White paper: Virtualizing BSS to Accelerate Service Innovation

© Copyright Openet Telecom, 2013

Virtualizing BSS to Accelerate Service Innovation

White Paper

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White Paper- Virtualizing BSS to Accelerate Service Innovation

2 © Copyright Openet Telecom, 2014

INDEX

INTRODUCTION 3

1 DEFINING VIRTUALIZATION AND NFV 4

2 KEY BENEFITS OF VIRTUALIZING BSS 5

a. Accelerating Innovation 5

b. Learning Fast: Rapid Product Deployment 6

c. Facilitating New Business Models 7

d. Optimizing Costs 7

OPERATORS ARE EMBRACING BSS VIRTUALIZATION 8

a. Charging and Billing 8

b. Policy Control 9

VIRTUALIZATION IN ACTION 10

a. AT&T’s Domain 2.0 Initiative 10

b. First Large Scale Virtualized Policy Deployed 11

c. Roadmap for BSS Virtualization: Reducing Risk & Protecting Legacy Investment 12

CONCLUSION 12

ABOUT OPENET 13



INTRODUCTION

More data, more partnerships, new business models, the need to enter new verticals, the desire to drive new revenues and provide an enriched customer experience are standard challenges for mobile operators. Add to this the need to better compete and partner with OTTs and content providers. And then there’s the pressure to develop and monetize new lines of business. Operators have a lot to deal with and not only are some managing this daily pressure but many are meeting this transformational challenge head on. This change is being driven by the need to innovate. Only a few years ago, operators were viewed as staid performers. They weren’t as cool as the OTTs, with too much legacy and baggage to be truly innovative; also their systems and processes weren’t as agile and fast as the OTTs.

This is all changing. Operators are now at a tipping point and becoming much more innovative. This is being driven by higher speed networks and smart devices enabling a much wider and diverse range of digital services which operators can profit from. A fundamental driver in this accelerated innovation is how operators define, launch and monetize services and new business offerings.

Virtualization is now seen as a significant enabler of innovation by operators. A defining moment for the drive towards virtualization in mobile networks occurred in October 2012 when thirteen of the world’s leading telecoms network operators came together under the auspices of the European Telecommunications Standards Institute (ETSI), to address the technical challenges around virtualization in an initiative called Network Functions Virtualization (NFV).

However, on its own network functions virtualization is not enough. BSS also needs to be virtualized; but to truly gain the benefits of virtualization operators need to partner and work with vendors with domain expertize and library of tested use cases to accelerate innovation and service launch. By virtualizing BSS, operators can:yy Adopt ‘learn fast’ processes: operators increase the range and speed of product

lifecycle management – leading to increased innovation and faster timescales to deploy new services and adapt existing offers

yy Adapt and scale new services to enable rapid time to market

yy Have a platform to embrace OTT and content partnerships and the flexibility to create new business models (such as new MVNO, M2M and enterprise models)

The roll out of the digital economy is forcing the evolution of BSS from revenue management systems to platforms to accelerate innovation. A major part of this evolution is the adoption of virtualization and NFV concepts to BSS. In fact, 66% of operators revealed that they have deployed or are planning to deploy virtualized BSS by 2016*.

*Survey of 100 operators, Operators’ BSS Strategies, Telecoms.com Intelligence, 2014

Figure 1: Operators Plans to Deploy Virtualized BSS



DEFINING VIRTUALIZATION AND NFV

Virtualization is a computing term that refers to the various techniques of creating a virtual (rather than actual) version of a computing resource; this can be a virtual hardware platform, operating system (OS), storage device, or network resource. It is enabled through a virtualization layer which is the software that sits on top of the physical hardware (host) to create the virtual machine (guest). The virtualization layer can run multiple and varied virtual resources on the one physical machine.

In the case of business support systems (BSS), virtualized solutions take away the one-to-one dependency of BSS software on specific hardware; this approach enables easier creation, scaling and management of instances of BSS solutions in response to business or technical requirements (as illustrated in figure 2).

NFV (Network Functions Virtualization) is an initiative launched by a number of network operators around the world*:

yy It aims to evolve standard IT virtualization technology to consolidate many network equipment types onto industry standard high volume servers, switches and storage.

yy It involves the implementation of network functions in software that can run on a range of industry standard server hardware,

yy and that can be moved to, or instantiated in, various locations in the network as required, without the need for installation of new equipment.

*Network Functions Virtualization – Introductory White Paper

1

Figure 2 – Virtualized BSS architecture



25%70%

KEY BENEFITS OF VIRTUALIZING BSS

a. Accelerating Innovation

Virtualization makes it easier for operators to deploy and manage software through the use of virtual machine images where a single host can be shared by multiple virtual machines.

This approach removes the need to create a full new hardware based environment for each service introduction, with its full procure-design-integrate-test-deploy cycle. This simplifies the deployment process, enabling operators to focus on innovating and creating new revenue streams more rapidly, without having to worry about integration, deployment and infrastructure management. Offers can be more efficiently tested and launched on the same infrastructure, without the need to create a separate test environment. The time from test to scale production can therefore be reduced from weeks to hours. Services can also be rapidly scaled up or down as required, allowing targeted services based on geography or customer sets to be introduced more rapidly.

Overall, virtualization accelerates the cycle of innovation and the time to market for new services. As an example, a tier one North American mobile operator is now able to introduce services in days which previously would have taken months without virtualization. In Europe, Telefonica has indicated its UNICA virtualization infrastructure can reduce deployment times from about 4 months to less than 4 days (fig 3).

2

Figure 3: Impact of virtualization on time to market - Telefonica’s Unica Virtualization Project*

*Telecoms.com, April 23, 2014



b. Learning Fast: Rapid Product Deployment

Virtualization makes it easier to test new services with minimum risk as these can be rolled out or rolled back, without committing resources that cannot easily be reused elsewhere. In a recent survey by Telecoms.com, 73.5% of operators said that virtualization enables them to trial new services and business models with minimum disruption (fig 4). A key advantage being that it’s easy to then go from a small scale trial to full scale production in a virtualized environment.

Furthermore, once the initial service is up and running, operators can far more quickly and safely perform in-service, automated upgrades and modifications.

With BSS and virtualization/NFV, the adoption of open standards also removes vendor lock-in, reducing the need for vendor specific skills and simplifying the integration of new components to the existing network.

Virtualization gives operators the ability to trial new services/business models with minimal disruption

Strongly Disagree Strongly AgreeDisagree Neutral Agree

1.6% 21%58.1%

15.3%

4%

Figure 4 – Virtualization gives operators the ability to trial new services/business models with minimal disruption*




c. Facilitating New Business Models

For several years, service providers have been interested in enabling a multi-sided business model where the operator acts as an enabler between upstream partners (software developers, content providers, OTT, M2M, Healthcare etc.) and downstream consumers and enterprise customers.

Virtualization makes this possible. The ease with which virtualization allows different combinations of BSS components to be deployed in a multi-tenant fashion on a common platform allows an operator to create “tailored” solutions for specific market segments. By exposing this capability to external entities such as MVNO or Enterprise customers, the operator can enable new business models and revenue opportunities

d. Optimizing Costs

Virtualization enables operators to reduce costs by consolidating hardware and simplifying service deployment processes. With NFV, operators expect to further reduce OpEx and CapEx by using high volume standard hardware instead of proprietary hardware. By extending NFV concepts to BSS, operators can further extend the benefits of virtualization with standardized hardware and open standard-based software.

In addition, virtualization allows for optimum utilization of the hardware deployed. For instance, hardware will no longer need to be permanently dedicated to a specific application or purpose; this means for example that hardware that is only needed for occasional peak load can be re-purposed during off peak periods, as virtualization makes it so easy to deploy applications. Furthermore, the ability for virtualized applications to co-exist on the same physical server (multi-tenancy) removes the need to dedicate a physical hardware set to one application

Figure 5 –Opening Virtualized BSS to Partners / New Service Enablers



OPERATORS ARE EMBRACING BSS VIRTUALIZATION A recent survey by Telecoms.com Intelligence showed that the majority of operators are embracing BSS virtualization. Two thirds of all operators surveyed have deployed or are planning to deploy virtualiazed BSS by 2016*. It is likely that even more operators will embrace the concept over time as the number of deployments increases and the promises of BSS virtualization are realised.

a. Charging and Billing

In a 2013 survey, 83% of operators stated that virtualized/cloud-based charging and billing systems will become widely used in the next three years**. However it doesn’t mean that on premise systems are due to disappear as mobile operators said they will be using a combination of both cloud and on premise systems. In particular, more cloud-based systems are expected to be deployed centrally by group operating companies, spread in multiple regions or subsidiaries.

3

We have begun trials of virtualized BSS operations

We have begun commercial operation of virtualized BSS

We are expecting to deploy virtualized BSS this year

We are expecting to deploy virtualized BSS in 2015

We are expecting to deploy virtualized BSS in 2016

We have no plans to embrace virtualized BSS

22.6%

8.9%

6.5%

13.7%

14.5%

33.8%

What is the extent of your organizations’ BSS virtualization

In terms of charging and billing platforms, what do you see becoming the most widely used in the next 3 years

**Survey of 80 operators, Charging and Billing for the Digital Economy, Openet, 2013

36.5%

28.6%

17.5%

9.5%

7.9%

Combination of cloud based systems and on premise systems

Cloud based systems - located in a central location for group operation

Everything in house - on premise systems

Cloud based systems - hosted by the charging/billing platform provider

Cloud based systems - hosted by a system integrator


Figure 6 –What is the extent of your organization’s BSS virtualization

Figure 7 – In terms of charging and billing platforms, what do you see becoming the most widely used in the next 3 years



b. Policy Control

A survey by Heavy Reading in 2013* showed that almost half of the operators intended to virtualize Policy Control and this was expected to increase (fig 8). 35% of respondents also said that they expected to offer policy as a service in the Cloud to third parties. One of the respondents said:

“The biggest advantage we can see is to have a single network cloud for all of our properties. One of our biggest problems is that we don’t have homologation in the commercial offers in different countries. With [virtualization] we can control all our commercial offers and it’s in the Cloud. And they [the commercial people] can then easily modify proposals.”

Policy virtualization is expected to reduce operational complexity and almost 75% of the operators said that lower operational costs would be an essential or significant benefit. 69% expect it to lower hardware CapEx, and 70% thought it would make it easier to scale up policy solution. One of the respondent said:

“The idea is that you should be able to apply any of the [possible] policies for network management when you hit a congestion level, making a decision that could be rate-limiting, or you could be shifting [particular users] to WiFi using ANDSF, or it could be something else [we haven’t thought of yet]. All of this could be done in virtualization instead of in different boxes. With a virtualization server, maybe a better video QoS [optimization] system comes along, and you can easily add it. On top of that you have the main advantage that you manage all [operational] processes more efficiently.”

Plans to Virtualize Policy

Yes, we will definitely virtualize policy control and are actively seeking solutions

We are looking into this and will probably virtualize policy control

We are looking into this but have made no decision about whether we will do it

We have no plans to virtualize policy control

Don’t know / Not sure

14.9%

33.8%

32.4%

12.2%

6.7%

*Heavy Reading survey of 80 network operator executives , June 2013

Figure 8 – Plans to Virtualize Policy



VIRTUALIZATION IN ACTION

Many leading operators are embarking on virtualization strategies. One of the highest profile strategies is AT&T’s Domain 2.0 initiative. This is discussed below as an example of a leading operator’s adoption of virtualization to deliver significant business benefits.

a. AT&T’s Domain 2.0 Initiative In September 2013, AT&T launched the next generation of its Supplier Domain Program – Domain 2.0 – triggering a swift and broad move to a modern, cloud-based architecture that is expected to significantly reduce the time required to pivot to this target architecture while accelerating time-to-market with technologically advanced products and services.

Domain 2.0 is a transformative initiative. Integrated through AT&T’s Wide Area Network (WAN) and utilizing Network Function Virtualization (NFV) and Software Defined Networks (SDN), as well as modern architectural and operational approaches, AT&T plans to simplify and scale its network by:

yy Separating hardware and software functionality;

yy Separating network control plane and forwarding planes; and

yy Improving management of functionality in the software layer.

Delivering this will require some of AT&T’s current providers, but also will require some new providers with different skills and capabilities.

“AT&T’s goal is to ensure that each investment accelerates our move towards an advanced all-IP broadband, all-wireless, and all-cloud infrastructure, delivers on the full promise of game-changing technologies, provides an industry leading customer experience, and maintains focus on a capital-efficient network,”

With these advances, AT&T plans to increase the value of its network by*:

yy Driving improved time-to-revenue;

yy Providing cost-performance leadership;

yy Enabling new growth services and apps;

yy Ensuring world-class, industry leading security, performance and reliability; and

yy Facilitating new business and revenue models.

4

* Extract from AT&T press release, September 23, 2013



b. First Large Scale Virtualized Policy Deployed

A Tier 1 North American wireless operator successfully deployed Openet Policy Manager in a virtualized environment to support 2G, 3G and 4G LTE networks. The deployment supports more than one million transactions per second, serving more than 100 million customers. It also aligns with the operator’s goal to adopt an architecture consistent with network functions virtualization (NFV).

This operator’s immediate need for virtualized policy was twofold; elastic scalability (capacity dynamically adjusted depending on actual load) to accommodate bandwidth demand, and to enable network maintenance and updates without service interruption.

The transition to a fully virtualized solution has enabled the operator to introduce policy-based use cases in days instead of months and to reduce the time to roll out additional capacity from days to hours. In addition, components that previously required separated dedicated physical hardware can now be deployed as virtual machines onto a common virtualized infrastructure. This has also resulted in a massive reduction in server hardware.

What the Analysts Said…

“This deployment of a virtualized policy server infrastructure is a great example of how to introduce NFV concepts into a live commercial network at scale. We expect many operators will follow a similar model as they look to virtualize the mobile core and prepare for a broader software-centric network strategy.” Gabriel Brown, Senior Analyst at Heavy Reading.

“Network functions virtualization has the potential to transform the way telecom networks are built and operated. The successful implementation of policy management by Openet at a Tier 1 wireless operator represents an important step in the validation of NFV” Lee Doyle, Principal Analyst at Doyle Research.

D O Y L E R E S E A R C H



c. Roadmap for BSS Virtualization: Reducing Risk & Protecting Legacy Investment

Operators can virtualize BSS in an agile way. Because virtual functions can be built to handle a specific service or target a specific market segment - such as MVNO, Enterprise or M2M - everything does not need to be ready on day one.

An application-driven approach where an operator starts with a particular application to virtualize, such as Policy and Charging Control (PCC), can be considered. This is a low risk approach as the deployment can be started at modest scale, for example as an adjunct deployment to handle a specific business case such as new Rich Communications Services. The deployment can then be scaled and/or additional functions can be virtualized as opportunities or needs demand.

For example, a subset of subscribers may be selected for a pilot. To roll out to production, the deployment can be scaled and subscribers migrated in a phased manner. Using this approach in a virtualized environment enables operators to:

yy Increase competitiveness as new services can be introduced without legacy systems acting as a bottleneck

yy Reduce risk as new services such as RCS (Rich Communications Services) can be rolled out in isolation of legacy systems (deployed as a co-located system using different APNs for new services)

yy Reduce time to market as services can be easily trialed and then scaled to production

CONCLUSION

Operators are transforming the way they do business in order to better innovate and compete. To gain operational flexibility, accelerate service innovation and reduce costs, they are turning to virtualization enabling them to decouple network services from the physical hardware. Operators are beginning to virtualize their network operations using network functions virtualization (NFV). However the related benefits will only be fully realised if the BSS is also virtualized and able to provide the flexibility required.

Virtualization and NFV concepts need to be applied to the BSS to deliver on the promises of faster time to market, reduced operational costs, elastic scalability (dynamic allocation of capacity) and greater service availability. This is particularly important for policy and charging functions as there is little point in having a dynamic network if the monetizing, access control, and revenue handling systems are not similarly capable.

In fact, given that a full end to end NFV may take many years to roll-out, some operators are considering virtualizing BSS first to create more flexible service innovation environments that can work across both traditional and virtualized network infrastructure. The key is to make the existing legacy systems as flexible as possible using middleware and, in an adjunct way, roll out new services using NFV. Areas where the functionality can be isolated such as VoLTE, MVNOs and M2M schemes may be the early deployment choices.

Many operators are adopting BSS virtualization and more are expected to follow as its promises are realiszed.

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How To Guide - Virtualizing BSS to Accelerate Service Innovation

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ABOUT OPENET

Since the introduction of mobile data services in 1998, Openet has helped service providers capitalize on opportunities and overcome challenges. With competitive pressure accelerating, today’s service providers rely on Openet software to evolve business models around networking smartphones, M2M devices and third party services. Openet’s portfolio combines policy and charging control with device and third party interaction to enable innovative charging models, to control operating cost and to personalize services. Many of the world’s largest and most innovative operators use Openet’s high performance software.

Openet has helped operators worldwide take advantage of growth opportunities by evolving legacy platforms to provide a flexible, real-time charging/OCS capability integrated with policy control (PCC).

All Openet solutions are available fully virtualised, vendor agnostic and built using open standards. Openet has three key advantages to help operators make an optimised transition to virtualization. The first is the domain experience to understand operators’ business needs. Another important capability is our technically advanced platform. It delivers fully virtualized policy, charging and mediation using a common virtualized framework that is open, flexible and NFV compliant. Finally, we have the experience, with the first large scale virtualized policy deployment at a tier 1 operator, serving 110 million subscribers and handling more than one million transactions per second.

For more information, please visit www.openet.com.

Technology

White paper: Virtualizing BSS to Accelerate Service Innovation