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The policy control market is poised to more than double over the next five years, as operators put policy at the heart of their strategic thinking

Policy Control: Preparing for a Virtual Makeover?

Heavy Lifting Analyst Notes
Heavy Lifting Analyst Notes
Heavy Lifting Analyst Notes
5/10/2013
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Our updated forecast for the network operator policy control and DPI market is out, and the very strong growth we reported previously continues apace. We measured the market in 2012 at US$1.24 billion, slightly ahead of our previous projection, as many vendors enjoyed a buoyant second half; that seems to be continuing into the first half of this year, as well, boding well for 2013.

On the face of it, the market is now approaching saturation: Already in mid-2012, our survey work with operators showed that almost 70 percent had deployed a policy server of some kind, and it's now likely at least 80 percent. So why are we expecting the market to more than double to $2.85 billion by 2017? Primarily because we're anticipating that operators will deploy more and more sophisticated solutions, handling more and more use cases, putting policy at the heart of their strategic thinking.

This trend is already driving a round of replacements of first-generation gear, as well as enhancements to deployed products to add new applications and connect more network and BSS gear into the policy architecture. In emerging markets, some policy servers are now handling dozens of use cases as operators fight to differentiate and improve the yield from spectrum and bandwidth.

In other words, the already high penetration of policy servers we uncovered conceals the wider truth that many initial deployments are relatively rudimentary, and often still in the deployment phase. It's revealing that one vendor in our Tracker research interviews told us that it had signed nearly 50 contracts over the past four years, but only 60 percent are carrying commercial traffic. Deployment cycles can be painful, with some operators saying that it's taken two years to get from order to traffic.

The bottlenecks center on difficulties interoperating with other network and IT elements, inflexible policy creation tools, and concerns about scaling, and that's led most vendors to try to improve their offers in all these areas, with measurable improvements in product sets in some cases. But it's also helping to stoke interest in virtualization of policy control, as well as SDN; in interviews with operators, we've found that there is strong interest in starting virtualization initiatives in the control layer, and most of the policy vendors we've spoken to now are responding, and have active programs to add virtualized versions. Many policy servers already use COTS hardware and x86 processors, and some vendors already offer virtualization of their own applications on those platforms.

There are, of course, plenty of open issues here. One of the biggest is the relationship between the ONF's de facto standard for SDN control, and the 3GPP's PCRF Policy Controller. This is an issue we discuss in a paper to be published next week by Sandvine Inc., and while the two standards are in some ways well matched, there are plenty of technical challenges to be resolved.

But though immature, these initiatives have great promise, carriers suggest. At the recent Policy Control event in Berlin, Alex Harmand, head of service platforms at Telefónica SA's Spanish unit, describing his company as "strong believers" in cloud and SDN, said they could help improve interoperability across the IT/network and OCS/PCRF barrier. More broadly, SDN could help improve the whole process and engineering environment, he said. But the relationship between policy and SDN remains to be defined.

The promise, then, is that virtualization could help telcos to bridge the still-wide gap between networks and IT -- a gap that is contributing to the difficulties that many have had in deploying conventional policy solutions. Yet technology fixes alone are no panacea; fundamental changes in the internal organization of network operators will be required if the promise is to be fulfilled.

I'll be at Management World in Nice next week, looking for answers to some of those questions, and look forward to reporting back on progress in a future column.

— Graham Finnie, Chief Analyst, Heavy Reading

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