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Service
Qualification: Dead End Technology or the Future of Provisioning
Examining trends of the service qualification industry
By: Bruce Bahlmann - Contributing Author (your
feedback
is important to us!)
Created: November 12, 2003
This paper is the product of
Service Qualification Market Research which is available from
Birds-Eye Network Services as well as my own personal experience with
this technology.
Building tools for broadband service providers to pre-qualify
and then automate the installation and follow-on support of their
subscribers still seems to be an attractive and profitable business.
Three vendors currently lead the charge to offer this software to
broadband service providers but what is the future of this technology
once everyone gets signed up? In this article we will review the
service qualification market that currently exists and where this
industry is headed.
Service Qualification Market
According to Yankee Group forecasts,
broadband data service in the US is growing at that rate of about 5
million subscribers per year. Average churn among broadband data
providers is about two percent which results in an additional ~614k
subscribers changing providers yearly. As a result there is a yearly
opportunity to sell 5.614 million units of service qualification
software within the US alone annually – at least through the year
2007. The 19 million broadband users in the US (in 2002)
represented roughly 6 percent of the US
population and the projection is that up to 17% of the US
population will have broadband subscriptions by the year 2007. If the
US population represents 4% of the world population,
the global annual market for service qualification software is
approximately 126 million units – assuming the penetration and adoption
rates worldwide resemble that of the US. Of course these assumptions
are not the case so this figure is a best-case scenario.
Service qualification software vendors (see Table 1.0) receive
anywhere from $0.50 to $1.50 per unit for their base software (used primarily
for computer or Internet service qualification). If we average
this cost over all units sold the average costs of service
qualification software is probably around $1 US per unit or less. So
the worldwide market for service qualification software is around $126
million annually (at least through 2007).
Table 1.0 Leading
Service Qualification Software Vendors
The actual share of the $126 million received by leading
vendors in Table 1.0 (as well as the dozen or so other smaller service
qualification vendors) is dependent not only on the number of broadband
service providers each vendor signs up but also how many subscribers
each of those vendors support. Note that a number of broadband service
providers may use multiple service qualification vendors so any one
vendor may not be able to claim all of the broadband service provider
subscriber numbers.
Other Markets
Providing service qualification software to a share of the
$126 million dollar global market is probably not a big enough industry
to support so many vendors. Thus software vendors in this space have
expanded their base products into other markets in an effort raise the cost of
their software (beyond the $0.50 to $1.50 commanded by their base
products) to increase their
profitability and address their customers’ ongoing needs. Some areas
where these service qualification companies are expanding include:
- Operational support software and/or service provisioning
- Network management and/or client experience monitoring
- Post installation troubleshooting and diagnostics
- Value added services (e.g. messaging, virus control, help
desk, etc.)
The major difference between these vendors and network management or
diagnostic companies is that service qualification companies can benefit
from a large installed base of broadband service providers already using
their software. Service qualification vendors also benefit from the fact
that end users (Internet customers) and broadband service provider field
personnel are already familiar with their user interface and potentially
even the brand names of these base products making
it easier to up-sell new products and quickly install plug-n-play expanded services. In addition, since
their entry price for their base product is low and long since paid for, service qualification
vendors can more easily add services on top of their platforms making
it more attractive price and feature wise for broadband service
providers to expand their relationship with their service qualification
vendor in lieu of starting over with a completely new solution and
vendor. Rolling out additional features on top of the service
qualification platform is a key to evolving and extending the value of
the proven service qualification technology. The more features and
services that can be rolled out on this platform the more critical it
becomes to everyday operations of the service, and ultimately the more service
qualification vendors can legitimately charge for this software.
Figure 1.0 shows a typical broadband customer care process.
Service qualification software now addresses the first two boxes (left
to right). Some service qualification software can address all of the
first three. The estimated per-subscriber cost for delivering functionality
across the whole customer care process is between $12-$18 per subscriber.
While service qualification vendors are inching
up through the customer care process. Billing, workflow management,
network management, and provisioning vendors are inching their way down
the customer care process in an effort to provide an increasing portion
of an overall solution. At the time of this writing however, no one vendor has
single solution that addresses this entire process. In fact there are
still items which remain manual - such as wiring the customer's home,
checking in paperwork, and terminating service.
Figure 1.0 Broadband Customer Care Process
But how can service qualification software vendors address the
higher order needs such as provisioning, mediation, and network
management from the edge of the network? The answer is fairly simple
and is in many ways far superior to that of the centralized solutions
they will ultimately compete against. Before we can discuss the basic
concepts of such an approach that I call “edge or endpoint
provisioning”, lets review the challenges faced by existing
provisioning systems.
Challenges Existing Provisioning Architectures Face
Existing provisioning systems must depend on interactions with
some service authorization host (typically a central web server or
web-portal) via a browser on some Customer Premise Equipment (CPE).
This web-portal centric approach has the following issues:
- Scalability – A central web-portal may be sufficient for
small to medium size broadband service provider but will have trouble
scaling to larger (carrier class) systems or increased traffic per
subscriber (handling large numbers of simultaneous requests). As a
result, to satisfy these systems one would need to eventually build out
web-portals to the distribution hubs of service providers to have even
a chance at satisfying the transaction load for such systems.
- Marketability – Since such provisioning systems are
comprised of highly customized applications, they only are able to
service broadband service providers. Other markets such as enterprise,
universities, and government easily fall outside the functional comfort
zone of provisioning vendors thus limiting their potential clients. In
fact, most provisioning vendors either service telephone or cable
broadband service providers but not both.
- Applicability – not every broadband service has (or will
have) access to a browser to interact with a central web-portal. For
example, a pure content
provisioning service would be severely limited if it was required
to interact with a central web-portal. Home appliances are also
increasingly becoming broadband capable and as they do they will likely
not include a browser. For these applications, a requirement to
interface with a centralized web-portal would be cumbersome if it is
even possible.
- Overhead – Interfacing with a web-portal requires overhead
to download complete pages of data that are mainly communicated in
clear text – not to mention the complex task of building all those
pages (or user interfaces) initially – all of which are geared towards
instructing an end user how to operate them. As a result, all
interactions with a web-portal must cater to its lowest level user thus
complicating its ability to handle simultaneous transaction-oriented
traffic.
- Identification – One would need to log in or provide some
kind of security (username/password) to interface browsers with a web
site and may well have to encrypt each message between the central
web-portal and the CPE. Although there are some technical tricks to
permit some crude form of identification, this traffic coming into the
central web-portal all looks the same. Today’s methods of using Media
Access Control (MAC) addresses, Internet Protocol (IP) addresses, and
domain names to identify customers and devices will be hard pressed to
identify broadband capable consumer goods and their many users.
- Message Security – Web-portal content is inherently not
secure. The content is all clear text and although there are security
extensions to protect this data (such as HTTPS and SSL), that often
comes as overhead to the traffic and eventually impacts its speed and
performance and/or scalability.
As a result of these issues, limitations exist within web-portal
centric provisioning approaches that will prevent them from evolving
beyond servicing CPEs that do not represent a full-blown computer (such
as a telephone, a security system, a television, etc.). To address all
types of CPE provisioning a new system is needed that overcomes the
issues of web-portal centric provisioning and provides a means of
evolving provisioning with home appliances as they become more
commonplace.
Edge Provisioning
Edge provisioning involves handling the provisioning
transactions as close as possible to the customer – which may be
considered the edge of the network. This approach is quite new and has
yet to be thoroughly explored within the provisioning space. For edge
provisioning to be successful, the client application that resides
within the customer’s dwelling and/or desktop must become quite useful
to the subscriber – beyond the current tasks they perform such as
initial install or infrequent troubleshooting and problem resolution.
Ideally, it would be great to have this application always-on, perhaps
even running on their residential gateway or start up alongside the
operating system and provide initial checks to ensure the service is
fully up and running, from there provide opportunities for the
broadband service provider to communicate with its online customers.
For example if the email server goes down, the broadband service
provider can make available a message pull to alert all subscribers
telling them the email server is under repair, when it will be back on
line, and that none of their incoming email will be bounced.
Edge provisioning can benefit from providing the consumer as
well as the broadband service provider with intelligent offerings of
services that do not require web enablement, complex processes, or
workflow management in the backend. A simple transaction server may be
all that is necessary. Edge provisioning clients may obtain all their
user interfaces dynamically or possibly cache certain personally selected skins locally –
all with the concept of providing only the most recent look-n-feel,
tools, and service offerings available to manage subscribers’ services
from the edge.
The edge client should have direct access to the subscriber’s
billing/service account (perhaps be a direct extension of it) all the
while providing the means to quickly, easily, and securely modify permissible
aspects of their billing/service account in real-time. If the customer
wants to contact customer care, request a service visit, or perhaps
order some promotion all this can be done through the client. If the
customer wants to check the status of his account, orders pending for
service, request credits, etc. all this would be available via the
client. The goal here is to act as an extension of the customer care
group proving automation to service requests and offloading busy call
centers with tasks that individual subscribers can do just as easily
when armed with the right tools.
The edge-provisioning client would represent the first real
connection between broadband service providers and their subscribers.
It would represent a quantum leap for broadband service providers who
find they must use snail mail as the only sure way to reach their
Internet subscribers, as many of their subscribers do not use their
provided email addresses. Subscribers should have the ability to
customize their experience of the broadband client or personal assistant and
allow them to ignore certain
promotions or low priority alerts. While this client would be promoted
as optional, the vast array of features would make it indispensable for
broadband users of all skill levels.
The edge-provisioning client could also act as a valuable
information collector regarding the client experience as perceived from
the subscriber’s location. Client experience monitoring is an excellent
non-invasive way to monitor the perceived user experience at the
customer’s location without attempting to do this invasively from some
remote location. Data collected from these tests could be rolled up and
provided to network operations to help with network planning and
address isolated bottlenecks.
In Summary
Edge provisioning would deliver numerous economic benefits to
the broadband service provider by enabling a streamlined headless
service authorization architecture, offload the bulk of customer
service requests, provide enhanced network health information, and
provide a convenient way for broadband service providers to effectively
communicate with their subscribers. Edge provisioning offers service
qualification vendors a real shot at providing much more than the small
piece of the customer care process they currently supply. While
numerous details need to be worked out as to how exactly would edge
provisioning function, the value of having this capability may well
catapult service qualification vendors into multiple broadband markets
and quite possibly long term profitability.
Check out these other Birds-Eye.Net papers/products
regarding Service Qualification:
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