VENDOR SPOTLIGHT – AMDOCS
Telecoms.com: What is your role at Amdocs?
Ofer Ben Yosef: I am general manager of Amdocs Network Solutions division, which provides software and service solutions to global service providers. Our network solutions leverage automation and orchestration to help service providers accelerate service agility with faster service introductions, improve operational efficiencies and shorten time to revenue. Examples include solutions that accelerate rollout of new technologies such as LTE and fiber, optimize networks to improve quality of experience, and Network Functions Virtualization (NFV) solutions that enable service providers to rapidly design, onboard and instantiate virtual services.
How have B2B services evolved for service providers? What new services are they delivering to enterprises, and why has B2B become one of service providers’ main areas of focus?
Over the past few years, we’ve witnessed an increasing focus by service providers on B2B offerings, driven by the lack of growth in consumer businesses, combined with the huge untapped potential of the B2B services market.
Service providers are facing tough competition for B2B services from non-traditional providers such as Google, Facebook and Amazon, who can offer advanced network services in a matter of weeks. As a result, getting new B2B services to market quickly has become a key imperative for service providers – both to tap into enterprise opportunity and to compete more effectively with new market entrants.
The B2B market represents a significant opportunity for service providers to expand their offerings towards new domains and services that lie beyond the traditional connectivity services they offered in the past. In fact, we’re seeing many service providers introducing managed services to address specific verticals, such as health, finance, education, government and so on.
Network transformations such as NFV are equipping service providers with the tools they need to quickly and cost-effectively introduce and fulfill new services, making this a market in which they can maximize their profits and generate operational efficiencies that improve time to revenue.
How can NFV transform the way service providers deliver B2B services?
NFV is a disruptive force for service providers. It includes new technologies, as well as new business and operations processes that can have a positive impact on the B2B market. For example, consider the virtual customer premises equipment (vCPE) use case, which is one of the most popular use cases we see being trialed at the moment. This is having a significant positive impact on the B2B segment. By allowing the service provider to offer numerous services in an agile way without the need to deploy equipment at the customer’s own premises, a vCPE solution can shorten the sales cycle and deployment from months to only minutes. The service provider can also offer customers a much larger set of options, such as a firewall application from various vendors, thereby enabling the enterprise customer to choose the solution that best fits their needs.
Another service that we’re starting to see gain traction is network on demand, which enables service providers to instantly provide solutions such as enhanced capacity or increased bandwidth in response to their customers’ changing needs. Self-service, which has been mainly used in the past for simple connectivity or residential services, is now, with the help of NFV, becoming the standard approach for complex B2B services. For example, we recently supported the introduction of an Ethernet over SDN service at one of our major US customers, which enabled their enterprise customers to order Ethernet and VPN-over-Ethernet on the fly, using a service-ready network. It is these cutting-edge services that will set the bar for how B2B services are delivered in the future.
What are the business benefits of NFV that makes service providers most enthusiastic to adopt the technology?
NFV effectively brings software control to the network through automation and orchestration, making the network “programmable” and introducing numerous efficiencies. One of the main benefits is service agility, which is the ability to introduce new services faster and more cost effectively. Because there is no longer a need for warehousing dedicated network appliances, the time and cost of delivering services is considerably reduced, enabling service providers to introduce a large variety of services more rapidly than was previously possible.
Moreover, the agile nature of software-based networks enables service providers to introduce ad-hoc, customized solutions as their customers’ needs change and evolve. Such levels of customization were not possible in the past, since each solution introduced to the market involved a long and costly process of deploying dedicated network equipment to support the expected demand of each and every specific service. So if customer needs changed, service providers had to revisit the process of network device rollout and installation accordingly, which limited the business value of customizing solutions to specific customer requirements.
Secondly, the service agility that NFV brings creates an environment of “a low cost of failure”, which enables service providers to rapidly build and trial new services in just a few months, as opposed to the nine to twelve-month cycles that are often the norm today. If the service works, it can be rapidly expanded at a later time to a wider group of end users. If it fails, it can be either “end-of-lifed” or adapted quickly and cost-effectively to create a new service that more closely matches the needs of the customer base. So the low cost of failure serves as a catalyst for innovation, allowing service providers to be much bolder and more imaginative in the types of services they create and launch.
Such ability to customize and adapt services to meet customers’ exact needs is disruptive and has the potential to attract new customers, while at the same time, increasing revenues from existing enterprise customers.
What challenges currently exist for service providers looking to introduce new services to enterprise customers, including troubleshooting, customer experience and so on?
Many of the challenges aren’t new. Indeed, service providers have always faced challenges serving their enterprise customers, including meeting service level agreement (SLA) commitments, addressing long delivery cycles, inability to meet contractual commitments, as well as the lengthy fault finding and repair times.
In the past, service providers, and more importantly their customers, had to accept that this was part of the complexity of delivering a B2B service. However, attitudes are now changing as a result of increasing competition and the increasing quality of service from over-the-top (OTT) providers, particularly in the residential and consumer markets. The reality is that enterprise customers today have more choice in providers and as a result, are no longer willing to accept service that is less than excellent.
To address this, we have been working with global service providers to support the introduction of new advanced B2B services as well as streamlining existing ones. Our B2B solutions shorten the order delivery and service lifecycle and make it more sophisticated, transparent and accurate than ever. As an example, one of our customers was able to reduce order-to-cash times for complex B2B services by more than 70%, double the orders processed per month, and reduce the costs per site by almost half.
What hurdles do service providers need to overcome in order to realize the full benefits of NFV?
The consensus is that hybrid networks, which comprise physical and virtual networks and services, will become the norm over the next decade and even beyond. But such networks bring more, rather than less complexity for service providers who are looking to operationalize complex services, including their physical and virtual resources, different fulfilment stacks and business operations processes. Negotiating this complexity is one of the most important hurdles that service providers need to overcome; as such, they need solutions that can be deployed in complex hybrid network environments.
Other challenges related to NFV today are around the operational aspects of NFV deployment. At Amdocs, we have taken an approach that supports the entire lifecycle operations of a virtual service, end to end. By providing best-in-class orchestration and automation tools, we can create NFV services rapidly and cost-effectively. This includes intelligent instantiation of services once they have been tested and validated, as well as continuous fulfilment as network circumstances change. And because our approach is vendor-neutral, we can work with any third-party virtual network function vendor. At the end of the day, our customers want to maximize innovation and flexibility, and this approach enables them to meet the needs of their enterprise customers and differentiate their services.
What does the future hold for service providers who can fully embrace an NFV-enabled B2B service delivery infrastructure?
By prompting innovation around new business models and services, and improving access to lucrative B2B market segments, NFV is set to transform the way service providers serve the B2B market.
The main reason for this is that provides a significant revenue opportunity. For example, in a recent survey we conducted in conjunction with Analysys Mason, it was estimated that a service provider who is an early adopter of enterprise vCPE could increase their net present value (NPV) by $1.2 billion over five years from a single NFV service alone. This is based on a significant reduction in capital and operating expenditures related to service delivery, as well the ability to launch new, advanced services that enable them to better compete in the market.
NFV is a game changer for service providers, particularly in the B2B services domain. As the technology develops further, software automation and orchestration will become critical capabilities to accelerate innovation and agility. As a leading software vendor in the industry, Amdocs has the knowledge, innovation and experience to help service providers accelerate this transformation and gain a competitive and business advantage in the B2B services market.
With Amazon and Google launching smart home initiatives, have the telcos missed out on their chance to cash in on this market?
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