New services and applications have opened the floodgates to content-creation opportunities for end users and are changing the way that value is created, managed and monetized in communications networks. Because the new communications experience no longer revolves around basic high-speed connections, content has become an important element of services. This is especially true when the content is relevant to the context — location or personal needs — of the end user, heightening end user differentiation.

 

A growing number of service providers realize that they need to redefine their strategic goals and transform how they bring new services to market. They are looking for ways to accelerate and monetize service innovation, enable blending and personalization of services that further enhance the end-user quality of experience (QoE) by taking advantage of key user trends and technology evolutions, such as IMS, digital TV, and Web 2.0-based concepts and technologies.

 

A Service Delivery Environment (SDE) streamlines service creation, provisioning and management processes and enables efficient service agility, blending and personalization for a user-centric experience. An SDE moves away from the traditional “silo” model of service delivery and enables improved time-to-market with rapid creation and integration of new, innovative services at a lower cost. Most important, it helps service providers attract and retain subscribers, create new revenue streams, and adapt to new business models.

 

Any service provider who operates in a competitive market is under intense pressure these days. They must find a way to quickly move from rigid network infrastructures, leveraging new and existing service delivery platforms (SDPs) to create a more flexible service environment that meets the service expectations of existing and potential customers. Until then, incumbent service providers must implement a migration strategy that leverages their existing networks and legacy environments to enable a new generation of services and lay the foundation for the all-IP networks of the future.

 

As they migrate their networks to IP to meet the new service demands of their customers, service providers will increasingly be required to offer consumers and businesses the ability to mix and match services at will for voice, data and video over broadband wired or wireless infrastructures. By enabling and supporting this capability, they will change the fundamental nature of the industry. The telecommunications market will take on many of the economic characteristics associated with the Web, and a new Telco 2.0 business model will emerge.

 

The ever-changing demands of consumer and enterprise end users have accelerated the pace of change at the subscriber, market and technology levels and created a constantly evolving environment to which service providers have to continuously adapt. In this new environment, basic voice and data services, which were once the mainstays of a service-provider business model, are no longer enough to compete. The market has evolved to the point where standard, connection-based services are now basic table stakes in the competitive game of customer acquisition and maintenance.

 

One of the main reasons for this shift is the change in consumer and enterprise end-user expectations of what a service is. Historically, service delivery was thought to commence and conclude with the physical connection of a circuit. However, end users expect to be able to connect anywhere, anytime, with any device. They also expect the connection to be available, just as they expect that lights will turn on with the simple flip of a switch. When they do connect, end users expect to have access to IP-based services that they can easily adapt and personalize to their needs on whatever device they choose.

 

In addition, the competitive landscape Figure 1. IP enables cross-domain competition has changed. Service providers are no longer competing just with other Telefonica service providers for market share because IP technology has lowered the barriers to market entry. As a result, new, non-traditional players are launching services and applications and capturing market share, as shown in Figure 1. Unlike service providers who have extensive, complex, multi-layered networks created over many years of development, these new entrants — over the top players (OTTs) such as Google (News - Alert)™, Yahoo!® and MSN® — are Internet-based, running on top of service-provider infrastructures with consequently vastly lower infrastructure and operation costs.

 

 

Meanwhile, the new services and applications have opened the floodgates to content-creation opportunities for end users and are changing the way that value is created, managed and monetized. Because the new communications experience no longer revolves around basic high-speed connections, content has become an important element of services, especially when the content is relevant to the context — location or personal needs — of the end user.

 

Today’s Web 2.0 capabilities enable and empower every individual and business in a network to be a content publisher. As a result, distinct, virtual global communities of common interest have formed around blogs, wikis, forums, and video shares. These virtual communities allow users to collect and consume information and collaborate on the creation of content in a way that dramatically affects traditional communication concepts while satisfying the content needs of almost all users.

 

At the same time, Web 2.0 has allowed the creation of mashups: services that are created by reusing pieces of other services in the Web domain. This type of service creation is also occurring with telephony and non-telephony capabilities to enable the creation of blended services. Voice and other telephony capabilities are therefore becoming components of other applications to provide end users with a seamless communication experience.

 

With blended services, communication services are integrated to allow users to access the functions they want on different devices. Voice, video and data are always on, and the user has the ability to move seamlessly from one device to another during a single communication session with no interruption in service.

 

Alcatel-Lucent primary research shows that end users are willing to pay for blended services that provide functionality applicable to their lifestyles or enhance their productivity. They are also willing to switch service providers if they don’t get the connections and the services they want. Mobile workers provide a perfect example of how the blended-services trend has manifested itself in the market. These end users are subscribing to wireline and wireless services that they can tailor to directly serve their individual requirements. They are demanding advanced communication services that simplify their lives: for example, a single, network-based address book and context-aware applications, including presence and location-based services.

 

At the same time, mobile workers want control of these services to dictate how and when they connect or are contacted, anywhere and anytime. This is one of the reasons why access to social networks in mobile devices in the United States reached 7.5 million mobile end users — 3.5 percent of all mobile subscribers — as of June 2007.

 

In addition, research has revealed that 17 percent of all cellular data users are willing to accept advertising on their mobile devices. This is an important fact because analysts’ forecasts predict that US mobile advertising expenditures will rise from $158 million in 2006 to $4.3 billion by 20112. In the home market, a January 2008 Alcatel-Lucent study in Spain revealed that 77 percent of those surveyed were interested in monitoring and controlling their home systems when at home or away from home. They were also interested in storing television programs, personal video recordings, Internet video, photos and home videos on a single, centralized hardware system.

 

As online video usage has increased, entertainment applications have started to affect broadband Internet adoption. In a recent Yankee Group study, 27 percent of broadband subscribers mentioned that an entertainment product or service was the reason for subscribing to broadband, compared to 21 percent one year ago. In 2007, online viewers watched an average of 3.4 hours of online video during December, representing a 34-percent gain since the beginning of 2007. Finally, Alcatel-Lucent research in the U.S. showed that 19 percent of digital TV subscribers are highly interested in a “multiscreen experience”

 

The Millennial generation — those born after 1982 — is a segment of the market that is also influencing the evolution of communication services. Millennials are the first generation to grow up surrounded by digital media. They view communications and networking technology as an inherent part of their daily lives, in much the same as baby boomers viewed TV. They spend a large portion of their disposable income on laptops, personal computers, and portable music and video devices.

 

Millennials are comfortable using wireless networking to stay connected with friends, family and colleagues.

 

A new digital lifestyle is emerging among these consumers. This market segment is driving the demand for always-on connections, more bandwidth and multiscreen services. Its members are comfortable using text messaging interchangeably with voice calls. They demand instant connectivity to their social networks using e-mail, instant messaging (IM) or mobile phone and are most responsible for the evolution of social networking web sites such as MySpace (News - Alert), Facebook, and YouTube.

 

In addition, Millennial consumers are opinionated and extremely active Web users who have a strong desire to influence the world with blogging, citizen journalism, viral campaigns, petitions, and other forms of user-generated content. For example, they share information on everything from their favorite web sites, using “social tagging” tools such as Delicious, to the location of good food with “geotagging” of maps.

 

Alcatel-Lucent has labeled this digital lifestyle “C3: Connect. Create. Communicate.” The C3 lifestyle blurs many previously existing distinctions: communications are integrated with entertainment and social networking, the roles of consumer and creator of content and applications are merged, and instead of synchronous/asynchronous communications modes there is a state of being “constantly in touch”.

 

For C3 consumers, ubiquitous, location-independent, 24/7 connectivity is critical, as Alcatel-Lucent primary research confirms. Fifty-one percent of US respondents and 51 percent of Canadian respondents strongly agreed with the survey statement: “It is important for me to always have access to my primary way of communicating electronically.”7

 

End-user expectations have also changed the expectations that enterprises have of their communication infrastructure. Today’s technologically knowledgeable and demanding end users are pushing Chief Information Officers (CIOs) to provide faster, ubiquitous communications services. These employees and customers are used to taking advantage of Web 2.0 community-based social networking and collaboration tools to connect with people and find information when and where they need it. Products and services that end users have adopted in their personal lives are also being brought into the workplace, including IM, social-networking sites, blogs, and wikis.

 

Secondary market research by Alcatel-Lucent reveals that mobile workers and teleworkers are expanding as a percentage of the total US workforce. Mobile workers increased from 32 percent in 2002 to 41 percent in 2006, and teleworkers grew 150 percent in five years to 20 percent of the workforce.

 

Therefore, to address the needs of employees and customers, CIOs are demanding secure, converged or blended communications solutions. They want solutions that optimize their networks to leverage the capabilities of a burgeoning mobile workforce, along with the applications and services that will maintain their competitive edge.

 

The bottom line is that enterprises can extend the reach of their employees and increase productivity and business efficiency with a converged network. To address these requirements, enterprise voice traffic is migrating to IP, and information technology (IT) platforms are moving to service-oriented architectures (SOAs).

 

Because voice and data services are no longer the basis of how an end user chooses a service provider, providers cannot rely on a single killer application that will attract and retain a large majority of consumer and enterprise end users. Each end user has a unique set of needs that can only be addressed by personalized services. To stay competitive in this environment, service providers must deliver new, blended lifestyle services. These services must combine network capabilities, content, and user-device features to address specific customer needs based on a variety of lifestyle factors.

 

Service providers can address this requirement by taking advantage of intangible assets such as brand, subscriber base, ID management and authentication capabilities, end-user current location and presence status, end-user billing/home address, end-user buddy lists, and end-user calling and browsing patterns to offer services that end users can personalize to their individual needs anytime, anywhere and on any device. The service-provider role therefore changes to “platform provider”.

 

Instead of relying on a killer application, a platform provider evolves service-layer capabilities to an environment in which intangible assets allow many new applications to be launched very quickly and without significant incremental cost. These new applications and services can be easily customized for several different segments.

 

Service providers are already making this transformation by shifting their thinking to leverage what Chris Anderson, editor-in-chief of Wired magazine, describes as the long tail of the market: a situation in which a high number of services that only appeal to specific customers are made available to a large market. Instead of a few services, each of which has many users, there are many services, each of which has few users. To offer this variety, the cost of launching a service and its operations must be dramatically reduced.

 

In a recent survey conducted by Heavy Reading, service providers from all regions of the world confirmed their interest in the benefits of this approach by listing the top 10 critical factors that must be met to enable them to adopt new service-innovation approaches.

 

 

1.      Improve time-to-market of new services, reduce time to integrate new services

2.      Increase flexibility in how we deliver new services (for example, across network infrastructure)

3.      Prevent revenue erosion and increase customer loyalty

4.      Gain access to new revenue streams using new business models (for example, advertising, revenue-sharing with third parties, QoS SLA enforcement)

5.      Reduce cost of service creation

6.      Serve new customer segments and markets

7.      Develop close relationships with enterprise customers by telecommunications-enabling their business processes/workflow systems

8.      Access large communities of developers and engage with third parties in the creation and provisioning of new services

9.      Access to new content-based value chain (for example, third party content)

10. Leverage end-user generated content and media (for example, social networking)

 

 

An overwhelming 55 percent of the same service providers acknowledged that their future approach to service innovation would increase the focus on third-party development of new services compared to development using their own resources. In addition, 86 percent rated the ability to blend telecommunications services as their primary approach to service innovation.

 

To respond to the changing market and position themselves for future success, service providers must transform how they create, launch and manage new services. They must undertake services transformation to allow them to achieve faster time-to-market, leverage and reuse assets to generate new revenue, and reduce operational costs and complexity.

 

By transforming service creation and delivery, service providers can build a competitive advantage by managing the end-user experience. They can be ready to offer new, context-aware, personalized and blended services. They can easily leverage network capabilities — for example, location, presence, and micro-billing — to foster third-party and user innovation in a secure and controlled way that allows them to monetize an entire communication session (before, during and after). Most important, they can position themselves to deliver the appropriate level of quality of experience (QoE) for all services.

 

An effective services transformation leverages a service provider’s intangible assets, such as:

 

·         Brand

·         Subscriber base

·         ID management and authentication capabilities

·         End-user current location and presence status

·         End-user billing/home address

·         End-user buddy lists

·         End-user calling and browsing patterns

 

The end result of this transformation is a new service environment that includes:

 

·         Common subscriber and user-profile management — As service providers move to an all-IP infrastructure, they need to redefine data models to focus on the end-user experience as opposed to a service. They need to examine their business model and determine how best to provision, store and share this data internally and with third-party partners. Depending on their requirements, service providers may want to move data to a common database or continue to store data separately while providing a common method for access across databases using a Generic User Profile (GUP) server.

 

·         Payment and content management — Flexible billing, payment and content-management enablers are a must: business-to-business (B2B) and business-to-consumer (B2C) services may need to support instant payment for items or content while telecommunications services often require prepaid and postpaid approaches. Online, real-time rating may apply to both types of services. Content delivery needs to be tracked for several types of content and across multiple devices to assure payment to content providers.

 

·         Network and service resource management — To allocate the IP-infrastructure resources necessary to deliver services and ensure QoE, the infrastructure needs access to accurate inventory and user information.

 

·         Service fulfillment and ‘ensurance’ — The new service environment must support service models that specify what to configure, which data to analyze, and how to correlate this information to provision and ensure a service. The process may include examining the user’s available bandwidth to determine whether a particular service — for example, IP television (IPTV (News - Alert)) — can be provisioned. The service environment may also need to determine how to provide the service to the subscriber with the required quality and conditions. Finally, the new environment must provide service operations components for self-management, including subscription, troubleshooting, and end-user and partner self-care.

 

·         Service creation — Service creation, a method by which to develop and deploy individual applications, should include support for multiple interfaces and communications protocol, as well as an orchestration function to enable the blending of multiple Web services.

 

Service providers need a framework to guide them through this transformation. The framework should enable services to be created faster, cheaper, and independent of technology boundaries. It must offer the flexibility to evolve and adapt to the changing environment by harnessing the right mix of enabling technologies, such as IP multimedia subsystem (IMS), IPTV, and Web services.

 

Most important, it must allow service providers to achieve the required level of integration with third parties and developers to foster more agile service innovation and delivery that will attract and retain subscribers and provide new sources of revenue using multiple business models.

 

The ideal service-delivery environment (SDE) framework must combine the best attributes of several technological domains, such as IT, telephony, broadcast and Web, as shown in Figure 2. An SDE must encompass partner applications and content to support the rapid creation, deployment and maintenance of new services, enabling the delivery of personalized, blended services while managing QoE.

 

 

Traditionally, service providers have met the service-delivery challenge by overlaying individual stovepipe services on their legacy and IP infrastructure. Current service-delivery capabilities usually have exclusive service creation, execution and management for a given technological domain. However, to deliver the enriched communication experience end users want, service providers must allow the blending and personalization of services independent of their service platform.

 

For example, service providers could combine conversational services with presence and digital TV. With this type of converged service, an end user would be able to see which friends are watching a particular TV show and subsequently chat with them and other viewers — all on a TV screen.

 

To make such a converged service possible, a service-provider infrastructure must allow for the sharing of information, such as user profiles and IP-infrastructure resources, and operational and business support functions. It is unrealistic to think that this is possible using a unique SDP that supports all types of services. Each type of service, such as those based on IMS or IPTV, has considerably different requirements, making it difficult for a single delivery paradigm to optimally deliver all the different services end users are demanding.

 

An SDE embraces the evolution of service-delivery capabilities. It allows service providers to leverage existing assets in an open framework that accelerates service innovation by allowing providers to create truly convergent applications and bind the applications with intelligent network resources. This binding facilitates intelligent delivery, blending, orchestration and personalization capabilities. It also allows service providers to add value to services created and executed on multiple SDPs by providing shared service enhancements and operations tools across all types of services, therefore eliminating service stovepipes.

 

A properly architected SDE allows service providers to accelerate service innovation by linking their own and third-party applications with network resources. It also comprises service-enhancement and operations components that act as common enablers across multiple SDPs. The SDE combines standard back-end billing and support system interfaces with business process rules and open application programming interfaces (APIs) for operational and administrative efficiencies and economies.

 

The SDE ensures a high QoE, orchestrating third-party relationships from inside and outside the network while seamlessly managing the back-office environment. The SDE retrieves and uses subscriber data to create dynamic new personalized service offers based on user preferences. It is usually implemented over time, with each solution focused on a specific business goal.

 

SDE implementations include SOA concepts, workflows and orchestration approaches that are employed to enhance various SDP capabilities to create a real-time, integrated IT and telephony services environment. The SOA-based SDE can support faster, often distributed processing that enables service blending, content and personalization, even across multiple domains, networks and devices, to deliver highly reliable real-time services such as voice and videoconferencing.

 

Next-generation and carrier-grade, the SDE delivers the basic elements service providers need to efficiently and effectively create, deliver, personalize, bill and manage blended lifestyle services over a converged IP network. This vision of future service provisioning is all about putting the end user center stage — precisely what the SDE enables — with a high level of control, flexibility, integration and personalization. Visibility of critical data across platforms facilitates multiple business models such as targeted advertising.

 

The SDE provides the foundation that allows service providers to blend legacy and next-generation Session Initiation Protocol (News - Alert) (SIP)-based services in real time. By encompassing and interworking multiple SDPs, the SDE allows critical service interoperability across different access technologies. Customers do not want their application or service experience to be interrupted, changed or unavailable simply because they have traveled outside their service provider’s geographic domain or screen.

 

This environment also allows service providers to easily adopt new business models or ways to monetize services. For example, a service provider could offer to procure, prepare, group, personalize and deliver “digital merchandise”, such as content, communications services or applications. A service provider may also decide to offer to authenticate and certify buyers/consumers and sellers/providers. Another option may be to match buyers/consumers and sellers/providers of digital merchandise.

Alternatively, a service provider may offer to select the “right” advertisement for the right consumer in the right context or to collect payment and perform financial settlement.

 

Ultimately, aggregation and intermediation capabilities will lead to new business models and new sources of revenue for service providers in the form of subscription and usage fees from buyers, sellers and advertisers.

 

The Alcatel-Lucent Service Delivery Environment incorporates all these requirements to deliver a solid foundation for effective services transformation.

 

A key element of the Alcatel-Lucent SDE is the Service Factory, which encompasses all application client-development tool kits as well as the application servers that support applications at run time.

 

The services it provides may include blended services, involving applications of multiple SDPs such as — but not limited to — video, SIP, legacy and Internet services.

 

To deliver the promise of carrier-grade QoE, the Service Factory relies on common enablers that support service delivery end-to-end and allow services to be personalized and blended across the shared resources of the common IP network. These common enablers are grouped into three main areas:

 

 

·         Federated Control — Includes all service and session-control applications of the SDPs. Examples of such controllers are the Serving Call Session Control Function (S-CSCF) for IMS, a video on demand (VoD) server for IPTV, and a Short Message Service Center (SMSC) for mobile, as well as a service broker and policy-driven dynamic resource controller to handle the services.

 

·         Service Enhancements — Incorporate data-federation technologies across SDPs. Their own databases control the sharing of data, such as user identities, location, presence and profile information across SDPs, as well as with third-party applications.

 

·         Service Operations — Encompass all network-management, operations support system (OSS) and business support system (BSS) applications, cooperating with Service Enhancements to obtain a coherent view of all services from an operational perspective.

 

These three areas are accessible in real time by all services. They provide the bridge between services, the resources required to deliver services, and the related service-operations applications.

 

Using the Service Factory approach, the Alcatel-Lucent SDE provides key and measurable business benefits:

 

·         Agility

o   speeds time-to-market of new services

o   reduces costs and operational complexity

o   enables alternative business models

o   monetizes communities, content and brands, including capability exposure to third parties

 

·         Personalization

o   explores end-user preferences and contexts

o   tailors services to “one” user

o   optimizes the use of common enablers such as location and presence

o   allows the end user to share generated content and media across multiple devices

 

·         Blending

o   interworks service silos

o   enables the fast and easy creation of convergent services across multiple domains

o   extracts greater value from existing network resources

o   uses network-wide visibility, orchestration, and control of resources

 

·         User-centric experience

o   manages QoE by implementing dynamic management of network traffic and resources

o   (real-time service and end-user policy control) and subscriber data management

 

Alcatel-Lucent supports this approach to services transformation with active participation in key industry groups. The company is a member of the TeleManagement (TM) Forum, contributor to OSS/BSS standards, and participant in TM Forum’s (News - Alert) Catalyst Project, Content Encounter.

 

The path to SDE realization is unique for each service provider. It depends on each provider’s specific business priorities and which platforms are already in place. A service provider can realize an SDE by adopting a modular, solution-by-solution approach or by creating an all-encompassing transformation program from the start. In both cases, it is important to have a blueprint for the ultimate objective — especially for an architecture created on SOA-based principles to allow for the reuse and sharing of assets and service components and the leveraging of network strengths. Each module has specific and measurable business goals and is aligned with an overall transformation plan.

 

Whatever the path chosen, the end result is the same: the traditional silo model of service delivery evolves and a new environment is established to allow the rapid creation of innovative services at a lower cost. Ultimately, both service providers and end users benefit from the transformation.

 

Service providers can meet end-user expectations for blended services and a rich end-user experience. In addition, with an SDE, service providers have the agility to introduce new, non-traditional sources of revenue to deliver targeted content to end users based on individual preferences. This content includes location-based and event-specific advertising and promotions that place the service provider in a strong position in the service value chain.

 

Services transformation is a key business imperative that puts service providers in a better position to attract end users and ensure their loyalty as the market evolves. Moreover, transformation attracts third-party partners who can provide new and innovative services, and it provides the flexibility to adopt new business models and create new sources of revenue. Services transformation accomplishes all this by reusing assets, sharing common enablers, providing greater agility in service creation, and allowing more efficient use of operations and administration resources to manage costs.

 

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