The 3 Missions of Policy Management | Author: Grant Lenahan
Customization.
Monetization.
Optimization.
These will be the three missions of “Policy” in the emerging Telco Cloud. Not long ago, policy was about “traffic management”, and occasionally, implementing tariffs. But, as we show in our latest research, Policy is taking center stage to help implement efficiency and agility across these three operational areas. The “rules” of the game have changed.
The reason for this dramatic shift is enabled by technology, but driven by business and economics.
• Point #1: the market is maturing, and competition is demanding increased innovation and differentiation.
• Point #2: simultaneously, the growth of broadband – both fixed and mobile – is driving both necessity and ability to create myriad data plans, including those associated with specific applications or endpoints.
• Point #3: the collection of virtualization technologies that we label the “Telco Cloud” is, for the first time, making on-demand services and [near] infinitely flexible packages possible. These points of flexibility include reliability, duration, scale, security and other service-specific variables.
These goals are neither theoretical nor technology driven. They all contribute to the ability to meet customers’ needs and price points more exactly. Steering clear of lengthy economic theory, this means the ability to satisfy customers better, while making better margins and gaining market share; a happy combination so long as we all keep our eyes on the prize. The chart below summarizes the basic economic opportunity.
Source: Appledore Research Group
Both the chart above, and further below are from the recently published Appledore Research Group “framework” report: “The Role of Policy in the Telco Cloud”. This report looks at how both the underlying network technology and markets are evolving; what they demand for commercial success, and what this means for the several roles of policy going forward. One tenet of the report is that Policy must evolve on two axes – one to support commercial agility, and another to support new technology – in effect network agility. Success is the combination of the two.
Source: Appledore Research Group
To illustrate this point, let’s look at an example: a CSP wants to introduce easily scaled firewall-on-demand service. This service would allow small and medium enterprises to buy when they need and exactly what they need. Economic success here demands two transformations: first – the ability to easily, immediately and cheaply create custom instances of the firewall service, and second – the ability to easily, cheaply, and efficiently handle thousands or millions of customized orders, from order handling through monetization.
Historically managing these three processes has impacted three skill and software sets, across BSS, OM, and provisioning/network creation. In reality, it was also economically un-feasible. Telco cloud technology, first and foremost makes it feasible, if and only if all operational processes become as agile as the underlying network promises to be. Briefly, success will demand self-care, parametric ordering, policy-based instantiation of the service, and policy-based monetization/real-time charging. Theses tasks may remain three process domains, but they can no longer be independent. A succinct summary of the impacts of the Telco Cloud on management processes and technology domains is in ARG’s earlier research publication, “Managing the Telco Cloud”.
Appledore Research Group is delving into existing practice, emerging needs, business requirements, technical requirements, and ultimately into an investigation as to how the supplier industry is meeting this challenge. Reports on end-to-end management of the Telco Cloud, and on the Role of Policy in the Telco Cloud are published and available to subscribers, and we are actively working on a series of follow-up reports covering how the industry is meeting this challenge.
Contact Grant at grant@appledorerg.com to gain more insight on this emerging market opportunity.