Thursday, May 3, 2007

Moving the Frontier between IT and Telco (part 1)

The recent years have seen an evolution of telecommunications systems from being implemented on telco-specific hardware and operating systems with telco (and supplier) -specific programming languages to increasingly relying on more standard IT platforms and technologies.

This evolution permitted new suppliers to enter the telecommunications business, for instance in the OSS/BSS (often called "IT") layer and in the parts of the application layer which are drifting away from classical telecom services (e.g. platforms for mobile portals, IPTV, media servers). Lately, even traditional telco areas have been made candidates for advanced IT-zation, as fortresses like IN and network databases (e.g. HLRs) are now under siege. The former is attacked by standard and open Java platforms (JAIN SLEE) while the latter is evolving from monolithic implementations to multi-tiered architectures making use of standard and open data repositories in the backend.

New entrants in the telecommunications domain tend to offer more features for a fraction of the cost associated to a large telco supplier alternative. The carrier-gradeness of products is less and less a distinctive feature of the old guard. On the other hand, there usually still remain important differences in the support offered to customers, which is a fundamental component of the telecommunications industry, with distinctive telco traits compared to other domains. However, new suppliers are more and more attractive for increasingly cost-obsessed operators, and this will certainly lead to a redefinition of the whole telecommunications supply chain in the years to come.

At the moment, most "core" telecommunication equipments (network, application layer) are still supplied by large telco vendors, which have an interest to adopt enough of standard IT to improve their productivity, optimize their development costs and satisfy their customers, but not too much in order to preserve as long as possible the largest share of the telecom cake.

Actually, the situation varies a lot depending on the suppliers. Some have already embraced the IT-ization of the telecommunications domain, by actively preparing their transformation from equipment supplier to software supplier, by acting increasingly as an integrator, and by relying more and more on strategic partnership with complementary companies. On the other end of the spectrum, there are suppliers which still resist this evolution, possibly because they have more to lose than others in a more open market.

Large telco vendors typically sell black boxes, with the difficulty for the customer to modify, customize or add features without having to beg and (over)pay for it.

I make a distinction between 2G and 3G black boxes. In a 2G black box, an entity specified in a telecom specification is implemented as one application vertically integrated with the platform it runs on. On the other hand, 3G black boxes are based on a more advanced IT architecture, which permits the supplier to implement and co-locate various standard entities on the same platform. The game is then to close the box and sell all these applications as a monolithic omnipotent product, instead of explaining to the customer that each application is independent and could be purchased without the others.

Another important leveraging element for traditional telco suppliers to maintain their footprint with operators is to keep as much control as possible on the OSS/BSS tools, by counting on both the resistance of operators' OSS/BSS employees to changes, but also by ensuring that provisioning interfaces remain as proprietary as possible. The OSS/BSS tools of the supplier will be the optimal ones to operate the products of the same supplier. In this context, 3GPP was never able to go very far in the standardization of management interfaces.

A technology like OSA/Parlay (the original version, Parlay Classic) was very interesting for these telco suppliers, as it permitted to define a clear frontier between the IT and Telco worlds in the application layer. The IT world started on top of the Parlay gateway, which implicitly meant that the gateway itself and everything below it was owned by the telco domain. Moreover, this frontier (the OSA/Parlay APIs) was defined according to the telco vendor's terms, as IT companies had very little if anything to do with the specification of OSA/Parlay.

The evolution towards all-IP networks and IMS, which essentially imports IETF specifications instead of re-inventing new telecom protocols based on an IETF baseline (see MMS or OMA IMPS as examples of telco-ization of Internet protocols), might lead to a new distribution of roles between legacy telco suppliers, mainstream IT vendors, and all companies in-between.

This prospect is not necessarily easy to accept for operators (or some of their organizations). Many of them have been used for years to rely on a few vendors for everything. This often leads to a strange and somehow unhealthy relationship, in which the vendor is sometimes in the position to think and decide on behalf of its customer. These days, an operator often has to chose between technically and financially superior solutions that also come with a set of challenges and risks (linked to novelty and the need for the operator to take more responsibilities), and the comfortable alternative to simply give more money to the legacy supplier who will take care of everything.

In a future post, I will more precisely speak about how I see the frontier between the IT and Telco domains in IMS.


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