1. business and industrial

February 2015
Innovation in an Industry in Flux –
Global Operations & Monetization 10 to Watch in 2015
Stratecast Analysis by
Tim McElligott
Troy Morley
Karl Whitelock
Operations & Monetization Global
Competitive Strategies (OSSCS)
Volume 16, Number 2
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Innovation in an Industry in Flux –
Global Operations & Monetization 10 to Watch in 2015
Table of Contents
Introduction........................................................................................................... 5
Innovation is Essential Now More Than Ever Before .........................................7
What Makes a Stratecast 10 to Watch Company ..................................................8
Year Eight and Going Strong................................................................................ 9
Global Operations & Monetization 10 to Watch in 2015 .................................... 11
Amdocs: Policy Management for VoLTE ........................................................................... 11
Centina Systems: Strategic Assurance and Analytics.......................................................... 13
Ericsson and MetraTech: An Interesting Acquisition and Integration .............................. 15
Hewlett-Packard: NFV and API Management ................................................................... 18
Infonova: Enterprise Business Enablement ....................................................................... 20
InfoVista: Service Assurance and Performance Management ............................................ 22
QOSMOS: Deep Packet Inspection and Network Intelligence ......................................... 24
Subex: The Return of a Revenue Leader? ........................................................................... 26
TEOCO: Bridging the Gap Between Operations & Monetization Functions ................... 28
TM Forum: Zero-Touch Orchestration, Operations and Management ............................ 30
One Year Later – Revisiting the 10 to Watch in 2014 ......................................... 33
Alcatel-Lucent: Analytics-Driven Mobile Security and Billing ........................................... 33
Amdocs: Self-Organizing Network (SON) Solution for Customer Experience ................. 33
AsiaInfo: Analytics-Driven Business Support ..................................................................... 33
Cyan: SDN NFV Management and Orchestration ............................................................. 33
Cycle30: Machine-to-Machine Business Management ...................................................... 34
Monolith Software: Unified Service Assurance ................................................................... 34
Nuage Networks: SDN Virtualized Services Enablement ................................................. 34
Omniware Solutions: Contract-Based Billing and Partner Compensation ........................ 34
Redknee: Virtualized Billing and Business Support Management .................................... 35
Shango: Unified Fulfillment - Supply Chain Integration .................................................... 35
The Last Word ..................................................................................................... 36
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Innovation in an Industry in Flux –
Global Operations & Monetization 10 to Watch in 2015
List of Exhibits
Exhibit 1: Seven Years of 10 to Watch ..................................................................................... 10
Exhibit 2: Amdocs: Making a PCRF VoLTE-Ready .............................................................. 12
Exhibit 3: Centina Systems Strategic Assurance Approach .................................................... 14
Exhibit 4: MetraTech Supports Complex GRU Business and Settlement Agreements......... 17
Exhibit 5: Hewlett-Packard API Management ....................................................................... 19
Exhibit 6: Two View of Infonova R6 Ecosystem Enablement Platform ................................ 21
Exhibit 7: InfoVista Service Assurance for the NFV Fabric ................................................... 23
Exhibit 8: QOSMOS Deep Packet Inspection Engine for NFV ............................................ 25
Exhibit 9: Subex Revenue Operations Center......................................................................... 27
Exhibit 10: TEOCO Customer Analytics Suite ....................................................................... 29
Exhibit 11: TM Forum Digital Services Reference Architecture ............................................ 32
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Innovation in an Industry in Flux –
Global Operations & Monetization 10 to Watch in 2015
Introduction1
For the communications service provider (CSP) global community, 2015 promises to be a year of
change for an industry in flux. To be fair, the previous sentence has been true for a number of years,
and the level of change seems to only increase.
Change isn’t necessarily a bad thing. For the suppliers of Operations & Monetization (O&M)—also
known as OSS and BSS—change is driving innovation and growth.
But growth will come only to those companies, big and small,
which can demonstrate that their innovations satisfy the continually
evolving needs of CSPs.
The transformation of the CSP global community includes a
number of catalysts. Stratecast has been describing many of these
for years; yet, their relevance in 2015 remains high. These include:
•
CSPs continue to be squeezed financially. Data volumes
continue their exponential expansion; yet, the carriers’
ability to monetize hasn’t kept pace with the rise. This
means that most CSPs, globally, struggle with tightening
profit margins. In response:
o
The importance of Financial Assurance increases.
This market, which includes Revenue Assurance,
Fraud Management, and Margin Assurance, is
growing rapidly. 2
o
CSPs are becoming receptive to new ways of doing
business. Many new business models include
partnerships between the CSP and other enterprises
to provide something of value to the consumer that wasn’t previously possible.
Partnerships require settlement; and they change what was previously a business-toconsumer (B2C) model, increasingly, into a business-to-business (B2B) to-consumer
(B2B2C) model.
o
As CSPs embrace new possibilities, they are increasingly demanding flexibility in
their O&M solutions. They want to experiment; and, if the experiment fails, quickly
try something else.
Please note that the insights and opinions expressed in this assessment are those of Stratecast and have been developed
through the Stratecast research and analysis process. These expressed insights and opinions do not necessarily reflect the
views of the company executives interviewed.
2 For more insight, see Stratecast report OSSCS 15-13, Global CSP Financial Assurance: Market Share Analysis, Forecast, and
Supplier Assessment, December 2014. To obtain a copy of this report, or any other Stratecast or Frost & Sullivan report,
please contact your account representative or email [email protected].
1
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•
The Virtual Network—which Stratecast sees as a blend of Network Function Virtualization
(NFV), Software Defined Networking (SDN), and cloud architecture—continues on the
path to reality, even as the industry continues to define what the Virtual Network is. While
none of these architectures will provide immediate relief to the financial squeeze CSPs feel,
CSPs have shown solidarity in their belief that the long-term benefits of flexibility,
programmability, cost reduction, and competitive prowess are compelling and achievable.
CSPs will undergo much introspection and technical analysis of the architectures in 2015.
•
As LTE deployments have increased globally, CSPs are looking to drive additional revenue
from their LTE networks. Voice has long been the main service offering; data and messaging
were add-ons. With Voice over LTE (VoLTE), voice is now an additional component on the
data network. This evolution of voice service could be a game changer; but expectations will
be high from both consumers and regulators. Will VoLTE finally allow CSPs to retire older
voice systems? Will consumers be willing to pay for high-definition voice and/or video calls?
The solution suppliers that provide systems, services, and IT infrastructure to CSPs—the O&M
suppliers—must stay abreast of the business and technology redefinitions that are now underway.
The CSPs are counting on their suppliers to lead them successfully through this extended period of
change.
O&M solutions will need to perform in a double-duty fashion for several years. First, seamlessly
interacting with existing systems and numerous data repositories associated with previously
implemented business management and network operations processes. Second, delivering new
capabilities essential to operate and manage the needs of new business models, new technologies,
new services, and new types of customers.
In addressing these needs, some systems will be
replaced, others will be augmented, and new
ones will be added. This is where a new age of
innovation is essential; and, from Stratecast’s
perspective, cannot be done by a handful of
entrepreneurial startups alone. Continuing from
last year, we have expanded our 10 to Watch
report to include all O&M suppliers, regardless
of size. This is a significant redirection from the
past, when 10 to Watch mainly spotlighted
smaller suppliers. We have seen innovation come
from all sources over the past 24 months,
including well-established market suppliers,
some of which are featured in this 2015 edition
of 10 to Watch.
Our reasons for looking at all O&M suppliers
are straightforward. While a smaller company
may focus on specific or targeted business
challenges for a smaller initial base of customers,
larger suppliers hear the same needs magnified by many. In response, they commission internal work
teams to attend to these needs—or risk losing such customers to the competition. Larger companies
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also commission advanced market strategy teams to prepare for challenges that lie ahead; in many
cases, operating them as though they were small entrepreneurial startups in their own right.
Regardless of company size, 2015 will see a new era of innovation ushered in by companies that
exhibit what Stratecast understands are the foundational attributes of all successful O&M suppliers:
agility, alignment with market needs, product reliability, innovation, scalability, differentiation, vision,
and strong partnerships with customers and other suppliers.
The answer to addressing many of today’s new business problems lies in the right combination of
capabilities, from several parts of the global marketplace, in a way that produces results much better
than if such assets were delivered independently. This means building ecosystems, and working with
partners in ways very different than in the past. We believe that O&M companies will work to solve
specific problems with unique technologies and approaches. These companies will take advantage of
the most recent advances in interface definitions and computing resources, regardless of delivery
model (licensed or virtual), and regardless of market position. Most importantly, Stratecast
believes that answers to tough business situations come from a dedicated focus on
problems, regardless of the size of the organization addressing them.
The 10 O&M companies that Stratecast has chosen as its 10 to Watch in 2015 are focused on
meeting critical business challenges and technology enablement functions. These companies are
included in our list because they deliver innovative solutions that help CSPs transform operations,
address new business needs, and help to improve the customer experience.
Innovation is Essential Now More Than Ever Before
In the past, when CSPs were focused on delivering only network connectivity at a price point
customers would accept, and at a revenue yield that maximized the return on all network
investments, the O&M marketplace (then referred to as the OSS and BSS marketplace) was
different.
Suppliers focused on specific operational functions such as billing, order management, network
inventory, or service assurance. While many bemoaned the silo mentality of the CSPs, the
communications world, in retrospect, seemed to be a much simpler place than it is now.
Today, the O&M world is not so distinct; and, in fact, that is why Stratecast moved away from the
term “OSS and BSS”—the lines between the two areas have blurred. Operations & Monetization
encompass both the traditional OSS and BSS functions as well as the new areas in which business
and network operations management must now play a role.
In the introduction, a number of catalysts and resulting transformations were examined at a high
level. But the specifics of the changes do not matter for this report. When transformation happens
in an industry, innovation is needed to facilitate the transformation. The communications industry is
experiencing transformation, in many different areas, and the rate of change continues to increase.
Innovation, from many different directions, is the key to the future of the industry.
However, before anyone feels bad for this industry, remember the only reason to comment on the
number of changes and the increasing rate of change is because the communications industry is
being forced to compete in a new world. Do the Apples and Googles of the world bemoan the fact
that things have changed? No, they create the change and thrive on it. But the staid and stable CSPs
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have finally opened their eyes and realized that without continual change and innovation, the future
might not be as bright as they would like.
Staid and stable is not a great business plan, and it’s also not very interesting, nor much fun
to cover. Stratecast looks forward to increasing levels of change, expanding innovations, and
a bright (and interesting) future for the communications industry.
What Makes a Stratecast 10 to Watch Company
10 to Watch companies have developed innovative solutions
that address current and business-critical objectives and businessimpacting challenges. These companies come from a wide range
of disciplines, business structures, and motivations. Some are
small, and others are well-established suppliers in their respective
fields. All 10 to Watch companies are organizations with proven
solutions through revenue-bearing customer installations.
Additional characteristics of a Stratecast 10 to Watch company
are:
•
Market Focused and Aware of What Is Beyond the Horizon – To be recognized in a
very crowded Operations & Monetization environment, 10 to Watch companies must be
up-to-date on all current business challenges and O&M needs. Such companies, small and
large, must always be mindful of how the industry is changing, and what will be critical
business requirements 12-18 months from the present.
•
A Culture of Innovation – A 10 to Watch Company must be innovative—possibly not in
every functional area the company may address, but surely within the functional domains for
which the company is recognized in this report. Most have fundamentally changed their
strategic approach to the market several times in an effort to meet on-going business
challenges. These companies must be able to continuously change as the industry or
industries they target evolve. 10 to Watch companies rely on their leadership to recognize
trends or impending market conditions. With their beyond-the-horizon awareness, these
companies adjust to meet those conditions through either organic development or
acquisition of assets. When such assets are blended with a company’s existing solutions, they
should yield a better approach or improved outcomes to new business requirements.
•
Support Rapid Change in Business Climate or Technology Approach – 10 to Watch
companies recognize that the pace of necessary innovation is accelerating; and thus,
solutions to address new business needs, which took several months to over a year to deliver
in the recent past, must now be done in dramatically collapsed time frames.
•
Business Savvy – 10 to Watch companies are attentive to market issues, and understand
trends relative to both CSP needs and the competitive landscape. Company executives are
constantly talking with current or potential partners, customers, sales prospects, analysts, and
consultants. Using their extensive radar, 10 to Watch companies recognize patterns of
unmet market needs; and rapidly translate these opportunities into strategic and marketing
initiatives.
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•
Market Savvy – To match the market reputation of an entrenched supplier within a market,
geography, or functional discipline, 10 to Watch companies must establish buzz and a viral
reputation tied to the business problems they address. Key needs include partnership
development, sales leadership, marketing, and communications functions that must be
clearly aligned around business problems at hand. This market savviness requires discipline
within each organization, from individuals well-connected in industry and financial circles,
who are well-spoken, and have a solid knowledge of both the CSP business problems and
the solutions offered.
•
Well-defined, Clearly Differentiated Product Offering – 10 to Watch companies offer
products that are not just technically differentiated, but often are geared to address an
evolving set of business needs or process inadequacies. Software systems and business
expertise tied to the solutions they offer must target a set of pain points regularly
experienced by CSPs and data service providers. These solutions must also show an easy-touse approach, appeal to a specific customer audience, instill confidence in a better way to
address an existing problem, or satisfy a new business need.
10 to Watch status does not excuse these companies from the usual requirements that CSPs place
on their network infrastructure and O&M suppliers, including: carrier-class scalability, product
reliability, interoperability, financial stability, ongoing research and development, and partnerships
for pre-integration and global support.
Year Eight and Going Strong
This is the eighth year for this report. Many of the O&M suppliers identified over this period
continue to grow and thrive, or have been acquired by larger solution suppliers to satisfy a growing
list of business concerns. Stratecast views the 10 to Watch companies as a source of innovation for
the industry.
There will always be startups that bring new ideas and innovation to market ahead of the
mainstream. These companies are important and play a valuable role in the changing
communications marketplace. Pockets of innovators within the large O&M suppliers will be
challenged to deliver solution strategies for the same new business problems that drive the startup
companies. But, many of the larger organizations have the foresight to either apply what they do
now in a different way in order to meet the needs of new business challenges, or they acquire the
innovative capabilities from other organizations to complement what these suppliers now deliver to
a varying number of CSPs and data services providers. Large or small, the classic “1 + 1 = 3 or
more” mentality is the driving force of all O&M suppliers in meeting the needs of the expanding
communications marketplace in 2015. Exhibit 1, below, summarizes the 10 to Watch companies
that have been recognized by Stratecast over the past seven years. Many have been acquired, while
others remain viable O&M suppliers for the growing communications market ecosystem.
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Exhibit 1: Seven Years of 10 to Watch
Source: Stratecast
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Global Operations & Monetization 10 to Watch in 2015
Amdocs: Policy Management for VoLTE
Amdocs is a public software and services company, traded on the
NASDAQ under the symbol DOX. It is based in Chesterfield,
Missouri, with major research and development centers located in
Brazil, Canada, Cyprus, India, Ireland, Israel, and the United States.
With fiscal 2014 revenues of approximately $3.6 billion—primarily
from telecom—and more than 22,000 employees worldwide, it is
one of the largest software and services suppliers in the
telecommunications market sector.
The company offers customer management, revenue management, service fulfillment, and network
control products, which Amdocs collectively names as its Customer Experience Systems (CES).
Stratecast covers the company from both the operations perspective and from the monetization
perspective. What makes Amdocs a company to watch in 2015 is its approach to policy, and
particularly, policy in support of Voice over LTE (VoLTE), along with the associated
Operations (O&M) functions needed to address VoLTE service offerings.
The company’s primary policy offerings include policy-enabled rating & charging and a Policy and
Charging Rules Function (PCRF) solution. Both of these solutions support the policy needs
associated with LTE services, including VoLTE.
The Amdocs Convergent Charging (Turbo Charging) module is the company’s policy-enabled
rating & charging offering. Amdocs explained to Stratecast that it makes use of a single real-time
charging and balance management support system to handle all types of events (off-line and online);
customer types (postpaid, prepaid, and hybrid); services; and lines of business (fixed, mobile, data)
across multiple network environments (fixed, mobile, IMS, SS7, and IP-based).
The Amdocs Policy Controller provides real-time network, application, and subscriber policy
control that allow service providers to manage, measure, and monetize data services and service
quality in the network. The solution determines how and under which circumstances subscribers
have access to applications and network resources, at the appropriate service quality level. The
Amdocs Policy Controller supports relevant 3GPP standards up to R11, and functions as the
Policy and Charging Rules Function (PCRF) required in 3G and 4G LTE EPC networks.
With a continued push by the industry toward customer service personalization, the Amdocs Policy
Controller features a business rules engine with a Web-based user interface, which Amdocs
explained will simplify the creation of the complex rules needed to create and modify data service
plans and the unique requirements of each CSP. Amdocs explained to Stratecast that, in addition to
a centralized business rules engine, the Amdocs Policy Controller provides the following features
and benefits:
•
VoLTE support that goes beyond dedicated Quality of Service (QoS) to include reliability
and availability—geo-redundancy, emergency services, and more.
•
New policy analytics to help CSPs close the loop on the subscriber impact of policies
implemented in the network, including QoS, fair usage, roaming patterns and usage, and
VoLTE service quality.
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•
Dynamic metering that supports real-time metering through the standards-based 3GPP Gx
interface, including metering multiple traffic flows within an individual user session.
Metering can be based on time, volume, application, or a combination of all three, to
provide support for differentiated and customized service tiers. Metering thresholds can also
be set on a monthly basis, with specific daily limits.
•
Virtualized policy control architecture that aligns to the ETSI NFV framework.
•
A comprehensive set of monetization use cases that can be enabled.
•
Configuration versus code approach to use-case creation and modification that accelerates
time to market and reduces total cost of ownership.
•
Vendor-agnostic approach, enabling interoperability with network equipment vendors and
policy enforcement specialists to ensure ease of deployment in mixed vendor environments.
•
Flexible deployment options including stand-alone PCRF, dedicated VoLTE PCRF,
virtualized, or as part of the Amdocs CES suite.
As LTE deployments have increased globally, CSPs are looking to drive additional revenue from
their LTE networks. Voice previously was the main offer, and data and messaging were add-ons.
With VoLTE, voice is now an additional component on the data network. However, the
expectations for voice are much higher, from both a consumer and regulatory standpoint. VoLTE is
driving a new set of requirements for policy and for PCRF implementations. Exhibit 2 provides a
snapshot summary of some of these new requirements.
Exhibit 2: Amdocs: Making a PCRF VoLTE-Ready
Source: Amdocs
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The Amdocs Policy Controller supports the requirements of VoLTE; but not all deployed PCRFs
can make that claim. To address this, Amdocs offers the Amdocs VoLTE Controller, as an adjunct
to legacy PCRFs, to support the needs of VoLTE. The Amdocs VoLTE Controller is a derivative
of the Amdocs Policy Controller, and can be upgraded to it. The Amdocs VoLTE Controller coexists with legacy PCRFs, and manages only VoLTE traffic.
VoLTE has the potential to be a game changer for CSPs, but only if it meets the expectations of
consumers and regulators. Amdocs’ approach is interesting, targeting both its existing customers and
other CSPs that selected the PCRF assets from a different supplier in the past. To existing
customers of the Amdocs Policy Controller solution, Amdocs is stating that they have access to
the most current software release that provides extensive support for VoLTE. But even if a CSP
chose another PCRF supplier in the past, Amdocs will help them be ready for VoLTE with the
addition of the adjunct Amdocs VoLTE Controller.
Centina Systems: Strategic Assurance and Analytics
Centina Systems, Inc. is a Plano, Texas-based provider of strategic
assurance and network performance solutions.
Stratecast could have selected Centina Systems as one of its 10 to
Watch last year, or the year before, or the year before that. After all,
it had plenty of momentum for a relatively new company, which is
something we look for in our 10 to Watch. Centina was formed in 2006, armed with solutions for
Tier 1 CSPs in service assurance and network performance management. It was fresh. It was new. It
was backed by seasoned veterans, and got off to a great start. Unfortunately, the company launched
two years before an economic meltdown.
Even in great times, Tier 1 CSPs are not eager to entrust their networks or mission-critical software
systems to startup companies. They want to do business with companies that will likely be in
business for the long haul. They are wary of unproven companies that have not yet shown they can
weather a storm. It is now 2015. Centina weathered the storm that hit in 2008. In fact, through this
turbulent time, Centina earned a spot in Deloitte’s Fast 500 category as one of the fastest growing
companies in North America from 2009 to 2013. Centina has also created a good message for the
storm that is about to hit network operations in the transition to the Virtual Network. The
company emerged from the storm of 2008 with a solid record of growth, and is wellpositioned with relevant solutions for the storm of 2015 and beyond, which is why Stratecast
believes it is now time to watch Centina Systems.
As Centina matured its product set, it did not sit around hoping to impress Tier 1 CSPs in the USA,
although it attracted its fair share of attention. Centina went out and got the business in the USA
and around the world, grew its customer base, proved its systems, and prepared for the future. Here
are some examples of business wins over the past few years:
•
C Spire – a wireless communications provider comprised of Cellular South and its affiliates
serving primarily the Southeastern United States
•
WOW! (Wide Open West) – a US cable MSO/broadband provider with 1 million
subscribers
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•
TRUE – a Tier-1 broadband service provider in Thailand
•
Telesur – a wireless and broadband communication service provider in South America
•
Conterra – a hybrid alternative access providers in the USA
•
SDN Communications – a business-to-business broadband service provider in four midwest states, with headquarters in South Dakota
•
Telem Group – the incumbent Caribbean telecommunications provider on the Dutch
Caribbean Island of Sint Maarten.
In recent years, Centina has also forged partnerships with worldwide telecommunication equipment
vendors to resell NetOmnia, such as Fujitsu.
Centina is in a very difficult market in terms of competition. It faces entrenched network
management and service assurance providers that have grown up with the industry, as well as other
smaller vendors that have a few more years under their belts. However, if ever there were an
opportunity for growth, the coming transition to the Virtual Network may provide it, not
only in managing the NFV infrastructure, but also the Carrier Ethernet networks that will
grow and evolve along with it. This is another reason to watch Centina in 2015 and beyond.
It is time for the company to make its next move; and Centina hopes to do it with a solution
it calls Strategic Assurance. The Strategic Assurance approach is illustrated in Exhibit 3. Centina
also plans to increase its global presence across Europe, the Middle East, Southeast Asia and the
Caribbean; and expand worldwide partnerships and support for SDN and NFV.
Exhibit 3: Centina Systems Strategic Assurance Approach
Source: Centina Systems
Strategic Assurance is a combination of analytics and network performance management that
relies on both business value and operational metrics. Among the capabilities that Centina claims to
have infused into its platform, which make it different from traditional service assurance, and better
able to support the Virtual Network, the top five are:
•
Real-time network resource awareness
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•
Pre-emptive service assurance with end-to-end service visualization and correlation
•
User empowerment with simple and scalable architecture
•
Out-of-the-box network support with plug-ins for over 1000 device types
•
Management of physical and virtual environments
Centina understands that there are three major challenges for service assurance in an NFV/SDN
environment, which the company believes it can help CSPs meet. The first challenge is the increase
in network complexity and diversity brought on by new control processes, among other changes.
This complexity includes the need to simultaneously support legacy and next-generation networks.
The next challenge is maintaining service topologies in a dynamic environment where configurations
are often changing. This includes both the hardware configuration as well as service chains across
networks. Somewhat related is the third challenge, which is the ability to accurately monitor the
network state in real time.
In addition to the five capabilities mentioned above for Strategic Assurance, Centina is enabling
dynamic interactions between service assurance and service orchestration, which will help networks
adapt in real-time to network conditions and service modification requests coming from the
orchestration platform.
No company has all the answers yet for managing and assuring the Virtual Network, but it will be
important to watch what approaches emerge in 2015.
Ericsson and MetraTech: An Interesting Acquisition and Integration
MetraTech was a private software supplier, founded in 1998 and
headquartered near Boston, Massachusetts. Stratecast has covered the
company for a number of years with interest, and featured Metratech in the
2012 edition of the 10 to Watch report. In July 2014, Ericsson announced
its intent to acquire MetraTech; and the acquisition was completed in
September 2014.
Ericsson is a provider of communications infrastructure, software, services,
and media solutions, based in Stockholm, Sweden. It is traded publicly on
the Stockholm Stock Exchange and on the NASDAQ under the symbol of
ERIC. The company employs over 115,000 people worldwide. Ericsson
reported 2013 revenue of approximately 227 billion SEK (U.S. $34.9
billion). (Ericsson has not yet reported 2014 revenues.) The company traces its origins to 1876; and
today, continues to offer its network equipment, services, and software solutions to service
providers around the world.
Ericsson is a leader, by revenue, in most of the segments of CSP end-to-end billing. MetraTech, on
the other hand, was/is a much smaller company, with around 140 employees (all of which were part
of the acquisition.) In many acquisitions where a big company acquires a smaller company, the
smaller company is never heard from again—and it often feels as if they never existed in the first
place. It appears that this is not the case here, as the MetraTech product line provides Ericsson with
a monetization solution for enterprises, and B2B billing and settlement for CSPs.
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The “whys” of this acquisition are what make this combination one to watch in 2015.
Stratecast recognized that MetraTech was different from most of the monetization companies
covered biannually in our CSP Billing series—and different in a good way. Most of the suppliers in
the series (well over 100 in the 2013 edition) focus on the business-to-consumer (B2C) world, where
CSPs bill their customers for usage. MetraTech focused on the management of complex businessto-business (B2B), agreements-based billing relationships, which often have a partner or reseller
component. As CSPs target cloud, content, and value-added services to the enterprise market, such a
capability will be critical. To put the difference into better perspective: in the B2C world, millions of
customers are charged exactly the same way for their subscription or usage. In a complex B2B
billing relationship, every relationship and every part of that relationship is unique to the contract
signed between the entities. Enterprises expect to structure individual agreements with service
providers to accommodate discount and commitment terms.
As partnerships have become more important to CSPs globally, most of the B2C billing solutions
have begun to incorporate some B2B capabilities, including Ericsson’s own billing solutions—which
include Ericsson Charging and Billing in One and Ericsson Integrated Policy and Charging.
MetraTech, while small when measured by revenue, is a thought leader in how to approach complex
billing in communications and in other industries.
As an example of this thought leadership (and real-world experience), Stratecast examined a case
study of how the São Paulo Brazil airport (International Air Transport Association code: GRU)
modernized with the help of MetraTech. 3 The airport, the busiest and largest in Latin America, was
moving from government control into private control, with a vision of becoming an “airport city.”
The new GRU airport includes a new modern international terminal, as well as partnerships with
airline and concession partners that are critical to support key growth and revenue targets for the
new GRU operator. The transition to a new billing platform that could handle the complex
relationships for a variety of services including aviation, cargo, and concessions, as well as support
Brazilian government tariffs, and be delivered in an incredibly short time-frame, all played a part in
the selection of MetraTech. MetraTech is also the billing solution for the busiest airport in the
world, Chicago O’Hare International, which provided a strong reference. Exhibit 4, below, provides
a visual example of these complex business and settlement agreements.
MetraTech won the contract, and went live at the airport nine weeks after contract signing, which
included time for MetraTech to be certified for airport billing in Brazil by the Brazilian government
aviation regulators. Very few solutions suppliers can address the complex wholesale B2B world, and
even fewer can do it in a matter of weeks. In 2014, MetraTech followed up its GRU deployment
with another win at the second largest airport in Latin America—Rio International Airport—which
was accomplished in ten weeks. These three deployments position MetraTech as a leader in
transportation billing. The thought leadership and experience in other industries is one reason
Ericsson acquired MetraTech.
See Stratecast report: SPIE 13-11, Agreements-Based Billing and Settlement Enables Multi-Industry Complex Business Models
Including Airport Operations in Brazil, March 22, 2013.
3
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Exhibit 4: MetraTech Supports Complex GRU Business and Settlement Agreements
Source: Stratecast
Ericsson stated publicly three reasons for the acquisition. MetraTech:
•
Strengthens Ericsson’s billing capabilities with solution functionality adaptable to the
requirements driven by Everything as a Service (XaaS) and Internet of Things (IoT)
economy
•
Provides Ericsson with an enterprise billing solution across vertical industries (MetraNet)
and a SaaS billing application (Metanga)
•
Broadens Ericsson’s software portfolio further with a metadata-based architecture
The MetraTech monetization platform, MetraNet, is built on an extensible metadata-driven
architecture. Metadata enables a customer to define the structure of the data model, the method by
which transactions are processed, and the structure of the interfaces. As a result, MetraNet is
industry and business model agnostic, and provides for the rapid introduction of services and pricing
plans that can respond to market demands as needed.
Billing and multi-party settlement functionality, such as commissioning, revenue sharing and other
B2B compensation schemes are also supported on the same platform. This enables partnerships
with third parties to be handled with accuracy, transparency, and control.
Stratecast believes that the Ericsson acquisition of MetraTech, and subsequent retention of
the MetraTech identity, creates a deeply enhanced business management strategy and
solution set to be closely watched in 2015. The thought leadership of MetraTech, backed by
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the financial and personnel resources of Ericsson, makes for a very solid business solution
proposition.
Hewlett-Packard: NFV and API Management
Hewlett-Packard (HP) is a global provider of printing, personal systems,
software, services and IT infrastructure. The company’s Communications &
Media Solutions division is creating the infrastructure and software to help
CSPs transition to NFV and SDN.
It isn’t as if HP’s Communications & Media Solutions division suddenly
woke up in 2014 and found itself sitting in the catbird seat of telecom. It
only looks that way. To be where the company is today, in terms of
positioning and products for the new Virtual Network, it had to have seen
the current trends of NFV and SDN coming early on, and quietly prepared.
HP appears to have recognized its potential for leading the communications market in
many ways, not just in servers and support software.
HP raised some eyebrows when it introduced DataPass in 2011. DataPass is a mobile broadband
service embedded on certain HP devices, which offers monthly data packages independent of the
mobile service provider. DataPass can be used when Wi-Fi is not available. The service was
launched in select countries in Europe in September 2013. By last summer, it was being piloted in
more than a dozen countries. However, HP really opened some eyes when it partnered with Fogg
Mobile in 2014. Currently, DataPass is in pilots around the world, and makes it possible for CSPs to
own the relationship with customers, even when those customers are roaming. DataPass suits
MVNOs that are interested in providing more than traditional voice, data, and texting on tablets and
other devices. The business model represents a significant shift in the options that mobile data
users have for securing services.
HP helps provide not just the DataPass service and devices; by virtue of its NFV capabilities, it
provides virtual network functions, such as IMS modules and OSS/BSS capabilities. HP’s new
model has not gone unnoticed by MVNOs and CSPs, which have engaged HP in discussions about
replicating the model for them. Stratecast believes that much positive change and opportunity will
stem from HP’s business model.
Part of what sets HP’s model apart is how NFV can be applied to enabling a resurgence in
the MVNO market, and more efficient support of mobile infrastructure in general. HP
focused on addressing an emerging challenge in the Virtual Network, one that stems from a
long-standing problem in telecom operations, namely API management. By addressing this
challenge, and with the momentum HP built in 2014 in NFV and mobility, Stratecast
believes HP is a company to Watch in 2015 and beyond.
HP’s OpenNFV program is a multi-vendor approach that allows HP and external partners, such as
network equipment providers and software suppliers, to leverage the open NFV reference
architecture and HP OpenNFV Labs to create solutions around NFV and SDN. For example, HP
recently released new versions of its NFV Director 2.0, which is a virtualized mobile core that
includes the HP API Management platform and HP Multimedia Services Environment WebRTC
Gateway Controller.
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NFV Director also offers a solution for what might prove to be one of the most challenging and
contentious areas of the Virtual Network in the coming year: service orchestration. Equally
challenging, but less a part of the public hype because it is not new like NFV and orchestration for
NFV, is API Management. When open, the application programming interface (API) has
enabled significant interoperability and interworking in the communications industry.
However, just as often, it has facilitated proprietary technologies that have stifled the kind
of open networking that will be required in the new Virtual Network. HP will introduce a
virtualized API management platform in 2015. That, alone, will make HP a company worth
watching in 2015. Exhibit 5 shows a functional diagram of the HP API Management platform.
Exhibit 5: Hewlett-Packard API Management
Source: Hewlett-Packard
The lower layer of API management shown in the middle section of the diagram above, Network
Exposure, is one of the least well-defined elements of the Virtual Network, particularly in SDN.
However, network exposure is a lynchpin to enabling the kind of service creation and networked
applications the industry has been calling for. Network Exposure opens the network and its critical
assets to third-parties and content providers, many of which use open-source software. Existing
practices around APIs will not suffice. Until a better solution is found, API management platforms
that can support legacy interfaces, as well as interfaces designed for the Virtual Network, will be
essential.
There are several API management initiatives in play today: GSMA’s OneAPI Exchange (now
operated by Apigee); the Open Mobile Alliance API program; RESTful APIs, and vendor-led API
programs. Given the drive toward open systems—the SDN controller, for example—it is reasonable
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to question whether or not a single vendor can lead the API platform market. Later in 2015, we
should start seeing more definition in this space. It is time for the industry to decide how
open it really plans to be; and APIs are an important part of that. If the work around APIs is
pushed out beyond 2015, the industry will only be asking for trouble.
Infonova: Enterprise Business Enablement
For a number of years, Stratecast has discussed a business model
known by many as Cross Industry 2.0. 4 This business model allows a
CSP to enhance the products from many organizations, in multiple
verticals, with those of the communications marketplace, to create
new or improved service offers. This model embodies an ecosystem involving partner-suppliers, the
CSP, sometimes other external entities, and end-user customers. Yet, to take advantage of the
opportunities that are now available, a CSP must fundamentally change its approach to business,
from being a provider of technology-based services—voice, data, and bandwidth access—to a
horizontally-focused federator of services developed and enabled by companies across multiple
industries.
Infonova, a wholly-owned subsidiary of BearingPoint Consulting of Europe, is an Austrian provider
of monetization and business management solutions for the telecommunications industry and
convergent industries. It has a laser focus on support for enterprise business enablement. The
company was founded in 1989, and employs approximately 350 people.
The Infonova R6 solution is an Ecosystem Enablement Platform (EEP) suite, which Infonova
explained to Stratecast is a “Concept-to-Cash” platform. It is shown in Exhibit 6, below. The point
of clear differentiation for Infonova is the unique ability to support multi-sided business
models in what is known as Cross Industry 2.0.
Why is 2015 a year to watch Infonova, since we have been discussing the company and Cross
Industry 2.0 for years? The marketplace is now ripe for large telecom operators to become business
enablers and deliverers on the promises of virtual service offerings. Stratecast firmly believes that
Infonova is one of a very small number of business enablement suppliers that can deliver on the
significant number of new business requirements that both virtual networking and virtual services
demand.
The Infonova R6 EEP is a robust version of perhaps one or two solution offers on the market
today that have been touted to address the interactions needed between partners and network
operators for the delivery of advanced virtual services. These interactions include partner
orchestration, fulfillment, monetization, and management functions.
More specifically, the Infonova R6 platform offers front and back office support to satisfy multilayer business models now faced by several CSPs. It includes the ability to address triple and quadplay bundling, tenant-based white label services, wholesale products, and advanced partner models.
It is designed to meet the operations needs of existing business models, and new ones, through the
flexible aggregation of legacy and content-based services. Infonova R6 addresses the needs of each
For more insight into the Cross Industry 2.0 business model, see Stratecast report: OSSCS 14-05, Global CSP Billing Part
1a – 2013 Edition: Market Drivers, Changing Strategies and New Business Models, July 2013.
4
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layer of the Cross-Industry 2.0 value chain, from Customer to Tenant Operator to Primary Operator
to Supplier/Partner.
Exhibit 6: Two View of Infonova R6 Ecosystem Enablement Platform
Source: Infonova
Within Infonova R6, the monetization-related functionality specific to horizontal orchestration
between multiple enterprises includes:
•
Billing Data Mediation – Online and off-line mediation for fixed, mobile, and IP
networks, as well as support for other industries.
•
Convergent Charging & Rating – A policy-enabled real-time rating and charging engine,
with support for retail billing, wholesale billing, and partner settlement billing.
•
Bill Calculation/Invoicing/Formatting – Calculates and generates invoices, formats the
bill for print or for electronic presentation.
•
Finance – Handles financial transactions including receivables, payments, disputes,
collections, and reporting to external financial systems.
•
Partner/Supplier Management & Sales Channel Management – Supports partners and
suppliers, as well as the sales channel.
Stratecast believes that industry suppliers have maneuvered to establish end-to-end operations &
monetization solutions that meet the inward-facing business concerns of the CSP community at
large. While a great start, the Cross-Industry 2.0 approach goes one step further to meet the flow of
customer information and interactive communications between industry entities, in an outwardfacing role, to address the collaborative business needs of enterprise-level customers. Infonova R6
is a good example of how to address this business concern from a single platform, especially as the
cloud-based solution concept gains strength within the IT channels of all industries. It is designed to
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work with multiple suppliers, partners and tenant operators that add business value to the service
offerings delivered to consumers and enterprise customers.
Stratecast looks forward to 2015 being the year that Cross-Industry 2.0 becomes real!
InfoVista: Service Assurance and Performance Management
The telecom industry is no stranger to the word “dynamic.” It has
been a welcome addition to the networking lexicon. Technologies
such as dynamic routing and dynamic IP address allocation
presented a management challenge when first introduced; but that
challenge was met and rendered a net positive for the business.
However, when entire networks, the services running over them, the data plans applied and the
policies enforced, all become dynamic at the same time—as they will in the Virtual Network,
comprised of NFV, SDN and public cloud architectures—the word “dynamic” takes on new
meaning. For network planning, performance management and service assurance suppliers, the word
“dynamic” is intimidating.
It is Stratecast’s contention that one of the most significant challenges of virtual network
environments will be the ability to assure end-to-end network and service performance—
primarily due to the network’s dynamic nature. InfoVista has taken an aggressive approach
to addressing this challenge. Stratecast has named InfoVista as a company to watch in 2015,
because of its commitment to this challenge, as well as its focus on planning and designing
small cell networks.
Stratecast believes that two areas of focus for InfoVista on NFV are particularly important:
managing the NFV fabric as a whole, and ensuring the quality of multi-network service chains.
Management and assurance are becoming an overlay to the Virtual Network fabric. So, it is fitting,
given how NFV and SDN will turn network management upside down, that network management
takes on the guise of a management network. Assuring these management networks is a critical part
of managing a next generation network infrastructure composed of SDN and NFV technology.
Likewise, as the Network-as-a-Service (NaaS) model goes mainstream, assurance suppliers will need
to assure the management network, as well as the infrastructure and network services. In October
2014, InfoVista presented a NaaS proof of concept, along with Oracle, which used both NaaS
concepts and Carrier Ethernet 2.0 standards to demonstrate how a Carrier Ethernet service could be
orchestrated and assured across multiple operators.
Information models, flexible service models and standardized APIs are the foundation for a realtime Operations (OSS) approach to managing legacy network technology; they will allow network
services to become dynamic, self-service and automatically controlled.
Regarding service assurance and performance management, in particular, InfoVista has examined
the transition from today’s physical network function-dominated environment to the future of NFV
and SDN. In doing so the company has identified five service assurance steps that CSPs will need to
address within their Operations solutions as they move to the Virtual Network. The more that
InfoVista can demonstrate its ability to support these steps in 2015, the better positioned they will
be for the future. The steps are:
1. Managing Virtual Network Functions (VNF)
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2.
3.
4.
5.
Managing the Network Function Virtualization Infrastructure (NFVI) Fabric
Scaling VNFs
Enabling Networking “as-a-Service”
Managing SDN & Wide Area Network (WAN) Architectures
InfoVista recently echoed TM Forum’s position that the industry needs new information models
that enable CSPs to follow the dynamic changes across networks, including dynamic provisioning
and service mapping. InfoVista developed a performance assurance maturity model for assuring
network and service performance, and quality within virtualized and dynamic networks. The model
extends from the initial remit of managing VNFs, to future stages such as managing the NFVI
fabric; then, managing VNFs on a vast scale; enabling NaaS; and, ultimately, managing SDN and
wide area network (WAN) architectures. InfoVista’s position is that in order to assure the
performance of the network function, a solution must assure the performance of the fabric, which
includes the compute, storage and network resources that support a distributed NFVI, as is
illustrated in Exhibit 7.
Exhibit 7: InfoVista Service Assurance for the NFV Fabric
Source: InfoVista
This blend of assuring network operations infrastructure and IT infrastructure, as well as the
services across them, is the management challenge of the coming virtual era.
On the planning front, CSPs face a different kind of blend. This blend is more one of physical and
virtual than operations and IT. It will occur noticeably in the small cell sector where a large variety
of virtual and physical devices will co-exist. Likewise, in the backhaul network, virtualization will
make planning more challenging but, at the same time, more malleable and potentially efficient.
InfoVista has come to see network planning and optimization increasingly as parts of the
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same function. As small cells proliferate this year, the eyes of the industry and individual
CFOs will be on this sector, scrutinizing the margins being realized. On the horizon is 5G;
and, according to recent Frost & Sullivan research, this evolution is also expected to translate into a
significant densification in the network, and an increasing number and variety of base stations and
access points. Densification and diversity are key drivers in the need for efficient planning.
QOSMOS: Deep Packet Inspection and Network Intelligence
Any supplier with a sound roadmap for NFV and SDN in 2014 is
already one-step ahead of most of its competitors, and wellpositioned to lead, or at least gain a little mind share, in 2015. This
year will likely be an exciting and turbulent one for those companies
seeking to be thought leaders for the next generation Virtual Network.
A key component for the Virtual Network to become a reality will be making the network more
service aware. A network designed to be as dynamic and programmable as the one the industry is
rushing towards needs to be aware of the many service types it is supporting, at any given time, and
at any given point in the network. The network must also have the real-time intelligence about those
services to create, deliver and monetize the service chains that will be a big part of the service
innovation to come.
Qosmos announced its strategic roadmap for NFV and SDN back in March of 2014. Its
strategy is aimed squarely at these two important components of service awareness. With
almost a year to progress on its plan, Qosmos has positioned itself to be a company to watch
in 2015.
Qosmos is not a traditional OSS company, nor is it a traditional infrastructure provider. Then again,
what company is exclusively either in this emerging virtual, software-driven environment? The
company has turned its deep packet inspection engine, ixEngine, into a virtual component, and
pointed it at the challenge of network intelligence. See Exhibit 8, below. Qosmos first demonstrated
its virtualized DPI in February 2014, deploying it within a virtual Evolved Packet Core (vEPC)
framework for 4G broadband mobile networks.
Qosmos’ products are used by network equipment suppliers, software vendors and system
integrators, which embed the company’s technology to extract the application-layer data from the
network that is necessary to make the solution service-aware, particularly in NFV and SDN
environments.
Qosmos’ Virtual DPI runs in a virtual machine and feeds application information and metadata to
other integrated components such as service routers, various IMS components, O&M solutions, and
analytics engines. Qosmos also has a service chaining module that leverages packet-tagging
mechanisms and protocol extensions to convey application identification and metadata in real-time
to applications and network functions, both virtual and physical. Using this data, software vendors
can dynamically optimize the number and sequence of chained services based on their traffic type.
This capability will allow CSPs to realize better resource utilization, and to more easily customize
services. The service chaining module will be available the first half of 2015.
Stratecast believes the Qosmos approach will play an important role in 2015 because, as
reality hits the market this year with regard to the challenge of actually implementing
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Virtual Network architectures, this deep level of network intelligence will be key to
maintaining efficiency and data integrity. The Virtual Network will certainly require both;
and it will require them from the beginning, not as an afterthought.
Exhibit 8: QOSMOS Deep Packet Inspection Engine for NFV
Source: QOSMOS
Qosmos demonstrated its service chaining module with partner Red Hat, in November 2014, at the
OpenStack Summit in Paris. The companies showed that network traffic could be more efficiently
and intelligently routed through applicable service nodes. This reduced infrastructure costs and
contributed to the creation and delivery of new, differentiated service combinations. The
demonstration included Red Hat’s Enterprise Linux OpenStack Platform, Open vSwitch (OVS),
multi-core Intel processors, and Intel Ethernet adapters, as well as Qosmos’ Service Aware Module,
which is based on its ixEngine DPI engine.
France-based Qosmos has been very active globally. The company claims to have signed several Tier
1 network equipment suppliers in Japan over the last year, and has opened an office in Tokyo.
As an OEM provider, Qosmos does well when its partners and customers do well. Its customers
and partners include several leading equipment makers, as well as new software- and platform-based
companies, such as: 6wind, Broadcom, HP, IBM, Napatech, Radisys and Windriver. All are well
positioned to capitalize on the data-centric solutions required for the new Virtual Network. More
than 60 companies embed Qosmos technology in their products. By virtualizing its DPI solution,
Qosmos has made a wider distribution possible. This wider distribution, to the network edge as well
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as backhaul and video/content distribution networks, adds to the data collection capabilities, which,
in turn, enhance the intelligence about services. It also says something to the market when a
purported enabler of virtualization adopts virtualization itself for its own delivery method. It says,
“Do as I do, not as I say.”
Subex: The Return of a Revenue Leader?
Subex is a public telecommunications software and services supplier,
headquartered in Bangalore, India. The company’s shares trade on the
Mumbai stock exchange under the symbol SUBEX, and on the
London stock exchange under the symbol SUBX. The company
reported fiscal year 2014 (ending March 31, 2014) revenues of
approximately 3.5 billion rupees (approximately $59 million).
Subex started as a wireless network systems integrator and test and measurement company in 1992.
Through a series of acquisitions and mergers, including that of Azure in April 2006 and Syndesis in
January 2007, Subex now has approximately 860 employees and 300 installations in 70 countries. It
has Tier 1, Tier 2 and Tier 3 customers in all regions of the world.
The company recently emerged from a long financial struggle that revolved around bonds and debt
from its acquisitions and mergers. This period had competitors whispering that Subex may go under
or file for bankruptcy, which led to some loss of customers and revenues. The company’s publicly
reported revenues reached a high in fiscal year 2011, were essentially flat in fiscal year 2012, and then
dropped more than 30% in fiscal year 2013. The good news for Subex was that revenue was up
almost 4% in fiscal 2014. Why is Subex a company to watch in 2015? Stratecast believes that
Subex is back on a revenue upswing, and 2015 is the year for the company to prove that it
will continue to be a significant force in the marketplace, both now and into the future.
The company offers the Subex Revenue Operations Center (ROC) portfolio, shown below in
Exhibit 9, which includes solutions that Stratecast has previously covered in its Financial Assurance
report and its CSP Billing report series.
As Subex explained to Stratecast, its customers are now provided with the full ROC platform so
that, when needed, any of the various functions shown in Exhibit 9 can be activated, and the
processes set in motion with minimal effort. Subex understands that all of these functions are
interrelated, and that they deliver business value in different ways, according to the different
business priorities of its customers. In fact, much of the growth that Subex continues to experience
comes from expanding relationships with existing customers to meet business needs within the
other functional domains defined by the ROC platform.
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Exhibit 9: Subex Revenue Operations Center
Source: Subex
In the recently released report on Financial Assurance 5 (which Stratecast defines as encompassing
Revenue Assurance, Fraud Management, and Margin Assurance), the following functions were
detailed:
•
ROC Revenue Assurance – The company’s Revenue Assurance solution, which covers all
of today’s increasingly complex services and the expanding web of partners and resellers.
•
ROC Fraud Management – A Fraud Management offering, which the company shared is
engineered to eliminate known fraud, uncover new fraud patterns, minimize fraud run time,
augment internal controls, and support continuous Fraud Management process
improvement.
•
ROC Credit Risk Management – A Margin Assurance solution, the ROC Credit Risk
Management solution allows CSPs to access and mitigate financial risks associated with
subscribers throughout their lifecycle—from acquisition, through ongoing use of services,
to collections and recovery.
•
ROC Cost Management – Another Margin Assurance solution, the ROC Cost
Management solution collects, collates, and correlates data from switches, inventory
databases, billing processes, partner invoices, and financial systems to provide insight about
costs.
While Stratecast did not include the Subex Network Analytics segment of the company’s ROC
platform in the recently published Financial Assurance report, Subex has indicated that it is moving
See Stratecast report: OSSCS 15-13, Global CSP Financial Assurance: Market Share Analysis, Forecast, and Supplier Assessment,
December 2014.
5
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to bring financial measures to this set of analytics. Stratecast believes this direction will pay off,
allowing CSPs to make more informed decisions about their networks based on financial criteria, in
addition to technical criteria. Stratecast will revisit this set of analytics for our next report on
Financial Assurance.
Stratecast covers the remaining two Subex solutions as part of our CSP Billing series: 6
•
ROC Partner Settlement – The solution, as Subex shared with Stratecast, allows operators
to quickly and accurately settle charges with their network and content partners, and helps
operators improve efficiency through light touch and automation, and accurate billing and
settlement.
•
ROC Route Optimization – The solution provides CSPs with tools to manage network
cost information and route interconnect traffic appropriately.
While it appears that Subex has stabilized its financial picture, the company has some work to do to
regain its place on the Financial Assurance revenue leaderboard. Just a few years ago, Stratecast
believed Subex to be the leader by revenue. In our last look, a number of Subex’s competitors had
climbed beyond Subex on the revenue leaderboard.
Stratecast believes that with the evolving communications marketplace pushing CSPs to
more significantly engage with partners and suppliers, the need for Financial Assurance
solutions is stronger than ever. Stratecast firmly believes that Subex and its Revenue
Operations Center portfolio are well positioned to take full advantage of these rising
Financial Assurance opportunities. We expect Subex to return to strong growth and improve
its leadership position within the Financial Assurance market in the coming months.
TEOCO: Bridging the Gap Between Operations & Monetization Functions
Stratecast recently completed a market survey of the Financial
Assurance segment, which includes the traditional areas of Revenue
Assurance and Fraud Management, along with a newer segment:
Margin Assurance. 7 Although Stratecast continues to view Financial
Assurance as a Monetization (BSS) function—the assurance complement to CSP billing—the lines
are blurring; and TEOCO has highlighted this blurring. In addition to its Financial Assurance
solutions, TEOCO offers Operations or OSS solutions that inject a financial viewpoint to augment
what were previously network operations and engineering decisions. Do these previously distinct
Operations areas now have an overlap within the Monetization realm? The answer is a resounding
yes!
TEOCO is bridging the gap between Operations functions, particularly traditional
engineering planning and network optimization, and the business-defining Monetization
functions of revenue generation, customer experience, and margin management. Stratecast
believes this makes TEOCO a company to watch in 2015.
See Stratecast report: OSSCS 15-10, Global CSP Billing Part 6b: Interconnect & Settlement and Partner Management Market
Share Analysis, Forecast, and Global Supplier Assessment, August 2014.
7 For a deeper examination of the Financial Assurance market, see Stratecast report: OSSCS 15-13, Global CSP Financial
Assurance: Market Share Analysis, Forecast, and Supplier Assessment, December 2014.
6
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Established in 1995, TEOCO is headquartered in Fairfax, VA, with offices in North America, Latin
America, Europe, the Middle East, and Asia Pacific. The company has approximately 1300
employees. TEOCO started with cost management solutions, with a primarily North American
customer base; and has grown both organically and via acquisition to offer Financial Assurance,
service assurance, network optimization, and telecom analytics solutions to a global customer base
of over 300 CSPs.
TEOCO’s Customer Analytics suite, as shown in Exhibit 10, provides a customer-centric
perspective that merges profitability, quality of experience, and behavioral data together to improve
understanding, targeting, and engaging of a CSP’s customer base. This suite of analytics tools is
utilized by TEOCO’s Monetization solutions—including its Financial Analytics offering—and, on
the Operations side, by its Service Assurance and Network Optimization solutions.
Exhibit 10: TEOCO Customer Analytics Suite
Source: TEOCO
The Customer Analytics suite includes:
•
Profitability Analytics – This module brings together cost, revenue, and margin analytics to
understand the profitability of subscribers, services, devices, rate plans, and other entities,
measured from a financial perspective.
•
Roaming Analytics – By capturing inbound and outbound roaming event data, and
enriching that data based on wholesale partner agreements, this product validates settlements
with roaming partners, thereby reducing overpayments. In addition, it identifies high
roaming subscribers, devices, and geographies to optimize price plans and roaming
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agreements. The solution can identify regions where network build out is more profitable
than continued payments to roaming partners. It can also identify roaming fraud; so, in this
capacity, the Roaming Analytics module provides Revenue Assurance, Fraud Management,
and Margin Assurance, combined.
•
Behavioral Analytics – Aimed at the marketing department, Behavioral Analytics allows a
deeper understanding of the behavior of customers; to aid in targeting marketing campaigns,
and to assist in segmenting the customer base to “personalize” pricing plans or services.
•
Predictive Location Analytics – This module utilizes multiple parameters and data sets,
including: location, customer, behaviors, and network context. From this information,
Predictive Location Analytics enables CSPs to more appropriately target the content
addressed to subscribers, including not just where subscribers have visited, but also where
they are likely to go.
TEOCO believes its subscriber-level financial analytics provides a “compelling and differentiated”
way to augment network, marketing, and customer care activities with customer financial profiles
and usage behaviors. By combining key performance indicators (KPIs) on usage, cost, revenue, and
margin with KPIs on quality, coverage, and capacity, TEOCO unites service quality and profitability
metrics to obtain individual subscriber-level insights. In other words, TEOCO brings a financial
perspective into what has traditionally been driven by technology or marketing metrics; and, in doing
so, blends formerly “siloed” O&M worlds to deliver its CSP customers with more than was possible
before.
And that makes TEOCO a company to watch in 2015.
TM Forum: Zero-Touch Orchestration, Operations and Management
The telecommunications industry evolved for more than 100 years
before the TeleManagement Forum came along in 1988. The forum
was then called the OSI/Network Management Forum; and is
known now as TM Forum. The organization cannot literally be
called a cornerstone of the industry, as the cornerstone historically
was laid first. Over time, however, the term has evolved, much like
TM Forum itself. The cornerstone is not always the first stone laid in a foundation, but it still
represents the foundation from which all other stones will be set in reference. That is the kind of
operational cornerstone that TM Forum has been to the communications industry for more than 25
years. Its information models, frameworks, and operations maps have provided guidelines and
standards by which CSPs around the globe have set a reference upon which to build their
operations. The Forum’s work helps set the plumb line for best practices in telecom operations.
Stratecast rarely focuses on standards organizations, consortia or other forum-centric
organizations in its annual 10 to Watch series. However, the industry is about to be turned
upside-down and inside-out by new open architectures such as NFV, SDN and public
cloud. As a result, the relevance of operational models and guidelines for traditional telecom
networks suddenly look questionable. As the industry increasingly dons the appearance, and even
some of the best practices, of IT organizations, it is hard not to ask the obvious: What becomes of
the decades-long work of TM Forum to streamline, standardize and optimize telecom operations?
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Stratecast does not believe there can be an out-with-the-old, in-with-the-new approach to
operations. Change will be significant for the Forum and its members; 8 however, Stratecast
believes there is important, field-hardened work TM Forum can bring forward into the new
Virtual Network paradigm. The industry is anxious to move on to ‘the next big thing’; yet,
serious consideration must be given to which work from the Forum can facilitate a smooth
transition to the future; which should be discarded in deference to new models or more IToriented models; and which should serve out their days supporting legacy networks. These
decisions must be made collectively with the Forum’s CSP members, supplier members, enterprise
members and other standards bodies, including emerging and sometimes contentious organizations
such as the Open Networking Forum, OpenDaylight, and the OPNFV.
This exercise in serious internal reflection and outward collaboration is what makes TM
Forum such an interesting entity to watch in 2015.
TM Forum recognizes the scope of change on the horizon, and has actively been engaging the ETSI
NFV working groups, as well as the Next Generation Network Management forum, Metro Ethernet
Forum, and 3GPP, in an effort to develop practical guidance for transitioning to the future. This
guidance includes new information models, process flows and organizational and cultural changes.
To this end, the Forum has also been doing a lot of internal work. It has created a project called
ZOOM, or Zero-touch Orchestration, Operations and Management, which will define how to
carry forward its work into the new virtual, software-defined world, and help operators identify what
OSS components and practices they, too, can carry forward. ZOOM has a strong NFV component
to it; but the Forum believes the framework has broader goals, such as creating a service enablement
environment with the capability to rapidly compose services, deliver them to the market, and then
monetize and manage them end-to-end. The goals are not too different from its long-term mission,
but there are many important nuances. This service enablement model must perform in a multitenancy, multi-administrative environment, using unfamiliar new processes from the IT world.
In addition to process changes, TM Forum will take a hard look at what a shift to virtualization
means to CSPs, organizationally and culturally. The organization has begun developing a common
information model and common vocabulary that allows it to help determine which models can be
leveraged and which need to change. For example, there currently is no concept for a virtual
network function (VNF) in its common information model. Below, in Exhibit 11, is the Forum’s
latest reference architecture.
TM Forum is organizing its ZOOM initiative around four themes, which it will incorporate into the
Frameworx architecture.
•
DevOps Transformation Framework for the Digital Ecosystem – This framework will
identify requirements for developing an approach to hybrid and virtualized operations. It will
outline a process for transforming from traditional Systems Operations and Network
Operations to a DevOps approach, which is another practice borrowed from IT. DevOps is
a methodology for uniting the separate functions of software development (Dev) and
production and operations (Ops) into a single, integrated and continuous process.
TM Forum currently has just under 1000 member companies comprised of software suppliers, systems integrators,
network equipment manufacturers, CSPs, as well as companies in the utility/energy, transportation, healthcare, and
government sectors.
8
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•
Blueprint for End-to-End Management – Here is where TM Forum will define the
essential requirements for end-to-end management of physical and virtualized services across
multiple provider environments.
•
Operations and Procurement Readiness – Operations and Procurement Readiness will
identify the technical, business, organizational and cultural requirements when sourcing agile
services in a hybrid environment, throughout the full sourcing lifecycle.
•
Open Source Direction – TM Forum will deliver a positioning paper on open source for
ZOOM/NFV that addresses interoperability and application programming interfaces (APIs).
Exhibit 11: TM Forum Digital Services Reference Architecture
Source: TM Forum
The Forum’s approach to 2015 will be one of pragmatism. The organization explained to Stratecast
that it believes people have seen the concepts and heard the arguments for the Virtual Network, and
now want practical guidance at a solution level for taking their first steps toward it. They want to
know two things, which the Forum believes it can help make clear: How does one begin its
transformation, and what is the end game? Answering these questions first is necessary for taking
rational steps.
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One Year Later – Revisiting the 10 to Watch in 2014
Alcatel-Lucent: Analytics-Driven Mobile Security and Billing
Alcatel-Lucent continues to offer its Motive Big Network Analytics solution that made the company
one to watch in 2014. Stratecast believes the marketplace continues to be receptive. The solution
combines mobile network data with IT and O&M information. It utilizes purpose-built analytics to
provide CSPs with turnkey tools to take advantage of this data. The tools include Smart Plan for
“agile marketing”; Motive Service View for Mobile, providing analytics-driven customer care;
Intelligent Traffic Management with selective traffic optimization; and Motive Security Guardian, a
value added service that CSPs can offer their customers to protect mobile phones from viruses and
malware.
Amdocs: Self-Organizing Network (SON) Solution for Customer Experience
Amdocs has a broad portfolio. Largely due to the company’s acquisitions in 2013 of Actix and
Celcite, for a combined $250 million, Stratecast focused its 10 to Watch selection on the near
immediate implications for Self-Organizing Networks (SON). While Stratecast still believes Amdocs
is well-positioned and capable of addressing SON, mobile operators themselves were not quite ready
in 2014 to go there. SON is a precision instrument, and, with so much change on the horizon, it was
decided by Amdocs, their operator customers, and much of the industry that SON would be
approached carefully and incrementally. However, Amdocs ended 2014 with a SON sale to
Vodafone Hutchison in Australia. The pause of SON, in general, did not negatively impact Amdocs’
OSS service assurance approach or detract from the value of its acquisitions. Amdocs has leveraged
both acquired companies to better address customer experience management and network planning.
In 2015, the company plans to leverage them by helping mobile operators with their carrier-grade
Wi-Fi efforts.
AsiaInfo: Analytics-Driven Business Support
AsiaInfo—the company shortened its name from AsiaInfo-Linkage in 2014—was a company to
watch in 2014 as it expanded its market presence into Europe, based on the strengths from its
customers in China and the Asia Pacific region. At the end of 2013, the company announced its first
O&M win in Europe with the Telenor Group, and in 2014 opened an office in Denmark to support
this project. In the past few weeks, AsiaInfo announced the opening of an office in Hungary to
support European expansion. The company continues to offer a range of solutions, which includes
end-to-end billing, customer relationship management, and business intelligence to address its newfound European customer opportunities.
Cyan: SDN NFV Management and Orchestration
Stratecast selected Cyan as a company to watch in 2014 because of its clear approach to NFV/SDN
management and orchestration. It was one of the first companies that came to market with an
orchestration platform. Stratecast noted then that it would be worth watching for how much the
company could drive the conversation among CSPs, move the early-adoption needle, and leverage
first-mover advantage. Cyan certainly drove the conversation with its aggressive participation in
industry fora, and its collaborative efforts in proofs-of-concept tied to network virtualization. While
carriers have not yet rushed to adopt the technology at the implementation stage, and thereby
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accelerate the early adopter phase, Stratecast believes Cyan still moved the needle in this regard. The
move may not be perceptible at this time; it could be that Cyan moved a needle that was pointing at
the year 2017 up to 2016 or even 2015 through its education efforts and proof points alone. Cyan
also leveraged its first-mover advantage by the sheer amount of exposure the company has received
to date.
Cycle30: Machine-to-Machine Business Management
Stratecast named Cycle30 a company to watch in 2014 for its billing solutions in support of the CSP
market, the enterprise market, and the machine-to-machine (M2M) or Internet of Things (IOT)
market. Cycle30 continues to offer a full order-to-cash solution for converged CSPs with its Pivot
platform. The company focuses on Tier 2 and Tier 3 operators. The same platform provides a
monetization and business support solution for the enterprise market that addresses complex
contract terms and service level agreements, along with advanced hierarchies and account structures
to meet the needs of any business. Cycle30’s Mobius platform provides a device-to-cash solution for
the IOT solution providers, which features global connectivity and monitoring, and real-time
analytics and diagnostics.
Monolith Software: Unified Service Assurance
Why Monolith? Stratecast liked Monolith Software’s focus on unified service assurance. It fit nicely
with the overall trend in the service assurance space. The company brought in a new CEO in 2010
bent on growing the company. In addition to building its unified architecture, Monolith was quick to
embrace an open architecture built on LAMP (Linux, Apache, Maria DB, PERL/PHB), and support
for open protocols. It added multi-tenant capabilities, which will be key to operating in a softwaredefined network. Monolith has been making its case for unified service assurance in the NFV and
SDN arena; while relocating its headquarters from suburban Chicago to a more technology-oriented
corridor in Texas. In the meantime, it partnered with Eirtec to deliver its AssureNow platform to
Manx Telecom in 2014.
Nuage Networks: SDN Virtualized Services Enablement
It would not be an exaggeration to say that Nuage Networks has contributed mightily to parent
company Alcatel-Lucent’s resurgence. Stratecast knew, when selecting Nuage for its 10 to Watch in
2014, that the company’s initial focus and impact would be in the enterprise cloud. However, we
believed that impact would create sufficient awareness in telecom operations that it would be worth
watching. Nuage did not disappoint. After much success in enterprise and cloud networks, Sunil
Khandekar, CEO of Nuage Networks, announced in the fall of 2014 that it was time for Nuage to
expand its scope to branch networking (SDN in all branches of networks, not just data centers), and
help CSPs embrace the cloud and SDN to better address the needs of the enterprise market in this
way.
Omniware Solutions: Contract-Based Billing and Partner Compensation
Stratecast regularly examines the CSP monetization market, and has noted the growing importance
of partnerships in new business models emerging within the communications marketplace. The
problem is that the end-to-end CSP billing market is dominated by suppliers that focus on
monetization in a business-to-consumer (B2C) sense, and not on the more complex monetization
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functions that arise with partnerships, contracts, and reciprocal compensation. Omniware Solutions
continues to be one of a fairly small number of monetization suppliers that automate the complex
needs of business-to-business (B2B) relationships, where the monetization solution—in this case,
Omnibill—must show extreme flexibility and rapidly address changing customer needs relative to
service package definition, pricing agreements, and consumption tracking. Flexible B2B systems are
critical for the success of data services suppliers and network operators alike. This is especially
important in the case where a single operator provides an enterprise with both network bandwidth
and hosted services as a consolidated services supplier.
Redknee: Virtualized Billing and Business Support Management
Redknee made a somewhat unique acquisition in 2013—acquiring a selection of monetization assets
from the much larger Nokia Siemens Networks (now Nokia Networks)—making Redknee a
company to watch in 2014. Redknee’s publicly reported financials indicate that the acquisition and
on-going business was a success: fiscal year 2014 revenues were up over 80% from fiscal year 2013.
In addition, several customer wins and contract extensions were reported by Redknee throughout
2014.
Shango: Unified Fulfillment - Supply Chain Integration
Shango was Stratecast’s long shot, selected for its ambitious supply-chain integration approach to
unified communications. Business looked promising in 2013 when Shango won business from TSG
Global with its SaaS-based Sourcing and Inventory Tracking service. Shango put together a
formidable ecosystem of partners, including Level 3, Onvoy, Windstream and XO Communications.
Unfortunately, it hasn’t done much since.
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Stratecast
The Last Word
Innovation comes in all shapes and sizes as the Stratecast Global O&M 10 to Watch in 2015
demonstrates. This year’s list includes a few smaller companies, a few very large companies, and
even an industry forum. Our 10 to Watch company selections include, in alphabetical order:
•
Amdocs: Policy Management for VoLTE
•
Centina Systems: Strategic Assurance and Analytics
•
Ericsson and MetraTech: An Interesting Acquisition and Integration
•
Hewlett-Packard: NFV and API Management
•
Infonova: Enterprise Business Enablement
•
InfoVista: Service Assurance and Performance Management
•
QOSMOS: Deep Packet Inspection and Network Intelligence
•
Subex: The Return of a Revenue Leader?
•
TEOCO: Bridging the Gap Between Operations & Monetization Functions
•
TM Forum: Zero-Touch Orchestration, Operations and Management
CSP transformation is an expensive, painful, and time-consuming effort that is never over. The
necessary changes will not happen overnight, but CSP transformation is happening, and key solution
suppliers are an increasingly important part of it.
The vendors named as 10 to Watch in 2015 are innovative, but also embrace solid business and
marketing strategies. Each delivers practical solutions that solve pressing problems in open,
interoperable ways. This combination of innovation and practicality enable 10 to Watch companies
to continue on a solid path of growth and success.
Tim McElligott
Troy M. Morley
Karl M. Whitelock
O&M Senior Consulting Analyst
Stratecast | Frost & Sullivan
[email protected]
O&M Strategy Analyst
Stratecast | Frost & Sullivan
[email protected]
Director Global O&M Strategy
Stratecast | Frost & Sullivan
[email protected]
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About Stratecast
Stratecast collaborates with our clients to reach smart business decisions in the rapidly evolving and hypercompetitive Information and Communications Technology markets. Leveraging a mix of action-oriented
subscription research and customized consulting engagements, Stratecast delivers knowledge and perspective
that is only attainable through years of real-world experience in an industry where customers are collaborators;
today’s partners are tomorrow’s competitors; and agility and innovation are essential elements for success.
Contact your Stratecast Account Executive to engage our experience to assist you in attaining your growth
objectives.
About Frost & Sullivan
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innovation that addresses the global challenges and related growth opportunities that will make or break
today’s market participants. For more than 50 years, we have been developing growth strategies for the Global
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information about Frost & Sullivan’s Growth Partnership Services, visit http://www.frost.com.
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CONTACT US
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For more information, visit www.stratecast.com, dial 877-463-7678, or email [email protected].