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Who should built VAS for an operator?

PREFACE

The idea of this research is to analyze cost/efficiency relation for different parties which pretend to be a service supplier for introduction of VAS in the network.

I officially state that during preparation of this article there weren't propagandized ideas of any described party.



This analysis is based on my personal experience and mine logical conclusions! No certain pricing or statistics data were used, therefore this article can't be considered as legal basis of choice within tenders or in certain negotiation's process. This should be accepted as a concept in terms of "for consideration" and "for further personal investigation".

PARTIES

Along with the developer of some VAS, itself, his system can be installed by some other parties. For example, these can be an operator itself or vendor of the core equipment. More over, there is quite possible, that some operators or core vendors can start their own development of VAS. And furthermore there are several companies which have deal with some OSS/BSS, IN and VAS platforms. Therefore, the scope of parties in this research represented by these types:

  • Internal IT resources of telecom operator - can be the one or all items mentioned below - department of IT infrastructure; operations and maintenance department(s) of telecom equipment and VAS/IN/OSS/BSS platforms; programming department for IT/IS/DB/SAP; applications programming department.
  • Telecom System Integrator - company which specializing in installation and primary configuration of telecom equipment and software. Along with Core and Radio networks, such company very frequently configuring systems like Billing, OSS/BSS and similar IT related.
  • Content provider - company which business is VAS in area of content and simple end-user software. In many cases this company have very strong programming department and have its own VAS systems.
  • Vendor of OSS/BSS systems and its Service Department - the company which main (original) business is development of OSS/BSS systems.
  • Vendor of IN/VAS platform and its Service Department - the company which main (original) business is development of IN or VAS platform systems.
  • Telecom Core Vendor and its Service Department - the company which main (original) business is development of core systems.

Notice: Under IN/VAS platform I mean some Server with base software on top of which can be installed exact VAS or this platform acts as Transport, Charge and O&M party for connecting VAS servers with exact applications.

 

PARTIES IN DETAILS - ANALYTIC CONSIDERATIONS

Internal IT: In general, internal IT forces of a telecommunication company are dealing with such systems as LAN, File Server, Post Server, some systems like SharePoint and other WEB related, then finally there can be activities in relation to SAP, databases and security policies.

 

If internal IT has some activities related to modern issues like VoIP, WEB 2.0 and so on, even then IT acts as operation & maintenance structure. Creation of Software Development sub-department will be same as start of new branch in business.

System Integrator: Originally such companies were specializing in things like building BTS/SDH sites, racks' installation, cable's laying and so on. Then these companies extended their services up to core and transport networks installation and configuration. Finally, some of such companies had moving in projects with OSS/BSS systems, IN platforms, Billing and various complimentary systems. Then these companies are quite ready to earn money on installation and configuration of VAS servers.



What is good for an operator in business with system integrator is that they have experience in lot of projects with various equipment, and pricing on service is quite moderate, compare to international corporations. Yet there is one very weak point is that general experience of such companies is in dealing with transmission and switching. To reach the point, that specialists in this company are getting well all the features of some exact Application Server, it's necessary lot of efforts!

Efforts here mean time and money paid by this time (typical payment per 1 working hour per 1 employee). It can be a situation, when efforts lead to spends comparable to same offered by international corporations. Then no more investments are possible and partially completed efforts lead to partial effectiveness of installation and configuration. Not a really nice situation!

Content Provider: Good thing with content provider is that they have good knowledge of how to develop, modernize, install, and integrate VAS server. Even more interesting is that such company knows for what is it for and how make money on this server. For the same activities they have resources, which are comparatively cheap and final price for the operator can be cheapest one.

 

From another point of view there are three main weak sides: (1) Content providers know well only services they are developed or ordered for their own use, and (2) Quite often their vision of VAS is limited by the services they are running. Then if it's some other service or service with deep integration with core equipment, then they can't help. (3) Finally they have resources and management model for their own companies, and start of some exterior project may be not such easy thing, in terms of effective management.

Vendor of OSS/BSS: This company has clear understanding of all telecom network interfaces, which are related to connecting of external systems, along with understanding of all network's elements interconnection, protocols and dependencies. Typical OSS/BSS project is much complex than typical VAS project, so it's even possible to say that OSS/BSS vendors are overqualified for VAS installation.

 

Meantime there are weak sides too. First thing is that knowledge about external interfaces are more oriented on core network values. Then there can be too formal understanding of why VAS connected to exact element, why connected over exact protocol and for what is it for? Second thing is that management procedures will be too heavy for most of VAS implementation projects. This "heavy" means some unjust extra budget.

Vendor of IN/VAS platform: There is more less same situation as with OSS/BSS vendors, except one important point - such company have clear understanding of telecom applications!  Yet even there are possible situations when effectiveness is not 100%.

 

If some VAS server is installing as application on the exact IN or VAS platform, then situation is perfect. Yet if such company invited as integration party for some complex project, where VAS server affects several IN platforms of different vendors or VAS server has deep direct integration with telecom core network, then same hurdles as for OSS/BSS vendors' case.

Telecom Core Vendor: There operator has a situation when company which integrates VAS server has a perfect understanding of what interfaces and protocols are for what. The weak side is that integration project must be very complex to justify costs of such a "big elephant" as core vendor. Yet if there are complex custom developments of VAS server, not plain interconnection with IN platform and deep penetration into core sub-systems, then selection of core vendor is seems ok.

 

Notice:

  • (1) There are companies which are OSS and IN vendors same time. Then we can consider such companies as IN/VAS platform vendors, in terms of VAS server integration.
  • (2) There are telecom core vendors which have their own IN/VAS platforms. Then we can consider such companies as IN/VAS vendors, but keeping in mind that in this case such integrator has more knowledge of core technologies and there can be great synergy effect if VAS server is installing on IN platform and in core network developed by one vendor!

PRO ET CONTRA

 

The Party

Examples

Strong sides

Weak sides

Internal IT

Vodafone,

DoCoMo

* Full control of costs

* Full control of development

* Weak experience

* Long time to market

* Spends on project management

System

Integrator

Tata Consultancy Services,

Byrne Software Technologies, Inc.

* Experience in work with the systems of various vendors

* Economy on scale in projects management

* Poor experience in applications

* Moderate knowledge of vendors' systems

* Long time to market

Content

Provider

ACE Entertainment,

Arena Mobile,

9 Squared Inc.

* Perfect understanding of VAS's insides

* Experience in work with the systems of various vendors

* Poor experience in system integration

* Moderate knowledge of vendors' systems

* Long time to market for complex projects

OSS/BSS

vendor

Amdocs,

CBOSS,

Infosys,

Telcordia Technologies Inc.

* Ultimate experience in work with the systems of various vendors

* Good understanding of telecom structure

* Some long time to market - cross coordination and case study

* A bit expensive project management, as it's copy&paste from more complicated OSS/BSS projects. Especially for simple VAS.

IN/VAS

vendor

HP,

OpenCloud,

CosmoCom

* Ultimate experience in work with the systems of various vendors

* Good understanding of telecom structure and applications

* Expensive project management for simple VAS integration.

* Some long time to market - cross coordination and case study

Telecom

Core

Vendor

Alcatel-Lucent,

Ericsson,

Huawei,

Nokia-Siemens Networks

* Perfect understanding of telecom structure and applications

* Broad experience in work with the systems of various vendors

* Most of companies have OSS/BSS and IN/VAS platform products.

* Expensive project management for simple VAS integration.

 

CASES

 

Here I will examine some generic cases and my opinion on preferences in selection of the VAS installation party. For the sure there is lot of points to discuss or examine alternative scenarios, but I have made my conclusions based on the ideas described above in this article.

Operator's internally developed VAS

  • Simple VAS (here and later on there is meaning that VAS has single API interface to core network and has no direct integration in network's nodes)
    • VAS has a direct interaction with Core Network - 90% internal resources and 10% consultancy from Telecom Core Vendor side. Outsource to System Integrator or Content Provider is not reasonable, as there are spending time/money on knowledge transfer about VAS, and additionally Core Vendor charging services without discount (which an Operator frequently has under the Frame Agreement)
    • VAS works over IN/VAS Platform - up to 90% -100% can be given away to outsource of IN/VAS Platform Vendor. Reason is that Platform Vendor has world-wide experience, then quality/price relation and time-to-market will be better than with using internal resources. The rest 0%-10% can be remained within an Operator for overall management purpose


  • Complex VAS (here and later on there is meaning that VAS deeply interact with several base core network systems and has a direct integration in these).
    • VAS has a direct interaction with Core Network - at least 50% of work should be done by Core Vendor. Preferably to reach 100% outsource by Core Vendor, even if it increases installation price, at first sight. Due to some technical know-how and world-wide experience of Telecom Core Vendor, the result will be like this - better quality and time to market for the same price.
    • VAS works over IN/VAS Platform - better solution is to give away all 100% to outsource by IN/VAS Platform Vendor. If it necessary, then they can request some information from Core Vendor, but this is not a headache or spends of an Operator. Price of the project will be higher, than if operator has an attempt to do everything by itself, but there are unpredictable quality results and time-to-market.

OEM like VAS, which offering by the System Integrator

  • Simple VAS
    • VAS has a direct interaction with Core Network - preferably that up to 100% is given away to outsource of System Integrator. Reason is that in all other cases there are additional spending time/money on knowledge transfer about VAS and its installation. In case of troubles they can request some information from Core Vendor, but this is not a headache or spends of an Operator.
    • VAS works over IN/VAS Platform - Same to the point above, but troubleshooting is in cooperation with IN/VAS Platform Vendor, instead of Core Vendor.
  • Complex VAS
    • VAS has a direct interaction with Core Network - at first sight it seems reasonable that System Integrator doing the project. Yet there is another suggestion - try to ask your Core Vendor about managing such project. It's still not very frequently using, but Core Vendors have quite great experience in various core integrated applications.

Notice: This experience they getting in two ways - 1st is when sign a frame contracts on a complete network development with obligations to manage VAS projects too, and 2nd way is when they get maintenance of operator's network under Managed Services Contract.

  • VAS works over IN/VAS Platform - Same to the point above, but with even more complex administrative part. Therefore best solution must be outsource to IN/VAS Platform vendor, as they have (or may have) world-wide experience. Then this Platform Vendor can consult with System Integrator (about VAS specialties) and with Core Vendor (about last updates in core).

 

VAS of the Content Provider

  • Simple VAS - can be done by Content Provider itself. No reasons to overview other variants.
  • Complex VAS
    • VAS has a direct interaction with Core Network - if there is a reference of Content Provider that similar project was done for the same vendor of core network equipment, then this is the best solution. Otherwise there is a reason to ask one of your Core Vendors about performing similar VAS installation somewhere in the World. Then preferably that project is leading by Core Vendor. If exact VAS is unique, then more efficient to appoint Content Provider as responsible party, because (1) it seems to be more simple management and therefore less costs, and (2) for Content Provider it's a major business and more awareness then.
    • VAS works over IN/VAS Platform - Same logic as in the point above - If references from Content Provider - then Content Provider is chosen, if not - then IN/VAS Platform Vendor is chosen. Yet there is still a reason to ask your core network vendor(s), as they may help in applying world-wide experience in the exact VAS project. Then it seems quite reasonable to negotiate implementation management by Core Vendor.

Notice: Very often there is the situation that Core Vendor agrees to lead some VAS implementation at very cheap price. It can be, for example, in complex upgrade projects or green-field tenders. However in this case Vendor has zero profit on it, but it's an opportunity to win the entire project.

OEM like VAS, which offering by the OSS/BSS Vendor

  • Simple VAS
    • VAS has a direct interaction with Core Network - preferably that up to 100% is given away to outsource of OSS/BSS Vendor. Reason is that in all other cases there are additional spending time/money on knowledge transfer about VAS and its installation. In case of troubles they can request some information from Core Vendor, but this is not a headache or spends of an Operator.
    • VAS works over IN/VAS Platform - Same to the point above, but troubleshooting is in cooperation with IN/VAS Platform Vendor, instead of Core Vendor.
  • Complex VAS
    • VAS has a direct interaction with Core Network - there is also preference that up to 100% is given away to outsource of OSS/BSS Vendor. Yet, if project is implementing first time, then there is another suggestion - try to ask your Core Vendor about managing such project. Decision on OSS/BSS Vendor VS Core Vendor can be taken depending on the fact of - who have more real experience for the exact project.
    • VAS works over IN/VAS Platform - it's preferably that project is given away to outsource of OSS/BSS Vendor. However if it has no experience for the exact IN/VAS Platform, then can be requested IN/VAS Platform Vendor as responsible party. If both mentioned parties have no experience, then Core Vendor may be requested. Finally, if it's a completely new project, then OSS/BSS Vendor seems to be responsible.

VAS of the IN/VAS Platform Vendor - or - VAS of the Telecom Core Vendor

 

In these cases selection will be quite logical and just, when such implementation projects will be leading by corresponding developer. If took all the considerations and election criteria mentioned above -  I think that there no need any comments.

 

RESUME

 

One of the main issues which I want to mention as the Resume is that Core Vendors are moving now into Applications area and can offer good services in this area. Within last 3-5 years the situation is changing and now companies like Alcatel-Lucent, Ericsson, Huawei Technologies, Nokia-Siemens Networks and similar are not just "producers of racks", but companies with broad experience in things like IN, VAS, infrastructure and business consultancy, integration services and even outsourcers for operation & maintenance of commercially running networks.

 

One more point to stress - whether these companies are seems to be huge sluggish corporations, yet there are benefits of using world-wide experience and very firm technical expertise! Do not hesitate to contact sales managers from these companies. So, if you (as an operator) starting a new VAS projects, do not hesitate to request services from Telecom Core Vendors, and you may have an easy recipe!

 

I hope that this article will be useful for some green-field operators and/or investors which have starting first telecom project.

 

Meantime I open for discussion and waiting for some brief articles, from the mentioned parties, where can be stressed some strength points which are got out of my sight, in this article. Then I will add these as appendices of this article.


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