Service_Assurance by Signal Ahead Dec09

Redefining Research

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Although the term service assurance means different things to different people, by our definition it means ensuring that the services offered by operators meet pre-defined service quality levels and customer experience targets, while also

providing operators with critical visibility into their network. The role that service assurance has in an operator’s network has evolved over the last

decade and there are a number of new trends and participants that will continue to evolve service assurance into the next decade. From an ecosystem perspective the participants include the traditional test and measurement companies who provide probe-based solutions, targeting both mainstream and niche market opportunities. Network Equipment Manufacturers (NEMs) work independently and in cooperation with third-party probe-based solutions to provide service assurance for both their infrastructure as well as in multi-vendor networks. Finally, the large system integrators reside on the top layer and allow operators to tie in all of the various piece parts of service assurance into one, hopefully seamless, solution that resides within the Network Operations Center, or NOC.

In keeping with our tradition of always trying to look ahead, there are a number of trends that will have an impact on this industry. Operators, both large and small, are looking to outsource the management and operations of their network and this is creating an opportunity for the NEMs and the service assurance products and services that they offer. Meanwhile, some networks are undergoing an OSS transformation, whereby operators consolidate their multiple service assurance platforms into a common platform from one supplier. Networks are also converging and LTE is gearing up for commercial launches. Both trends mean a greater emphasis on IP, thus impacting how and what service assurance can do for an operator, including a growing importance on deep packet inspection. Finally, service assurance is moving away from a network-centric view to a customer-centric view, also called Customer Experience Management (CEM). With CEM, service assurance can be used to proactively monitor the end user experience of a single user (VIP) or a group of users, such as the employees of a business, in the network. All this and more in this week’s issue of Signals Ahead.

Volume 5, No. 15 December 15, 2009 Michael W. Thelander (510) 338 1284 [email protected]

www.signalsresearch.com

Service Assurance: Ensuring Next-Generation NetworksWhile the wireless and networking industries have been awed by the remarkable changes in the communication networks in the last 20 years, there has also been a big revolution in the operators’ back office systems that are needed to manage and deploy these networks. Originally considered as an appendage of their

networks, the back office systems, collectively referred to as Operation Support Systems (OSS) and Business Support Systems (BSS), have grown more sophisticated and complex in the last ten years. In fact, the OSS and BSS together constitute a very large part of the tele-com software segment.

2 Signals Ahead, Vol. 5, Number 15

OSS/BSS systems are comprised of software platforms which provide operators the “smartness” to deliver services to their customers. These systems activate subscribers and new services for subscribers, generate bills, provide customer care, automate service delivery, track network assets, manage net-work infrastructure and monitor subscriber traffic. The list of systems that are part of OSS/BSS runs long. Broadly, it con-sists of the following systems: Service Fulfillment, Inventory Management, Billing, Customer Care Service Assurance, Service Delivery Platforms (SDP), and Network Manage-ment Systems. Of these systems, service assurance provides operators with intelligence on their own network. Service assurance is a part of the OSS that is layered on top of network infrastructure to enable operators to monitor and measure their network and the services that the network is designed to support.

Service assurance ensures that the services offered by operators meet pre-defined service quality levels

and it provides operators with critical visibility into their network.

The term service assurance is not widely used in operator community. More often, operators tend to use the term net-work monitoring. But service assurance is broader than sim-ply monitoring the network and generating network statistics. Instead, service assurance ensures that the services offered by operators meet pre-defined service quality levels and customer experience targets, and it provides operators with critical vis-ibility into their network. Without service assurance, operators would be in the dark over how their networks are behaving, whether the offered services are delivered at the expected ser-vice level, and more importantly, whether the customers are actually happy with the services that they are using.

Operators are also preparing their networks for broadband data services through the deployment of Next Generation Networks (NGN). For wireless operators this means prepar-ing for the onslaught of data traffic that is being generated by smartphones, USB dongles, embedded solutions, and ulti-mately MIDs and similar form factor devices by upgrading their networks to HSPA/HSPA+ or by deploying LTE. On the wireline side, the same trend is occurring with deploy-ments of VoIP, IPTV, FTTx and Ethernet-based services. As this evolution occurs, a lot of emphasis has been right-fully placed on the selection of the access technology, the use of an IP-based core network architecture, the appropriate end-to-end service delivery platform, and the evolving business models that will be required for NGN. An equally important aspect is the OSS/BSS, including service assurance, which enables the management of these networks. Next-generation networks and services affect the vari-ous service assurance models and platforms that exist. Ser-vice assurance platforms clearly need to evolve to support next-generation monitoring, measurement and analysis. For example, one of the conclusions that we reach in this issue is that there will be a shift from network-centric service assurance to customer-centric service assurance. Our goal in this issue is to address the trends that will shape the service assurance segment as well as the new requirements that ven-dors must address.

Service assurance vendors will need to address the key trends if

they want to generate meaningful growth in what would otherwise be a low-growth market opportunity.

Although forecasts from market research firms, such as the OSS Observer, indicate that the service assurance segment will only grow in the low single digits for the next five years, service assurance vendors can generate meaningful growth if they address the key trends in the service assurance market. Therefore, we will also analyze the impact of the trends in the service assurance industry on different vendor categories and on some niche areas that represent opportunities for these vendors.

Major Areas of Service AssuranceGiven the complexity of an operator’s network, service assur-ance is not a single integrated platform that can provide vis-ibility into all aspects of the network. End-to-end service assurance also means that operators need to monitor various

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3 December 15, 2009

aspects of their network such as fault alarms, performance data, signaling traffic and voice + data traffic. As indicated in Figure 1, service assurance comprises of number of categories.

Fault & Event Management: provides the management of minor/major alarms and events generated by the different network elements and the ability to react to major faults.

Performance Management: collects performance data from the network elements and hardware probes (discussed later in this issue) to analyze network utilization and net-work reliability. Performance Management also provides input into planning tools for network upgrades.

Application Assurance: monitors signaling and voice + data traffic from specific applications to ensure these appli-cations meet required the service quality.

QoS/QoE Management: measures Quality of Service (QoS) or Quality of Experience (QoE) for a specific service or specific group of customers.

Business Analytics: are tools that analyze the collected data feeds to determine traffic/customer trends to support business functions such as marketing, customer acquisition, and customer support.

SLA Monitoring: is a set of functions that enable opera-tors and their customers to analyze the traffic to measure and monitor Service Level Agreements (SLA) between them.

Active Network Test: allows operators to simulate calls and traffic for a specific service or customer in order to pro-actively measure the Quality of Experience (QoE).

Troubleshooting: is a set of functions that enable oper-ators to isolate and identify faults in the network that may cause network or service outages.

Work Flow Automation/Service Management: are tools that allow operators to automate aspects such as trou-ble ticket management and the deployment of new services

Customer Experience Management (CEM): is a new area of service assurance which enables operators to mea-sure and offer end-to-end assurance for a specific customer or group of customers.

These myriad of tools require data feeds related to perfor-mance and QoS from multiple sources in the network. The network elements, such as switches and routers, generate a number of these data feeds, including alarms, operational mea-surements, and possibly signaling logs. Further, the software

Figure 1. Service Assurance Categories

Source: Signals Research Group, LLC

SLAMonitoring

Active Network Test Troubleshooting QoS Management

ApplicationAssurance

Fault & EventManagement

NetworkAssurance

PerformanceManagement

Work flow automation &

service management

Customerexperience

management

End-to-endservice

assurance

BusinessAnalystics

SoftwareAgents

Switch/Router

Measurements

Probe-basedMonitoring


agents running on application servers in an operator’s services network generate data feeds related to applications and operat-ing systems (OS). Typically, most operating systems are pre-installed with software that generates performance and fault events. The third source of data feeds are passive hardware probes that are installed on various links in an operator’s network. These high-capacity hardware probes collect information about the signaling and data traffic without impacting latency or the content of the traffic. Since the probes need to monitor literally billions of calls it is not feasible to feed the entire traffic flow through the various analysis tools that are part of the service assurance platforms. Instead, the probes perform filtering and basic analysis to reduce the size of the data feeds in order to make the amount of analyzed data manageable. This setup creates a hierarchical service architecture with probes, network elements, and software agents generating fil-tered data feeds for higher layer analysis tools. Taking it to the next level, the analysis tools are also multi-layered with lower level analysis tools feeding data to higher level analysis tools. Platforms, such as IBM’s Netcool and HP’s OpenView, sit at the top of the service assurance hierarchy as they consolidate reports from various underlying tools and data feeds. The Telecommunication Management Forum (TM Forum), which is the standards organization for creating management standards, plays a key role in the interaction between different tools. In particular, the TM Forum’s standardized interfaces enable interoperability between tools at different levels of ser-vice assurance hierarchy. This level of interoperability is critical since operators typi-cally employ service assurance solutions from multiple vendors for different service assurance applications. This approach is also used by operators who maintain a separate wireline and wireless network. Worth noting, service assurance solution providers who are considered to be strong/weak in wireless/wireline may be weak/strong when it comes to supporting wireline/wireless. When thinking about service assurance as it applies to wire-less and wireline networks it is important to realize that service assurance solutions for wireless networks cover the radio access and core networks while for wireline networks service assur-ance solutions address legacy SS7 technologies as well as newer NGN technologies. The NGN technologies are generally based IP-based technologies such as IMS/VoIP and IPTV.

Passive versus Active Service AssuranceAnother major distinction in service assurance platforms is the notion of passive versus active service assurance. Passive service assurance is based on hardware probes and network

Take the ChallengeSince it appears to us that the industry is making a number of aggressive promises regarding the performance capabilities of all next-generation wireless technologies, we offer our readers the chance to participate in a survey. Over the course of the next year, or until we are able to provide the correct answer, we will periodically publish an updated set of survey results. Please only vote once and send your response via email to [email protected].

Question #1. Which technology will deliver the most compel-ling user experience as defined by the average downlink data rate, the average uplink data rate, and network latency: DC-HSPA, LTE or Mobile WiMAX? For purposes of this question, readers should assume the following: DC-HSPA (64QAM, 5.7Mbps uplink capability, no MIMO) is deployed at 850MHz with two logically com-bined 2x5MHz radio carriers (20MHz total). LTE (likely with MIMO, but this is TBD) is deployed at 700MHz with 2x10MHz radio carriers (20MHz total). Mobile WiMAX is deployed at 2500MHz with 1x10MHz radio carriers (N=3 or 30MHz total).

Question #2. Which technology will deliver the most compel-ling user experience as defined by the average downlink data rate, the average uplink data rate, and network latency: HSPA+, LTE (2x5MHz) or Mobile WiMAX? For purposes of this question, readers should assume the following: HSPA+ (64QAM, 5.7Mbps uplink capability, no MIMO) is deployed at 850MHz with 2x5MHz radio car-riers (10MHz total). LTE (likely with MIMO, but this is TBD) is deployed at 700MHz with 2x5MHz radio carriers (10MHz total). Mobile WiMAX is deployed at 2500MHz with 1x10MHz radio carriers (N=3 or 30MHz total).

The winning technology for each question will be based on drive testing each technology in a dense urban/urban environ-ment during off-peak hours in order to eliminate the impact of network loading which could impact some networks more than others (e.g., the ones that have been commercial the lon-gest). Results of these tests will be published in Signals Ahead. For DC-HSPA and LTE the networks will be tested when they are delivering commercial services or as soon as we are given access to the networks. The results for Mobile WiMAX will be based on the performance of the network at that point in time.

5 December 15, 2009

element measurements. It is also non-intrusive and it does not inject any artificial traffic that doesn’t already exist into the network.

Passive service assurance is non-intrusive and it does not inject

any artificial traffic into the network while active service

assurance can simulate specific situations or traffic to analyze the behavior of the network.

Active service assurance is based on test tools that can sim-ulate specific situations or traffic to analyze the behavior of the network. It allows operators to troubleshoot specific issues in the network or measure the customer experience in certain situations more accurately. There has been some suggestion that the industry is trending away from passive-based monitoring and toward active-base monitoring; however, nothing that we encountered during our research supports this theory. Instead, operators typically uti-lize a combination of passive and active service assurance solu-tions. While active service assurance provides a more accurate view of the service, it is difficult and expensive to maintain and manage a large active assurance infrastructure across the entire network. Moreover, these solutions do not provide a network-wide view for service assurance. Conversely, passive probe-based solutions are more manageable and they can be deployed across the network in a hierarchical architecture to generate a network-wide view of service assurance. Consequently, while both methods of service assurance are deployed in the network, passive probe-based assurance is the dominant part of service assurance. We can only theo-rize that the notion that active solutions will replace passive solutions was based on some increased interest from opera-tors in active solutions. In our view whatever increased inter-est exists for active solutions will not come at the expense of passive-based solutions.

Service Assurance VendorsThe service assurance industry is very competitive with a few established large players and a large number of smaller play-ers. The players in the service assurance space can be divided into three categories as identified in Table 1: Test & Measure-ment (T&M) vendors, Network Equipment Manufacturers (NEMs) and large system integrators. Among these three categories, the T&M vendors typi-cally supply probe-based service assurance solutions. NEMs

and large software integrators typically supply software-based higher-level service assurance analysis engines/tools. The T&M vendors tend to be at the bottom of the service assur-ance hierarchy, providing data feeds for higher level analysis

Probe-based Service AssuranceThe T&M companies are the major providers of probe-based service assurance platforms. Some of the companies are pure play service assurance companies while others are large T&M companies that also supply service assurance solutions. The strength of the service assurance solutions from these vendors depends on the number of interfaces and protocols covered by their probes. Tektronix and Agilent are the biggest passive probe-based service assurance vendors in the industry. They are followed by number of companies, such as Anritsu, Spirent, NetScout, JDSU, EXFO, Astellia, Polystar, Nexus Telecom and others. While a few companies, such as Tektronix, Agilent and Spirent compete in both wireless and wireline service assurance, many others compete in only one of these segments. Tektronix is perhaps the leading provider of probe-based service assurance solutions. Although the company provides both wireline and wireless service assurance, its strength is in wireless – especially with UMTS/HSPA. The Tektronix product portfolio includes hardware-based probes (GeoProbe, Ethernet Probes) as well as higher layer software analysis engines (Orion, Beamer). Tektronix has also assembled end-to-end service assurance solutions largely through acquisi-tions. One of its more recent major acquisitions was Arantech who is a leader in Customer Experience Management (CEM) which is a fast growing area of service assurance (discussed in more detail later in this issue). Additionally, Tektronix has a number of active service assurance solutions for areas such as VoIP and video. Agilent is another major player in the probe-based service assurance segment. The company is a leader in service assur-ance for legacy technologies such as GSM and 1X, as well as for SS7 wireline technologies. Agilent is also a major player in 3G wireless service assurance although it is stronger in the

Category Companies

Probe-based Service Assurance Vendors

Tektronix, Agilent, Spirent, NetScout, EXFO, Nexus Telecom and others

Network Equipment Manufacturers (NEMs)

Alcatel-Lucent (ALU), Ericsson, Nokia-Siemens Networks (NSN), Huawei and others

System Integrators IBM, HP, Telcordia and others

Table 1. Service Assurance vendor categories

Source: Signals Research Group, LLC


3GPP2 family (e.g., 1X/EV-DO) than in the 3GPP family of technologies (e.g., UMTS/HSPA). Beyond these two major players, other companies, such as Spirent, Anritsu and NetScout have a respectable share in the probe-based service assurance segment. Spirent has historically been a major player in service assurance for legacy technologies. Anritsu has an impressive wireless service assurance solution based on its MasterClaw™ platform. Conversely, NetScout’s probes are limited to NGN technologies which make it a stronger player in an operator’s core network. There are also a number of pure play service assurance ven-dors who participate in a specific segment such as 3G wireless or VoIP/IMS. France-based Astellia is an example of a pro-vider in the 3G wireless service assurance segment for UMTS/HSPA networks with a strong presence in Europe. Given its French heritage, Astellia has a strong presence in France Tele-com and Orange and it has a strong R&D partnership with Orange labs.

The service assurance segment can also be characterized by a higher affinity for incumbent vendors.

The service assurance segment can also be characterized by a higher affinity for incumbent vendors. The service assurance hardware probes and associated software are well integrated into an operator’s OSS within the Network Operations Cen-ter (NOC) and there are high switching costs associated with replacing a vendor. Moreover, operators have invested time and money in developing the service assurance infrastructure and training their employees. Therefore, it can be very challenging to unseat an incumbent service assurance vendor. However, this trend applies more so in established North American and European markets. In emerging markets, operators may still replace incumbent vendors mainly due to the cost of the solutions as there have been some instances of vendors being replaced if the license renewal costs are too high. Operators may also replace a vendor if they fail to meet new requirements, such as the evolution to 3G in a timely fash-ion. Another way to gain entry into an operator’s network is to address niche and disruptive areas that are not supported by incumbent vendors. For example, Customer Experience Management (CEM) is one such area that is not addressed by many vendors, and companies, such as Arantech, have taken advantage of the situation and successfully gained entry into a

number of operator’s networks. Another disruptive technology is IPTV which has not been addressed by any of the traditional service assurance vendors. These areas create opportunities for competitors to enter the market.

Trends in probe-based Service AssuranceThe basic architecture of how and where probes are used will not change in the transition to next-generation networks. However, we do see other key trends for probe-based solutions largely due to the transition to IP/Ethernet based networks.

Probe architecture. We believe there will be a shift from proprietary probe-based hardware platforms to indus-try standard platforms such as ATCA. This trend is driven by factors such as the cost of developing proprietary hard-ware, the maturity of the standard hardware platforms, and customer demand. The result may be that the probe-based platforms will become more commoditized, thus putting pressure on margins for probe vendors.

Impact of data traffic. The deployment of 3G net-works and the popularity of smartphones, such as the iPhone, have resulted in an explosion of data and signal-ing traffic. ABI Research, for example, estimates that the monthly volume of data traffic in wireless networks by the year 2014 will exceed the yearly volume of traffic that was present in 2008.

The increase in data traffic puts additional strains on probes since probes are required to analyze data as close to wire speed as possible. Therefore, a major differentiating factor for probes will be their traffic processing capacity. Probe vendors will need to move to next-generation high-capacity probes as soon as possible. The increase in data traffic is also a revenue opportunity as well since operators need to add more monitoring capacity, in particular as they intro-duce new network elements, such as GGSNs into their net-work. However, the increase may not be linear. One rule of thumb that an interviewee suggested is that the doubling of data traffic results in only a 10% increase in revenue. Still, this increase in revenues is material for probe vendors since the Cisco Visual Network Index expects the increase to be 1200% between the years of 2008 and 2014.

Specialized probes. While major vendors have devel-oped general purpose probes that can monitor a large number of interfaces, some vendors have focused on niche technologies. Vendors, such as Prosilient, have developed IP probes which can only monitor IP traffic thus enabling them to offer simpler products at a much lower price point. Deep Packet Inspection (DPI), which supports deeper

7 December 15, 2009

analysis of IP packets, and IPTV are other areas where spe-cialized probes have been developed for specific needs.

NEMs as Service Assurance ProvidersNetwork Equipment Manufacturers, or NEMs, have his-torically offered service assurance solutions to monitor and measure their own network infrastructure that they have deployed for operators. These service assurance solutions take measurement feeds directly from their own network elements to provide a complete view of network/service performance. Therefore, NEMs generally do not require separate hardware probes as part of their service assurance solutions. In this regard, the NEM’s service assurance solutions are essentially higher layer analysis engines known as Service Quality Man-agement (SQM) solutions since they accept data feeds directly from the network elements in order to monitor and measure service quality.

Some NEMs have gone beyond service assurance solutions

meant for their own network infrastructure to offer sophisticated

service assurance products which can be standalone solutions.

Some NEMs, however, have gone beyond service assur-ance solutions meant for their own network infrastructure to offer sophisticated service assurance products which can be standalone solutions. Ericsson, Alcatel Lucent (ALU), and Nokia Siemens Networks (NSN) are three major NEMs with an extensive set of service assurance solutions and these solu-tions are now part of an expansive set of OSS/BSS solutions offered by these vendors. We see NEMs playing three different roles in service assurance segment: as a provider of in-house products, as a system integrator for end-to-end service assur-ance, and as a managed services vendor. We will address their impact of managed services vendor later. Ericsson’s broader OSS portfolio includes service assur-ance solutions. Ericsson identifies service level management, which involves SLA monitoring, traffic stream QoS, and end user experience QoS as three major areas of its offerings in the

service assurance segment. Ericsson has been a major system integrator of service assurance solutions, integrating service assurance products from various vendors, but Ericsson’s role as the biggest managed services vendor among the NEMs will have a major influence in the service assurance segment for its competitors and partners. ALU is a major player in the broad OSS segment as it has traditionally offered Service Quality Management (SQM) solu-tions to monitor and manage its own network infrastructure. ALU’s service assurance solution portfolio, which is known VitalSuite, is aimed at application performance and network performance management. VitalSuite spans both wireless and wireline NGN networks. ALU has become a system integra-tor for service assurance solutions through its acquisition of ReachView Technologies. Through its subsidiary, ALU has been deploying end-to-end service assurance solutions by inte-grating products from various vendors. Specifically, ALU has been a major integrator for IBM’s Netcool product lines. NSN’s service assurance solutions are built around two prod-uct lines: Netact and Traffica which were developed by Nokia before the merger with Siemens Networks. Of these two solu-tions, Traffica is the service assurance analysis and reporting engine while Netact is the planning and configuration engine that can utilize Traffica analysis for network planning and for the configuration of networks. Although Netact and Traffica initially supported NSN’s infrastructure, they have been expanded to support multi-ven-dor networks through the support of probes from other third-party probe vendors. These probes interface with non-NSN network infrastructure, thus enabling NSN to offer multi-ven-dor service assurance. NSN has developed a certification pro-gram to support hardware probes from multiple vendors. The first group of probe vendors to join this program was Nexus Telecom, Polystar and Radcom who are second-tier probe ven-dors. NSN has also developed a harmonized software layer for their solutions which provides well known interfaces for inte-gration between their solutions and the hardware probes. The goal is to reduce custom integration costs for operators. Tekelec is another NEM who has leveraged expertise in its network equipment into developing a service assurance solution for that segment. Tekelec is well known for its sig-naling products for the NGN core. These products include IP-based Signaling Transfer Points (STP) where it is a mar-ket leader. Its service assurance solution, known as Integrated Application Solution (IAS), does performance monitoring for IP-NGN core and it is a complementary solution for its signaling products. While Tekelec offers standalone versions of its service assurance solutions, its strategic advantage is integration with its signaling products. This capability has

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enabled Tekelec to successfully deploy IAS wherever its sig-naling products are deployed.

Large System Integrators as Service Assurance VendorsLarge system integrators, such as IBM, HP and Telcordia, are the third category of service assurance vendors. Service assur-ance is just one part of the expansive portfolio of OSS solu-tions offered by the system integrators. The service assurance solutions from system integrators sit at the apex of the service assurance hierarchy in an operator’s NOC. These platforms aggregate performance, fault and QoS data feeds from the var-ious network elements, probes and software agents to provide an integrated view of service assurance. IBM, HP and Telcordia are the dominant system integra-tors who provide telecom service assurance solutions. HP and Telcordia have been leaders in telecom service assurance. HP’s OSS solution is known as OpenView and Telcordia’s OSS solu-tion is known as Service Director. IBM, on the other hand, is a new entrant into the telecom service assurance market. Its plat-form for telecom service assurance is Netcool/Proviso which came through the acquisition of Micromuse a few years ago. The integrated service assurance platforms from system integrators are feature rich and extremely powerful. How-ever, they are also expensive platforms, meaning that gen-erally it is the larger operators who have deployed these platforms. For smaller operators, these platforms can be overkill. Instead, smaller operators and emerging market operators generally deploy either probe-based service assur-ance solutions or they deploy service assurance solutions from NEMs which are integrated into their network equip-ment and may not require probes.

Competition and Partnerships among Vendors All three groups of service assurance vendors compete and cooperate with each others. In the overall service assurance hierarchy, the probe-based SA providers are at the bottom of the hierarchy. NEMs and system integrators provide higher layer software-based service assurance solutions. NEMs compete with both system integrators and probe vendors and they have been building service assurance solu-tions as part of a larger OSS portfolio to compete with the system integrators. But we must stress that there is a fair bit of partnering as well. ALU’s partnership with IBM in this space is a prime example since, as previously mentioned, ALU has integrated most of its OSS solutions with IBM’s Netcool/

Proviso while it is also one of the major integrators for the Netcool/Proviso platforms.

Network Equipment Manufacturers are a significant threat to the probe-

based service assurance vendors.

While NEMs compete with both groups, they are a sig-nificant threat to the probe-based service assurance vendors. When NEMs offer service assurance solutions for their infra-structure, the use of third party probes is redundant. The com-bination of NEM’s software-based service assurance solutions and their network infrastructure (which can provide data feeds) are functionally equivalent to hardware and software solutions from probe vendors. For example, ALU claims that the com-bination of its newly developed Network Guardian (NWG) solution and measurements from its radio infrastructure pro-vides more visibility and actionable intelligence than an army of probes. Moreover, ALU, NSN and Ericsson, who are the major service assurance vendors, are also the dominant players in the infrastructure market. Combined, these vendors already provide infrastructure to a majority of the addressable infra-structure market that the probe-based vendors are also target-ing. However, the NEMs have a significant advantage in terms of understanding the operator’s requirements and positioning their service assurance solution to meet those requirements. As an example, in Latin America, where NSN’s infrastructure supports 150 million POPs, almost 100 million POPs are cov-ered by NSN’s Traffica service assurance solution. That said, unless a NEM’s solution is integrated with solu-tions from the probe vendors, the service assurance solution would be less effective in a multi-vendor network since they would not be able to provide end-to-end service assurance. More over, some operators may be interested in an indepen-dent view of their network from third-party probes. Another knock against service assurance solutions based on network infrastructure is that the monitoring feeds may not be available when they are needed the most – when the network is loaded or in the event that a network element has crashed. While NEMs and hardware probe vendors compete with each other, there are also a number of strategic partnerships between them. The partnerships between NEMs and probe-based vendors are important especially for probe vendors since NEMs typically integrate their service assurance solutions with probes from their preferred partners. For example, Ericsson’s

9 December 15, 2009

preferred vendor for passive probes is Tektronix and Ascom for user experience probes. Additionally, Ericsson partners with Prosilient for IP-based probes.

Whether or not probe-based vendors benefit from preferred

relationships with NEMs depends on how operators select their

service assurance vendors.

Such relationships allow NEMs to offer end-to-end solu-tions to operators. Whether or not probe-based vendors benefit from these preferred relationships depends on how operators select their service assurance vendors. Some operators include service assurance as part of their network procurement process, in which case operators look to NEMs to provide the overall infrastructure, including service assurance platforms. To the extent that operators look to NEMs to provide service assur-ance solutions, preferred vendors have an advantage since their products will be deployed as part of overall solution. In other cases, operators select service assurance vendors independently and generally after network equipment contracts have been awarded. In such cases, the preferred relationships do not necessarily benefit probe vendors. Overall, we put preferred relationships with NEMs as a plus for probe-based service assurance vendors

Service Assurance TrendsService assurance solutions are rapidly evolving, driven by number of trends in the broader telecom industry. These trends range from technological evolution of operator networks to changes in business models for operators.

1) Impact of Managed ServicesOver the last few years, there has been a dramatic shift from operators managing their own networks to outsourcing it to third-party providers for installing, maintaining and manag-ing networks on their behalf. Typically, these third-party ven-dors tend to be NEMs who supplied the network equipment to operators. Managed services are one of the major trends in the telecom industry as a whole and the wireless industry in par-ticular. Several NEMs have been actively pursuing managed services with Ericsson being the biggest player so far, followed closely by ALU and NSN. A key part of this outsourcing effort is managing and main-taining an operator’s Network Operations Center (NOC) which hosts the BSS and OSS. Since service assurance is a major part of the OSS, the transition to a managed services

model impacts the service assurance business, especially for pure-play service assurance vendors. Given that managed services vendors are on the hook to deliver negotiated Service Level Agreements (SLAs), they have meaningful influence on the service assurance model and the best practices in a man-aged network. When operators outsource the management of their networks these networks already have service assurance infrastructure which may not be supplied by the managed ser-vices vendor. The major issue then becomes what the managed services vendor does with the existing solution.

The major managed services vendors prefer to manage their networks using a common set

of platforms and best practices that they have established.

In discussions with the major managed services vendors they indicate a preference for a transformation of BSS/OSS systems in their managed networks to a common set of platforms and best practices laid out by managed services vendor. That trans-formation is required to drive operational efficiency across dif-ferent network properties managed by the same vendor. Such a transformation also allows vendors to deliver value to operators and more importantly to their own bottom line. This phenom-enon has an impact on service assurance infrastructure since managed services vendors may replace existing service assurance platforms with their own in-house platforms or platforms from their preferred vendors as part of transformation process. However, these transformation processes are unlikely to occur as soon as the network is handed over to a managed services vendor. Instead, there is generally a transition phase where the existing infrastructure is managed with the exist-ing service assurance solutions to minimize disruptions. Nev-ertheless, partnerships with these managed service providers are essential for service assurance vendors. For example, Erics-son’s strong presence in managed services business helps its preferred probe partners. In some cases, operators may still retain control over part or all of the OSS systems, including the service assurance platforms. This may generally happen when operators have partially outsourced their network such as the RAN or core networks or the transport networks. In such cases, operators may influence the selection of the service assurance platforms that are used by the managed services vendors. It is also unlikely that large service assurance solutions from system integrators are impacted by the transition to managed services. This scenario is because it is very expensive to replace


their service delivery abilities. For example, Telstra has car-ried out a successful multi-year OSS transformation effort in their NOC. In some cases the OSS transformation is part of a larger process of network transformation to a single inte-grated network. An example is British Telecom (BT), which has been carrying out an OSS transformation as part of its 21 Century Network (CN) project.

Many operators have recognized the need to evolve into next-generation

integrated OSS platforms.

The OSS Transformation has a major impact on service assurance vendors at all levels and it represents an opportu-nity as well as a threat. One of the major goals of the OSS transformation is the consolidation of a number of vendors and the reduction of a number of systems. In many of these transformations, operators have consolidated the service assurance platforms around one vendor where they previ-ously had two vendors. Ultimately, this occurrence benefits the remaining vendor at the expense of the losing supplier. The OSS transformation trend appears to be most pre-dominant in Asia and Europe while operators in the United States have not undertaken on the OSS transformation pro-cess for a number of reasons, including:

➤ the sheer size of the networks makes such undertaking risky and expensive, and

➤ the stringent regulatory requirements in the US may limit an operator’s ability to carry out an OSS transformation.

3) Network ConvergenceThe convergence of communication networks around IP is no longer a new trend, but is has deepened in the last few years to where most of the communication (wireline and wire-less) traffic is transported over IP networks. The transition impacts everyone in the industry and service assurance is no exception. The network convergence around IP technology impacts the service assurance segment at different levels and it has created winners and losers. Even though the growth in the overall service assurance markets is anemic and the service assurance business for legacy networks is declining, the opportunity for service assurance with IP networks (a.k.a. NGN) is increasing. As a result, some of the vendors who were leaders in legacy service assurance have lost significant market share and their leadership position

the incumbent systems. Additionally, an operator’s business practices are built around these systems and it would cause dis-ruption if they were replaced. The system integrators such as IBM and HP are also big players in the managed services seg-ment and they may be competing with NEMs for the managed services business of the NOC. In several networks, NEMs may manage the network infrastructure, but system integra-tors have won the managed services business for the NOC and other back office systems.

Ericsson and NSN have put a major emphasis on service

assurance solutions as part of their managed services strategy.

Ericsson and NSN have put a major emphasis on service assurance solutions as part of their managed services strategy. Specifically, NSN has been actively pursuing the managed services of service assurance infrastructure and performance monitoring of different parts of an operator’s network. It is promoting the managed services of service assurance based on its Netact and Traffica platforms. In that regard it has recently won managed services businesses for service assurance and performance monitoring for key network pieces such as the backhaul transport network.

2) OSS TransformationAs communication networks and services have grown over the last few years, the OSS for these networks has become more complex. An operator’s network is a mix of legacy and NGN technologies. In many cases, as operators deliver quad play (voice, video, data and mobility) services, their OSS has grown diverse and complex with separate OSS silos for each network. The NOC is subsequently filled with hundreds of screens, managing the OSS for different networks supplied by different infrastructure vendors. While the network may be evolving to an integrated network based on IP technology, OSS systems are still diverse and complex. This scenario has hindered an operator’s ability to manage these networks as one integrated network. Therefore, the associated service monitor-ing and service delivery processes have grown more complex and they can be riddled with errors. Many operators have recognized the need to evolve into next-generation integrated OSS platforms. This trend has resulted in what is commonly referred to as the OSS trans-formation which is a multi-year project for operators to trans-form their NOC into an integrated system without disrupting

11 December 15, 2009

due to their failure to anticipate the transition to IP networks based on NGN. However, service assurance has the same busi-ness model as any large-scale software platform wherein there is large upfront CapEx, followed by recurring support/professional services revenue. Therefore, these vendors should still expect a recurring stream of revenues from the installed base while the legacy networks remain in place. They will, however, have to focus on IP NGN networks for any meaningful growth. The transition to IP networks has brought IP to the edge in both wireline and wireless networks. For example, all-IP wireless networks have brought IP all the way to the base sta-tions in wireless networks and in broadband networks IP has extended all the way to a customer premise. All things being equal, IP enhances the addressable market for IP probe-based service assurance vendors who previously did not have any presence in areas such as Radio Access Network monitoring. This view means increased competition for some of the tradi-tional service assurance vendors.

The evolution to IP networks will open up a few niche areas for service assurance vendors.

The evolution to IP networks will also open up a few niche areas for service assurance vendors. The open nature of IP net-works makes them vulnerable to security threats. Therefore, Deep Packet Inspection (DPI), which involves the analysis of IP packets, becomes increasingly important in NGN. The tran-sition to all-IP in wireless networks also creates new require-ments for service assurance with respect to IP/Ethernet-based backhaul networks. We will address these areas and issues in a later section.

4) Impact of LTEGiven that LTE has been selected by 3GPP and 3GPP2 oper-ators, the technology will likely become the dominant wireless technology in the next 10 years. As such, LTE represents an opportunity for service assurance vendors, but the degree to which it becomes an opportunity depends on several factors. First of all, LTE is not a near-term opportunity. LTE deployments have already began on a limited basis, and while deployment activities will pick up in 2012+, we do not believe that there will be a critical mass of LTE connections until the 2015 timeframe.

Operators consider LTE to be an evolutionary technology, at least

from a service assurance perspective.

Even when the deployment of LTE gathers momentum, LTE may not necessarily represent an opportunity for vendors to gain market share. This outcome is because LTE is actu-ally considered by operators to be an evolutionary technology, at least from a service assurance perspective, rather than as a disruptive technology or service, such as IPTV. In other words, LTE does not change the service assurance model that is used in wireless networks. And as mentioned earlier in this issue, operators are generally reluctant to change their existing service assurance platforms due to their large installed base of legacy products and the disruptions that a vendor swap could cause. Instead, operators seem willing to use the incumbent ven-dors as they evolve to their next-generation network. Therefore, LTE is still the opportunity for incumbent service assurance vendors to lose, even if they may not completely fulfill all of the operator’s requirements for LTE. Moreover, LTE is based on an all-IP network architecture, meaning that if the incum-bent vendor(s) already supports IP-based probes and service assurance solutions then the incumbent(s) is in a comfortable position to deliver the service assurance solutions for LTE. The deployment of LTE also imposes certain product requirements for service assurance platforms. Some of these requirements are hardware related and some of the require-ments are software specific. Since one of the major rationales for LTE deployments is higher data capacity, the hardware probes need to evolve into a next-generation architecture that has the capacity to handle the increased throughput. Addi-tionally, niche areas, such as DPI, will become mainstream in LTE, thus imposing even greater processing requirements on hardware probes.

Niche areas, such as DPI, will become mainstream in LTE.

But not all the requirements are hardware based. The soft-ware-based service assurance solutions are required to incor-porate changing applications and the new services paradigm that exists with LTE. For example, the all-IP nature of LTE


enables it to carry diverse applications such as voice, video, web, enterprise and M2M (Machine to Machine) applica-tions. From a service assurance perspective, operators require advanced application monitoring and analysis capability to assure delivery of these services to their customers. At this point, there are no clear leaders in LTE service assurance. This is largely because operators generally select ser-vice assurance vendors closer to their commercial deployment. Further, the major service assurance vendors do not expect to have commercially available service assurance solutions for LTE until the second half of 2010.

5) Customer Experience Management – The third stage

of service assuranceCustomer Experience Management, or CEM, is the final emerging trend in service assurance that we would like to cover in this issue. CEM represent the third stage in the evolution of service assurance. In the first stage, the service assurance platforms were deployed for network assurance which meant the monitoring of network performance and network avail-ability. The only goal was to provide visibility into network. In the second stage, the service assurance platforms evolved to monitor application/services performance, thus ensuring the performance of key applications such as VoIP, video and data services. Both of these first two stages focused service assur-ance on the operator and its networks CEM evolves service assurance from a network/service centric focus to a customer centric focus. CEM is a holistic approach to service assurance in that it focuses on an end-to-end service assurance since it monitors and measures all aspects of customer interaction or touch points with the operator and the operator’s network. While traditional service assurance relies on data feeds from probes, network elements and serv-ers, CEM collects additional information regarding customers from other sources, such as customer care centers, billing sys-tems and devices.

CEM can perform application, service and network monitoring/

analysis for a single customer, such as a VIP, or for a group of customers.

The entire analysis done in CEM is from the customer per-spective. CEM can perform application, service and network monitoring/analysis for a single customer, such as a VIP or a distinguished wireless research analyst, or for a group of cus-

In Case You Missed It ➤ 11/19/09 “LTE in the Americas” We discuss the key themes

and trends that emerged from the LTE Americas Summit that took place in Dallas, Texas and we compare those themes and trends with what emerged from the LTE event that took place during the summer in Europe.

➤ 11/04/09 “Let’s Go to the Video” We provide performance benchmark tests results from lab-based tests that were conducted on several leading smartphone platforms. In collaboration with Spirent Communications, we tested 7 handsets, including hand-sets from Nokia, Motorola, Samsung, LG and Sony Ericsson. KPIs include VMOS, average start time, A/V synch faults, video missing and video interruptions. Tests were conducted using 3G, Wi-Fi and playback from local memory.

➤ 10/01/09 “It’s a Mad Mad Mad Mad [4G] World” We shed some light on why AT&T made its decision to deploy LTE over HSPA+ and why the strategies of AT&T and Telefonica should not be misinterpreted as the inevitable downfall of HSPA+. By looking strictly at the spectrum holdings of the operators, we can determine which potential mergers or partnerships make sense and which operators need spectrum to fulfill their network evolu-tion strategy.

➤ 9/09/09 “Wireless in Washington…and the sur-rounding Portland area” In this 54-page special report we provide the first detailed assessment of the individual user experi-ence in a Mobile WiMAX network. For this study we leveraged a Rohde and Schwarz network analyzer and other sophisticated data capture tools to analyze a wide assortment of KPIs (MIMO A/B/ availability, RSSI/CINR values, transmit power, modula-tion type, DL/UL throughput, etc). Our analyses are based on transferring 47GB of data and traveling nearly 420 miles around the Portland area over a 5-day period.

➤ 7/21/09 “Wassup with WiMAX?”We discuss many of the salient topics based on our participation at this year’s WiMAX Forum’s Global Congress. We look at the differentiated perspec-tive that Greenfield WiMAX operators have relative to their incumbent peers, discuss the implications of the time to market differences between LTE and WiMAX, discuss why broadband usage on most WiMAX networks won’t/can’t be much different than what it is on today’s HSPA networks, take an updated look at the WiMAX ecosystem and weigh in on WiMAX device/chipset prices and IPR.

➤ 7/01 “HSPA+: Up Close and personal – Down Under” We provide what we consider to be the most comprehensive, indepen-dent assessment of HSPA+ in a commercial network. In addition to the typical throughput, we present a wealth of KPIs, including CQI values, # of HS-PDSCH codes assigned and receiver power strength. The results are based on testing Telstra’s network over a multi-day period, including 41GB of data transfer and >400km of driving in and around Melbourne.

➤ 6/09/09 “LTE – All’s quiet on the European front” We provide a technology and market update for LTE with a particular focus on Europe. Key topics include the motivating factors which are driving operators to deploy LTE and the technology/market inhibitors which could delay or at least curtail widespread deploy-ments and adoption.


tomers, such as a large corporation or an enterprise. In doing this analysis, CEM utilizes data feeds from traditional and non-traditional sources. For example, it can thread together incidents from customer care centers and self service channels, such as web sites, to generate an analysis of the customer expe-rience. Finally, CEM can analyze data for customer personal-ization and precise marketing of new services to the appropriate customers. A major characteristic of CEM is that it is actually a pro-active service assurance tool. CEM seeks to identify and fix issues with a customer or group of customers before the issues snowball into a bigger problem, such as customer desertion. Telstra, which implemented CEM as part of its OSS transfor-mation effort, uses CEM for proactive service assurance. For example, the operator proactively monitors base stations along routes of some of its customers that are involved in the trans-portation industry. If any issues are detected with these base stations a customer specific alarm is generated and communi-cated to customer care centers that are responsible for interact-ing with customers and engineering divisions responsible for maintaining the network. As many operators mentioned to us, it is less expensive to retain existing customers than it is to acquire new customers. Additionally, operators need to drive new revenue opportuni-ties with their existing customers. Therefore, the goal of CEM is to keep a customer happy, avoid customer churn, and target new services for existing customers. A recent NSN survey of over 30 operators on CEM under-scores this aspect. The survey defines what is known as a Customer Lifetime Value (CLTV) which is essentially the net revenue generated during the lifetime of a customer’s

subscription with the operator minus all the costs associated with the customer (Figure 2). During the initial subscription period, the CLTV for a customer is negative. Unless the cus-tomer is retained for a longer duration, an operator suffers a loss with respect to that customer. However, a longer lifecycle enables operators to target new services for those customers that are retained. While CEM puts focus on the customer experience rather than network or application assurance, we must stress that CEM does not lessen the need for robust network and appli-cation assurance. In fact, a robust network and application/services assurance is critical for achieving CEM. The NSN survey lists network and service quality as being one of the five drivers for CEM. Other drivers are service/device portfo-lio, cost/billing, customer care and brand. Therefore, operators cannot focus on customer experience unless they already have an excellent network and service quality. Operators around the world have recognized the need for CEM. One of the larger North American operators inter-viewed as part of this research rated CEM as an 11 on a scale of 1 to 10 with respect to their key service assurance priorities. However, from a solutions perspective, CEM is still an undefined market without a lot of overall market adoption at the moment – most of the interest has transpired in the last 18 months or so. There are perhaps a dozen or so operators that have launched CEM versus the literally hundreds or even thousands of operators that exist on a global basis. These oper-ators tend to be more forward-looking and/or place a greater emphasis on mobile data services. Further, since many CEM solutions require at least some customization of the end user device it is fair to say that the penetration rate of CEM solu-

Figure 2. Customer Lifetime Value (CLTV)

Source: Nokia Siemens Networks (recreated by SRG)

Acquire Introduce Profile Grow Cultivate End

Target Shorten Deepen Maximize Lengthen Learn

Accumulatedcost of

serving acustomer

Negative CLTV

Positive CLTV

Time/customer lifecycles

Accumulatedcustomerlifetimerevenue


tions within any operator’s network that supports CEM is rela-tively modest. And from a solution providers perspective there are also not any clear market leaders. Further, no one currently offers an end-to-end solution that can address all of the areas of CEM that are mentioned in this section while there are not any known CEM solutions that can support both wireless and wireline networks. In that regard, CEM is not a single product, instead, in many cases it involves corralling existing solutions together to provide an integrated view of a customer or customers. That said, many vendors have been addressing the market. Arantech, who was recently acquired by Tektronix, is one of the leaders in the mobile CEM segment. Arantech’s Touch-point CEM suite is targeted for mobile wireless networks. The company believes that its solution provides mobile opera-tors with proactive CEM tools that can be used throughout the customer(s) life cycle. In the case of Arantech, its solu-tion is an equipment vendor independent solution that can read data feeds from installed network equipment and probes. Arantech has been the most successful in the EMEA where it has deployed its solution with leading operators, including Vodafone. Mformation is a privately-held company that has made a name for itself with its device management solution. The com-pany is now leveraging this foothold to provide additional functionality in the form of a SIM-based or software client-based CEM solution that can report CEM-specific informa-tion back to its network server along with supporting the more traditional mobile device management services that it already provides. Presently, Mformation’s client list includes major European, Asian and North American operators across three of the 3G technologies – HSPA/UMTS, EV-DO/1X and Mobile WiMAX. As mentioned earlier, CEM requires an extensive inte-gration of existing solutions. The expansive nature of CEM requires not only the integration of different service assurance platforms, but also medium to large scale integration with dif-ferent BSS/OSS platforms, such as customer care and billing systems. Therefore, while off-the-shelf solutions can provide certain basic CEM features, there will be an implementation phase specific to each operator. That effort requires system integration expertise which is the domain of system integra-tors, such as IBM, HP or Telcordia. The system integrators have been investing in the CEM seg-ment although so far most of their efforts are geared towards wireline NGN. For example, Telcordia has invested in Fine Point Technologies which makes CEM solutions for wireline broadband networks. More recently, Fine Point has been ven-

turing into the mobile wireless segment with device manage-ment solutions. And as NEMs evolve into managed services, they are also transforming their OSS solutions into CEM solutions. Alcatel Lucent has developed a major line of CEM solutions called Motive which integrates key functions such as cus-tomer care, self-service channels, activation systems, service management and device management. Likewise, NSN has been repositioning its slew of OSS solutions including Netact and Traffica for CEM.

Software integrators and NEMs are in a better position

to implement customized CEM solutions for operators than probe-based vendors.

Software integrators and NEMs are also in a better posi-tion to implement customized CEM solutions for operators than probe-based vendors. One possible exception is Tektronix which is well-placed in CEM because of its Arantech acqui-sition. That said, probe-based vendors can still benefit from CEM by implementing CEM functions in probes and then partnering with software integrators or NEMs. Customizing for customers. The customer centric view of CEM requires CEM solutions to provide the ability to customize an experience for specific groups of customers. The customization may be in terms of specific metrics to be measured or the workflow required for customer interaction. That means not only is there a system integration effort to cre-ate CEM solutions, but there is also ongoing customization required as specific groups of customers are added to the system. Operators need to control this customization process without the need to go back to system integrators or NEMs. Therefore, CEM solutions need to provide customization capabilities. The lack of such features in CEM solutions has forced some operators to implement in-house CEM solutions over existing BSS/OSS platforms to implement customization rapidly. For example, Telstra built its own CEM solution during its OSS transformation. Telstra believes that its CEM solution allows it to develop new features for different customer groups in mat-ter of days or perhaps weeks in some more extreme cases. Service assurance at the edge. Effective CEM will require pushing service assurance to the edge of the network to user devices, such as mobile phones and set top boxes. This additional requirement is because the majority of the customer-network interaction is through the device. This new feature of CEM entails the collection of data related to the customer’s


interaction with the device such as application usage and efforts to access new services. Therefore, device agent solutions that can monitor device utilization are a required component of CEM. So far, none of the major service assurance platforms pro-vide support for the integration of device agents. While major service assurance vendors have yet to address this area, there are few start-ups or privately-held companies that have devel-oped device agents that can collect the data experience from the devices. For example, CarrierIQ , Mformation, and CIQUAL have developed solutions that can gather experience metrics on mobile handsets and feed it back to the network over the air. These solutions install intelligence device agents on mobile phones. In the case of CarrierIQ , the solution is integrated into the chipset, while the previously mentioned Mformation solution is incorporated within the SMS card or available via a separate software client. In addition to providing basic CEM features, some of these solutions can also support other critical features, such as device management with the use of the Mfor-mation platform. To be sure, putting agents on devices could result in mas-sive amounts of data being uploaded over the air. In addition to making it more challenging to shift and sort through the information to extract what is relevant, operators could be con-cerned about increasing traffic on what can already be a con-gested network. The latter issues can be overcome by uploading during evenings and weekends when the network is not loaded. Finally, there are privacy issues which may require an opt-in choice for consumers.

Niche Areas in Service AssuranceWhile CEM requires a horizontal end-to-end implementation, there are niche vertical areas that represent new opportunities in service assurance. All of these vertical areas have been cre-ated due to the transition to all-IP broadband networks as well as due to the exploding growth of data traffic in general and to mobile data traffic in particular. Deep Packet Inspection (DPI): refers to peering inside data packets to gather information on the payload being trans-mitted in the packets. DPI allows operators to gather better visibility into their network through application usage and resource utilization analysis. Operators can secure the net-work and devices by analyzing the traffic for malicious con-tent. Additionally, DPI enables the implementation of service assurance features such as utilization control and tiered band-width plans. DPI is increasingly becoming important for operators as data traffic explodes in their network. Operators view DPI as a necessary component to meet QoS requirements for services

and customers by prioritizing traffic streams in the network. For example, certain Peer to Peer applications (BitTorrent video downloads) can hog bandwidth in a network. DPI analy-sis allows operators to ensure QoS for services offered by them by prioritizing them over Peer to Peer applications. We must point out that DPI has some negative connotations with the net neutrality debate that rages in the communications indus-try. Further, DPI has come to be associated with bandwidth restriction (to some extent it is) and privacy issues.

Despite facing issues like net neutrality and privacy concerns,

DPI is gaining acceptance as a critical part of an operator’s service assurance solution.

But even with all these issues, DPI is gaining acceptance and it is becoming a critical part of an operator’s service assurance solution. While DPI has been used in cable and other wire-line broadband networks, mobile operators have just begun to deploy DPI-based service assurance as data growth is explod-ing in the industry. This trend is because DPI gives mobile operators a measure of control over resource utilization. DPI is a significant opportunity in service assurance, espe-cially for probe-based service assurance vendors since these vendors can extend their expertise in probes and apply it to DPI. However, DPI requires specialized probes that are opti-mized for IP packet inspections rather than general purpose probes that are offered by probe vendors. So far, none of the traditional probe vendors have addressed the need for DPI. Instead, the DPI market is largely addressed by non service assurance vendors such as Continuous Computing, Procera Networks, Endace and cPacket Networks. Among the large NEMs, companies like Cisco and ALU have DPI solutions. ALU’s 9900 Wireless Network Guardian (WNG) is a DPI solution primarily targeted for mobile broad-band wireless networks. Deployed in packet core networks between packet data nodes (PDSN to Home Agent or SGSN to GGSN), WNG can perform packet inspections to provide visibility into the data traffic that is occurring over the wireless networks. The WGN consist of an IP-based DPI probe, called a WNG Detector, which analyzes the IP packets off the wire and an analysis tool called WNG Central. The WNG Central analyzes data feeds from several WNG Detectors deployed in the network. WNG provides DPI capabilities for IP packets much like other DPI solutions. However, its key differentiator is its abil-ity to tie the information back to the wireless (or radio) layer so


that it can be used to determine the impact on resource utili-zation (for example: air time) and performance, thus enabling operators to optimize their wireless networks. Further, WNG provides granular reporting on a per subscriber, per application or per device type, thus providing operators with the intel-ligence that is needed to perform network planning, optimi-zation and target new services. Moreover, ALU believes that WNG can provide protection against threats that are specific to wireless networks. Mobile backhaul: Mobile operators are evolving their backhaul network from circuit switched technologies to packet switched technologies such as Ethernet. This evolution is driven by the capacity requirements of mobile data traffic and the need to control cost. As Ethernet makes the transition from LAN- to WAN-based Metro Ethernet technology, it has emerged as the transport technology for backhaul networks. As the number of connections grows, operators will need integrated service assurance tools to monitor and manage their backhaul assets.

The service assurance tools needed to manage the Ethernet-based

transport networks for backhaul purposes are not mature yet.

The service assurance tools needed to manage the Ethernet-based transport networks for backhaul purposes are not mature yet. Since most mobile operators are expected to lease Ethernet capacity from large Metro Ethernet operators, SLA monitor-ing will be a crucial component of Ethernet service assurance. Operation, Administration and Maintenance (OAM) will be another major requirement for Ethernet service assurance. As Ethernet became a WAN technology, a number of OAM fea-tures, such as Ping and Traceroute, have been added to the Ethernet technology to ensure the availability of an Ethernet-based transport backbone. Therefore, service assurance tools need to add an Ethernet OAM. The expected deployments of Ethernet backhaul solutions are over fiber or microwave. As such, optical service assur-ance vendors, such as EXFO and JDSU, have upgraded their solutions to compete in this niche area. Meanwhile, smaller players, like Prosilient and Accedian Networks, are leveraging their expertise in IP/Ethernet-based probes to offer solutions for backhaul assurance. Video Assurance: As operators search for new revenue streams, telecom and cable operators have been encroaching on each other’s territory. Likewise, telecom operators have joined

cable operators in offering video services with their next-gener-ation networks. IPTV deployments have been gaining ground in North America, Western Europe and Asia. In the United States, AT&T is seeing good traction for its IPTV-based U-Verse service, netting almost a quarter million new subscrib-ers in the second quarter of 2009. Verizon’s Fiber to the Home (FTTH) based FiOS has seen wide deployments as well. Video service quality assurance and end-to-end IPTV assur-ance will be key opportunities for service assurance vendors. Video quality service assurance refers to monitoring, measur-ing and assuring the quality of video streams over different communication networks. The video quality measurement sys-tems are evolving to address video over IP services with the video service quality measurement market being addressed by number of major players. IPTV service assurance refers to the end-to-end monitoring and measurement of the entire IPTV network infrastructure. While IPTV deployments began over five years ago, they are only gaining ground as of late. Therefore, a number of the probe-based service assurance vendors have waited for the technology and the market to mature before developing service assurance solutions. The delay on the part of these companies has opened the door for start-ups, such as IneoQuest and Shenick Net-work Systems, which have developed probe-based IPTV ser-vice assurance solutions, suggesting that these companies will benefit from the growing deployments of IPTV services. Currently, video services are not a significant part of a mobile wireless operator’s offerings. This scenario is largely due to bandwidth constraints and device limitations. However, the deployment of broadband wireless networks such as HSPA/HSPA+ and LTE, as well as emergence of smartphones, has minimized those constraints and they will provide the plat-form for the future growth of video services. Although video service assurance over wireless networks is another addressable market for service assurance vendors, it is largely unaddressed market today. Since customer experience is paramount, device-based assurance solutions may be the best way to measure the customer experience with video ser-vices over wireless networks. Such solutions can be tied back into the probe-based video quality measurements in the net-work to provide end-to-end video assurance over the mobile wireless networks. We must point out that it is impossible for large service assurance vendors to address all of these niche areas in-house until these areas are mature and accepted by operators. Gener-ally, these areas are addressed by start-ups who focus on one area. At the same time, service assurance vendors need to be nimble and quick in order to respond to new trends and opera-tor requirements. Therefore, service assurance vendors typi-


cally use acquisitions to beef up their solutions or enter new service assurance areas. Major service assurance vendors, such as Tektronix and EXFO, have been some of the most prolific vendors when using acquisitions to enter new areas. We expect that this trend will continue in the future.

Final ThoughtsService assurance is undergoing transformation with the deployment of next-generation networks and services. The major trend underlining this transformation is Customer Experience Management (CEM). CEM will transform ser-vice assurance from a network centric process to a customer centric process. The transition to all-IP networks will also create new requirements and opportunities. For operators, understand-ing these trends is essential to realize the full potential of their huge investments in NGN. For service assurance ven-dors, identifying and implementing these trends is essential to achieve growth in an otherwise slow growing segment. Until next time, be on lookout for the next Signals Ahead...

Michael Thelander, CEO, SRG Michael Thelander is the CEO and Founder of Signals Research Group. In his current endeavor he leads a team of industry experts providing technical and operator eco-nomics analysis for clients on a global basis. Mr. Thelander is also responsible for the consultancy’s Signals Ahead research product, including its widely acclaimed “Chips and Salsa” series of reports that focus on the wireless IC industry. Previously, Mr. Thelander was an analyst with Deutsche Bank Equity Research. Prior to joining Deutsche Bank, Mr. Thelander was a consultant with KPMG (now known as BearingPoint) and a communications officer with the United States Army. Mr. Thelander has also published numerous articles for leading trade publications and engi-neering journals throughout his career. He has been an invited speaker at industry conferences around the world and he is frequently quoted by major news sources and industry newsletters, including The Econo-mist, The Wall Street Journal, Investors Business Daily, Reu-ters, Bloomberg News, and The China Daily. Mr. Thelander earned a Masters of Science in Solid State Physics from North Carolina State University and a Masters of Business Administration from the University of Chicago, Graduate School of Business.

Narayan Parameshwar Narayan Parameshwar is a contributing author to SRG. His expertise is in the areas of Wireless and IP commu-nication networks. Mr. Parameshwar is the founder of a consulting company called Solubiq which is focused on consulting and training for Next Generation Networks. He has extensive experience in product design to net-work planning, deployment, optimization and system performance analysis. Mr. Parameshwar has worked with operators and vendors on market/technology analy-sis, product planning, training and strategic planning for future. He has published many articles on next generation wireless and other NGN technologies in trade and IEEE publications. Currently, his consulting practice is focused on design and deployment of the next generation of tech-nologies including UMTS/HSPA, LTE, VoIP/IMS and Ethernet transport. Previously, Narayan worked at Award Solutions as director of product management guiding consulting and training practices. Prior to that, Narayan was Member of Scientific Staff at Nortel Networks. He was part of the team that developed the first CDMA network from Nortel Networks. Narayan has a Masters of Science in Computer Sci-ence Engineering from University of Texas at Arlington. Narayan can be reached at [email protected]


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please note disclaimer: The views expressed in this newsletter reflect those of Signals Research Group, LLC and are based on our understanding of past and current events shaping the wire-less industry. This report is provided for informational purposes only and on the condition that it will not form a basis for any investment decision. The information has been obtained from sources believed to be reliable, but Signals Research Group, LLC makes no representation as to the accuracy or completeness of such information. Opinions, estimates, projections or forecasts in this report constitute the current judgment of the author(s) as of the date of this report. Signals Research Group, LLC has no obligation to update, modify or amend this report or to otherwise notify a reader thereof in the event that any matter stated herein, or any opinion, projection, forecast or estimate set forth herein, changes or subsequently becomes inaccurate. If you feel our opinions, analysis or interpretations of events are inaccurate, please fell free to contact Signals Research Group, LLC. We are always seeking a more accurate understanding of the topics that influence the wireless industry. Reference in the newsletter to a company that is publicly traded is not a recommendation to buy or sell the shares of such company. Signals Research Group, LLC and/or its affiliates/investors may hold securities positions in the companies discussed in this report and may frequently trade in such positions. Such investment activity may be incon-sistent with the analysis provided in this report. Signals Research Group, LLC seeks to do business and may currently be doing business with companies discussed in this report. Readers should be aware that Signals Research Group, LLC might have a conflict of interest that could affect the objectivity of this report. Additional information and disclosures can be found at our website at www.signalsresearch.com. This report may not be reproduced, copied, distributed or published without the prior written authorization of Signals Research Group, LLC (copyright ©2004, all rights reserved by Signals Research Group, LLC).

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