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No Country for Old Networks
1.
lobal Software Group
LLC No Country for Old Networks - Consumers Drive Network Change White Paper February 2009 Stephen Chen, Partner Global Software Group LLC 21218 Saint Andrews Blvd, #750 Boca Raton, FL 33433 +1-877-GSG-4450 www.globalsoftwaregroupllc.com © 2009 Global Software Group LLC
2.
No Country for
Old Networks 2 Introduction Today’s mobile networks have been and continue to be built around the network model of a subscriber, an abstract entity that subscribes to network services from the network operator. With a subscriber, once service options are selected, they are difficult to change and cannot be selected on a per usage basis. In contrast, internet content and applications providers have introduced a “MY” service option to the web experience. Here, a consumer can select from a wide variety of options and can dynamically change as often as desired. On handsets, consumers warmly embraced the intuitive touch screen interface made popular by Apple’s iPhone and the new Google Android phones. The combination of a “myWeb” and a touch screen experience has created a new paradigm in terms of expectations for the mobile device. As a result, significant pressure has been placed on incumbent service providers and mobile device manufacturers to make such interfaces standard. Implicit in this expectation is a need for operators and manufacturers to “open up” their offerings to permit a greater array of services, features, and applications. Moreover, as “over the top” operators (those firms offering services directly to the consumer) proliferate, and unregulated wireless broadband services become available, the pressure to change is impossible to ignore. In this paper, we present the case for a “consumer-centric” network model that allows both traditional and new operators to survive and potentially flourish. A new architectural layer, Consumer-centric Services, is proposed to provide functions that can be delivered through a variety of access networks. At the core of our argument is a need for all major stakeholders, including network operators, applications and content providers, and device manufacturers, to proactively pursue standards for APIs and metadata. This will enable the sharing of consumer-centric information and provide consumers with the tools to manage a personalized experience. The winners will be those offering the most choices with the highest “bang for the buck”. Subscriber -centric Networks Traditional mobile network operators typically offer a small fixed set of services from which the subscriber picks during an enrollment process. Although some changes may be made subsequently, these initial choices remain until the subscriber cancels service. In order to attract customers, mobile operators constantly offer promotions either in the form of a discounted mobile device or a low-cost services contract. Not surprisingly, when the contract expires, subscribers do not renew but shop for the latest attractive promotion often from a competitor. Since existing subscribers are not given much choice or flexibility in services, there is little incentive to stay with the same operator. One of our hypotheses is that “stickiness” can be created if a compelling and personalizable set of services were offered. In a direct challenge to the subscriber-centric model, “over-the-top” service providers are creating a distinction between service provider and network operator, where, in the days of voice and limited data communications, these terms were synonymous [Reedy, 2008]. These new operators include mobile device manufacturers (e.g. Apple’s iPhone, RIM’s Blackberry, and Google’s Android) and portal operators (e.g. Yahoo, Google, and AOL). It is noteworthy that the user interface offered by these companies provides the “stickiness” that has eluded the network operators. Moreover, the consumer regards the application and not the service plan as driving his/her choice of provider. The subscriber-centric network model is slowly devolving and the operators’ traditional “walled gardens”, where only services and applications “certified” by the operator are available, are crumbling. Momentum is shifting towards a Consumer-centric network model where the consumer selects and often defines the services he/she wants. Table 1 offers a high-level view of differences between the two network models. Characteristics Subscriber-centric Networks Consumer-centric Networks User Experience Operator defined Consumer defined QoS, Security, Privacy Fixed by operator Consumer chooses January 2009 © 2009 Global Software Group LLC
3.
No Country for
Old Networks 3 Billing Method Static, once chosen by consumer Consumer chooses based on application Content Operator controlled Consumer chooses Network Agreements Operator roaming agreements Consumer chooses based on location, context Calling Networks “Friends” on the same network Social network independent of operator Applications Operator controlled Consumer chooses Table 1 – Subscriber/Consumer-centric Networks The key observation from the table is the amount of control the consumer has in determining service parameters. The challenges for service providers center on how to provision and deliver “mass customization”. The popular “MyWebPage” offered by many web portals (eg. Yahoo, AOL), content providers (e.g. Wall Street Journal Online, MySpace, Flckr) and Application Providers (e.g. Mapquest, GoogleOffice), are raising expectations that the mobile internet should also be personalizable in a similar way. Subscriber-centric networks are often deployed using a Service Delivery Platform (SDP) as shown in Figure 1. This platform consists of Operations Systems and a Core Infrastructure to provide such functions as fault tolerance, database management, infrastructure tools, network monitoring, network services for voice calling, storage, an execution environment, and security. These functions are typically provided to application developers through standard APIs or a web services interface. Figure 1 – Subscriber-centric Service Delivery Platform Most application service/content providers who have developed services find working with the operators’ SDPs to be a difficult and expensive process. Development kits, simulators, testing systems vary in quality and are often very complicated to use. The business models are heavily weighted towards the January 2009 © 2009 Global Software Group LLC
4.
No Country for
Old Networks 4 operators (typically, 20-60% of revenues flow to the developers). Small wonder that the number of applications delivered by the operators has failed to meet expectations. Consumer-centric Networks Consumer-centric networks require a significant paradigm shift in how services are delivered to consumers. New service providers offer services directly to consumers with or without “permission” of the network operators. These so-called “over-the-top” operators deliver their services through a mobile or web portal. Hence, the browser on the mobile device directly interfaces to these applications. Yahoo and Google Mobile are examples of such services. Often, these services are delivered via SMS text messaging since many consumers do not have smart phones or phones with browsers. Figure 2 – Consumer-centric Service Delivery Platform Figure 2 proposes an augmented view of an SDP for Consumer-centric Networks. In this case, a layer has been added to allow consumers to manage policies, content, context and information. Clearly, much of this data needs to be persistent and any implementation will require an architecture that optimizes data stores across mobile devices, personal gateways, network gateways, and service provider storage. The proposed Consumer-centric Services layer provides a set of common core functions for both applications and content providers. Consumer Policy Management includes components for managing personalized policies • (e.g. Opt in/opt out choices and QoS for each service, access to personal content, social network access privileges), ad engines, preference engines, and local search engines. A January 2009 © 2009 Global Software Group LLC
5.
No Country for
Old Networks 5 particularly difficult challenge in policy management is the issue of identity, privacy, and security. Consumer Content Management includes components for content upload/download • across device domains, synchronization engines, content dispatchers, interfaces to social networking sites for content updates, and playlist managers. Consumer Context and Information Management components for gathering usage • information, a dashboard collector and information manager, recommendation engines, context aggregators and rules engines, and consumer backup storage. Clearly, the functions described above are a first approximation of what is required. Detailed analysis and design will likely result in modified and additional functionality. Moreover, as personalized services become commercially available, standards and de facto interfaces will emerge. The determination of where in the end-to-end ecosystem, components of the Consumer-centric Services layer reside is a challenging and poorly understood problem. Device manufacturers will be incented to provide as much of the functionality in the device as possible. Similarly, the network operators will try to offer these services through the network, and applications and content providers will attempt to keep key information on their private data stores. Indeed, Amazon, Google and Yahoo are prominent players in this space today and have written components to provide many of the functions listed in our Consumer- centric Services layer for their respective applications. The mobile operators are protective of their franchise and in addition to certifying all applications, require that all services billing be done by them. This is obviously a key control point. In partnership with the operators, Apple, Nokia and RIM offer server-based applications with recurring revenue streams. Currently, there are no widely available devices for consumers to manage their own services. Some of the entertainment gateways and IPTV systems provide modest control over cable offerings. Home networking systems that allow computers and peripherals to communicate are available. Finally, specialized equipment to allow VoIP, landline, and cellular services to be selected based on least-cost routing is being introduced into the enterprise and home markets. However, all these systems are “stand-alone” and are not integrated into a consumer-centric personal network. We finally note that at the heart of a consumer-centric SDP is an open platform. If a true ecosystem is to exist for delivering personalized services, device manufacturers, mobile network operators, and applications and content providers will need to agree to a set of standard APIs and protocols to share information across domains. Additionally, in order to spur third party development and innovation, the platforms must provide development kits, simulators, and testing environments, all built using open standards and interfaces. Although standards are emerging for SDPs (e.g. Parlay and XML), adoption has been slow and the operators’ commitment to IMS is problematical [Wsky, 2005]. The danger of moving too slowly in adopting open standards has claimed Microsoft as a victim and more nimble players, such as Jamcracker, are succeeding in the SDP space [Lght, 2008]. Consumer-centric Networks - Opportunities Mobile Network Operators The current environment represents significant challenges for the incumbent mobile operators. Consumers, given more choices, are no longer reluctant to change carriers as soon as their contracts are due for renewal. The high churn experienced by AT&T’s competitors when the iPhone was introduced is a harbinger of what has become common. Consumer loyalty can no longer be taken for granted. Assuming they can make the transition to a customer-centric network, a potential benefit to the operators is the growth of a large and profitable applications services business. Their stated fear is to avoid becoming “dumb pipe” providers. Hence, they face a dilemma of how to deliver value over and above the provision of network transport services. As opposed to a “one-stop shop”, there are certain January 2009 © 2009 Global Software Group LLC
6.
No Country for
Old Networks 6 services that can be offered naturally by them. These include billing, federated identity, security, bandwidth on demand, digital rights management for copyrighted content, and contextual data (e.g. location and presence). Under this scenario, the operators will need to provide open interfaces to these capabilities and offer flexible, compelling and easy-to-use development and testing environments. Application Service/Content Providers Amazon, MySpace, Facebook, Apple, Yahoo, and Google, among many others, provide open and flexible development environments for third party applications developers. Microsoft has its own proprietary environment but because of its market power, .NET is a de facto standard, at least, in the enterprise. Operating mainly as “over-the-top” providers, these firms interact directly with consumers through the mobile device. However, depending on customized client software, the user experience varies widely depending on the device. Apple’s iPhone and Google’s Android phones represent the current high end, whereas applications built on SMS are at the other end of the spectrum. Among the key opportunities for applications and content providers is designing an open architecture to allow consumers to manage and distribute content and metadata across providers. Several firms such as ShoZu (social networking) and Nero (digital media) aggregate web sites and content, respectively, and provide it directly to consumers. However, their protocols are proprietary and closed. Similarly, Apple, Nokia, and Microsoft offer published interfaces that are proprietary. Google’s Android is one of the first open development ecosystems for mobile devices. A controversial but powerful technology has been employed by many content providers to perform file sharing. Peer to peer (P2P) protocols such as BitTorrent, eDonkey, and Skype are being used to harness the power of computing and communications devices to decentralize the transmission of large data files and to share bandwidth and computing power. Currently, P2P traffic is second only to video streaming in terms of overall internet usage [Odly, 2008]. The promise offered by P2P is that applications can communicate directly with other peer devices and avoid a centralized server. eBay exemplifies this usage by bringing buyers and sellers together using their Skype technology. What is needed, of course, is a set of metadata standards that define how content and information can be exchanged between applications providers, device manufacturers, and network operators. Lacking such standards, the current and near-term approach is to provide the “transcoding” explicitly using customized devices and software. Device Manufacturers Since the mobile phone has become a powerful computing and communications device, manufacturers have been competing in a “features” war. The mobile phone is no longer just a phone. It is a camera, music player, FM radio, TV screen, transcription device, messaging and emailing device, navigation and gaming device, and web browser. Soon it will be a projector and remote control for home security and entertainment systems. The addition of these capabilities significantly increases the complexity of the hardware and especially, the software in the device. Moreover, service provisioning, over-the-air updates, and remote maintenance become increasingly critical functions. Security is also an issue with several high profile “hacks” into devices owned by celebrities. Given these trends, device manufacturers face enormous challenges but also can enjoy potentially huge opportunities to provide rich user experiences. In order to deliver on this promise, several key changes need to be made. They include: • Greater access to the mobile device’s functionality • Standard interfaces to mobile and internet devices from different manufacturers • Standard APIs to be used by third party developers and providers • Allowance for “thin” clients where processor=intensive applications (e.g. graphics and video encoding) can be off-loaded to a server and only rendering activity occurs on the device January 2009 © 2009 Global Software Group LLC
7.
No Country for
Old Networks 7 Conclusion The decades-long promise of communications and computing convergence is upon us but not in the way that the original forecasters predicted. At the time, technology futurists believed that telephone networks and computing would combine into a wired superstructure where supercomputers and superswitches would dominate. Few envisioned the rise of wireless and fewer foresaw that it would overtake wired communications as the most prevalent form of telecommunications in the world. With the advent of true broadband wireless, convergence may be at hand. However, in order to realize this attractive vision, significant changes in how networks deliver services to consumers are required. In this paper, we have argued for Consumer-centric Networks which place the consumer, and not the subscriber, in the middle. A proposal for a new layer in the Service Delivery Platform is presented. This layer will necessitate proactive participation by network operators, application and content providers, and device manufacturers for definition and implementation. Openness and a common vision are characteristics of this new ecosystem and success will come to those who embrace these concepts. Acknowledgements The author is grateful for the insightful comments and suggestions made by Drs. John Waclawsky and Jacques Meekel. References [Reedy, 2008] Reedy, Sarah, “Telephony Live: Redefining Tomorrow’s Service Provider”, Telephony Online, 9/30/2008, http://telephonyonline.com/wireless/news/service-providers-0930/ [Wsky, 2005] Waclawsky, John G., “IMS 101: What You Need to Know Now”, Business Communications Review, June, 2005, pp 18-23 [Lght, 2008] Light Reading, “Microsoft Kills its SDP”, 12/2/2008, http://www.lightreading.com/document.asp?doc_id=168726 [Odly, 2008] Odlyko, Andrew, Minnesota Internet Traffic Studies (MINTS), http://www.dtc.umn.edu/mints/home.php January 2009 © 2009 Global Software Group LLC