Transcript: Network Transformation: Market Drivers

This transcript is from a PodTech.net podcast at:
http://www.PodTech.net/?p=874

Network Transformation: Market Drivers

[music]

Michael Johnson: This is Michael Johnson and we are going to be doing a series of informative podcasts, bringing together some analysts from industry, some technology experts, service providers, talking about carriers and the transformation that major carriers are going through right now. They have to transform their networks to deal with some of the new technologies that are being offered today, multi-service packet-based technologies. We're going to be covering IMS, soft-switching, VoIP, Triple Play, IPTV design and management, all kinds of things. With me today, on the line, from different parts of the world, actually. We're going to be speaking with John Lazar, who is the CEO of MetaSwitch. Welcome to the podcast, John.

John Lazar: Thank you Michael. It's a pleasure to be here.

Michael Johnson: And also on the line is Joe McGarvey, who is the Senior Analyst at Current Analysis in New York. Welcome, Joe.

Joe McGarvey: Thanks, Michael.

Michael Johnson: We're going to start with you, John. Tell me a little about your background and a little bit about the MetaSwitch company.

John Lazar: My personal background Michael is as an engineer. I joined MetaSwitch's parent company, Data Connection, 18 years ago. So I've been with the same company a long time. But I've done a variety of different things within the company ranging from engineering through product management to architecture and obviously business generation and more general management responsibilities. MetaSwitch is a separately branded division within Data Connection. We started MetaSwitch about six years ago and our strong focus has been on providing next-generation voice technology to service providers in North America and in the UK. MetaSwitch's real value-add has been in a very strong understanding of the next-generation voice-over-IP and IMS landscape, and a good understanding of how we can make it easier for service providers to migrate from their existing, legacy networks.

Michael Johnson: Now, Joe, maybe you can tell me a little bit about what kinds of issues that you cover at Current Analysis.

Joe McGarvey: Sure. The module -- the coverage area -- that I work in is described as "carrier IP telephony." As that might suggest, I'm looking at equipment that the carriers are deploying to offer new services, many of the ones you described earlier. That includes soft-switches and related equipment. Right now, as you might expect, I have been focusing quite a bit on IMS and all of that implementing that technology entails. Actually, I should say all that architecture entails. It's not really a technology, as we'll probably get into it later.

Michael Johnson: So I'm going to get back to you, John. Tell me a little bit about how telecommunications is changing. I know telecommunications is really key to shaping the entire world and how people communicate. Can you talk a little bit about how things are changing and how some of this technology right now, especially as the telcos are looking at it, is going to change networks and change the social interactions of people?

John Lazar: OK. I think the two trends that I would emphasize first is that we have seen a revolution in the network that binds people together. Whereas 25 years ago, the network was a relatively rigid, TDM voice network, the explosion of the Internet has meant that IP is becoming ubiquitous, and that is an extremely transforming influence on business models and technology. I think the second thing, which is probably even more important, is that we are seeing just a complete revolution in the kinds of services that people are expecting and, very importantly, in where service providers are able to get their revenue from. This is certainly something maybe we can talk about more later. But I think that if you look at the emergence of mobile applications and if you look at the web-based and Internet-based applications, there has been a really radical shift in people's usage, and equally radical shift in what they are prepared to pay for.

Michael Johnson: Now I'm going to turn to you for a second, Joe. Tell me a little about how the telcos are responding in the light that people are using the services very, very differently. They are starting to put different kinds of things together. I think people are now starting to understand the linkage between videocasts, television and their computers. Can you talk a little bit about how big companies are responding?

Joe McGarvey: Sure. By "big companies, " I assume you mean the carriers, right? I agree completely with what John had to say. The way we see it, and I hope it relates to what you're asking is, in a word or maybe it's two words, "user centric" is what the service providers are responding to now. I think that's a good way to describe the transformation of their networks. I shouldn't say the "transformation." Their attempt to transform the network, that's what's driving this. I've probably said this too many times, but I use the analogy of Copernican theory. Copernicus, he was really the first person credited with looking at the way the universe is oriented and recognizing that not everything revolves around the Earth, but everything revolves around the sun, including the Earth. A similar thing is happening with the service providers. It used to be that the network was the center of the universe and subscribers had to adapt their usage the number of devices, the access to the network. In this new paradigm, the idea is that the subscribers are the center of the universe and the onus is on the network to automatically apply itself to the needs of the subscriber.

John Lazar: I think there is another angle on that. I agree with what Joe is saying, very much. The other way of thinking about that is to say historically it's been a very static link between the network and the subscribers. Subscribers were identified by a line down to them. Service providers charged money for the line or usage thereof. What's happened now is that there is a disconnection between the network and the subscriber. Subscribers are essentially mobile. That means you can't charge per line anymore. You have to find another way to create the business.

Michael Johnson: Now it seems like obviously the service providers and the carriers have to respond to this, otherwise they are going to be left in the dust. Maybe you can talk a little bit about why or how these companies are migrating to some of these new technologies. As you say, the network was static before, but now it's become completely fluid. It's hard to know where Copernicus would be in this particular universe.

John Lazar: I think this is obviously where IMS enters the picture.

Michael Johnson: Let's define that real quickly before we go on.

John Lazar: OK. The acronym stands for "IP Multimedia Subsystem." It's an architecture that arose originally within the wireless space, the mobile space, in the 3GPP standards body, which is looking at the third generation mobile services. What's happened more recently is that it's spread from 3GPP through wireline carriers into other parts of the network, if you like. More and more service providers are looking at IMS as a blueprint for how they can migrate their networks. From my perspective, I've always looked at IMS as very interesting, but we see it like a quite interesting evolution from some of the earlier soft-switch architectures that people have been discussing for many years now. But I think what IMS leads us to is two key things. First is transformation of the network, where you can genuinely converge your TDM network and your IP network into a single network to provide services for a different range of subscribers, different devices and access points. But I think the more interesting thing, and this comes back to the question that you asked, Michael, is that the really big promise of IMS is that it really provides a very, very strong, clear separation between the core control at the core of the network and a service delivery platform where the service provider can very quickly and flexibly generate new services for subscribers, whether they are coming in on a cell phone, or coming in on their PC, or coming in on their old-style black telephone. That's the key to what we're looking for here because flexible service delivery with integration between mobile and IP and other parts of the network is incredibly key.

Michael Johnson: Now is IMS applicable only to 3G wireless carriers, or is that a broader industry requirement now?

John Lazar: Joe, do you want to take that?

Michael Johnson: We've leaped on the technical side there for a second.

Joe McGarvey: Sure. It's kind of interesting. Sort of the irony of IMS is that it did emerge in the mobile world. It was promoted and created by the 3GPP and 3GPP2, which is the mobile standards body. But it wasn't long before equipment vendors and service providers said, "Hey, this makes a lot of sense for us as well." In fact, this makes a lot of sense, as John was describing, as a mechanism for converging our networks and in creating a lot of efficiency through dismantling some of these "siloed," or vertically oriented, delivery platforms. As John was talking about, creating a single delivery platform that has reusable parts, basically, and can be used over and over again so every time you build an application you don't have to build a completely new network.

Michael Johnson: So that's on the industry side there. Let's take it around to -- I don't know if we can call them the "end users" anymore since we're not delivering stuff to the end of a pipeline anymore. I'll shoot this to you, John. What are some of the trends that you see in people adopting this kind of service by business and also by consumers? Maybe you can address that a little bit.

John Lazar: OK. Stepping right back here, the thing I find very interesting is I have two teenagers, a son and a daughter. I think there is a very, very interesting social shift in the way that they use the network and the way they engage the services. For a start, they expect to get all their music online rather than buying CDs or DVDs. They are willing to pay for ringtones, but they are not willing to pay for music. They have no concept of seeing a landline as important, whereas my wife and I might still use the landline as our primary telephone usage and a cell phone as being something that's convenient. My kids would view cell phones and Skype as being absolutely essential to what they do, but that voice should also be free, and so on and so forth. Fundamentally, we have a situation where we have a group of young people where in ten years' time, they will be the people who will be the primary purchasers of new services and, at this point, we are entering an arena where we can't predict what services they are going to want and we certainly cannot predict what they are going to pay for. So I think what's interesting about IMS is many people are discussing it in terms of network and architecture and there is all kinds of discussions about how the network will migrate, and that's interesting. But, for me, the much more interesting piece is if it does come off and it does work properly, then it will create an environment where new services can be delivered very quickly and very flexibly, and that is going to be incredibly important to deal with this very different social trend that's taking place under our feet.

Michael Johnson: Now it just seems like the virtualization of the entire structure -- I mean, I know that there is the concept of virtualization has something in computing for a short while -- but it seems like it is taking on more of a perceptual mode right now with business and with services altogether. I mean everything is becoming virtual it seems.

John Lazar: Yes, I think that's right. I think there is also a level of integration, which we're now beginning to see. To come back to your question about how people are beginning to deploy these services, what's interesting to me is it is all about integration of devices and different networks with the same application and service. So the kinds of things we're seeing happening within MetaSwitch and our customers is integrating voice services with TV services, even simply down to the point where you may be sitting on your couch watching TV and a call comes in and you get a screen-pop on your TV telling you the caller ID of the person calling in and you can either take the call or send it to voicemail using your remote control. Or find-me, follow-me services where your home phone and your cell phone will ring simultaneously or hunt through to your soft phone running on your PC. Or applications like a desktop assistant running on your PC where if you home phone rings you can see who it is from and you can use your mouse to send the call to voicemail. So those kinds of very simple integration are beginning to happen and they are made much, much easier by the underlying IMS/SIP infrastructure on top of which the services are built.

Joe McGarvey: Just to follow up on what John is saying, different carriers, different vendors have different names for it, but it comes down to -- some call it blended services, some call them combinational services -- but I think the big aspect from the user side is just as John was describing. It's a combination of the whole idea of multimedia or mixing media -- the combination of the television and the telephone. And the idea of having one or two devices instead of carrying around a different device for every application and calling, or having six voice mailboxes, one for every device, having all that unified and centralized is one of the big pushes from the end user or subscribers' side.

Michael Johnson: What about the business side of things? I asked John about how that affects the consumer side. Can you talk a little bit about these trends are going to be changing the way business operates?

Joe McGarvey: Sure, the enterprises. Depending on what market you're in, of course, there are two sides of it. Every couple years it sort of changes. It seems like the subscribers are driving it. Maybe it's just perspective, too. Subscribers are the drivers for some of these things, and then the enterprise subscribers rather than the consumer subscribers are the ones driving it. I primarily look, from my standpoint, at the enterprise. There is a lot of stuff going on that side of things. Probably the most interesting is that enterprises are starting to think of their communication, which typically in the past has been your telephone is like your stapler or any other desk device. Now the idea with some of these services that we're talking about, this idea of combinational services and having a single interface on your desktop to launch IM, to launch a video conferencing call, to no longer having to track someone down by leaving four voicemails, where they are at the present, that sort of thing. People are starting to talk on the enterprise side about communications actually being a productivity app. Some folks are even trying to measure if we adopt these services, what kind of productivity can we get out of the average worker who no longer has to spend all the time tracking people down and listening to voicemail and that sort of thing.

John Lazar: And I'd add two things to that. First is obviously when you begin to talk about the enterprise it is terribly important to track what Microsoft is doing. And they obviously had a substantial recent announcement in this space. A lot of what they are looking at are exactly the things that Joe has talked about there, where you want to, when you sit at your desktop, you can see where somebody is because of presence. You click-to-dial and your phone rings or you cell phone rings when you've tracked them down. But you can integrate all of those services. The second point I'd make is that I think the boundary between the enterprise and the consumer is also changing and breaking down because so many people now either work from home or on the move. So the kind of services we've seen people adopt in their home office needs to be integrated with the enterprise because they really are part of the same nexus of services that people are looking for.

Joe McGarvey: That's a great point and that's another capability of IMS and SIP is the ability to handle your services and to create some sort of virtual separation between your entertainment, your work, your residential services. Through IMS you can use the same device, the same service, of course, that's the ultimate goal of the service provider, is to have a subscriber get everything from them. Through IMS and SIP you can partition all those different identities and different lifestyles and combine them, but at the same time keep them separate.

Michael Johnson: On this podcast we've been speaking with John Lazar, who is the CEO of the MetaSwitch company on the line with us from London, and also Joe McGarvey who is the Principal Analyst at Current Analysis on the line with us from New York. If you'd like to find out more information about some of the topics we've been talking about, you can go to www.metaswitch.com/podcast.

Michael Johnson: I'm Michael Johnson. Thanks for being with us.

John Lazar: Thank you, Michael.

Joe McGarvey: Thank you.

[music]