Diameter Signaling Market Update

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Greg Collins Founder & Principal Analyst Exact Ventures

Greg Collins Founder & Principal Analyst Exact Ventures

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  • 1. Greg Collins Founder & Principal Analyst Exact Ventures Exact Ventures is an independent research and advisory firm that creates unbiased, enduring market shares and forecasts for emerging and transitioning high technology markets. IMS/VoLTE, EPC, SBC, Diameter, WebRTC Twitter: @exactventures greg@exactventures.com www.exactventures.com
  • 2. Diameter Signaling Market Update © Exact Ventures, Inc. www.exactventures.com Exact Ventures Confidential 2 • Massive growth in signaling traffic due to: - LTE/VoLTE subscription growth - Increasingly complex monetization and policy efforts • Diameter investments prompting some demand for converged signaling infrastructure. SS7/SIGTRAN not going away. • Economic impact of SDN/NFV
  • 3. DSC Market Update © Exact Ventures, Inc www.exactventures.com Exact Ventures Confidential 3
  • 4. Signaling to Grow greater-than 2X Data © Exact Ventures, Inc www.exactventures.com Exact Ventures Confidential 4 Signaling CAGR = 135% Data CAGR = 58%
  • 5. Smartphone Subscriptions © Exact Ventures, Inc www.exactventures.com Exact Ventures Confidential 5 CAGR = 25% Additional 2.4 Billion Smartphones by 2018
  • 6. LTE Subscriptions © Exact Ventures, Inc www.exactventures.com Exact Ventures Confidential 6 CAGR = 57% LTE accounts for 24% of subscriptions in 2018
  • 7. Present Day DSC Use Cases • Interconnect or DEA – Roaming (LTE-LTE, LTE-2G/3G) – MVNO, Roaming Hub, IPXs • Core Routing or DRA – Policy or PCRF load balancing – Billing – HSS Address Resolution – Protocol and AVP normalization © Exact Ventures, Inc www.exactventures.com Exact Ventures Confidential 7
  • 8. SDN/NFV • Timing – Transition is generational and will be very gradual – Early applications will be of less latency-sensitive application like M2M • Effect on revenues and business models in a pure SDN/NFV world will be profound – Value is re-distributed across hardware, software and services – Customer support relationships will need to be established. When there is a problem, whose neck will you choke? © Exact Ventures, Inc www.exactventures.com Exact Ventures Confidential 8
  • 9. SDN/NFV, 2 • Hardware revenues – DSC specific hardware revenues go toward zero. Spending shifts to COTS servers • Software revenues – Continued price pressure on Tps/Mps licenses – Will there be differentiation with base DSC functionality? – Will vendors be able to charge for different use cases and implementations? – Value shifts toward orchestration layer(s) SW © Exact Ventures, Inc www.exactventures.com Exact Ventures Confidential 9
  • 10. SDN/NFV, 3 • Services revenues – Installation and HW maintenance go toward zero – SW maintenance fees become more important – Customer support relationships need to be defined. With multiple software layers, who is responsible for service and support for virtualized applications? © Exact Ventures, Inc www.exactventures.com Exact Ventures Confidential 10
  • 11. Summary • DSC market at early stages of market transition of signaling infrastructure to support LTE/IMS/VoLTE • Diameter investments prompting some interest in converged signaling infrastructure • NFV is generational shift, will be very gradual and will slowly shift revenue and pricing models for vendors © Exact Ventures, Inc www.exactventures.com Exact Ventures Confidential 11