A look at new service revenue generation via IP services

The main problems today’s service providers face are not a surprise to anyone who works in the telecom industry. What is new is the opportunity for resolving these problems via IP Services.

The main problems today’s service providers face are not a surprise to anyone who works in the telecom industry. They have been discussed and rehashed for the past year in the media, at conferences and in internal meetings. A recap:

•  Budget constraints as service providers try to be competitive and meet customer requirements. Budget constraints of end users who ultimately purchase these services. How to reach new customers that don’t already purchase their services. How to add new service offers to existing customers’ portfolio. How to enable all of this without major network overhauls.

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As I already mentioned, none of this is particularly new news. What is new is the opportunity for resolving these problems via IP Services.

Just a few years ago, IP services primarily consisted of transport-based IP service offerings including Internet access, site-to-site VPNs, and remote access VPNs. In today’s environment, these transport-oriented IP services are table stakes for service providers to compete. Service providers can build more intelligence into these services as well as introduce enhanced security options to create differentiation and ultimately improve profitability.

The next-generation of differentiated IP services, called high-touch services, are application- and content-aware or -enabled. Through policies, the service provider can develop and introduce services tailored for specific applications, content, IP addresses, source and destinations, time of day, and other parameters. The policies may include the access or denial to specific applications/content, bandwidth guarantees, application of different qualities of service, enforcement of specific security parameters, etc. Furthermore, the next-generation of IP services would apply these policies dynamically and automatically on a per-subscriber and/or per-session level.

Service providers can also create differentiation with the launch of prepackaged services for specific applications such as Internet telephony and video-on-demand. Packaged services may target specific vertical and/or horizontal markets such as campus environments, residential power users, and others.

View from the service provider

The opportunity for a service provider who wishes to offer network-based IP solutions is to layer these services on top of the services they already offer in order to enhance their product portfolio. For example, many providers already offer managed CPE services in conjunction with dedicated connectivity options. These solutions for the most part are aimed at larger enterprises. Usually these customers have an internal support staff that wishes to maintain some level of control and management of the solution required. Because some level of “hands on” interaction is required from the enterprise itself, these solutions are not feasible for most small and midsize enterprises.

By adding network-based IP solutions to their current portfolio, most service providers enable themselves to reach a new set of customers. These being the small and midsize businesses that require more secure connectivity between locations, customers and partners. These customers may also be interested in utilizing broadband solutions for a more effective cost point then dedicated services. There may also be an opportunity in the high-end residential market through the addition of network-based IP services.

View from the enterprise

As a cost conscious enterprise manager in today’s economy, you are always trying to do more with less. The less not only encompasses monthly outflow of dollars and cents, but headcount and capital assets. Network-based IP solutions provide one way to assist with these challenges. But utilizing network-based IP solutions as opposed to those you manage and maintain at your customer location, many economies of scale apply.

The requirement for in-house personnel who have the expertise to manage and maintain these services is greatly reduced. By utilizing outsourced options from your service provider’s network you can not only reduce headcount, but in many cases capital purchase requirements. With a do-it-yourself implementation you not only have to manage and maintain the assets, you must also own the assets. In many circumstances a service provider will provide the required assets as part of a managed service where a monthly fee for the service is the only cash outlay required. In some cases the customer premises-based equipment can be eliminated altogether with a network-based IP solution.

Retaining your competitive edge while continuing to be cost conscious is another issue in today’s enterprise manager’s mind. The ability to utilize network-based IP solutions can allow a small/midsize enterprise to present themselves to the world as a larger enterprise. By utilizing assets deployed in the service provider’s network, a business can take advantage of advanced services they could never afford to deploy on a do-it-yourself basis with a limited budget.