In a new Heavy Reading report – "Mobile Broadband & the Rise of Policy: Technology Review & Forecast" – we estimate that the policy management market (including policy servers, policy enforcement gear such as DPI appliances, and ancillary elements) grew by almost 40 percent in 2010, and is set to become a $2 billion market within the next five years.
That's encouraged all kinds of vendors to pile into the sector: By our reckoning, 15 companies have launched a policy server based on the 3GPP PCRF standard in the past three years, and our report reviews a whopping 40 companies that have some kind of policy proposition.
What's underpinning this boom – and more to the point, is it sustainable?
To date, policy has been used mainly to support so-called "fair use management" in mobile networks – that is, to control how much bandwidth and data customers get, especially during periods of congestion. Policies may be applied across the board to certain applications such as P2P traffic, but increasingly they are applied to subscribers based on what service tier they belong to, and the volume of data they are entitled to.
However, our research with both operators and vendors suggests that the range of policy triggers and policy use cases will grow. Indeed, policies based on device, location, time of day, and prioritization or QoS based on application, URL or subscriber value have already been deployed by some operators as they seek to establish what kinds of mobile data service packaging will deliver the most value at the least cost.
Putting it another way, fair use management is gradually morphing into a broader means to differentiate among customers and offer them more personalized service packages – and as a result, policy management will, at least in principle, become a strategically vital weapon for operators battling to maintain ARPU and market share.
That, at any rate, is the vision. In reality, deploying policy is a complex affair, both from a technology and business point of view, and there are plenty of things that could prevent this vision from being realized, as our report also discusses. These include:
- Scale: Can policy servers scale up to handle the potentially enormous number of transactions and sessions implied by some operators' plans, without falling over?
- Charging: Operators say that integration of policy and charging is a big problem. But without effective integration, many of the planned policy use cases will be unrealizable.
- Subscriber data: Operators would like to invoke as much subscriber information as possible when making policy decisions, but linking policy to the various places where this information is stored, in real time, is no simple matter.
- Policy creation: Vendors have worked hard to make policy creation environments more user-friendly. But can they really be used directly by non-technical staff to create new services and packages?
- Cost: Operators are concerned that it's often hard to compare different vendor offers, or to get a clear view of what the total cost of ownership will be.
- Internal affairs: Initial decisions to deploy policy were typically taken by network architects and the CTO, but the new business case requires buy-in from marketing, product development and IT – complicating and slowing the decision-making process.
Most of all, perhaps, questions remain about whether it is possible to build a strong business case for policy deployment that is not just built on reducing costs.
Whatever the issues, there is certainly no shortage of choice for operators, and our report reveals a great deal of variation in both the capabilities and the strategies of policy vendors. Some emphasize their ability to provide both policy and charging; others are focused on linking policy and subscriber data repositories; others emphasize their ability to handle both policy decision-making and policy enforcement. Some vendors focus marketing on their ability to scale, or to provide user dashboards, or to provide strong analytics, or to handle RAN congestion control – and the list goes on and on.
For network operators, careful framing of RFPs will be vital to ensure that the right vendors are ultimately chosen. For vendors, meanwhile, convincing customers that they can remove the barriers we identified above will be vital to stay in the game: In such a crowded market, a shakeout of the weakest is inevitable.
— Graham Finnie, Chief Analyst, Heavy Reading
For more information about Heavy Reading's "Mobile Broadband & the Rise of Policy: Technology Review & Forecast," or to request a free executive summary of this report, please contact:
- Dave Williams
Sales Director, Heavy Reading