BSS (inc. billing, revenue assurance)

Amazon, AsiaInfo Team Up to Disrupt the Telco Back Office

AsiaInfo has a dream -- that communications service providers (CSPs) of all sizes, from competitive virtual operators to global Tier 1 giants, will all run their back office business support system (BSS) operations over the public cloud, a radical departure from the premises-based IT systems that run all-important BSS processes today.

And it has just the partner to help make that dream a reality – Amazon Web Services Inc. .

AsiaInfo Inc. (Nasdaq: ASIA), which has ambitions to build on its success in China and compete with the likes of Amdocs Ltd. (NYSE: DOX), CSG International , Ericsson AB (Nasdaq: ERIC), Huawei Technologies Co. Ltd. , Netcracker Technology Corp. , Oracle Corp. (Nasdaq: ORCL) and others in the global BSS market, is confident that the growing maturity of public cloud platforms and the business benefits of a software-as-a-service (SaaS) model will eventually result in the mass migration of BSS systems from dedicated hardware and software systems to centralized, shared resources.

To that end, it has launched Veris Cloud Core, the company's entire suite of integrated BSS tools -- including billing, policy control, rating, mediation, CRM, analytics and data warehousing -- on Amazon's public cloud in Europe. (See AsiaInfo Unveils Cloud Core BSS.)

"We believe the future of BSS, even for Tier 1 operators, is as a public cloud service -- a software-as-a-service model," says Andy Tiller, AsiaInfo's VP of corporate product marketing, who explains that the service has launched in Europe initially (from AWS's facilities in Ireland) and with a lot of help from new strategic partner Amazon, which has set the service up to meet the European Union's complex data protection regulations and helped with development, training and marketing.

Tiller stresses that this isn't just part of AsiaInfo's offering that's been made available -- it's the company's entire portfolio. "This isn't a scaled-down version. We can offer full functionality as we've developed our software from scratch with a common data model, so it is fully configurable in the cloud. No customization is needed and it's customization that would kill this type of model."

Tiller adds: "The business case stacks up -- it is not cost-effective for operators to run their own data centers… and we have a very transparent pricing model that is based on per subscriber per month, with no extra or hidden charges or costs that go to Amazon. We're doing this in Europe because the operators here are looking for disruption," adds the AsiaInfo man, who gained notoriety recently for taking a public pot-shot at Gartner's Magic Quadrant process. (See Magic Quadrant or Gartner 'Graft'? and So It's Not Just Me Then....)

Tiller is also mindful that there's unlikely to be a queue of operators at his door tomorrow. "We can do this now because we have the answers to the main questions, especially around data security. And it's possible to achieve real-time operations using the public cloud [AWS latency is pegged at a maximum of 80 milliseconds for a round-trip cross-Europe transaction]. But that doesn't mean people will be convinced straight away… though we have evidence that this matches the plans of large and small operators. We have spoken to Tier 1s that have agreed this is the future."

Tiller, though, didn't feel able to name those Tier 1s or discuss the identities of any operators that AsiaInfo may have engaged with about this model: It's not a giant leap, however, to imagine that the vendor's existing and named European customer, Telenor, will be very aware of this development.

Obviously, AsiaInfo is very gung-ho about this model -- the company is a competitive challenger that's trying to win market share from established and larger companies: By Light Reading's estimates, privately held AsiaInfo has annual revenues of around $600 million, the vast majority from its established relationships with China's three main operators, while rivals such as Amdocs, for example, have revenues in the billions and a much larger and more established customer base. (See Amdocs Reports Fiscal Q1.)

But it looks like AsiaInfo might be on to something with this public cloud offer, believes experienced industry analyst Caroline Chappell, Practice Leader, Cloud and NFV, at Heavy Reading .

"This is very disruptive, very thought-provoking and has real potential in hyper-competitive markets such as Europe, where this can be very attractive to the large operators that could try it out in one of their smaller operations, as well as being attractive to competitive service providers. This model can be tried out for a new service or in a new market at first. All of these players are under pressure to dramatically reduce their operating expenses by massive amounts, some by as much as 50%," says Chappell.

"Putting it in AWS is extremely bold, but if you have financial institutions and other large enterprises putting their business applications in the cloud, why not the telcos? This is utility computing come to life. Everyone was saying three years ago that billing was the [BSS] application that would not be virtualized, that it wouldn't go into the cloud, but now it just looks like a data migration exercise, though that is not an easy undertaking in itself. I think this could be very tempting for a lot of operators -- I think they will kick the tires on this one and it won't cost them much to do that."

For more on how communications service providers are revamping their businesses, networks, operations and culture, check out our sister site, Telco Transformation.

Chappell believes the proposition is one that will resonate with executives at the top level at the telcos. "Those executives have been looking hard at the cloud… they might not be thinking about hosting VNFs in the public cloud but they understand the hybrid cloud model. AWS, Google and Microsoft are emerging as the global cloud and functions such as billing and CRM are centralized functions for operators -- it makes sense to have them on one shared platform," adds the analyst, who notes that this will also put pressure on other BSS vendors to do something similar -- that might be harder for other companies that have built up their BSS portfolios through acquisitions, and which have private cloud service propositions, such as Oracle.

This relationship also looks very good for Amazon, notes Chappell. "This is a very cute move by AWS. If it can show it can operate with these services and meet data governance and latency requirements, this is a great story for it to take to other companies."

— Ray Le Maistre, Circle me on Google+ Follow me on TwitterVisit my LinkedIn profile, Editor-in-Chief, Light Reading

kq4ym 2/19/2016 | 11:53:14 AM
Re: The fuse has been lit.... I would guess they'll being doing fine as long as they keep those three Chinese connections, as keeping their primary source of current income will be crucial as they expand and attract new business, convincing potiential clients of the long runs savings of going with them.
danielcawrey 2/12/2016 | 2:20:44 PM
Re: The fuse has been lit.... There is a lot of potential for companies like Oracle to get into this market and stay there. Another one to look out for is Dell, because the VMware acquistion has given it some pretty compelling private cloud technology executives will be impressed with. 
msilbey 2/11/2016 | 1:12:30 PM
Re: The fuse has been lit.... You're probably right about the hybrid bit, but I've been surprised at how quickly businesses have gotten comfortable with certain aspects of the public cloud. 
Mitch Wagner 2/11/2016 | 12:13:56 PM
Re: The fuse has been lit.... It makes sense to move apps to the cloud where those apps don't provide differentiation: Payroll, email, and document sharing are the canonical examples. 

Does differentiation among BSS implementations provide strategic advantage for telcos?
[email protected] 2/11/2016 | 10:50:43 AM
The fuse has been lit.... A bomb has just been placed under the telco BSS market... but the fuse looks like it might be pretty long.

Like Caroline Chappell, I think this is giong to interest a lot of people - but like in so many cases, I think the market will end up in 'hybrid' mode - with a mix of public cloud, private cloud and on premises.

The big question is - what will the ratios be?
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