "The standard one-size-fits-all approach to mobile charging is proving ineffective. Consumer confidence in operator services can be vastly improved by giving them the power to control and manage their own spending," he says. Acision's own research shows 63% of consumers would pay for personalised mobile broadband services. Policy vendor Tekelec claims 50% of consumers would pay 3.4 ($5) a month extra for unlimited use. Telesperience's research and publications director, Teresa Cottam notes that: "Moving forward, smarter strategies such as differentiated quality services will provide choice, a better experience and, importantly, create those vital new revenue streams service providers need," she says. "Dumb 1G techniques such as capping and throttling have been prohibitive and universally unpopular with customers. Information is power, Tucker adds that operators watch Netflow, use Deep Packet Inspection and test case software to assess network robustness and site behaviour. "In order to prioritise you must analyse traffic across your network and must manage services to prevent degradation," he warns. Gordon Rawling: Problems can be managed by focusing on customers first Steven Van Zanen: The standard approach to mobile charging is proving ineffective 26 VANILLAPLUS APRIL/MAY 2011 For F5's Cole,"LTE and 4G themselves are necessary steps to maintain and improve quality of Service (QoS); the iPhone has been the most visible driver of vastly increased mobile internet traffic in recent years, placing great strain on existing MNO infrastructure and this isn't likely to change now the iPad has hit the shops," he says. Oracle notes many are unwilling to make investment in LTE until they see a strong business model. Rawling notes: "We love to have a technology conversation, but there are constraints on current technologies." A smart strategy would be to deliver different types of service for different customers, he believes. "Enterprises are very willing to invest," in excellent services, "CSPs must now think differently about customer services," he says. Cole feels that generous capped data deals today will seem stingy tomorrow. "Operators are preparing us for a new payment era...where users are segregated and serviced based on the amount and type of data consumed," he says. "Improved quality of service and reduced operational costs will be made possible by offloading and other congestion control solutions like optimisation," says Juniper Research analyst, Nitin Bhas. Telesperience data reveals 20% of operators are offloading traffic right now, but this climbs to 73% by the end of 2012. Telesperience sees Wi-Fi offload becoming the prevalent model, though hurdles exist. "Customers complain they have to pay for femtocells to make up for failures in the cellular network. Perhaps we should move to a point where consumers get the box free with the subscription," says Cottam. Like so many industries in the Internet age, mobile is evolving into a massive market of multiple niches, where operators must focus on their strengths to serve specific solutions. "The key to success is coming up with an offer that seems fair, is easy to understand and use and is still profitable. What that is, though, is the $64,000 question. In reality there is unlikely to be a single answer, but lots of variations," says Cottam. s ss i r cce e o su an off ey t y h ek wit eas "Th up , is ing fair d use com eems an s nd t le. tha dersta tab n rofi ugh, is to u o till p is s t is, th stion" nd a ue ha 0q at t Wh 64,00 $ the VANILLAPLUS APRIL/MAY 2011 27 CUSTOMER EXPERIENCE EXPERT OPINION: Operators can retake the initiative and get back in the game Scott Stonham explains how operators can combat the OTT threat by making use of their existing winning attributes. Communications service providers of all types face a range of threats to their business. They have to contend with the commoditisation of core revenue streams from traditional voice and data services. They must also invest in improved network capacity to cope with the massive increase in video and other data traffic, while deriving little, if any, additional revenue from such services. Providers of over the top services such as Google, YouTube and Facebook are using their networks to deliver bandwidth intensive services but operators are being cut out of the revenue chain while simultaneously being required to support such offerings. Consulting firm Cap Gemini recently researched the impact of increased bandwidth consumption on the earnings before interest and taxation (EBIT) of a sample European broadband operator for the period 2009-2012. The analysis found that for customers with 1GB of average use per month, EBIT margin declines from 50% to 20%, for users with 1.6GB of average usage per month, EBIT declines from 45% to around 10% and for users with 2.4GB per month, EBIT falls from 35% to minus 10%. Stack that against typical industry figures suggesting that Facebook accounts for 40 to 60% of mobile network traffic and the scale of the problem is laid bare. "Telcos have to decide the strategy they want to pursue into the future," Ulrich Hammerschmidt, a vice president in the innovation group of Deutsche Telekom ICSS, told a CommuniGate Systems user conference in Bodrum, Turkey, last year. "Do they want to continue providing just commercial products or do they want to move up higher in the 28 VANILLAPLUS APRIL/MAY 2011 value chain in order to compete against companies such as Facebook or Skype?" The obvious answer to that question is yes, but operators are not only engaged in competing with those companies. At the same time, new threats such as Mobile VoIP (mVoIP) are coming to market that will impact mobile operators in particular by encouraging users to switch to VoIP when roaming thereby killing the traditional operator cash cow of voice roaming charges. The compound affect is nothing short of spectacular. Analyst firm InStat has revealed that a mobile VoIP user could talk for 22,222 minutes before exceeding a 5gigabyte/$30 mobile data cap � there are only about 43,000 minutes in a month. In addition, the firm predicts that by 2013, mobile VoIP apps will generate revenues of $32.2bn pa, with more than 278m registered users. At the same time, operators will bear the full burden of carrying this traffic. Juniper Research predicts the number of mVoIP minutes carried annually on 3G and 4G networks will rise from 15bn in 2010 to 470.6bn in 2015. Operators are aware of the problem. "Mobile VoIP has been growing at an exponential rate and will continue to grow," Cengiz �ztelcan, director of international investments and business development at T�rk Telecom, said at the CommuniGate Systems event. "We believe that offering better value for money is the key and the new technologies such as VoIP and high definition voice are going to be the key differentiators." However, to date operators in general have broadly failed to carve out a strong position Scott Stonham is vice president of marketing of CommuniGate Systems for themselves in the mobile applications and services value chain. Initiative after initiative has failed as operators have tried to impose their business models on a user base that has changed forever and companies such as Apple, Amazon and Google have made relevant propositions with attractive delivery models to the market. Operators have been left behind, vainly trying to engage the market with walled garden content ecosystems and other proprietary offerings. "There are a lot of threats coming from companies that are providing free services, such as Skype and Google," Khaled Nuseibeh, who leads mobile data and broadband marketing for Zain in Jordan, acknowledged to the Bodrum summit the challenges of providing services that are similar to the free services but offer greater value. "Customers see that as a priced versus a free service and it's not easy to compete." The battle operators now face is not so much with their traditional competitors as with these new providers of applications and services. In the past, AT&T would have battled with Verizon for market share, Vodafone would have battled with Telef�nica or Bharti Airtel would have fought with Aircel and that competition will continue. However, in some respects that intra-industry competition has left operators behind in the new applications and services arena. They've focused too hard on bringing services and offerings to market that they felt enabled them to compete in the old telecoms market with telecoms-related offerings and, while their attention has been occupied with doing that, the lean and the lithe, unencumbered by the burden of network operation and investment, have entered the market with propositions that consumers that are sold in ways that consumers enjoy buying them. "The communications market is moving toward mobile devices, mobile VoIP, and mobile unified communications, and the opportunities for revenue and first mover advantage are significant," Brent Kelly, senior analyst and partner at Wainhouse Research, commented recently. The fight back starts here These factors strung together paint an extraordinarily gloomy picture of a future for operators as a provider of a commoditised, fat but dumb connection. The situation is now so acute that commentators predict that typical operators will reach the end of profitability by 2015 if continued erosion of traditional revenues continues and nothing emerges to replace them. That may turn out to be the case but we have not reached the point at which it is game over for operators. They have to do things better, faster and cheaper than ever before but they still have a range of attributes that can aid them to get back in the game. Voice revenues might not be fully replaced by 2015 but the attributes listed below provide a foundation for the operator sector to be far more than a dumb pipe and highly profitable again by 2020. � Operators' trusted relationship with their customers � Operators' billing relationship for charging for new services � Operators' ability to do complex things at great scale � Operators' expertise in voice � Operators haven't made the most of their position in the market � Operators own more of the end to end delivery network than anyone else � Operators are typically more in touch with their local markets than the OTTs � Operators own the numbering pools for telephone numbers These factors mean operators are still very much in the game and, although they are late to the field of competition, they have a very realistic prospect of turning the situation to their advantage if they now play to their strengths instead of replicating the confused strategies of the past. The battle operators now face is not so much with their traditional competitors as with these new providers of applications and services. This article is an CommuniGate Systems is hosting a Summit in Berlin on 25-27 May designed to help carriers address these questions and collaborate with each other to build innovative products and future strategies. For further information visit: http://www.communigate.com/Berlin abridged version of a CommuniGate Systems whitepaper, which can be viewed in full at: www.communigate.com/OTT 29 VANILLAPLUS APRIL/MAY 2011 VIDEO PREVIEW How CSPs can win in the cloud An operator's cloud services offerings need to encompass both on-premise and syndicated offerings, according to Jack Zubarev of Parallels and Knut Aasrud of Microsoft. Here we preview a video conversation between them coming soon to www.vanillaplus.com. Communication service providers (CSPs) are in a fantastic position to capitalise on cloud services for three main reasons: 1) they own the underlying network infrastructure 2) they have existing commercial relationships with tens of millions of small and medium business (SMB) customers 3) they have a culture of support that creates a competitive advantage over pure-play cloud providers. However, to profit from the cloud, CSPs will need to offer a full set of cloud services so that they can cover the IT needs of all potential SMB customers. In addition, CSPs will need to make sure customers are activated and using more than one service, as this reduces churn by over 50%. Finally, CSPs will need to enable online selfservice so customers can easily add, remove, and update their cloud services without having to call in to support. Offering a wide range of cloud services With the right cloud service delivery automation solution, CSPs can aggregate multiple cloud services from multiple vendors, giving them the choice to either manage these services onpremise, or let a third party provider manage the actual infrastructure while just orchestrating the provisioning, billing, and licensing of the service � a syndicated approach. Given how rapidly customer requirements are evolving, time-to-market is THE critical factor for winning in the cloud. The fastest and most flexible way for CSPs to proceed is with Parallels Automation: commercial-off-the-shelf software built on multi-tenant standards and designed for enabling the delivery and management of cloud services while integrating with existing OSS/BSS systems. Using Parallels Automation, a CSP is able to rapidly add new cloud services and define service bundles along with pricing and margins. How Parallels enables Microsoftbased cloud services Microsoft offers a wide range of cloud-based solutions for CSPs to offer their customer base, in both on-premise and syndicated models. By using Parallels Automation, a CSP is able to manage their entire cloud services portfolio and harness the power of Microsoft's offerings. For example, Microsoft Exchange is one of the most widely used messaging platforms among businesses today. With Parallels Automation, a CSP can choose to allocate resources � such as the number of mailboxes and the amount of storage space � according to the service plan the customer chooses, billing overage charges when a customer exceeds the allocated amount. Taking it a step further, a CSP could also use Parallels Automation to add Microsoft Lync Server and Microsoft SharePoint to provide its customers an even more comprehensive communications package. In addition, as Microsoft makes continued investments into its online portfolio of services, Parallels Automation also enables a CSP to syndicate the Microsoft Office 365 suite of applications, thereby gaining the ability to: � Rapidly launch syndicated Office 365 services - in weeks rather than quarters � Maintain the primary billing relationship with the end customer � Leverage open APIs to integrate with existing OSS and BSS systems � Easily bundle additional cloud services, such as backup, security, domains, and VPS Although the Office 365 services are hosted in Microsoft's data centres, other services the CSP chooses to include in the bundle may be hosted by them or syndicated from other sources. Ignore the cloud? Simply, CSPs that ignore the cloud will see churn increase. In a recent AMI study, 48% of SMB respondents indicated they were likely to switch providers in the absence of cloud offerings. Disruptive players are coming into the market with full service offerings and growing rapidly; CSPs cannot afford to ignore the opportunity and threat that cloud services represents. For more information visit: www.parallels.com/csp Jack Zubarev, president, marketing and alliances, Parallels: Time to market is critical Knut Aasrud, general manager, Microsoft Communication s Sector, EMEA: Wide range of cloud-based solutions for CSPs to offer 30 VANILLAPLUS APRIL/MAY 2011 D ATA M I G R AT I O N EXPERT OPINION: Critical data migration � time to conquer the challenges of change Operators are increasingly finding themselves under pressure from agile new entrants capable of undercutting their prices. To remain competitive, operators must be able to make use of economies of scale, keep up with intense competition, engage with increasingly technology-aware consumers and deploy innovative services. Judi Gill examines how operators should approach the need for an OSS refresh. The lynchpin to addressing all these activities is the consolidation and automation of processes across different services and networks with the latest generation systems, including Operational Support Systems (OSS). However, updating a legacy OSS, or any other system, can be a significant challenge � after all, they are highly complex, critical systems that are integrated into every aspect of an operator's business. Often multiple systems have evolved organically over time, resulting in a tangle of business critical processes and disparate data. This can make the implementation of a new OSS a foreboding challenge indeed. A protracted period of transition or, worse still, a failed deployment, can cost operators considerable amounts of time and money. The tipping points for change For these reasons, many operators hesitate to modernise their OSS. Operators with systems that do not meet their requirements often find themselves unable to deploy new market strategies, even when the business case for them is clear, due to the cost and risk of supporting the change in the OSS. They notice that they are constantly being outpaced by competitors, which seem to be much faster at launching products and capturing market share in new areas. Meanwhile, they find their profit margins are dangerously thin, despite having higher prices than their main competitors because of a lack of automation in cross-product processes. Data migration One of the most hazardous areas in an OSS refresh is the migration of data. Automation demands data accuracy, so legacy data must be taken from many disparate structures and formats and compiled into one consolidated database. To achieve this, data analysis should be addressed right from the start of the project so that adequate time is allowed for successful cleansing and migration activities. One successful approach is cleaning data before migration to the new OSS, rather than as part of the migration process. For example, an operator may have regional deployments of its legacy OSS, each very similar, but with their own customisation. Getting this data cleansed and in a consistent format within each system before it is migrated takes great pressure off the OSS migration. It means that there needs to be only one data migration process, rather than several variants. Even if there is only one existing OSS, prior data cleansing makes sense. Most importantly, it means that the expert users of the system can quickly resolve any data discrepancy issues � after all, they have used these systems and processes for many years. Put those same experts in the alternative scenario of a new OSS being delivered at the same time, and the data discrepancies get entangled with the changed processes � making it very hard to pinpoint the root cause of fallout. The resulting frustration impacts user buy-in to the new system and the fallout in processes until issues are resolved can greatly impact critical business operations and customer satisfaction. Reaping the rewards Data migration is by no means the only hurdle faced when migrating to a new system. The project roll-out strategy needs to be an optimal balance of minimising impact to the business, whilst providing benefits upfront to drive the transformation forward. Phasing the introduction of the OSS, for example, by service or by functionality, allows the delivery team to focus on delivering initial phases quickly. In doing so, the program demonstrates to the business sponsors that it can meet the demands of the business case, and sets a positive momentum for change across the organisation. VANILLAPLUS APRIL/MAY 2011 31 The author, Judi Gill, is director of market analysis & strategy at Clarity VIDEO PREVIEW Deliver visibility into the network for next generation services Jay Borden, CEO, Nakina Systems: Challenges can be overcome For innovative service providers building next-generation services, automated discovery of network equipment, reconciling networks with inventory systems, auditing software in the network and centralising management of network security are all required. Here, VanillaPlus previews an upcoming video for www.vanillaplus.com with Nakina Systems. In the video, Nakina CEO Jay Borden will address the challenges faced by service providers who are rolling out LTE, IMS and cloud-based services with their network software configuration. He will review how the challenges can be overcome with the right solution. Nakina Systems delivers unprecedented levels of visibility into the network. The detailed configuration information provided by Nakina's Network Integrity Suite allows any operator to achieve network integrity and deploy services more quickly and with fewer outages. Borden will discuss the current `best practices' for auditing and updating network software configuration and discuss the benefits of automation. Highlights are set to include a discussion of the concept of `gold standard maintenance' and what it means to Nakina. Doug Bellinger, chief technical officer of the company will address the network inventory challenge facing many service providers in today's market. He discusses the importance of a discovery solution in addition to the benefits to the customer. Highlights will include issues faced by service providers due to inconsistencies in their databases of record, which hamper efforts to automate critical processes such as service activation. Bellinger will review how Nakina's NICollector inventory solution addresses these challenges. David Broad from Bell Canada will explore the key security challenges existing in the network which require them to take action. Many large organisations face serious challenges managing passwords and privilege categories, networkwide. Broad will detail how Bell leverages the Nakina solution to optimise this process across the network. In particular, Broad will highlight the video logging feature, which played an important role in the security implementation. In addition, he will discuss what specifically, about the Nakina solution, was of value to Bell. Doug Bellinger, CTO, Nakina Systems: Inconsistencies in data hamper efforts to automate Enterprise-class cloud must be robust and scalable Many enterprises have made good progress toward getting better utilisation out of their infrastructure through virtualisation of compute and storage � and optimisation of networks, but are still looking at ways to move their IT workload around depending on economical, trust and functional aspects. Andy Waterhouse, pre-sales director of EMC Ionix, will discuss the issues in greater depth in an upcoming VanillaPlus video. Cloud computing offers the promise of such improvements in business agility through the ability to put IT workloads where they're best utilised and where they're most efficiently and safely delivered. The key to capturing this promise lies in effective `workload right-sourcing' which trusted, enterprise-class cloud service providers can enable. Besides having a robust and scalable cloud infrastructure in place, those cloud service providers need to address its complexity with the right infrastructure management architecture and three operational areas become critically important. The ability to: 1. Rapidly provision new applications and services 2. Know and maintain compliance to service level objectives at any time 3. Find and fix problems before users are impacted A highly automated management solution, such as EMC Ionix, addressing the physical and virtual infrastructure helps to overcome these operational challenges. 32 VANILLAPLUS APRIL/MAY 2011 Andy Waterhouse, pre-sales director of EMC Ionix: No network equals no service This applies not just to the virtualised data centre, but also to the wide area networks carrying the cloud services all the way from the cloud service provider to the enterprise. The reliability of the network is another critical part of the infrastructure since no network equals no service. Proved by more than 250 communication service providers around the globe, EMC Ionix has particular strength in that area and in combination with its extended management capabilities for virtualised data centres it can be turned into a real competitive advantage for cloud service offerings. EMC leads the cloud computing sector and as part of our cloud strategy, EMC is committed to the enablement and long-term success of selected service providers through the EMC Velocity Service Provider Partner Program. We're offering a comprehensive set of technology, solutions, and differentiated services to help service providers capture the demand for public cloud and IT as a service. THE CONVERGENCE OF BSS AND POLICY EXPERT OPINION: The light at the end of the congested bandwidth pipe The mobile web is one of the richest veins of opportunity today for Communications Service providers (CSPs) � and presents one of the greatest challenges, writes Alice Bartram Driven by advanced devices and bandwidthintensive applications, exponentially growing data traffic on limited pipes can degrade the user experience due to congestion management issues. With all of this traffic growth, one would expect revenues to soar. However, ironically, the flat-rate plans that worked so well to hook customers in the penetration phase are now greatly impeding mobile data revenue growth. How can CSPs capitalise on mobile broadband uptake? With three key considerations: pricing/ charging flexibility, better network management and an improved customer experience. Combining BSS and Policy: The way forward The huge increases in mobile internet traffic have caused an acute need for a centralised, flexible and scalable policy solution, but early forays into use of policy quickly revealed that looking at policy just in terms of the network is limiting � both to subscribers and to the operator's business. Instead a multi-dimensional approach to policy management is required. Multi-Dimensional Policy Management, ties together all aspects of the customer relationship, network resource management and monetisation when defining and enforcing policies and pricing schemes. The combination enables data rate plans to correspond directly with customers' class of service, with detailed real-time usage information � including service type and network status � being made available to the charging system. This provides the ability to smartly charge based on any combination of service, application, content or website, network condition or device type, facilitating quick and easy definition of segmented data plans that are both subscriber- and network-aware. Industry analysts are convinced that interdependencies between policy and BSS elements require solutions that combine and unify them. A leading analyst notes that all four functions � policy management, enforcement, DPI (deep packet inspection) and real-time rating and charging � working together, can enable an effective customer-focused policy strategy that can flexibly define competitive offers to support the operational needs of the advanced services that customers have come to expect. Another prominent analyst emphasises that the, "...appeal of linking policy with the BSS is that it aligns activities more closely with customer data. If policy controls and enforcement are preintegrated or part of the BSS, it can reduce costs, time to market, and the risks associated with deployment." Bringing multi-dimensional policy management and smart data charging into the realm of reality will require dismantling of siloed ecosystems not merely extending these with `bolt on' solutions. Critical success factors When planning a move towards a comprehensive end-to-end solution, look for solutions that provide: � A unified information base: Complete, current and consistent customer and product information available at every interaction Unified functionality: Combined policy management, enforcement (including DPI) and comprehensive BSS functionality spanning critical business functions such as sales, marketing, customer and order management, real-time rating and charging and billing Pre-configured business flows: To address most common business issues out-of-thebox � reducing deployment time and risk Centralised provisioning: A single creation and provisioning point for all data plans and their underlying policies The author, Alice Bartram, is associate vice president at Comverse � � � Such a solution exists in Comverse ONE Billing & Active Customer Management. This modular, high-performance, highly-scalable converged BSS system provides critical business functions and deep-rooted in-network capabilities that span policy management and enforcement, all unified around a single data model and product catalogue. This unification removes complexity for an operator and removes translation between disparate systems � sources of cost, slow timeto-market, and poor customer experience. With Comverse ONE, a multi-dimensional approach to policy management and smart data charging are available now to all CSPs looking to make their networks smarter. VANILLAPLUS APRIL/MAY 2011 33 VIDEO REVIEW CSG Intec: Five revenue-generating priorities for CSPs in 2011 In November 2010, Denver-based CSG Systems acquired Intec Telecom Systems to form the world's second largest Business Support System (BSS) vendor. Through a combination of licensed products and managed services offerings, the combined company serves CSPs on every continent and in all three sectors of wireless, fixed line and cable. This expansive industry view gives CSG Intec insight into how the world's service providers are pursuing top line revenue growth. VanillaPlus caught up with David Heaps, senior vice president, Corporate Strategic Planning and Research and Dwayne Ruffin, senior vice president, Product Strategy, to learn more about the acquisition and the top five revenue-generating priorities for CSPs in 2011. The industry's over-arching issue is revenue generation, and this is driving initiatives such as understanding the customer and monetising content, both areas where CSG Intec delivers value through its Singl.eView charging and billing; Total Service Mediation; Quaero customer intelligence and Wholesale Business Management solutions. According to Heaps, content monetisation is the top priority "from which all the others flow." CSPs face a continued need to innovate and differentiate, and to attract and retain customers. And the CSP must now capture and maintain relationships with the best and mostdemanded content providers, providing the best service on both sides of the value chain: to partners as well as customers. The expanding consumption of content comes at a price; the cost of maintaining network capacity to meet demand will soon exceed the revenue generated. Gone are the days when network policy management and cost controls were sufficient. CSG Intec's clients are moving away from restricting subscribers' usage through network policy management to enabling subscribers to consume in an informed and controlled fashion. This necessitates bringing together policy management and charging which traditionally were regarded as separate domains. The combination enables the CSP to both restrict and empower customers, resulting in revenue generating opportunities. The third priority is operational and profitable LTE-driven convergence, which has impacts that will be felt throughout the BSS: LTE will facilitate a move towards value-based pricing, enabling differentiation in over-crowded markets; higher volumes of network transactions will be processed increasingly in real-time, necessitating more scalable and more reliable mediation systems than ever before; and increasing partners in the content and service ecosystem means that wholesale charging and settlement becomes more complicated. The era of the multiply-connected consumer is already upon us. Recent studies have shown that the average worker has six communications devices. For CSG Intec, providing a single view of the subscriber means that all discounts, loyalty points and other account activity can be shared between devices and users. The increase in devices isn't restricted to the realm of humanity: M2M represents an opportunity for the CSP to expand its business models, including deployment, monitoring, maintaining and reporting of the related operations. CSG Intec has a growing presence in serving CSPs with BSS infrastructure for their M2M business models. David Heaps: Clients are moving away from restricting usage Watch the video at www.vanillaplus.com 34 VANILLAPLUS APRIL/MAY 2011 VIDEO REVIEW LTE: end-to-end service management. How to ensure customer QoE in 4G In a recent VanillaPlus video, filmed on location in Barcelona, Spain at Mobile World Congress, Paul Gowans, regional marketing manager of JDSU shared his view of the challenges the industry faces when it comes to ensuring that operators will be able to deploy LTE smoothly, profitably and efficiently. The video is available to view now at www.vanillaplus.com Monitoring and troubleshooting mobile data services just got a whole lot more complex. With the introduction of LTE, many new end user devices will be introduced capable of high bandwidth services and an entire new radio and core network to support them. Operators need to be able to keep up with the insatiable demand for always on, always available mobile services � and it's not a case of if things go wrong but when. Without the right monitoring capability, customers will go elsewhere as their loyalty to the handset increases. Get it right though and carriers will have many highly profitable customers loyal to their network and brand for the long term Learn from JDSU around running successful LTE pre-deployment trials, delivering tools for all mobile data services covering 2.5G, 3G, HSPA and now 4G. Find out how JDSU can use their 4G trial and 3G deployment experiences to manage the challenges and service affecting issues carriers will encounter in LTE. Find out more at jdsu.com and jdsu.tv Paul Gowans, regional marketing manager, JDSU: Operators need to keep up with insatiable demand How to monetise data � your strategic asset Connectiva sees increasing convergence of customer experience analytics with revenue assurance and fraud management as providers look to consolidate analytic applications and exploit mutual synergies. Vanilla Plus recently caught up with Anandan Jayaraman, the company's chief strategy and marketing officer to make a VanillaPlus video exploring initiatives, best practices and recent success stories. The video is live now at www.vanillaplus.com, key questions are profiled below. VanillaPlus: Telcos are drowning in data and yet most of them are no closer to leveraging it effectively. How can they go about this better? Anandan Jayaraman: We see three major challenges that are creating a perfect storm. First, in most operators, customer data is incredibly fragmented, distributed and replicated across hundreds of applications. Second, just in the last 12 months alone, customer data has quadrupled and that proliferation is only getting worse. Third, business processes and systems are still channel and product centric making it difficult to get a single view of the customer. Several leading operators are now starting to create and evolve an analytics framework for subscriber data monetisation � an integrated and holistic way to capture customer data across multiple systems and then monitor and monetise it across different applications. We believe this is going to be a game changer for providers. VP: Connectiva is redefining its positioning around subscriber data monetisation. AJ, what are the principles behind it? AJ: Subscriber data monetisation is a business and technology framework that we offer to the marketplace. It is based on three major principles: It's a smart way to collect and correlate customer data across a fragmented BSS/OSS landscape and build a single and real time view of each subscriber; Embedding this customer intelligence into all front office channels so that call centre agents, PoS personnel and systems can make intelligent decisions; and Enabling all analytics in the enterprise to leverage this body of knowledge integrated across varied fragments of the customer's life cycle. This makes each analysis function � be it revenue assurance, fraud or customer analytics � a lot more effective. We help organisations uncover insights from customer data and translate them to tangible business outcomes that optimise revenues and profits. Anandan Jayaraman is chief strategy and marketing officer of Connectiva: This is going to be a game changer for providers VANILLAPLUS APRIL/MAY 2011 35 SERVICE CONVERGENCE EXPERT OPINION: Are we ready to deliver the uber service of all services? Today, there is no shortage of talk around the issue of service mash-ups. One that's often discussed is the merging of telecoms and utilities offerings, an example being AlertMe, a U.K.-based company that's already in talks to bundle its energy services with telecoms. The marriage makes sense, argues Doug Zone. In many geographies, telecoms and utilities already have robust relationships behind the scenes, and many cell carriers currently provide backhaul networks for grid communications. This state of affairs, at least on the surface, should come as no great surprise to those of us in billing who, after all, have been talking about "convergence" of services for over a decade, albeit in most cases doing very little about it other than talking. The author is Doug Zone, CTO of MetraTech transparency, audit compliancy, and other certifications along with the increasingly prevalence of service aggregation accelerated by the hunt for partners to deliver innovation, and you are left with a complicated set of billing and compensation needs where the only constant is change. Underlying business functions are equally being impacted by these new realities. Customer Relationship Management, Channel and ReSeller Management, Marketing & Offer Management and Supply Chain Development and Management are all changing � and in doing so they are making new demands on BSS which legacy systems in the main either struggle to, or simply can't satisfactorily answer. Certainly not quickly, easily, or cost effectively. This flow of demands, something we know as the "ripple to monetization" is more like a flood; it poses questions that billing has to answer - and answer with something deeper than just another legacy system workaround. The tipping point to service convergence, if it hasn't now arrived, is very rapidly approaching. Service industries � and not just telcos - are all under real pressure and, as they adapt to meet new market forces, Business Support Systems (BSS) will have little choice but to keep up with their changing business demands. Let's be clear, those that don't or can't keep up -- principally the enormous legacy systems into which huge amounts of time and money have been sunk over the past two decades -- will not disappear overnight. They'll live to fight many more days billing for low margin core services where the business case to replace them can only be driven by cost, not revenue . But they'll likely recede further and further from the services cutting edge where margins are growing. Already, a number of tier one communications providers have "new services billing" on their tips of their tongues as they seek to launch those services that will secure their future rather than cement their past. The change in billing boils down to service convergence � across industries. Why? Take a forest for the trees look at today's commercial landscape. In almost every service industry, underlying services are becoming commoditized, driving the imperative to differentiate through how you sell rather than what you sell, causing increased attention to customer demand for ease-of-use and pricing , and pushing the sheer (and increasing) speed and volume of new multiservice product launches. In turn, these new products are characterized by the new ways of doing business that underpin them: colocation shifting to Cloud, License shifting to Software as a Service, in some cases Usage shifting to Flat Rate, and in others Flat Rate shifting to Usage. Throw in regulatory demands for financial As simple as A-B-C? So if tomorrow's world demands another billing, what is it -- this "new" billing 2.0? The answer can be found in an approach shaped by the multitude of interrelated financial relationships that drive today's services industries. It's "as simple as A-B-C" - Agreements-based Billing and Compensation (ABC). Why? Because" agreements" define today's commercial world. Agreements are the overriding common element that distinguish today's relationship-based services from yesterday's single service product offerings, and which set the benchmark for the legacy IT solutions required to support them. In very, very simple terms most legacy billing systems were designed to bill for a product sold by one entity and bought by another free of any contract but the most basic; modern billing systems need to account for transactions which by their very nature are multi-party and multi-faceted (from SLA's and special terms to bundled services from multiple partners to diverse delivery channels involved along the value chain) and which are entirely regulated and defined by complex relationships - aka business agreements. The days of simple "time and distance" are very long 36 VANILLAPLUS APRIL/MAY 2011 gone; today, it's the business relationship as captured in the agreement that defines billing for services, rather than the service offering itself. Agreements require billing functionality that isn't adapted from legacy but rather can be built from core constructs -- quickly -- to cope with fluid, personalized, multi-party transactions. Agreements-based billing delivers the ability to support case-by-case and customer-by-customer negotiations and to dynamically set unique parameters for each (often complex) agreement that might ensue. Agreements-based billing delivers the ability to constantly and quickly create highly differentiated consumer products based on complex value chains that must be finely tuned in agreements to ensure margins. The modifiers of these agreements can be numerous, from Individual Case Basis rating to promotions, discounts, accelerators and more. Regardless, the billing system needs to be able to easily cope with each demand. Furthermore, these systems need to deliver almost unbounded support for how business services might be monetized in the future, in addition to how they already are being used. Thus, the new BSS needs to be able to support fluid supplier and consumer groupings (cooperatives), overlapping fiscal geographies, unprecedented volumes of low value events, and business parameters and profiles that today lie well outside the remit but might be central literally as soon as tomorrow. Agreementsbased Billing provides the "lens" to enhance competition capability in the new services landscape where the legacy systems are often a gating factor. How does the Agreements-based Billing and Compensation achieve this? As noted earlier, new billing must be designed from core constructs based on managing financial relationships explicitly as multi-party agreements. This is the only way to deliver the flexibility needed in today's world easily and quickly, without recourse to custom coding in or alongside the existing billers to adapt to each new service offering. Agreements are not easy but two central elements are critical: Metadata configuration of all user profiles and supporting agreements, along with straightforward synchronization with external account structures and product catalogs. In essence, the billing system needs to be able to reflect, rather than rebuild each new service offering, thus quickly enabling it to come off the drawing board and into the market. If that sounds in some way simple, it's worth underlining that simplicity is a key. Agreementsbased billing is the correct and the most intuitive approach to enhance the online customer, partner and channel experience rather than to simply provide the minimum level of required mechanical support for new services. So not only do they need to be easily and rapidly configurablable to reflect the substance of each new service offering, they also need to be accurate, auditable, and understandable in spite of delivering the sometimes complex nature of what has been agreed (rich chargeback modeling and the proration of bundles, for example) as demanded by innovative services. And then, of course, there's the "c"; Compensation. The increasingly multi-party nature of modern services (all built on a foundation of business-to-business agreements) demands a billing product that enables the service provider to manage the channels on both wholesale and retail levels. That means coping with both incentives and compensation through the BSS. Eating the pudding (the proof) The reality is that innovators like AlertMe's time is here today. They are and will put pressure on established service provider models. Agreements-based Billing and Compensation is no longer a luxury but a must-have. The good news? It's a proven approach that's working in multiple industries today. The evidence? Microsoft deploys MetraTech's Agreement-based Billing and Compensation solution for the company's Cloud Computing Services, Microsoft Online services, which remove the burden of managing and maintaining business systems and frees IT departments to focus on initiatives that can help deliver true competitive advantage. The Depository Trust & Clearing Corporation (DTCC), which through its subsidiaries settled nearly US$1.48 quadrillion in securities transactions in 2009, and provides a range of clearance, settlement and information services in the equities, fixed-income, over-the-counter derivatives, wealth-management and insurance markets in the U.S. and overseas turned to Agreements-based Billing and Compensation from MetraTech some 20 months ago. OnStream, a National Grid Company in the UK which provides gas and electricity metering solutions to energy suppliers, deployed MetraNet to provide the billing element of its extensive business transformation program in 2010. Communications Service Provider Meeting Zone's award-winning new collaboration portal, which set industry standards for ease-of-use and self-service functionality is founded on the relationshipbuilding principles of agreements-based billing. As progressive service providers in multiple industries are now clearly starting to demonstrate through A-B-C, BSS need no longer be a barrier to innovation and, thus, to future success. Doug Zone is chief technology offi cer of MetraTech Corp. He has played a major role in shaping the BSS industry for the past two decades, and is a member of Vanilla Plus' editorial panel. VANILLAPLUS APRIL/MAY 2011 37 Communications Market Intelligence from VanillaPlus direct to your desk! EMEA's LEADING COMMUNICATION SYSTEMS MAGAZINE! Who should read VanillaPlus? Anyone interested in delivering profitable Communications, Media and Entertainment (CME) services. Is it for Mobile, Cable or Fixed line Communications? VanillaPlus covers ALL communication types. What's Different about VanillaPlus? Our Profit Focus! Our Design Style. Our Sense of Humour. Our Industry Connections and Comment. Where can I receive it? Worldwide. Why pay to subscribe? A paid subscription is the only way to receive issues outside EMEA (Europe, Middle East & Africa) or if your primary business is NOT telecoms. SPECIAL OFFER UNTIL 1st JULY Subscribe now to receive 6 issues at �49 or 12 at �99 8 Benefits of Subscribing to VanillaPlus Magazine 1. News Analysis: Company & Product News, People on the Move, Contract News and the Contract Hot List. 2. Opinion Leaders: Our Talking Heads column brings exclusive interviews with C-level executives. 3. 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VANILLAPLUS APRIL/MAY 2011 39 D I A R Y Upcoming Events TIA 2011 17-20 May, 2011, Gaylord, Texas, USA www.tia2011.org/ Managed Services and Network Sharing 23-25 May, 2011, London, UK www.iir-telecoms.com/event/ networkstrategy Roaming World Congress 23-26 May, 2011, Madrid, Spain www.iir-telecoms.com/event/roaming MACH Insights 6-8 June, 2011, Berlin, Germany www.mach.com/en/Insights/Insights-2011 Regulatory Cost Modelling & Accounting 14-16 June, 2011, Vienna, Austria www.iir-telecoms.com/event/regcost B/OSS Live! 15-17 June, 2011, Washington D.C., USA http://www.billingosslive.com/2011/dc/ Number Portability 20-22 June, 2011, London, UK www.iqpc.com/Event.aspx?id=494242 Cloud Computing World Forum 21-22 June, 2011, London, UK, www.cloudwf.com/ Telecoms World Congress 21-23 June, 2011, Amsterdam, Netherlands www.terrapinn.com/2011/twc/ Global Messaging and VAS 22-23 June, 2011, London, UK www.globalmessagingcongress.com/ SIMposium 2011 28-29 June, 2011, Berlin, Germany www.simposiumglobal.com/ Telecoms Loyalty & Churn 4-7 July, 2011, Monaco www.iir-telecoms.com/event/loyalty Broadband Traffic Management Global Congress 15-17 November, 2011, London, UK www.broadbandtrafficevent.com Mobile Network Optimisation 6-9 June, 2011, Vienna, Austria www.mobilenetworkoptimisation.com/Ev ent.aspx?id=450748 With mobile data traffic forecast to rise 40fold over the next five years, is your network ready? Do you need to know how to optimise your network capacity and performance to ensure optimal quality of service (QoS)? Telecom IQ's Mobile Network Optimisation event will detail the strategies and solutions that operators are using to monitor and optimise the performance and capacity of their networks in the most cost effective way. With the move towards 4G on the horizon, hear how to optimise your LTE network to efficiently manage increasing and more complex traffic levels, and learn how to anticipate and overcome the migration challenges that it will bring. In addition, attendees will hear how to integrate femtocells with their network planning strategy to reduce the strain on the network and enhance the customer experience. Understand how to overcome the impact of offloading on service continuity and ensure a seamless handover. VIDEO PREVIEW How to deliver a highly differentiated subscriber experience in a 4G world? The days of best effort services are numbered, and with the growth of multi-tiered pricing plans the pressure is on service providers to compete on quality of service. Aricent's executive vice president and general manager of its communications service provider business unit, Patrick Joggerst, will discuss the key trends, challenges and solutions to deliver a highly differentiated subscriber experience as the world moves to 4G in a VanillaPlus video coming soon to www.vanillaplus.com. Service provider CIOs are constantly being asked to do more with less � reduce subscriber churn and increase customer satisfaction. Executives are finding the most promise for efficiency gains in their operational and business systems (OSS/BSS), where the return on investment has been proven to be substantial. Process inefficiencies, lack of integration and contemporary tools, and a shortage of personnel with deep domain expertise, all add up to higher costs, missed objectives, and lower customer satisfaction. Service providers need to re-examine the entire customer interaction cycle � from service activation to billing and everything in between. Subscriber churn because of dropped calls, poor coverage, slow data speeds and support for new devices is on the rise and operators that deliver the best `in-service user experience' will win. 4G is a complete transformation of the carrier's network to a pure IP network � just like what 40 VANILLAPLUS APRIL/MAY 2011 happened in the enterprise transformation from TDM to VoIP). This means the carriers are faced with a number of challenges from efficiently utilising their spectrum, designing the most optimal network from CapEx perspective, to delivering the best subscriber experience. Next come all the back end systems changes that they need to deliver new services like machineto-machine (M2M) interactions � smart parking meters, ereaders, tablets, smart energy, gaming and real time video � usually people think about this at the very end. Operators need to engage in a comprehensive audit of their existing back end systems to determine their readiness as they plan to move to 4G. Aricent has worked with several customers and the results are stunning. This is a good time to assess the viability of existing systems � and enhance or replace to optimise operations to support existing and future services. C L O C K I N G O F F ! It's hip to be square, apparently Do you want the good news or the bad news? The bad news, well maybe it's not news, is that the use of text messages by 15-24 year-olds is going to fall by one-fifth in many large markets including the UK. The good news? Well, as the American songwriter Huey Lewis once said, `it's hip to be square' � at least for Blackberry users, says Mark Dye. Lost you? Okay, I'm talking BlackBerry devices here. The darling of many a boardroom is now showing its popularity in the classroom and Dad's business device is now `down with the kids'. There is, of course, a killer app at the heart of that shift. Forecasts made by the consultancy firm, Mobile Youth, suggest SMS volumes will drop by 20% within two years in markets such as the UK, Indonesia, South Africa and Brazil, where the use of instant messaging and BlackBerry Messenger (BBM) in particular is popular with teenagers and students. According to a report in the Financial Times, use of BBM has rocketed recently with volumes increasing by up to 500%, while figures from Research in Motion (RIM) suggest that more than 39 million people already use the platform. So, it's good news for RIM and might not be all bad news for operators. Until now most have enjoyed the fruits of bundling text offers to users in one of their easiest revenue spinners to date. Yet with the worm turning as many of us migrate to other less expensive messaging solutions like WhatsApp, BMM and Gtalk � those last two both free on BlackBerry and Android respectively � what are operators going to do? Users aren't going to pay when you can get these services for free, even on pay-as-you-go phones, so, aside from some newfound efficiency in the network, what else might we see operators offering as bundles to entice customers in? If you're of a lateral cast of mind, then perhaps you might do something similar to Steve Strand, the owner of a branch of RadioShack in Montana, USA. In a move that has tripled his business since October, Strand has been rewarding customers wanting to sign up for two-year Dish Network satellite TV packages at the store with a voucher for a pistol or shotgun. Outside the store his sign read: "Protect yourself with Dish Network. Sign up now, get free gun." Those not interested in obtaining free firearms were invited to opt for a $50 pizza gift certificate. While I'm not suggesting North American carriers go out and do the same, this strange sounding move says something about knowing your customer. With 90% of Montana residents apparently already owning a gun, Strand's promotion, including a coupon for a $125 pistol or a $115 shotgun to customers who sign up, has proved compelling. Of course, you've guessed it, this tale doesn't have a happy ending. RadioShack understandably demanded that Strand pull the promotion for fear of the damage it might do to its brand - something he has since declined to do while he seeks legal representation. However, in an effort to go someway to appeasing the powers that be has removed the offending sign. Whatever next, carriers offering cuddles to long-standing customers? The author, Mark Dye, is associate editor of VanillaPlus and a freelance technology journalist VANILLAPLUS APRIL/MAY 2011 41 www.comptel.com/events/managementworld2011 Take Charge of Your Services... Policy Control & Charging Management World 2011, Dublin, Ireland, Comptel stand #49 FRAUD SUPPLEMENT APRIL / MAY 2011 VOLUME 13 ISSUE 2 F R A U D C O N T R O L A N D R E V E N U E M A N A G E M E N T TALKING HEADS Subex CTO advocates product-based approach for improved insights into fraud trends MOBILE PURCHASING How can operators get ready for purchase fraud? FUTURE FRAUD Get on your marks to chase down the constantly changing enemy with no face REVENUE ASSURANCE Time to stop leaking profits blog-led website and quarterly magazine for machine to machine communications the latest news, reviews and insights in the world of M2M M2Mnow.biz Profit from a world of connected devices S U P P L E M E N T C O N T E N T S Rise to the challenge of future fraud The threat operators face to their businesses from fraud is simply greater than ever. Where once they suffered with fraudulent activity that resulted in unmonetised use of network capacity, operators now face frauds that do far more damage. The situation is like an airline in that old-fashioned fraud was the George Malim, equivalent of having someone fly for free in an empty Editor: VanillaPlus seat but modern fraud means not only does that person get a free ride, the airline has to pay for their meal, their drinks and their entertainment. A loss of capacity becomes a loss of cold, hard cash. To make matters worse, organised crime is increasingly targeting the telecoms market in more and more cunning ways. Operators have to rise to that challenge but approaches to fraud management remain fragmented and there are no standard means to controlling the menace. As Mark Nicholson, the CTO of Subex, explains on p S4, a lot can be achieved with a productbased approach that brings the experience of a vendor to all it's customers but that isn't the only issue. As journalist Mark Dye points out on p S8, new frauds and new solutions leave us where we started � in the shadow of fraudsters, hanging on to their coat tails. This VanillaPlus Supplement explores the issues of current fraud complexity and how operators can overcome the challenges of future fraud. The more that is known � and shared � the more that can be saved, and those savings go largely to the bottom line. Enjoy the supplement George Malim, editor VanillaPlus Subex Limited is a leading global provider of Operations and Business Support Systems (OSS/BSS) that empowers Communications Service Providers to achieve competitive advantage through business optimisation and service agility. Subex offers a scalable managed services programme and has been market leaders in business optimisation for three consecutive years. The company pioneered the concept of Revenue Operations Center (ROC) � a centralised approach that sustains profitable growth and financial health through coordinated operational control. Subex's product portfolio powers the ROC and its best-in-class solutions enable new service creation, operational transformation, subscriber-centric fulfillment, provisioning automation, data integrity management, revenue assurance, cost management, fraud management and inter-party settlement. Subex's customers include 26 of the world's 50 biggest telecommunications service providers. The company has more than 300+ installations across 70 countries. www.subex.com <http://www.subex.com> PUBLISHED BY Prestige Media Ltd. Suite 28, 30 Churchill Square, Kings Hill, West Malling, Kent ME19 4YU, UK Tel: +44 (0) 1732 844017 CONTENTS SUPPLEMENT CONTENTS S3 S4 Introduction and Contents Talking Heads, Mark Nicholson, CTO of Subex Chasing the tail of fraud How to cope with purchasing fraud S7 S9 S4 TALKING HEADS Mark Nicholson, CTO of Subex S7 S9 FUTURE FRAUD PURCHASING FRAUD � Prestige Media Ltd 2011 VANILLAPLUS SUPPLEMENT APRIL/MAY 2011 S3 TALKING HEADS Product-based approach provides operators with greatest insight into fraud trends Mark Nicholson is the CTO of Subex where he is responsible for the company's longterm technology strategy and for driving the definition, direction and development of the Subex software suite. Nicholson previously served as CTO and senior vice president of product development at Syndesis. Prior to Syndesis, he was the CTO of Nortel eBusiness Solutions, where he was responsible for its provisioning suite of products. Nicholson has also worked on the operator side of the industry at AT&T Wireless and Rogers AT&T. Here, he shares his vision of how operators can rise to the challenge of greater complexity and new forms of fraud. A snapshot of Subex Subex, a world leader in fraud management solutions with 20% market share (Source: TRI) has 100+ fraud management installations across 190+ networks and is live in 10 of world's top 20 operators. Subex's customers include 26 of the world's 50 biggest telecommunications service providers and the company has more than 300 installations across 70 countries. Subex has been leader in business optimisations for three years in a row according to analyst firm Analysys Mason. How does your experience as a vendor of fraud management systems to the world's largest operators provide you with insight into the ways in which operator demands are changing? We're a global, product-based company so the difference, compared to a service-based company, is that we have one product code line for all the operators we support. That means we have an intimate understanding of each operator, each country and each region's approach to a specific type of fraud. A number of vendors build customised solutions for their customers resulting in them getting exactly what they want, but the challenge with that approach is that the insights gained from that implementation don't typically get spread across the vendor's entire customer set. The difference with our approach is that support for new fraud types gets rolled back into the core product line so that all our customers benefit from it. In addition, the challenge is not just about identifying fraud, it's about managing and preventing it with scarce, high-skilled fraud analysts. As a result, the operational best practices we gather across all customers are ultimately rolled back into product management and are reincorporated into the product for the benefit of all. To what extent are operators demanding managed services and cloud offerings in the fraud management domain? How important is it that vendors are flexible when it comes to offering different cost or pricing models? It's very important and the driver is shrinking margins. This financial reality ultimately translates into demand for lower operating costs, since you can't control price, you need to control cost. However, effectively combating the increasing volume and sophistication of fraud is resulting in substantial costs for operators. Subex supports our customers' new cost realities in a number of ways. From a software procurement cost perspective, in addition to standard CapEx-based software licensing, we offer our solutions via the OpEx-based SaaS model leveraging our globally distributed data centres. From a total cost of operations (TCO) perspective, we offer both Professional and Transformational managed services where Subex runs the Fraud operations on behalf of our customers using our `right-cost' resources in India and other geographies. With our Professional offering, a customer can choose to outsource specific parts of their operations to us whereas with our Transformational offering, customers choose to outsource their end-to-end operations in a full blown Business Process Outsourcing engagement. With this holistic approach i.e. a product-based Fraud Management solution wrapped with cloud-based delivery models and managed services for operations, we can offer alternative pricing models based on quantified business benefits we deliver. As an example of that, we have jointly developed the industry's first self-monitoring, quantitative, Risk/Reward Share model with Swisscom. Can you talk more about the Risk Reward Share model? How does it work and what have you achieved in your deployment at Swisscom? One of the challenges with Risk/Reward Share (RRS) models for fraud management is quantifying tangible, financial benefit in a manner where both operator and vendor agree. What we've done with Swisscom and others is to focus on standard categorisation of different types of fraud and define measurable financial values for each categorisation. The key concept of the commercial model is to take the cost of identified frauds and forecast the benefits of stopping the fraud as early as possible. Through a series of detailed agreements, the actual cost of a fraud is extrapolated to calculate a "Prevented Fraud Loss" (PFL). The amount of fraud prevented depends on the type of fraud. The Reward aspect is that operators will pay us based on the quantitative fraud we've protected and prevented. Operators want an option as opposed to large up-front CapEx expenditure; that option being an OpEx return-based model. This has proved to be a win-win initiative with Swisscom reducing its systems' CapEx costs and paying the cost of the fraud solution using the S4 26 VANILLAPLUS SUPPLEMENT APRIL/MAY 2011 funds saved from prevented fraud losses. In return, Subex is working in close cooperation with Swisscom to develop new fraud prevention features and receiving a potentially higher payment for its fraud solution over the life time of the system. You mentioned operators' budget squeeze for OSS/BSS. How has this impacted their utilization of the fraud management solutions in particular? There is certainly an increased focus on sweating the assets, and maximising the return on investment (ROI) from their fraud management solutions. To this end, our solution is being used for applications you wouldn't normally associate with a fraud management solution � for example, acting as a liaison and source of information for law enforcement agencies. We're also helping some of our customers prevent bill shock, by sending automated alerts to customers when their usage crosses certain thresholds. In that respect, we're actually helping operators improve the customer experience � who would have thought a fraud management system could do that? Fraud management used to be viewed in isolation. Now it is routinely viewed along with revenue assurance as an integrated stack in the operator back office. How has Subex aligned its business to reflect that? There's a lot of debate out there. Some see fraud as moving closer to security, others see it as a distinct skill set and process. We see a combination of those; it's a hybrid approach. Aspects of fraud management align or should align with an overall security strategy; however fraud management requires an optimised operational solution and approach. What we are seeing is a trend of more joint RFPs for fraud combined with other business audit and assurance functions such as Operational best practices we gather across all customers are ultimately rolled back into product management and are reincorporated into the product for the benefit of all Mark Nicholson, Subex VANILLAPLUS SUPPLEMENT APRIL/MAY 2011 S5 TALKING HEADS That's one of the challenges with fraud. There's typically a justified reluctance among operators to be open about types and levels of fraud they're experiencing. In addition, the industry is not very clear when it comes to defining standard classifications and metrics around fraud, so it's very difficult to understand specific trending across operators, countries and regions. On the other side of the operators and vendors, fraud is big business and fraudsters are good and getting better by leveraging the same asset we're protecting in the network. They use the network effectively to share approaches to fraud with each other, to collaborate on attacks and to refine their craft via best practices. Looking at the Revenue Assurance domain, industry groups such as the TMF are working with operators to come up with standards and metrics such that as a global industry, we all can elevate our Revenue Assurance maturity and effectiveness through learning from each other. Subex is actively working to bring similar approaches to the fraud domain. We and other vendors are working with the operators and industry bodies such as the GSMA Fraud Forum on issues such as standard classification of types of fraud. We are actively working with them to evolve a common language when it comes to telecom fraud. We firmly believe that as operators start talking about fraud using the same language; it would for the first time pave the way for true industry-wide cooperation in fighting fraud as a common enemy. Fraud systems are increasingly applicable as the value chain becomes more complex and the services provided become more valuable. How does that change the value proposition? The third party partner ecosystem, especially with smartphones is definitely more complex and operators deal with shared content, IPTV and other higher value services. Fraud is perpetrated on customers and sometimes by customers and that is also true for content and partners. Fraud is perpetrated on content providers or by content providers. There's a definite need for fraud management to address both sides of the equation, and Subex is already at the cutting edge of many of these emerging business models. For example, we're already helping our customer's combat frauds in the area of mobile commerce. Third-party content is an increasing part of an operator's service offering especially when it comes to IP services. Operator and partner contracts for this content typically involve content providers being paid by operators based on use. When fraud is perpetrated on these networks and services, it triggers usage which results in operators losing hard cash versus unmonetised network capacity consumption in the traditional voice world. In the old world it was a closed ecosystem but in the new world of IP services and a widening third-party eco-system, effective fraud management is growing in importance and criticality. we're actually helping operators improve the customer experience � who would have thought a fraud management system could do that? Mark Nicholson, Subex Revenue Assurance (RA). As a result the industry has seen traditional fraud vendors adding other functions such as RA to their solutions and the reverse of traditional Revenue Assurance vendors adding fraud functions. We believe that revenue assurance is a different discipline than fraud. They have users with different skill sets, different operational practices, and different departments with different mandates. That's why we believe you need optimised operational solutions for fraud, revenue assurance, credit risk and other business assurance functions but at the same time have a higher-level common information store where shared and linked information is housed along with analytics and business intelligence. At Subex, we refer to this higher-level customer and partner focused informational store with its associated business intelligence as the Revenue Operations Centre or ROC. So how can embedding the fraud system in the customer acquisition process add value? Fraud systems used to be very standalone and very reactive. The trend is now far more towards proactive approaches and fraud systems are now being embedded within mainline processes such as customer acquisition. As an example, with fraud embedded in the acquisition process, when a seemingly `new' customer buys a new service, we'll profile the customer through our system to see if they have been a fraudster previously with that operator or another. If detected, the acquisition process is stopped. With the typical reactive approach to fraud, we would have signed that customer unaware until a later date when a reactive system picks up on their fraudulent activity. By which time we would have suffered preventable losses. In addition, our approach means that fraud at other operators can be detected and used in this process. There are no standards and there is no crossindustry reporting of fraud. It's obviously a sensitive issue for operators but what can be done to reap the benefits of industry-wide efforts to understand fraud triggers or identify trends? To what extent is the industry's failure to work together more effectively costing operators money? S6 26 VANILLAPLUS SUPPLEMENT APRIL/MAY 2011 FUTURE FRAUD Chasing the tail of fraud In fraud operators face a constantly changing enemy often without a face. Mark Dye spoke with some of those tasked with helping to prevent this to gauge where we are in the evolution of this revenue sapping threat. With the mobile phone becoming ubiquitous its data presents a goldmine of opportunity for carriers. Yet in the wrong hands this definitive map of who we are and how we live our lives presents a very real threat of lost revenue and very real implications in terms of data privacy. "The trust we're putting in a mobile device already is really quite astonishing," warns Dale Youngs, product manager for fraud, revenue assurance and credit risk management at Subex. "The banks think this is a trusted piece of kit and if they actually looked underneath and looked at operator procedures for managing customer credentials and things like that I think they would sometimes be horrified." Strong words. But with the mobile industry not the gravy train it once was Youngs says financial pressure to consolidate and cut costs is directly affecting fraud teams seeking to tackle attacks that are becoming increasingly technical in nature. Jason Lane-Sellers, principal consultant at Connectiva Systems, believes that this impact and squeeze on operators via their customer base and finances means the fraud department is often one of the first challenged as it can be seen as a cost centre. And with the focus firmly on that customer base he says a big push is often made to keep customers happy via improved offers and incentives to retain them. "Both these mean that the fraudsters can shift their emphasis in times like this and rather than target new connections, they actually increasingly target fraud against existing account holders, known as account takeover or facility fraud," he says. "This attack is often due to the fact that existing customer bases often have much less fraud team focus when the squeeze is on, but the returns can be much higher as existing customers can get the best deals with little or no checking or validation by the network due to the desire to keep the customer." Tal Eisner, senior director of product strategy at cVidya, adds that in the last few years more `classical' fraud types such as PBX hacking Dale Youngs, Subex: Being flexible and agile is the key VANILLAPLUS SUPPLEMENT APRIL/MAY 2011 S7 FUTURE FRAUD and various Premium Rate Service (PRS) schemes - including International Revenue Share Fraud - have become routine worldwide. "PRS related fraud is organised crime that relies on PRS numbers globally and is characterised by the distribution of such numbers and the artificial inflation of traffic to [them], along with inflation of traffic that results from calls coming out of stolen phones," he explains. "Thus, this is a more mature, organised and efficient way to commit fraud and it involves more personnel and not just the single fraudster committing single local or specific frauds." Yet, Lane-Sellers says that with fraud still being a business, the simplest and quickest attacks are the most prevalent. "This is why account takeover is such a growing trend at the moment," he adds. "For the fraudster, the revenues can produce a good, high value return with relatively small effort required and minimal technical or support resource." Of course, such attacks can be sustained over time and are very flexible, with fraudsters being aware that they target areas that traditionally have little active fraud coverage or monitoring, as they are based on process manipulation rather than traditional usage methods. According to Lane-Sellers, account takeover fraud is also one of the worst things for a company to suffer at this time. "This is because for every fraud instance, a genuine innocent customer will feel an impact and this can mean a double blow to revenue costs, via goodwill or account reimbursement, a third blow, due to the massive loss of trust and hugely negative customer experience, and finally a fourth mortal blow, which can be to the brand via the implied lack of data security or management of customer data indicated by such a fraud," he adds. Simon Collins, vice president for business consulting at Praesidium, believes that another major change in the pressure faced by operators has been in the separation of the bearers that link customers to networks compared to the services that are carried. "This means that there is a need for fraud services and bearer fraud detection as two S8 26 VANILLAPLUS SUPPLEMENT APRIL/MAY 2011 separate items," he explains - something which applies particularly in next generation network services like fixed mobile convergence, IMS and VoIP based service offerings. "Closer links are growing between fraud and revenue assurance," he adds. "IP security is something we also see growing as people, data sources and systems merge." Interestingly, Praesidium often finds that vendors of fraud systems do not understand IP and the event record. This often means many say they can include these in an existing fraud system data feed, but do not consider the use of the record in the system and do not have the tools to adequately use the data. "If operators are looking to have IP and data services in their existing systems, they must fully understand the direction of NGN services and the data sources plus the IP fraud control rules they need to use," says Collins. As a result, Youngs points to a more holistic approach in the future where fraud is looked at in conjunction with related areas like revenue assurance and credit risk. "I think we're seeing an increase in the need for managed services, for cloud applications, and also quirkier things like risk reward share models," he says. "One other thing here is not just looking at it from fraud and related applications like revenue assurance and credit risk, but looking wider and sweating the assets and looking at completely different applications like law enforcement liaison," he adds. He reasons that fraud systems are ideal for running queries and extracting data for agencies whilst also being good for managing things like bill shock. Unfortunately for operators Youngs thinks we're some way off winning the battle with fraud though and, rather soberingly, wonders if we'll ever get there. "It's so difficult to pre-empt where fraud will go or where any clever new frauds will emerge," he adds. "Being flexible and agile is the key. If you look at just the brainpower out there and the motivation of fraudsters it's always going to be that much higher than those trying to stop it. We're probably where we've always been; in the shadow of the fraudsters, hanging onto their coat tails." Tal Eisner, cVidya: Classical fraud has become routine Simon Collins, Praesidium: Often fraud systems don't understand IP PURCHASING FRAUD How to cope with the growth of mobile purchasing fraud Mobile purchasing is one of the fastest growing sectors in the mobile industry and it will soon impact the billing sector as consumers expect to be able to pay for digital and physical purchases alongside the voice, texts and data on their mobile phone bill, writes Chris Newell. Currently mobile purchasing is mainly done through premium SMS or the app market � either purchasing the apps themselves, or increasing the engagement with the content through an inapp purchase. However, the success of these forms of mobile purchasing, alongside the growth of technologies such as near field communications (NFC), means that operators are increasingly looking to offer mobile purchasing to their customers. However, with the rise of mobile purchasing, so the opportunities for fraudsters increase. For the billing community, as well as the mobile operators and the content creators, to be able to benefit from this new opportunity the threat of fraud must be eliminated. Yet is the billing community equipped to tackle mobile purchasing fraud? "With the rise of mobile purchasing, so the opportunities for fraudsters increase" VANILLAPLUS SUPPLEMENT APRIL/MAY 2011 S9 PURCHASING FRAUD The rise of mobile purchasing The global mobile industry is preparing itself for major change: the mass adoption of mobile commerce and with it the new wave of billing `events' that need to be tracked, managed and ultimately collected. Mobile purchasing is set to increase radically. Initially through in-app payments, which allow mobile users to pay for games, apps and content from within the app; but also the industry's push into NFC payments which allow users to make small-value transactions for goods using their mobile handsets. On top of that, there are already many popular existing payment methods, including premium SMS. that as fraud increases, confidence in the bill will erode from both sides. Consumers need to be confident that their bill is a true reflection of their activity, but as the bills get more and more complicated with multiple purchases on them, on top of voice, texts and data, it is harder to keep track. So they will be increasingly worried about personal fraud and incorrect bills. While for operators new transactional data is now being generated that falls well outside the traditional mobile activity which must be incorporated within billing systems. The risk of fraud and the potential cost is very high. Yet if this issue remains unresolved and the growth of mobile purchasing is restricted, the mobile industry is potentially stifling a very lucrative market. Fighting fraud As the sector grows, there are solutions coming onto the market that help identify fraudulent activity. By monitoring purchasing data in real-time, across a number of different data points, it is possible identify patterns and unusual behaviour that might indicate fraudulent behaviour. A risk value can then be ascribed to each transaction or, by setting business rules, real-time decisions can be made to block transactions, in a similar way to many of the policy control systems that the billing sector currently sells. So the battle against mobile purchasing fraud is not one that we should give up on and it is time for the billing sector to pay attention to mobile purchasing and in particular to the issue of mobile purchasing fraud. All operators are looking for ways to increase both their revenues and consumer satisfaction. For many operators mobile purchasing is seen as a way to achieve both goals. Yet the issue of fraud is still a dark cloud on the horizon. If the billing sector was to grasp the nettle and offer mobile purchasing fraud solutions for operators then there would be a huge market opportunity to be gained for all concerned. The author, Chris Newell is CEO of BillingScore "By monitoring However a little-known � but major � purchasing data in real-time, across a number of different data points, it is possible identify patterns and unusual behaviour that might indicate fraudulent stumbling block to the adoption and credibility of this new revenue opportunity is the threat of mobile fraud. In the UK alone, it is estimated that millions of pounds are lost to premium rate fraud every year � globally, this could translate to billions of dollars. If this issue is not tackled, all the players in the mobile industry, from SMS wholesalers and aggregators through to the billing industry and ultimately consumers, are at risk. The growth in the popularity of mobile protection of other forms of payment, such as credit card, means that there are an increased number of fraudsters targeting it. One example of this is artificially inflated traffic (AIT), creating `false' transactions which are cashed out by the service providers and carriers. Fraud currently costs the premium rate and mobile purchasing industry both financially and in terms of credibility. One of the main difficulties in spotting such fraudulent traffic, ironically, is that high volumes of legitimate traffic pass through the various systems every day and it can be hard to identify the fraudulent transactions amongst these. So the question is, how much will this affect the BSS industry? One of the main issues is behaviour" purchasing, combined with the increase in S10 26 VANILLAPLUS SUPPLEMENT APRIL/MAY 2011 No other publication works harder or travels further! In a period of global financial turbulence, company failures, re-structures and negative economic growth it seemed like everyone in publishing was battening down the hatches and sitting tight. Everyone that is apart from VanillaPlus magazine. 2010 saw continued substantial growth and investment in VanillaPlus. We enhanced our existing products, broadened our portfolio and invested in our circulation. Whilst other magazines were falling by the wayside, look what VanillaPlus did for you: BOOSTED VanillaPlus increased its presence at key events and attended 54 events in 20 different countries across Europe, Middle East, Africa and the USA � ensuring the furthest possible reach for its advertisers and gaining more key readers around the globe. INVESTED VanillaPlus continued to invest in circulation, adding top level new Operator names across Brazil, Russia, India and Australia. At the same time we cleaned and refined our data and got to know our readers even better. See our 2011 Media Pack for the latest details. LAUNCHED In 2010 VanillaPlus launched Video Talking Heads � video interviews of key industry players filmed on location across the globe and available to view at www.vanillaplus.com IMPROVED In 2010 VanillaPlus continued its website improvements � making video available, adding a Knowledge Centre resource, and a full issue archive INCREASED In 2010 VanillaPlus increased the circulation of its ezine, VanillaPlus Bites to a whopping 23,000 � with more signing up daily We firmly believe no other IT & Comms magazine works harder, travels further or invests more to offer the best possible value and quality to its advertisers and the best possible reader experience. Make 2011 the year you join VanillaPlus! www.vanillaplus.com A Tier 1 European carrier reduced FTTP design time by 70% with Telcordia. When you're about to launch a new business model targeting tens of millions of people, you have to be able to move fast. Our solution allowed this provider to automate next-gen fiber access design, reducing FTTP design time for a single neighborhood by 70% � from weeks to days. They also eliminated paper records of network assets, discovering 30 million of unrecorded equipment inventory. Wouldn't your company like to realize potential like that? Get more details at www.telcordia.com/potential_realized Realize the potential of telecom �2011 Telcordia Technologies, Inc. All rights reserved.