Most of the focus related to New IP network transformation has been on virtualization. But how this transformation benefits the end-user is often not asked about or discussed.
In short, network functions virtualization (NFV) -- the ability to uncouple network services from the hardware that delivers them -- allows network functions to be delivered in software and deployed on general purpose appliances. It also provides an opportunity for operators to reset the cost base of their network operations and create a flexible service delivery environment that supports new business models and services.
Whether it is opex or capex savings (most likely both in the long term), migrating to the New IP will have a profound impact on the future of network operators. At the same time, the benefits to the end user are the ability to have access to the services they need, at anytime and anywhere.
Some service examples include:
- Pay-As-You-Use: The ability to pay only for what they are using, when they are using it, is a highly attractive proposition for many businesses. This provides opportunities for virtual network functions (VNF) suppliers to offer new licensing models with fees that vary with usage, whether in terms of features, bandwidth and/or time, and minimize the upfront payment.
- Services On Demand: Many times a business (or even an individual) needs access to a service on a temporary basis. The ability to access a service catalog, request a service and have it available almost immediately is certainly worthy of some premium pricing models.
- Bandwidth On Demand: Sometimes you just need more bandwidth -- maybe for an hour, a day or a month. These New IP networks enable operators to offer, provision and provide additional bandwidth on-demand presenting more opportunities for creative pricing models which often scales up or down demand on amount and time.
- Tiered Security Services: An enterprise may require different security features based on the type of content being accessed. In a New IP environment, the network would automatically configure its service chaining to route traffic through the appropriate security appliances.
These types of new services offer a new type of user experience, driven by new consumption patterns and user behavior, which challenges the traditional business models of most operators. Additionally, a common denominator is the move away from a fixed license fee to a dynamic license fee. Customers are intrigued by the possibility of more flexibility in their services and pricing; the question is whether operators can actually monetize it -- to not only replace the existing revenues, but also increase them.
A key element towards this monetization is the shift from support systems towards enablement systems. The New IP will require a system that is open, agile, automated and intelligent with the functions of OSS/BSS -- such as planning, configuration, fulfillment, charging, billing and analytics -- to be integrated. Transformation of the network enables the flexibility demands of these new services, but it is the transformation of the OSS/BSS that enables operators to actually implement these new business models.
— Teresa Mastrangelo, Senior Analyst, New IP, Heavy Reading, special to The New IP