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With the telecommunications industrys rediscovered appreciation for profitability, return on investment and other bottom-line interests, vendors will take advantage of this weeks SuperComm conference in Atlanta to show providers how to offer differentiated services in the hope of increasing the revenue potential of each user.
While it is not clear that customer demand is driving the trend, customers are likely to benefit from the manufacturers concomitant efforts to create greater interoperability.
The historic telecom carrier profit model is diminishing as pure transport service becomes increasingly commoditized, leaving providers looking to vendors for more intelligent network components. Avici Systems Inc., an IP router manufacturer, will unveil several product upgrades this week to help providers eke more capacity out of their networks, support end-to-end services and provide bandwidth on demand.
“The feedback from our carrier customers is about the fundamental problem of how to increase services to increase profitability,” said Esmerelda Swartz, director of strategic marketing at the Billerica, Mass., company. “Theyre spending a lot of money on new equipment and not seeing revenue derived from it.”
Working toward a similar goal, RiverStone Networks Inc. will promote hardware platforms for metropolitan area networks to allow telcos, application service providers and data centers to convert raw bandwidth into profitable services. RiverStones products enable providers to prioritize customers traffic and provide bandwidth on demand. At the show, the Santa Clara, Calif., vendor will be looking ahead, promoting service providers future need to combine technologies to create unique services.
Likewise, Ellacoya Networks Inc. will tout the benefits of differentiated services among broadband access providers. The Merrimack, N.H., vendor builds IP networking platforms to help service providers become content and applicationdistributors, allowing them to move toward a subscription-based sales model.
“The economics of content distribution on the Internet are no different than they are in the real world,” said Ron Sege, Ellacoyas president and CEO. “The same revenue shares are available online.”
The immediate value proposition to the user of the service providers ability to migrate from transport to enhanced services is less apparent at this stage. In theory, any efficiencies accrued to the carriers would translate into faster deployment of next-generation services, such as video on demand and IP voice offerings. At a time when the typical IT shop is facing its own restricted budget, many say they are focused on this generations network.
However, the redoubled focus on the bottom line is also accelerating vendor interoperability initiatives, which suggests a more immediate benefit to customers. The drive toward open standards should allow users to assemble best-of-breed systems and reduce the opportunity for any single vendor to “own” the customer.
“The next step after making new features available was starting to work towards interoperability,” Swartz said.
Avici will participate in the Optical Internetworking Forums demo at Supercomm. The OIF is a coalition of carriers and vendors working to unite packet and voice networks to accelerate the deployment of internetworks.