Title: the Next Generation Service Provider

Title: The Next Generation Service Provider

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Under the category of “White Papers.

Version Date: May 12, 2009

Systems Group

Chuck Gray Senior Architect

Over the past year I have been talking about service providers morphing to resource management infrastructure centers of excellence. This holds great financialopportunity for Telco service providers if they get aggressive about driving technological innovation.

The service provider today needs to address being restricted from the value-added parts of the ecosystem. The question I am hearing , "why shouldn't I get pay for multiple services as they are used through the flow of my network". Examples of this are application stores (lease and rent), smart phones services, netbooks service, and similar technologies that threaten revenue streams by relegating service providers to being conduits. The win with cloud computing is that the network isn't just the intermediary that gets bits from point in to point out, but the cloud is logically indistinguishable from the "network" to the common user. The cloud can be a revenue win for service provider and convenience win for the consumer, services retailer, and content owner (how many of these services can the service provider make revenue from?). This is not the case with a non-cloud environment where the user knows the end points where only part of the revenue is realized from the billing of conduit use (this restricts service provider revenue).

Telecommunications providers will play an important and lucrative role in the new world of cloud computing (Utility computing, Elastic IP, or what ever we want to call it) by combining natural advantages as network operators with next generation network technological innovation. We can partner with service providers in this race to win more subscribers and improve revenue per user. This means service providers need to move much faster than their current approach to technology evolution.

The potential represented by cloud-based services is immense as it increases the value of the carrier's networks in several ways and creates new roles and revenues for Telco service providers. Clouds Servicescould greatly increase network traffic utilization and transport revenues by physically delivering cloud-based services. Telco carriers have an opportunity to extract two or more revenue streams from the same function, charging end users for a given level of service quality and, at the other end, charging cloud-based providers for service quality an arrangement similar to that often discussed in the context of content delivery networks. The revenue flows from port of ingress and egress, or in other words pay me now and pay me later.

Telcos can leaverage some inherent advantages based on IP infrastructure. This infrastructure lends itself well to cloud services, and enablement. The highly componentized nature of telco operations software blend well with cloud services because each software component can be treated like a hosted application, which yields parallels in processing and performance, is enabled by emerging telco technologies such as IP multimedia subsystems (IMS), Service Delivery Platforms (SDP) and next-generation networks (NGN) service architectures. These architectures are developing into logical service components that will fit in cloud environments.

A service provider using cloud computing can build a supply side architecture that matchs up with the current application and service needs. This will blend all of their services into revenue components that are tailored to the individual clients needs. Using NGN defined IMS/SDP enablers can be as simple as defining a activation profile and updating subscriber information.To be a leader and play a bigger role in the cloud, telecom service providers will need technology that not only blends the services, but the environments.

In conclusion here are a few examples on cloud revenue potential for Service providers:

IAAS = Infrastructure as a service

SAAS = Software as a Service

PAAS = Platforms as a service

CAAS = Connectivity as a Service

Definition of Cloud Computing

My definition of Cloud computing is a computing paradigm in which tasks are assigned to a combination of connections, software and services accessed over a network. This network of servers and connections is collectively known as 'the cloud. Cloud computing opens a tremendous opportunity for revenue generation for service providers.

Date: May 2009