Production theory identifies two extremes – one-off and mass production. Of course, the theory also includes a continuum between these poles, but essentially we are led to the conclusion that customisation is incompatible with mass production. That is, if we deliver products to a large consumer group, we cannot individually tailor them to their needs. Certainly, this thinking must underpin some of the comments in this interview about SaaS business models. The implication is that the cost of delivering software to so many different customers creates huge upfront costs with no guarantee of near-term payback.
At Gintel, we happen to disagree with that contention. Here’s why. First, though, some theory. Although it is accepted that mass production leads to uniformity, with endless rounds of identical goods being stamped out on the production line, it is generally recognised that not everyone will accept this. People increasingly want customisation in the goods that they purchase. There is an emerging literature on this subject, but a useful reference is this paper, written by Qiao, Lu and McLean. As the authors write, “The emphasis on increasing product variety and individualisation has created a strong demand for a new strategy of Mass Customisation Manufacturing (MCM). A competitive and flexible manufacturing system must be developed to respond to small batches of customer demand”.
We couldn’t agree more. Although this was written in the context of manufacturing physical goods, we think this can equally apply to services. The problem has been that it hasn’t been economic to customise services that are deployed en-masse. Service customisation has been dependent on traditional software development models, with a limited pool of resources capable undertaking development.
Take hosted telephony services, for example. If a customer buys a PBX for deployment on their premises, there is probably the expectation that the product that is delivered has some degree of customisation, even if only in the range of services that they choose to select. But traditional Centrex solutions have depended on providing a much smaller range of options and essentially expecting users to select from the menu of available features. It doesn’t have to be like that.
Qiao et al describe a model in which various levels of MCM can be defined. The ultimate realisation of an MCM approach is Level 2, in which production strategy derives from two fundamental ideas:
- We cannot accurately predict who our customers will be, and
- We have the ability to provide demanded services
In other words, we don’t necessarily know what people want, but we can deliver it. This sounds an unattainable goal. In fact, that’s just what we have done. Gintel’s Easy Virtual PaBX solution allows operators to deliver hosted telephony services to enterprise customers across any network. But it also includes a toolkit that allows service customisation and creation; the Easy Composer suite.
However, in contrast to previous service creation models, Easy Composer can be used by front-end staff, not core network engineers. This means that services really can be tailored for individual customers. We have seen this actually happen in live networks. At the recent SDP conference in Prague, Network Norway, which uses the Easy Virtual PaBX and Composer platforms, commented that they had tailored services for each of the major customer segments that they identified, and has continued to supply customer specific enhancements since the launch of their mobile office solution. That is really mass customisation in action, achieving the Level 2 status defined above.
The dream of creating new services cheaply and quickly has been around in telecoms for quite a while, but has never really been achieved. Reducing the economic impact of service customisation to such a level that an operator can deliberately use this capability as part of their strategy to win business in a service with thousands and thousands of customers is quite an achievement, and we – and Network Norway – are obviously very proud of this, But it also illustrates the fact that you really do have to move away from old ideas to compete in today’s fast-moving world. If some people don’t believe in SaaS models, then perhaps that’s because they have monolithic software solutions that don’t lend themselves to an MCM approach.
One more thing. Qiao et al go on to make a very interesting point regarding logistics management. In traditional approaches, the input, operations and output all come BEFORE sales and marketing and customer service. So, the customer appears to be at the end of the chain. In their new conceptualisation of an MCM system model, sales and marketing are at the start of the model, indicating that customer preference, expression and desire are key inputs into the process, as this diagram from their paper illustrates.
|
What’s really intriguing is the presence of a design tool with input from sales BEFORE the operations system comes into effect. We couldn’t have drawn a better representation of what we enable. That is exactly what Easy Composer offers. Sales people can work with prospective and existing customers to design a service that can then be deployed in real time.
Changing the process in this way represents a dramatic shift in thinking. The customer really does get to be first in line, something that will change the relationship forever. And also, something that might just do the trick to build a profitable future – worth thinking about in these challenging times. Gintel’s Easy Composer really does deliver the power to achieve mass customisation effectively. Talk to us – and we will show you how.
Tore Saeter, October 2008
References:
Qiao, G. Lu, R. and McLean, C. “Process Control and Logistics Management for Mass Customisation”, National Institute of Standards and Technology
Much has been written and spoken about Service Delivery Platforms, or SDPs. There will be plenty of opportunity for further discussion at the forthcoming SDP Global Summit in Prague, at which we are proud to be speaking and exhibiting. It is a good time to reflect on what the point of a SDP is, rather than how it should be constructed.
As far as we can tell, an SDP is a platform for unifying service delivery in an operator’s network. Unity is the key theme: an SDP provides a uniform mechanism for offering and supporting a range of services; a uniform way of integrating those services; and a uniform means to integrate the services with the billing and support tools that allow operators to bill customers and provision the services to which they are entitled. Critically, the SDP should allow innovation in service creation to be extended and broadened to maximise return on the operator’s assets.
There are of course, many problems with this description, not least is the fact that there is little current agreement on what constitutes an SDP. This is our opinion; others may have a different view. However, the area of most obvious concern to us is that of the uniform mechanism for offering and supporting a range of services. In order for this to be achieved, service enablers need to be provided, or exposed, by the underlying network assets owned by an individual operator. These can then be interpreted, composed and orchestrated to allow services to be created. The problem is that there is no consensus on how this can actually take place.
There have been many attempts to provide a solution. The problem stems from providing a means of the interpretation of complex signalling protocols that actually control call or media sessions into something that can be leveraged by a developer into a service. Normally, this takes place via one or more kinds of gateway. Such gateways provide an abstracted output of signalling information, making it available to applications that interpret it for processing. The output is typically in the form of an API. We touched on the theme of network APIs in our last post; let’s dig a little deeper now.
Various APIs have been developed for the presentation of signalling and session data. Efforts range from those that provide an interface of great granularity, with little abstracted from the signalling itself, to those that abstract the data to a very high degree. Highly granular APIs provide rich control possibilities, but create the problem that a pool of specialist talent is required to work with the resulting data. More abstract APIs broaden this pool, as less specialist knowledge is required to interpret the data, but can affect the utility of such data, limiting the scope of the application. Proprietary APIs have abounded, as different vendors created their own solutions to address the issue. However, this limited operator choice, led to vendor dependencies, and created interoperability issues.
Some groups have tried to address the issue by creating public standards that can be adopted b any vendor and are positioned at different levels of complexity, accepting the trade-off that greater abstraction reduces the advantage gained. Parlay is one example of such an initiative.
Parlay was created to abstract network resources sufficiently such that a wider pool of developers could be enabled and thus permitted to create applications that could run on an operator’s network. However, the resulting APIs were arguably too complex to allow this to happen and the use of Parlay was largely restricted to within an operator itself. Later efforts, such as Parlay X have attempted to address this, by providing further abstraction and delivering a format that was more familiar to non-telco developers. It remains to be seen if this will be successful, but early indications are that additional abstraction may be required. Still further efforts have been made using XML and SOA principles, and the quest will doubtless continue.
This is all very confusing for operators – which interfaces can be used to provide the right amount of access and control, allowing real third party innovation? In the context of an SDP, this is a critical issue. If the chosen platforms neither support nor expose the correct interfaces, the strength of the SDP as a means for uniform service delivery - or a platform for innovation - is fatally undermined. Operators face tough choices in assembling the elements that comprise their SDP in order to meet these needs.
At Gintel, we are faced with this problem all the time. Each operator’s network is different and contains a different array of solutions for the presentation of signalling information. We are not in the business of specifying APIs at a network level. However, our expertise has been critical in helping achieve uniformity in presentation of information for service creation. We are able to interface to a wide range of network gateway solutions, ensuring that our applications can be deployed in any network environment. This is a crucial advantage – we can adapt our solutions to any network interface, ensuring that operators can achieve the uniformity that is required for successful deployment of one of our solutions. We recognise that it’s simply not enough just to provide robust, feature rich applications. Operators also need application vendors that can understand the underlying network and ensure compatibility to both existing and future interfaces and architectures.
We are looking forward to the SDP Global Summit in Prague, where we shall certainly hear more about different approaches to resolving network interface issues. Our customers can be assured that this is one issue we have solved for them – one less thing to worry about in ensuring successful application delivery and deployment. If you plan to attend, be sure to drop by – we look forward to seeing you there!
Tore Saeter, September 2008
There is considerable debate around the service delivery core of next generation networks. For some, IMS remains unconvincing, despite the great strides made in formalising the architecture, the momentum that seems to be gathering around the standards, and the evidence of real network deployments. At Gintel, we believe that IMS has much to offer and expect to see more IMS rollout in coming months. But, we also recognise that it is not an ideal solution for all situations.
Never-the-less, some attributes of IMS have become cornerstones of network evolution. For us, these include the following:
- Decomposed network architecture
- Exposure of abstracted service enablers
- Adoption of SIP
The decomposed network architecture is critical. Building on the IN / CAMEL model which defines functional and physical entities and adding the concept of layers (transport, signalling, service, control), a decomposed architecture promotes a strong separation of concerns and points to a framework in which vendors can play to their strengths, delivering specific solutions that meet particular requirements, whilst slotting into a holistic view of the network.
The addition of abstracted service enablers builds on this, providing the interfaces that will unlock innovation and stimulate new business models. The search for a rich set of service enablers that can be exposed to different stakeholders has been ongoing for some time. The IN SCE tended towards the proprietary and was usually restricted to specialists within the telco itself. PARLAY, which we fully supported, was a strong contender, but never really achieved the goal of broadening the service development community. But, the kinds of enablers that are emerging today, based on web services and SOA principles offer much greater promise. What makes these developments compelling and suggests that we are finally on the right track is that newer abstract models can co-exist with more granular and lower-level concepts and interfaces. Thus, a telco can offer web services APIs in conjunction with their own PARLAY based systems or other service creation paradigms, all based on the same set of underlying network resources.
This can build an environment in which the telco can create the services they need to adapt and customise their network, whilst simultaneously allowing third parties to innovate in a secure environment with interfaces that are more intuitive and require limited specialised knowledge of the network itself – a key criticism of earlier efforts in this direction.
SIP has become the de facto standard for interconnection of NGN elements, as essential as oil to the running of an engine. Although the standard has evolved considerably since first introduced in the 1990s, SIP is a rich protocol for connecting and managing all kinds of disparate sessions.
These three elements are at the heart of Gintel’s product offer and underpin our philosophy. All of our applications are designed for a decomposed network, in which different external platforms and solutions provide the network connections and resources that are required for the application to function. These include:
- Standardised execution environments, such as Application Servers that can provide connectivity to an enterprise service bus (ESB)
- Media gateways that deliver TDM connections to the solution
- Signalling gateways to connect to legacy SS7 signalling
- Media Servers to provide media processing functions
We can both connect to existing abstracted network enablers, such as PARLAY, and expose service creation capabilities via a powerful yet simple graphical user interface. This allows insertion alongside existing service enabling technology and to provide new capability exposure to third parties.
Finally, our solutions have been developed from the ground up to support SIP and the signalling models it offers. Our applications can connect to IMS-compliant or alternative SIP interfaces, simplifying network connectivity options and supporting the gradual migration to an NGN SIP-enabled architecture.
We recognise that these three tenets are fundamental to the evolving network, but we also understand that there may be different ways of embodying these principles. One operator may choose IMS as the paradigm for building these capabilities into their network, whilst another may choose a different path to reach the same goals. For us it doesn’t matter – we consider it important to deliver the key attributes demanded by the NGN, but without compelling operators to adopt one particular model over another. After all, as service experts, we recognise that operators have to customise services to meet the needs of their individual markets and customers. The same argument applies to their networks – operators have choices that they make in order to create the best environment for their unique circumstances.
The three principles outlined above, encapsulated in the vision of “any user, any network, any service” remain true whichever model the operator chooses to adopt in NGN migration. Yes, IMS will be central to this, but at Gintel, we truly understand that operators also need choice. Our goal is to provide solutions that meet all of these requirements. Operators can be confident that solutions from Gintel can fit into their network and help them achieve their goals, irrespective of the overall framework that they choose to adopt.
And, at the end of the day, this is what matters more than the debate, interesting though it is, surrounding IMS and its future. That is really a sideshow that shouldn’t diminish the real goals of operators – to achieve a network configuration that allows them to control network resources, deliver rich and exciting new services, and create profitable new business relationships that leverage their assets and expertise. It doesn’t really matter how this is done, so long as the chosen model delivers on those key principles – a decomposed network, exposure of abstracted network capabilities, and use of SIP where appropriate to help harmonise network connectivity. So, don’t be distracted – talk to Gintel now, and see how we can help you achieve your goals!
Tore Saeter, July 2008
In the past, when we have spoken to operators, they have generally already gone through a process of evaluation to determine their strategic direction and the services they want to deploy. Typically, this means that they have already considered our area of expertise – services for the hosted enterprise market – and decided that they want to invest in these capabilities; the conversation they then have with Gintel is about choosing the best solution or helping to define an RFx.
Recently, however, we have enjoyed more conversations that we would describe as ‘evangelical’ in nature. That is, the operator is searching for ways to enhance its business and has included Gintel in these discussions. This is a privileged position to be in, and the discussions echo many of the dialogues we shared internally when deciding to launch our own product portfolio some years ago. We thought we would share some of these thought processes with you in our latest post.
Everyone knows – or claims to know – that operator enhanced service revenues are forecast to grow rapidly. At every conference we attend, there are multiple charts from different analysts all pointing to the same thing (Does anyone ever check them retrospectively? Perhaps we should hold a sweepstake to see which one wins? Or is that the role of the stock market?). The corollary of this is that basic voice service revenues are predicted to fall significantly. So, the argument goes, operators will have to work harder at the enhanced services to plug the gap and provide engines for growth. Whilst this makes intuitive sense, it conceals a much more complicated picture. It’s not just revenue growth per se that matters, it’s profitable revenue growth. Similarly, operators are clearly not focusing on a single issue: there are other ways of making money than from leveraging core assets, as nimble players have found. But, for the majority of operators, enhanced services are at least part of the solution to the revenue challenge.
Logically speaking, thinking about profitable services – as opposed to just services – should encompass consideration of the different segments that make up a subscriber base: many segments have different spending abilities and correspondingly different profit potential to the operator. One of the core assets available to operators today is the intellectual capital that can be derived from the extent to which this is understood and can be quantified, and there are some significant innovations out there that demonstrate this. It’s abundantly clear to many that the enterprise market has to feature in these deliberations prominently.
There are many reasons for this. Enterprise customers have larger budgets, have demanding needs and the potential to pay for a whole raft of services, provided they can be leveraged and delivered in a straightforward manner. Not only can ARPU be higher in the enterprise, but AMPU – and this takes us back to profit – can also be higher.
So, superficially, the enterprise appears to be an attractive market to address. But, of course, it’s also a demanding one. It’s not enough just to launch and promote a service – it has to meet the rigours of the business environment, exacting SLAs, and so on. It also has to be simple – there’s no point offering something revolutionary if no-one can use it. Most importantly, the benefits need to be clear. It’s probable that there is no single stand out feature that delivers these benefits, but the mix of benefits has to satisfy the range of stakeholders in the enterprise – those who pay the bills, those who manage the infrastructure and those who use it. Satisfying all of these people, all of the time is clearly a challenge.
One service that is gaining a good deal of attention at present is the virtual PaBX. Actually, you can call it a mobile PBX, or even just IP Centrex, but whatever term you adopt, there are some key features and capabilities that are required. Various reports have highlighted the potential of such services, the cost savings they offer, the revenue opportunities for the operator, and the benefits to the enterprise, amongst other things. Indeed, there is some extremely good data available that we use ourselves and respect greatly. But pulling all of these data points together is hard. Yes, we can build a compelling picture, but there’s more to it than that. Behind it all, we need to be able to deliver something that actually helps the operator to realise the vision. In turn, this enables them to directly target the most profitable segments in their market and, having targeted them, to keep enriching the offering to make it even more compelling and rewarding. We all know how opportunities can be missed, or perfect solutions go stale.
That’s where Gintel comes in. We can help operators to build a compelling portfolio of services to target enterprises – starting with virtual PaBX, mobile PBX or IP Centrex, whichever term you prefer – and building on it with a rich and evolving suite of services that help enterprises to achieve consistent utility and value – and the operator ensure a consistent and growing return. Why not talk to us and see how we can help you develop a strategy to address this market? Not only do we have the technical expertise and experience to make product rollout happen, we can also share our insights to help you define what it is you need to achieve in the first place!
Tore Saeter, June 2008
Software as a Service (SaaS) can be defined as software that is available to rent by individuals and enterprises. Such software applications can be rented from application service providers, who may exist as entities focused exclusively on making a particular application available. Increasingly, telecoms operators and service providers are adding such capabilities to their product portfolios. The concept is nothing new – centrex has been around as a service for over 40 years – allowing customers to rent access to a service that is hosted by the telecoms operator. However, the broad term SaaS covers a multitude of applications and is reckoned by many to offer outstanding growth potential. Indeed, Gartner points to growth as an industry from $5 billion in 2007 to over $11 billion in 2011. No wonder the term is attracting so much interest.
But, we shouldn’t let the mystique of a new movement mask the reality. It’s not just CRM or other applications that benefit from the SaaS model. In fact, plain old centrex is a core element of the movement. It’s not old-fashioned TDM centrex anymore though, but powerful new developments enabled by advances in VoIP technology. IP Centrex is a key application that has been revitalised by upsurge in interest in SaaS, with new capabilities and compelling benefits. Next generation centrex services can offer considerable advantages to both the enterprise and to the carrier.
Enterprises gain the advantages of fully-featured PBX services without the overhead of managing on-premises solutions. They gain seamless mobility, reflecting an increasingly mobile and nomadic world. Capex can be reduced as the equipment doesn’t need to be purchased up front and opex benefits can be enjoyed too as there is no need to manage a costly box of tricks attached to the corporate WAN. This is often overlooked in discussions of SaaS, as the emphasis tends to be on new applications or new ways to share data. The reality is that voice communications remains fundamental to the core of enterprises, as it’s still the most common means of communication.
From the service provider’s perspective, hosted voice services represent a clear and compelling revenue opportunity, as they offer a means to target market segments with high and sustainable ARPU and AMPU. If we consider for a moment the turbulence that is generally experienced amongst consumer markets, the enterprise represents an interesting segment to address, particularly for operators seeking to challenge an incumbent or dominant player. Consumer markets are hard to break into – witness the fierce competition shaken up by ever-lower cost broadband service packages. Consider also the rise of new business models that are directed towards differentiated consumer segments, such as the emergence of the advertising-funded mobile play exemplified by Blyk. Operators have to innovate ever faster simply to maintain their position, let alone develop a strategy for growth.
Worse, not only can operators end up investing for no net benefit, but may actually lose out as more nimble players emerge to attack their customer base. How can this cycle of chasing the same markets with increasingly ingenious tactics and programmes for essentially the same or diminishing reward be broken? Well, one approach is to sidestep the problem and invest in new markets and segments, which is why the enterprise domain and SaaS is gaining such interest amongst the operator community. Centrex offers operators a means to reach out to a promising and relatively unexplored market, capitalising on the richness of a new class of products, enabled by IP technologies. As Sten Nordell of Telenor commented at last week’s IMS World Forum, the SME segment remains the largest untapped market for service providers.
But this opportunity needs to be balanced against the fact that customers are now more demanding. If a similar cycle of increased demand and delivery to no net gain is not to be experienced, then operators need truly differentiated solutions. They need tools to enable themselves to stay several steps ahead of both their customers and their competitors. That’s why IMS offers a long term solution, as a strategic tool for operators to launch services targeted towards niches within highly segmented markets. Gintel’s solutions offer a way to address this, deployable on both an emerging IMS framework and on any NGN architecture. They deliver both rich and proven services, and the means to evolve new features, products and capabilities to exceed customer expectations. Gintel's solutions are adapted to the new environment of IMS and SIP, and, crucially, build upon the heritage of the past. Solutions that contain the tools to build competitive advantage for the future, not only selectively adapting to the demands of customers, but allowing operators to anticipate new and unexplored requirements. Why not take a moment to explore what we can offer?
Tore Saeter,
CEO.
Comments? Email us: info@gintel.com
As the end of March approaches, we find ourselves caught between fading memories of the MWC in Barcelona and anticipation of the IMS World Forum in Paris at the end of April. Barcelona was great – by far the most successful event for Gintel to date – but it’s interesting to consider how the hype pendulum has swung between this year and the last. For example, it was striking how the buzz surrounding IMS has quietly diminished to be replaced by that surrounding femtocells and mobile content distribution models. And yet, with the largest event in the industry dedicated to IMS fast approaching, it is worth reflecting for a moment on the challenges still presented by IMS and how it is shaping our industry: after all, it’s clear that the hype hasn’t entirely evaporated.
For an application provider like Gintel, IMS has always been peripheral to our strategy. Yes, we need to be very aware of the standards. Yes, we need to understand how our applications can fit into the IMS application layer. Yes, we need to understand how our applications can leverage common capabilities exposed via the IMS presentation layers. But, we don’t see the world exclusively through an IMS-shaped prism. When we talk to customers, we find that IMS readiness matters less than the specific business case for a particular service.
In fact, after determining whether a particular service can be profitable, the issue of the platform on which it can run is secondary – the technical decision makers simply validate what is being proposed by the marketers and ensure overall compatibility with the network architecture schemes that are being considered, regardless of the platform. If this is the case, it might be indicative of a power shift in the operator hierarchy, moving from the traditional engineering-led company to a more innovative market-led operation.
Putting that to one side for a moment, the issue of business case is one that has to be dealt with across the entire organisation. It’s not just the service in question, but it also serves to define the operator itself. For example, in saturated markets, where can companies seek differentiation? One obvious choice is to adopt a bias exclusively to a particular segment, to occupy this niche and to achieve excellence here rather than seeking to draw battle lines with more established players. Logically, it makes more sense to chase niches that offer better margin potential than others. One such niche is the SME market and there is rich potential in the delivery of revenue-generating enhanced services directly to enterprise customers.
Thus, the business case that drives the application is intimately connected to the business case that drives the overall strategy. This level of focus goes above and beyond anything that might be related to IMS, SDPs and the like. These may well be of vital importance to how an operator delivers services, but they are clearly of incidental importance to which services the operator actually chooses to offer, for it is via their service package that they can define themselves and achieve leadership positions in their chosen markets.
So where does that leave the IMS World Forum? Past experience has shown this to be a lively and interesting event, but clearly things need to move on from discussions about the arcane complexities of the IMS architecture. What really matters in order to provide this event with the vigour that continues to make MWC so compelling, is that the complete value-chain of the IMS movement needs to be addressed, so that the end-to-end proposition can be made clear to operators – and that includes a particular emphasis on the applications that will be delivered via the emerging IMS infrastructure.
The event should not simply be a discussion about what an elegant solution IMS is to a range of technical issues (though of course that last point has been much debated) – it also needs to be made clear that there are applications available that can be deployed today and do not need to wait until some future point when there are sufficient IMS client end-points available to make it worthwhile: that’s just the sort of argument to make the current decision makers in the industry walk away shaking their heads.
This is why the power-shift matters – just as we at Gintel have to play to our markets and emphasise the unique and compelling merits of our products to the appropriate people, conferences like the IMS WF have to continually look to ensure that the event is attractive to the right decision makers in the industry. This suggests that both the delegate profile and the event should evolve to encompass marketers and product managers, not just R&D staff, and to present more applications that deliver meaningful and, potentially profitable, benefits.
Of course, Gintel will be present and strongly endorses the event, having been invited to present in the application showcase. Of course, we are bound to say that such showcases are just what the IMS World Forum needs, but in this case, we are convinced it is true: we need to motivate the industry with clear and compelling applications that may happen to leverage this technology. If we can do that, then surely the technology will follow behind?
Tore Saeter,
CEO.
Comments? Email us: info@gintel.com