Application Reach How Service Providers Can Leverage Todays Assets for Tomorrows Future

AppTrigger
Patrick Fitzgerald Senior VP, Global Sales and Marketing

White Paper: Application Reach How Service Providers Can Leverage Todays Asset s for Tom or r ows F uture

Abstract
Market saturation along with escalating competition is making it increasingly difficult for service providers to achieve bottom line growth and satisfactory financial performance. As untapped markets shrink, service providers must work harder to retain their existing customers, increase ARPU, and acquire new customers from their competition. Accomplishing these goals requires quick introduction of new exciting services with the ability to leverage existing revenue producing applications into the new service offerings across converging network domains. Unfortunately, the traditional application deployment and interworking solutions are cumbersome, costly, and highly inefficient. This white paper explores these challenges and the opportunities that come from leveraging existing service provider assets to create a new service paradigm.

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Killer Environments to Support the Next Generation of Applications

The lack of visibility into the next killer application has shifted the focus towards creating a dynamic architecture capable of rapid new service introduction and removing the legacy silo model. Executives at service providers worldwide are focusing energies on how they can transform the application deployment model which will enable them to grow their incremental average revenue per subscriber (ARPU), decrease their network operating cost (OPEX) and at the same time, be competitive with new competitors in the marketplace. Most service providers focus on transforming the architecture to IP (NGN / IMS) while at the same time investing in re-usable SOA architecture (Service Delivery Platforms- SDPs) to enable rapid new service introduction and create new innovative services via an powerful ecosystem of application developers. Ideally, this transformation would take place overnight but due to todays cost constrained market, this reality is many years away. Then the challenge becomes how to best minimize investment risk in next generation applications and maximize the benefits of the existing enhanced applications while building and enabling new application innovation for the existing subscriber base?

Two Schools of Thought

Todays service providers face a dilemma of unprecedented proportion. On the one hand, they need to convert their network assets to IP/NGN while at the same time transform their existing business model to compete with over the pipe Internet players. No small task by any means. To this end, the market has broken into two camps of thought as to the best way to create this new dynamic. The first camp assumes that the key to success is network transformation (i.e. NGN and IMS build-outs). Change the network to NGN, innovation and growth will follow through new services such as mobile broadband, mobile advertising and more personalized user experiences.
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The other school of thought embraces leveraging IT technologies to create a re-usable, horizontal software layer (i.e. SDPs) that enables rapid application prototyping and the promise of unique innovation. However, both of these approaches have limitations on the ability to maximize the service providers current revenue producing assets or to protect next generation investment. Assuming network transformation is the key can be limiting. For example, 3G network build-outs have been around for over 5 years and very little has changed in the way people communicate or in terms of the amount they spend with service providers.

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White Paper: Application Reach How Service Providers Can Leverage Todays Asset s for Tom or r ows F uture

Legacy Applications
INAP SCP or App Camel SCP or App WIN SCP or App

New Applications
SIP AS or SDP SIP AS

Figure 1 Next Generation Application Infrastructure

Wireline

GSM Wireless

CDMA Wireless

IP

NGN / IMS

Legacy Infrastructure

Next Gen Infrastructure

The applications remain by and large the same with traditional voice being central to the service. Additional business model challenges exist when assuming re-usable horizontal software solutions provide the answer. Next generation applications are not proven and as a result, business cases continue to fail due to low return on investment. These two schools of thought are beginning to merge as Tier I service providers want to leverage IP within the network infrastructure and at the same time, become focused on creating process re-usability at the application layer. A new paradigm is clearly taking shape in which NGN/IMS network build-out is a key architecture priority to support IP across the network domains while SDPs are becoming a vital application deployment model.

The Business Case Dilemma

The fundamental problem of network transformations and SDP build-outs is that both are enabling frameworks but by themselves do not do anything without subscribers and applications. The reality is that existing subscribers reside on the current network generating revenue which challenges the basic return on investment of building the frameworks with no guarantee of increase in ARPU. In short, in the beginning of these transitions, there will be very few IMS /SDP subscribers generating very little revenue. In contrast, there is a lot of revenue coming from existing subscribers. Hence the business cases are failing to justify new build-outs. Due to the silo nature of todays application deployment model and where the majority of subscribers reside on the network, service providers have limited future-proof deployment models to choose from which ensure every existing and new application be available to every subscriber regardless of network. For example, if a service provider wants to implement a new service to the TDM subscriber base, they could roll out an-

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other IN based application that generally requires a big investment but does not extend to NGN or IMS subscribers. If the service provider deploys next-gen services within the IP domain, these traditionally do not benefit the TDM subscriber. This dilemma is even more apparent for IMS-only applications due to the low number of IMS subscribers. A carefully planned application reach strategy which focuses on how to best leverage existing assets and future investment both from a network and business perspective will be a key competitive advantage for operators migrating into the NGN/IMS and SDP space. This application reach strategy will likely be the difference between making the business case work or not.

Application Reach: Extend Existing Application Reach to SDP and NGN/IMS Build-Outs
Service providers today spend billions of dollars on deploying new applications and supporting and maintaining existing applications on their networks. These voice centric and ubiquitous applications are the backbone of the revenue model for the service provider and define the user experience today. These application assets offer tremendous value not only from a revenue perspective but also from a personal user perspective. Service providers today want to and need to invest in next generation technologies to remain competitive for the long run but this spend must be justified and be grounded in a pragmatic approach. Todays SDP and NGN/IMS build-outs require all applications to be part of the Rewrite /Re-purchase mentality in which applications must be recreated within the new frameworks to leverage the benefits of them. This mentality and requirement increases the overall cost structure as well as increases the business risk of success of the new build-out without any guaranteed increase in ARPU or innovation. A better and more efficient model is to leverage core application assets and extend them to SDP frameworks and the NGN/IMS build-out. With this approach, a service provider mitigates investment risk, increases new application ARPU opportunities and establishes the groundwork for an easy, planned migration of existing applications and customers to the NGN/IMS network. Investment risk is relative to the rewards it will create. Without good insight into the killer application and voice revenues still key to a service providers financial health, a more pragmatic approach provides the service provider the best of both worlds. On the one hand, it fully maximizes existing assets and at the same time, allows for innovation investment and an elegant go forward solution. Rather than working through costly re-writes of existing applications, the work done to extend an existing application provides a future proof migration path for existing users to the NGN/IMS. The migration is transparent to the existing subscriber base, while at the same time the subscribers can take advantage of new innovative applications from the SDP platforms along with the more familiar and revenue producing traditional applications.

2008 AppTrigger. All Rights Reserved.

MORIANA

White Paper: Application Reach How Service Providers Can Leverage Todays Asset s for Tom or r ows F uture

Existing Applications
INAP SCP or App Camel SCP or App WIN SCP or App

New Applications
SIP AS or SDP SIP AS

Figure 2 Extending the Reach of Existing Applications into New Networks

SIP-ISC

Wireline

GSM Wireless

CDMA Wireless

IP

NGN / IMS

Legacy Infrastructure

Next Gen Infrastructure

Extending the reach of todays revenue producing applications into the SDP framework provides the service provider with a win-win value equation by providing an increase in profits from existing applications, eliminating the re-write requirement of todays framework offerings and provides proven applications to the NGN/IMS network.

Application Reach: Extend New IMS /SDP Application Reach to Existing Subscribers
Key investments that enable service providers to deploy applications faster, open the network to innovation from a larger application developer ecosystem and provide competitive advantage are fundamental to the long term survival of the service provider. However, time and time again service providers find they must continue to invest in infrastructure and applications that do not prepare them for the long term vision. Ideally, service providers do not want to be spending investment dollars on legacy solutions but want to ensure their investment ties into the long term direction and vision. On the surface this makes perfect sense, but the challenge has been the business cases to support investment on NGN/IMS applications have failed. They have failed for two major reasons. First, the low number of subscribers on the NGN/IMS network does not justify the new application for such a small potential market. Secondly, the recreation of voice centric services without an increase in ARPU is very difficult to justify especially since the recreation of these services is very time consuming and not all features are easily duplicated. Service providers must look at ways to increase the probability of success and minimize the risks associated with launching new NGN/IMS applications. Every service provider brings with them a very strategic benefit; a large existing, revenue generating subscriber base. To ensure IMS/NGN application success, service providers must

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Figure 3 Extending New Applications into Legacy Networks

INAP SCP or App

Existing Applications
Camel SCP or App WIN SCP or App

New Applications
SIP AS or SDP SIP AS

S
SIP-ISC

Wireline

GSM Wireless

CDMA Wireless

IP

NGN / IMS

Legacy Infrastructure

Next Gen Infrastructure

make NGN/IMS applications available to the largest addressable market of existing subscribers. By spreading the investment over a larger potential subscriber base the business case improves from one searching for users to one with a secure incumbent base from which to grow. The ability to extend new applications to existing users results in increased initial usage of the new applications and profitability is now accelerated. Also, by connecting the SDP eco-system to a wider audience the case for building out the SDP applications and improved return on investment for the applications running through it is enhanced.

Unlocking a New Wave of Innovation

Todays service provider derives a tremendous amount of revenue from enhanced voice services while the business case to re-create these services in the NGN /IMS network or the SDP has failed to demonstrate an overall increase in ARPU. As the market continues to take shape, existing enhanced services are prime candidates for incremental innovation and ARPU enhancements. By leveraging the existing enhanced services and creating innovation on top of them, service providers complement an understood user experience while at the same time, enable an ecosystem to reinforce the first social network application, voice services. AppTrigger provides the key to unlocking this innovation via the industrys first Service Broker. The Service Broker sits between the application layer and the core network to provide interworking and manage connectivity to the evolving network. The Service Broker is able to connect any application to any user by incorporating a number of open standard APIs and is purpose built to deliver the signalling, media and the feature interworking between disparate networks that converged and consolidated applications require.

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White Paper: Application Reach How Service Providers Can Leverage Todays Asset s for Tom or r ows F uture

Figure 4 Blending Services

This functionality enables the ability to expose a services kernel of an existing revenue producing application facilitating new innovation through a blending of services. For example a VoiceMail application, integrated with a Service Broker could have a deposit service exposed into a SDP framework enabling web direct voice mail deposits. The concept of Web 2.0 Blending Services provides the collaboration or glue between the legacy services and a delivery framework exposed to a developer ecosystem. The ecosystem is then immediately exposed to not only the legacy applications but the subscribers using those applications.

Summary
As service providers continue transforming their network and creating re-usable building blocks to dynamically change the application deployment model, application reach is a strategic element for todays service providers. Applications Reach provides the service provider: The ability to eliminate the application re-write or repurchase model Increase Profits from Existing Applications Provides proven Apps for IMS/NGN Network Spread Investment Risk of New Apps across to Large Subscriber Base Accelerate Profitability of New Applications Build easy transition to NGN/IMS Networks The ability for every existing and new application to be available to every subscriber, regardless of network, ensures the service provider has a long term solution that will lower CAPEX/OPEX and create new service blends which help grow ARPU.
2008 AppTrigger. All Rights Reserved.

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