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May 11, 2012
Stratecast Analysis by
Jeff Cotrupe
Stratecast Perspectives & Insight
for Executives
Volume 12, Number 18
Business Intelligence for Operators:
Business Intelligence for Operators: Can You Have it All?
Introduction
1The banking, financial services and insurance industries began moving toward business intelligence (BI), of which analytics is a subset, when they began to leverage analytics in the early 1970s. Those early efforts were focused mainly on customer acquisition (sales & marketing); but in subsequent decades, companies in those and other verticals have been adopting analytics and even broad-based BI solutions to optimize their businesses.
Communications service providers (CSPs) have been wrestling with massive amounts of network, customer and usage information, too. Yet, for decades, the state of the art in CSP analytics went about as far as recognizing that Mother’s Day was the heaviest voice traffic day of the year, so CSPs needed to add network capacity and map out reroute plans to handle it. In 2007 Stratecast called on CSPs to awaken their analytics potential, citing a significant lack of analytics maturity in nearly half the CSPs we surveyed at that time: usage of analytics mainly or only in the market department, and lack of an enterprise-level commitment to using analytics as a competitive enabler.2
CSPs have come a long way since ’07; and, on balance, Stratecast believes BI adoption has been slower in telecom for three reasons:
• Tactical trumps strategic – CSPs have been consumed with providing an ever-widening array of services to increasingly mobile (and fickle) customers, and have found it difficult to take more strategic, analytics-driven approaches.
• Dearth of telecom-specific BI – most of the BI market leaders are global IT powerhouses, and while their solutions are clearly working for large enterprises, they are not telecom-specific and are not specifically designed to integrate with a CSP’s existing OSS/BSS fabric.
• Telecom-focused analytics – most of these solutions do not offer end-to-end BI and are fragmented along technology and customer type lines; for example, video service assurance and QoE.
This Stratecast SPIE report will analyze how and where CSPs can benefit through the intelligent application of analytics; and whether ‘BI for CSPs’ is a technological and bankable reality for CSPs and BI solution providers alike.
1 In preparing this report, Stratecast interviewed these representatives of Sandvine: • Lee Brooks, Manager, Product Marketing
• Jennifer Ross, Corporate Communications Manager
Please note that the insights and opinions expressed in this assessment are those of Stratecast and have been developed through the Stratecast research and analysis process. These expressed insights and opinions do not necessarily reflect the views of the company executives interviewed.
2Starting Up A CSP Analytics Engine, SPIE 2007-27
Stratecast believes CSP BI adoption has been slowed by three factors: internal CSP tactical, rather than strategic, focus; a lack of telecom-specific BI solutions; and fragmented, technology-specific analytics offerings.
Welcome to the (Data) Revolution
In the 1990s, a group of companies—some larger (AT&T Network Systems and Bellcore) and some smaller (Applied Computing Devices, Objective Systems Integrators and TCSI)—led a telecommunications industry data revolution. They were building software systems that liberated CSP information from its usual resting places—such as stacks of network traffic reports—and deployed it in an exciting new form, ‘the GUI’: graphical
user interfaces that put a user-friendly face on the complexities of the underlying systems.
Once telecom engineers and executives had a chance to access the data in a unified visual form, they began developing innovative solutions to everyday problems. ACD’s Correlator product, for example, was one of the first
telecom management software systems to deploy algorithms that triangulated data from various seemingly-unrelated network events to derive root causes of network problems. So, for example, Correlator would acquire and parse through hundreds of network events and present a single root cause to the system user: “Fiber cut in this specific network segment.” ACD was also the first to identify and present so-called performance faults to system users. A network fault, like the aforementioned fiber cut, meant a service outage; and, of course, a flood of angry customers calling CSP help desks. Correlator identified degrading performance conditions in devices in the network that historical trending data indicated would eventually lead to a network fault; and presented it to system users as a performance fault. The CSP could repair or replace the impacted devices and thus head off a future (and most likely widely-publicized) service disaster.
Since then, CSPs have been using data in some useful yet rudimentary ways, such as: • Mediating and analyzing service detail records (XDRs) for billing purposes
• Analyzing performance with regard to customer trouble response and resolution, such as deriving figures on mean time to resolution (MTTR)
• Analyzing network usage, costs and outages • Performing vendor invoice analysis
• Conducting standard accounting functions
• Performing trend analysis to adjust future operations based on historical traffic trends (as in the Mother’s Day example)
Welcome Big Data? No Need: It Is Already Here
Fast-forward to today, and CSPs, like all other organizations, are facing a tidal wave of data in their own systems—from the Web and in tide pools of data locked up in external databases. Big Data (millions to billions of records) is upon us; and it is difficult or impossible to manage it using existing database management tools. Big Data is a big and complex problem, but CSPs can cut it down to size and put it to work for them if they can do three basic things:
• Access, manage and report on data from multiple data sources. These sources include networks, both their own and partner networks or segments; mobile networks, users and
Given the chance to access data in a unified visual form, telecom
engineers and executives began developing innovative solutions to everyday CSP problems.
devices; their OSS/BSS infrastructure; and CSP enterprise-side functions incorporating key performance indicators (KPIs). Other sources include content providers, such as those marketing mobile apps and games to a CSP’s subscribers (and rendering a cut of the revenue to the CSP); content delivery networks (CDNs) supporting media and entertainment services, including over-the-top (OTT) video; the Web; and any other channel external to the CSP.
Manage Big Data. The issue with Big Data is not just its sheer size, but the growing
number of data types hurtling at CSPs today. The first broad category is Structured data, which includes things such as customer, demographic and usage records that are easily accessed in table and row database structures using SQL queries. The second, Unstructured data, encompasses everything else: email, business documents, images, web page content, audio, video and more. Unstructured data is also growing much faster than its Structured counterpart. A BI solution must effectively accommodate both—and a great deal of both.
Provide effective structures and strategies for analytics, data warehousing (DWH) and extraction-transformation-loading (ETL). DWH occurs on data computing
appliances that process data at high speeds. ETL is the combination of processes that results in data being acquired by a DWH.
CSPs Can Reap BI Benefits Across Their Operations
BI is a multibillion-dollar global market, with some industry figures placing it in the tens of billions of dollars on an annual basis; and Stratecast plans to analyze and quantify both the total BI market and the market for BI specifically for CSPs, in upcoming reports.3 BI inspires billions of dollars in
spending because implementing BI offers a wide range of business benefits, from empowering all authorized users to access the data they need, to understanding competitors. Those general benefits apply to CSPs as well, but CSPs can also reap a wide range of other benefits that do not apply to enterprises. For the purposes of this report, we are focusing our attention on BI’s impacts on four function and process groupings: Network & Operations; Products, Marketing and Mobile Commerce Management (MCM); Core Customer Data;
and CEM. Other CSP areas where BI can have a major positive impact include Billing & Revenue Assurance, C-Suite and Carrier/Partner Relationships. Major benefits of BI to a CSP’s Network & Operations processes are reflected in Figure 1.
Figure 1: BI Supports CSP Teams-Areas-Processes: Network & Operations Team-Area-Process Where/How BI Helps
Service Fulfillment o Infrastructure layer orchestration: data collection, validation, correlation and distribution
o Resource utilization patterns and forecasting o Installation process optimization
3 Planned titles: Business Intelligence 2012: Harnessing Big Data for Sizable Business Results and Business Intelligence for CSPs 2012. BI inspires billions of dollars in spending because implementing BI offers many business benefits. In CSP environments, those benefits are most keenly felt in areas such as Network & Operations, Products & Marketing, Core Customer Data, CEM, Billing and Revenue Assurance.
Team-Area-Process Where/How BI Helps
Service Assurance o Customer interaction management o Predictive customer assurance o QoS pattern identification
o Correlation of signaling data with OSS data
The NOC o EMS/NMS/OSS analytics
o Network monitoring
Operations/MIS o Infrastructure and capacity planning o MIS administration
o Decision support systems
Source: Stratecast
The rise of digital analytics and marketing platforms speaks to the power of automating product and marketing processes. By the nature of the markets in which they compete, CSPs take the expression “always selling” to the extreme; and analytics-driven automation enables them to keep up with the drumbeat of the market.
Mobile commerce management (MCM) offers CSPs one of their most lucrative opportunities for leveraging analytics to drive new revenues.
BI impacts on Products & Marketing processes are shown in Figure 2.
Figure 2: BI Supports: Products, Marketing and Mobile Commerce Management Team-Area-Process Where/How BI Helps
Product Development o BSS analytics (e.g., product catalog) o Product development and optimization o Pricing plan design
CMO, Marketing o Prospecting, lead generation, competitor tracking o Database marketing
o Customer base segmentation, offer customization o Online behavioral analytics: Site & Social
o Messaging and content/campaigns-promotions Mobile Commerce
Management (MCM) oo Marketing automation and campaign management Campaign response modeling
o NEW synergies: digital/mobile + traditional advertising, mobile barcodes/POS
o M-commerce: m-payments/-ticketing/-shopping
BI can enable CSPs to retain and reap maximum value from subscribers. In addition to helping them cover the bases when it comes to understanding their customers, BI can also help them follow MCM best practices to reach their subscribers on the go: not just with advertising messages but with core customer communications and save offers in response to negative service events. Social Network Analysis (SNA) is growing in importance because it helps identify Influencers (and those they influence in a CSP’s customer base. That can be crucial because when Influencers try new offers, so does their circle—and when they churn, they take others with them. BI’s benefits on Core Customer Data processes are shown in Figure 3.
Figure 3: BI Supports: Core Customer Data Team-Area-Process Where/How BI Helps
Customer Analysis and
Communications oo Customer lifetime value (CLV)/profitability analysis Revenue forecasting o Churn reduction
o Data mining
o NEW: adapt MCM processes to all customer communications Churn Prediction and
Management oo Interaction management Real-time, adaptive customer communications: all touch points o Customer’s profile (behavior/attributes) combined with
responses to questions/offers
o Trigger function: customer change yields offer(s) Social Network Analysis
(SNA) oo Identify Influencers and Influenced in CSP subscriber base Adjust communications/offers/churn policies accordingly
Source: Stratecast
Customer Experience Management (CEM) is an area of focus for CSPs that Stratecast defines in four distinct parts. One, Application Performance Monitoring (APM), enables CSPs to “see” services, mobile devices, apps and sites through the eyes of the subscriber. CSPs do not own or control all elements of the application and service delivery ecosystem—but if mobile users cannot access everything error-free and at top speed, they are going to blame their CSP. So, APM provides an outside-in, user-centric perspective to complement the equally essential service assurance solutions already hard at work in the NOC. BI’s impact on Stratecast’s four defined areas of CEM is shown in Figure 4 below.
Figure 4: BI Supports: Customer Experience Management Team-Area-Process Where/How BI Helps
Application Performance
Monitoring (APM) oo User view of service/app/device/site performance Quality of service (QoS) o Video service assurance/QoE
Customer Service
Assurance (CSA) oo Usage data patterns, trends and preferences Probes and other in-network data collection devices Quality of Experience
(QoE) oo Customer experiences with company itself Purchases, bill payment, support/help desk, retail experience and more
o Mapping ‘analog’ customer QoE into ‘digital’ (quantifiable) metrics
Customer Experience
Analytics (CEA) oo Operational, usage and revenue statistics Multichannel measurement, including social
o Customer profiles to drive offers and other treatments
Source: Stratecast
BI for CSPs: A Capable Provider Covers Most of the Bases
In the Introduction we introduced three answers to the question, “Why haven’t CSPs moved as quickly as some other industries into BI and analytics?” While it is difficult to directly influence CSPs moving beyond the tactical to take a more strategic, analytics-driven approach, we contend that the right vendor solutions—CSP-focused, broad-based BI rather than analytics point solutions—can create the environment for positive change.
In our continuing research and analysis of the market, we have identified a company, Sandvine, with a range of solutions that deliver CSP-focused BI and that should eliminate any CSP excuses re: “BI is important, but BI providers don’t understand our business.” Sandvine positions itself as providing Intelligent Broadband Networks through network policy control, and offers only one product with Analytics in its name; but CSPs who choose its full solution suite go a long way toward implementing a full-bore CSP BI solution. The components of the Sandvine suite include:
• Network Policy Control System comprising these platforms:
o Policy Traffic Switch (PTS), built on the Sandvine Policy Engine (SPE), which interacts directly with data traffic by enforcing (usage and service) policies on a per-flow and per-subscriber basis.
o Service Delivery Engine (SDE), built on the SPE on top of RedHat Enterprise Linux and third-party hardware, operates in the control plane between the data and provisioning layers, to integrate BI with OSS/BSS.
Sandvine’s CSP-focused BI solutions should eliminate CSP excuses re: “BI is important, but BI providers don’t understand our business.”
o Subscriber Policy Broker (SPB), built on storage-reporting-policy (SRP) hardware, which provides granular long-term storage of network and subscriber usage information, and offers public APIs for ready integration with OSS/BSS and other CSP systems.
• CSP BI products:
o Network Analytics supports CSP network processes and functions, as shown was in Figure 1. Purpose-built by the company for converged-access CSPs, the product helps CSPs improve business performance by using predictive analytics to optimize capital expenditures (capex), operations processes and revenue. Network Analytics includes five separate dashboards:
Traffic Management Dashboard (integrated with Sandvine’s Traffic Management product), which supports CSP network, customer data and CEM processes, as shown in Figures 1-4, by helping CSPs achieve fair-use and traffic optimization objectives supporting subscriber QoE. This benefits the CSP in terms of both open market competition and regulatory compliance. The Traffic Management product does the real-time management, and the Traffic Management Dashboard is closely integrated, so it shows the metrics that help operators view the effectiveness of their traffic optimization policies and plan capacity expansion, management policies and other initiatives more effectively.
Usage Management Dashboard (integrated with Sandvine’s Usage Management product), which supports a broad array of CSP processes and functions including product & marketing and core customer data (detailed in Figures 2 and 3), as well as billing and revenue assurance. Usage Management’s supported billing functions include subscriber interactivity such as changing postpaid service plans on the fly to reduce “bill shock” from usage overages, as well as subscriber top-up (adding money to a prepaid or real-time-billed subscriber account to maintain service). The Usage Management Dashboard displays the relevant metrics and forecasts.
Real-Time Entertainment Dashboard, which supports the APM segment of CEM, as was shown in Figure 4. Each time a subscriber on the CSP’s network consumes a piece of real-time entertainment media (primarily audio or video), the product collects data about the content provider and the content delivery network (CDN) that delivered the traffic; the duration and size of the video or audio file(s); metadata such as video and audio codecs, as well as media containers used; and most importantly, the device used by the subscriber, and the QoE they received. The product aggregates and reports on these analytics, segmented by content provider, CDN, geography and other class-level characteristics. One view of this dashboard, the Engineering Summary, is shown in Figure 5 below.
Network Summary Dashboard, which integrates inputs from all products to monitor overall network developments, track CSP business-side key performance indicators (KPIs) and initiate action, supporting Engineering, Marketing and other teams.
IPv6 Transition Dashboard, which focuses specifically on monitoring the applications and devices driving IPv6 adoption on the CSP’s network
o Network Demographics is a reporting product, included with all Sandvine PTS deployments, that allows CSPs to explore past network measurements by using a library of predefined reports and custom reporting capabilities.
Figure 5: Sandvine’s Real-Time Entertainment Dashboard: Engineering Summary
Source: Sandvine
Sandvine supports its products with consulting, customer advocacy and education services, some of which include:
• Business cases & ROI analysis
• Engineering and solution design & planning • Installation, integration and commissioning
• Maintenance & support
Sandvine has more than 200 CSP customers in more than 85 countries, serving hundreds of millions of broadband and mobile data subscribers; named CSPs include Comcast, ClearSky, Cricket, NTT Communications, SK Broadband, StarHub, Telefonica and VOX Telecom, as reflected in Figure 6.
Figure 6: Selected Sandvine CSP Customers
Stratecast
The Last Word
CSPs were slower to embrace business intelligence (BI) than some other industries, but Stratecast believes that was due less to resistance-for-resistance’s sake and more to factors both internal and external to the CSP. On the one hand, CSPs themselves have been caught up in the serious business of providing an ever-wider array of services to their increasingly-mobile, churn-ready subscribers. This has caused them to not so much take their eye off the ball as to have “few eyes left to watch the ball”—unable to take a step back and realize that making a strategic move into BI holds the key to solving those very same tactical, resource-intensive issues that consume their daily lives. On the other hand, the IT giants who control the wider, cross-industry BI marketplace offer solutions that are both technologically and price-wise a great fit for multinational corporations—but are not telecom-specific; and, by and large, have been designed without regard to integration with a CSP’s existing OSS/BSS infrastructure. Telecom vendors have joined the fray in recent years with point solutions that address CSP analytics, not the broader need for CSP BI; and, while some provide excellent functionality, they collectively represent yet one more standalone element that a CSP then needs to integrate into its infrastructure.
All that is changing, however; and Sandvine is an example of a provider devoted to serving the global CSP community, whose solutions can help its customers implement BI tailored to their needs. Sandvine’s solutions support areas we have identified as benefiting from BI, including network & operations, products & marketing, core customer data, CEM, billing and revenue assurance.
One of the most pressing issues for CSPs is how to manage over-the-top (OTT) video that is voraciously consuming an ever-larger share of their network and systems resources. This has led to the emergence of some excellent video service assurance and QoE point solutions in the marketplace. Sandvine offers a solution in this area, too: its Real-Time Entertainment Dashboard. In Stratecast’s definition of CEM, this product supports the APM segment, and it is as comprehensive as any of the CSP video APM solutions we have seen. What we like even more about the Real-Time Entertainment Dashboard is that it is part of Sandvine’s CSP BI solution suite, which
means it can help CSPs implement a strategy to deal with video that fits smoothly into their larger strategy of implementing CSP-specific BI.
The upshot is that for CSPs still hesitating about when and how to implement BI, Stratecast cannot recommend more strongly that the time is now, and Sandvine offers viable answers to the question of how.
Jeff Cotrupe
Global Program Director – ACEM and OSSCS Stratecast | Frost & Sullivan
SPIE #18, May 2012 © Stratecast | Frost & Sullivan, 2012
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