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Optical/IP

SP Execs Crave Speed But Resist Change

Service provider executives really do want to bring new services to market faster, to be more competitive, but they haven't made the internal changes needed to accomplish this, according to new research to be released later this week by Amdocs Ltd. (NYSE: DOX).

That research also shows that increasing demand for support of third-party services, such as application stores or IPTV, and additional connected devices, such as smartphones and tablets, is actually slowing down new service rollouts.

Of the 125 wireless, telco and cable executives interviewed, 70 percent said the speed of rolling out new services was very important to their business. Only 59 percent said so in 2008, the first time Amdocs commissioned this survey. (Interviews were carried out by independent research firm Coleman Parkes.) But the need for speed hasn't prompted much change. Sixty-five percent of respondents said their companies were able to bring new services to market within six months -- down from 67 percent in 2008.

Cost and complexity are the big hurdles, says Cassandra Millhouse, director of product marketing for Amdocs's OSS division. The challenges listed by respondents read like the typical litany of complaints from companies hamstrung by outdated systems and siloed organizations:
  • Complexity of the current technology environment
  • Changes that would be required to internal systems and processes
  • Organizational alignment
  • Project management and control
  • BSS/OSS integration
  • Data quality
Each of those points was supported by more than half the respondents.

That partly explains why half of the operators said the cost of bringing new services to market has gone up 15 percent just within the last year.

Now here's a shock
Not surprisingly, given its corporate interest, Amdocs is stressing that major changes to BSS/OSS systems can help by streamlining internal processes. (See The Order Management Revolution.)

Millhouse points to survey results that show about one third of service providers are bringing new services out more quickly and at lower cost. Those happen to be the ones that have invested in upgrading and integrating their BSS/OSS systems.

Companies that sped up the deployment of new services attributed their improvement to better project management and control, which included a consolidated view of products, services and resources, and to organizational alignment, BSS/OSS integration and increased investment in appropriate technologies and tools.

So, why aren't all service providers rushing to transform their internal systems and processes?

"They fear that process of change," Millhouse says. The problem isn't the change itself so much as a perception that change has to be a sudden, "big bang" process, she says -- meaning Amdocs and other SPIT vendors will need to show service providers ways to tackle change incrementally.

For more
Amdocs also released research earlier this year showing poor customer service was hurting potential profits from smartphones. (See MWC 2011: Survey Says Smartphone Profits in Peril.)

— Carol Wilson, Chief Editor, Events, Light Reading

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paolo.franzoi 12/5/2012 | 5:07:51 PM
re: SP Execs Crave Speed But Resist Change

 


Okay, not an angry rant but maybe you will read this. :)


Basically the fact that they are considering OSS/BSS tools as part of the solution IS the problem.  What is going on out there is this entire experimental soup of stuff.  Its half baked, it doesn't scale, it doesn't do SLA management...especially at first.  8 bazillion things are being slung out there.  What sticks then gets some actual effort in scaling/reliability/etc put into it.  It becomes, over time, a real product.


Service Providers (large ones anyway) have no such model.  I don't actually want them to en masse.  They would probably need a separate subsidiary to go do this stuff and then I want it to run on other people's networks.


seven


 

cnwedit 12/5/2012 | 5:07:50 PM
re: SP Execs Crave Speed But Resist Change

Okay, I get it now, and what you say makes a lot of sense. Do you see anyone -- any SP, that is -- doing this? Taking the apps approach?


Also, on the cloud front, the telcos I talk to insist their cloud services are very different from AWS, in that they are adding in more security, bundling them with network services and doing more specialized IT offerings and applications that go beyond computing-as-a-service or storage as a service. I'm guessing you aren't buying that.


 

cnwedit 12/5/2012 | 5:07:50 PM
re: SP Execs Crave Speed But Resist Change

Interesting and, for the record, I always read your posts.  Just don't always have a snappy comeback.


If I'm understanding what you are saying then, you think service providers are wasting their time trying to upgrade their legacy systems - at least until a fully mature, scalable solution exists? 

paolo.franzoi 12/5/2012 | 5:07:50 PM
re: SP Execs Crave Speed But Resist Change

 


Nope.  What I am saying is that we are in the world of experimentation for services.  There are some basic services (bandwidth stuff) which is just point a to point b and needs new OSS/BSS support. 


New, high value services are not deterministic.  Things change.  One of the problems is overinvestment in services that turn out not to work.  So, to create an entire environment to be able to support scaling and efficiency at the front makes a huge assumption.  This drives up the cost of service creation and extends the time.  What I see a lot of is service providers (read Telcos) talking about making services that service providers (read new types of providers) make.  My favorite example of this is the cloud stuff at the carriers.  I compare it to AWS and go - well so you are shooting at what is already a product.  Too late.  By the time the carriers get to where AWS is today, AWS will have an even better product offering.  So, the carriers will have to either commoditize or do it all over.


The only way out of this is the App approach where they open up to lots of folks to build junk and a few gems come out of it.  Once they have a gem they go work it and scale it.  This is an entirely different model than a traditional SP can even model.  Note in the app model there is LOTS of failure.  90%+ failure.  So spending a lot of R&D to get into 90% failure is a really bad idea.


seven


 

paolo.franzoi 12/5/2012 | 5:07:49 PM
re: SP Execs Crave Speed But Resist Change

Outsource to salesforce.com...Okay so let's use that as an example.  Are you saying that say Verizon is going to become a Salesforce Var and have staff on hand to customize/write code for Salesforce?  Since Salesforce is already a cloud service.


Outsourcing IT resources.  I think that needs to be considered very carefully.  Remember, EC2/S3 is just raw boxes and bytes.  If you are outsourcing your custom apps, are they becoming like the 8 zillion Indian firms who keep trying to write my code?  Are they trying to take over server maintenance (interesting idea, but wow lots of fingerpointing along the way) even if its a virtual server?


If you can try to pin them to a specific.  When you mean Outsource IT what kind of people do you expect the enterprise to be able to layoff?  That should help provide some better clarity.  Right now the cloud app space is really specific (for example we are a cloud security vendor) and each vendor does its specific thing.  To say now, that they are going to be a generic IT support function really is a non-starter.  They have to be a specific IT support function.  Which one or ones is it?


Maybe they will tell you.


seven


 

paolo.franzoi 12/5/2012 | 5:07:49 PM
re: SP Execs Crave Speed But Resist Change

AT&T is at least trying on the app front...probably failing but trying.


Bundling with Network services....unless that means low cost bandwidth, who cares?  I can get bandwidth - remember these are IP services - from dozens of carriers.


You really need to look at the range of services AWS and its ilk are offering. From the AWS products section (don't get me started then on Rackspace and Google Docs and others)


 

<div class="content">
<div class="singlePane pane">
<div class="tripleColumn">
<div class="col">
<div class="products">
<h4>Compute</h4>
<ul>
<li> Amazon Elastic Compute Cloud (EC2) </li>
<li> Amazon Elastic MapReduce </li>
<li> Auto Scaling </li>
</ul>
<h4>Content Delivery</h4>
<ul>
<li> Amazon CloudFront </li>
</ul>
<h4>Database</h4>
<ul>
<li> Amazon SimpleDB </li>
<li> Amazon Relational Database Service (RDS) </li>
</ul>
<h4>Deployment &amp; Management</h4>
<ul>
<li> AWS Elastic Beanstalk </li>
<li> AWS CloudFormation </li>
</ul>
<h4>E-Commerce</h4>
<ul>
<li> Amazon Fulfillment Web Service (FWS) </li>
</ul>
</div>
</div>
<div class="col middle">
<div class="products">
<h4>Messaging</h4>
<ul>
<li> Amazon Simple Queue Service (SQS) </li>
<li> Amazon Simple Notification Service (SNS) </li>
<li> Amazon Simple Email Service (SES) </li>
</ul>
<h4>Monitoring</h4>
<ul>
<li> Amazon CloudWatch </li>
</ul>
<h4>Networking</h4>
<ul>
<li> Amazon Route 53 </li>
<li> Amazon Virtual Private Cloud (VPC) </li>
<li> Elastic Load Balancing </li>
</ul>
<h4>Payments &amp; Billing</h4>
<ul>
<li> Amazon Flexible Payments Service (FPS) </li>
<li> Amazon DevPay </li>
</ul>
</div>
</div>
<div class="col">
<div class="products">
<h4>Storage</h4>
<ul>
<li> Amazon Simple Storage Service (S3) </li>
<li> Amazon Elastic Block Store (EBS) </li>
<li> AWS Import/Export </li>
</ul>
<h4>Support</h4>
<ul>
<li> AWS Premium Support </li>
</ul>
<h4>Web Traffic</h4>
<ul>
<li> Alexa Web Information Service </li>
<li> Alexa Top Sites </li>
</ul>
<h4>Workforce</h4>
<ul>
<li> Amazon Mechanical Turk </li>
</ul>

Security is a big deal but would have to understand a multitenant solution to a cloud offering.&nbsp; I think it is just as funny as pie that they think they are going to be differentiated. Take a look at an example at Amazon Fulfillment Services or the Flexible Payments Services.&nbsp; I am not saying they are the only company in the world, but sheesh the carriers are years behind these type of companies.


seven


&nbsp;

</div>
</div>
</div>
</div>
</div>
cnwedit 12/5/2012 | 5:07:49 PM
re: SP Execs Crave Speed But Resist Change

The salesforce.com reference isn't the best example, sorry. We have seen announcements like Verizon's with SAP around CRM that focused on securely integrating mobile access&nbsp;-- &nbsp;http://www.lightreading.com/document.asp?doc_id=205696 --&nbsp; and offering things like PCI compliance and HIPPA-level security for healthcare IT apps.&nbsp;


I'm not disagreeing with what you are saying because it makes sense, but I'm also not willing to say that there is no hope for large SPs to innovate in cloud offerings with the right investments.&nbsp; Not to keep using Verizon as the only example here but I think their acquisition of Terremark is an indication they understand there is a strongly competitive challenge ahead in cloud offerings.


Our HR analyst, Caroline Chappell, makes the same case in her recent research:


"At an early stage in the cloud services market, it looked as though telcos would gain a competitive edge over players such as Amazon.com Inc. (Nasdaq: AMZN), Google (Nasdaq: GOOG), Savvis, Rackspace and Terremark because their network ownership would enable them to better support virtual private clouds end to end, from the data center to customer premises. But increasingly, non-telco cloud service providers are just as or more likely than telcos to have the IP skills and the unified IT and networking organizations needed in this area. The new players have invested in the same advanced hardware platforms -- the fact that Terremark runs the same VMware Inc. (NYSE: VMW) / Cisco Systems Inc. (Nasdaq: CSCO) / EMC Corp. (NYSE: EMC) (VCE) cloud platform as Verizon was no doubt a consideration in the acquisition -- and in the case of Amazon and Google, have highly visible brands. "


&nbsp;

cnwedit 12/5/2012 | 5:07:49 PM
re: SP Execs Crave Speed But Resist Change

I've actually scanned this list before -- it seems very much aimed at Web service developers and e-commerce apps, where the SP cloud services are aimed more at their enterprise customers who are looking to outsource internal IT operations that include Web apps like salesforce.com but other operations as well.


That said, we're doing a Cloud Carrier Forum in May at Interop and at least one presenter will make your argument, that service providers should not be trying to compete with Amazon.


C

paolo.franzoi 12/5/2012 | 5:07:48 PM
re: SP Execs Crave Speed But Resist Change

&nbsp;


Yeah, I understand the HIPAA and PCI thing.&nbsp; I think there are lots of vendors in that business - even Cloud based.&nbsp; If I recall, Level 3 just did a deal with a company that was a SaaS vendor in the complete security space.


Problem with security at the low level its plumbing and highly commoditized.&nbsp; At the high end its complicated.&nbsp; Interested in seeing an actual differentiated offering but because we are using them as an example:


http://aws.amazon.com/security...


I am mostly linking this stuff because I suspect a lot of the readership here is a long way away from what is going on in the IT space.


Right now, I see 3 things really competing:


- The existing telcos someday maybe even cable...if you think the telcos are behind in this space....&nbsp; :)


- The cloud based (whatever that means) providers - Google, AWS, Rackspace, etc.


- The traditional IT consulting firms (I mean what the heck does IBM do if this is all outsourced and clouds?)


Will be an interesting tug of war.


seven


&nbsp;

Bahmin' Brahmin 12/5/2012 | 5:07:48 PM
re: SP Execs Crave Speed But Resist Change

So the answer to completely in-agile infrastructure from existing BSS/OSS vendors is MORE BSS/OSS infrastructure from existing BSS/OSS vendors?


What am I missing here?

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