Turning Network Assets Into Market Opportunities Wp 1


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Turning Network Assets Into Market Opportunities Wp 1

  1. 1. T E C H N O L O G Y W H I T E P A P E R Turning Network Assets into Market Opportunities Encourage innovation and growth by safely sharing network enablers The demand for rich service experiences has increased dramatically with the rise in popularity of Web and mobile devices that offer access to innovative software applications. Seeking new and reliable sources of revenue, many service providers are investigating new business models that involve application and content providers. Many of these business models have had limited success. To attract partners, service providers need to offer effective access to valuable network capabilities. Recognizing that greater interplay between service provider and developer communities helps foster innovation and growth, Alcatel-Lucent has created the Application Exposure Suite, which allows service providers to transform their network assets to application developers in a mutually beneficial way. With this suite, Alcatel-Lucent helps service providers harness the innovative power of extensive developer communities without compromising the security of their valued network capabilities.
  2. 2. Table of contents 1 Introduction 1 Challenges for service providers 2 Factors that impede application innovation programs 2 Risks and rewards for service providers 2 Challenges for developers 3 Challenges for enterprises and end-users 3 Application Exposure Suite: uniting service providers and developers 3 A closer look at the Application Exposure Suite 6 Who benefits from the Application Exposure Suite? 7 Conclusion 7 Acronyms
  3. 3. Introduction The growing interest in rich Web and mobile applications is creating unprecedented opportunities for service providers, developers, enterprises and end-users. Each of these groups understands the appeal of applications but faces challenges that keep them from getting the experiences and results they want. Service providers view applications as a way to attract new customers and diversify revenue- generation opportunities but often lack the resources they need to develop, onboard and support new applications. Developers create innovative applications but struggle to make them profitable. End-users and enterprises seek enriching service experiences but have valid concerns about privacy and security. The business models used by many application, content and service providers have proven to be unstable or ill-suited to meet the increasing demand for high-quality products. Some efforts to bring applications to broader customer bases have achieved significant success and have provided viable environments for developing, buying and selling applications. To date, however, even the most successful application innovation programs have been hampered by an absence of mechanisms that permit open and secure sharing of network functions and data between service providers and developers. A business model that encourages shared innovation between service providers and developers would clearly be a welcome addition to the marketplace. Recognizing the value inherent in facilitating collaboration between service providers and application developers, Alcatel-Lucent now offers the Application Exposure Suite. This suite provides tools and capabilities that help foster innovation and create new opportunities by allowing service providers to expose select network assets to trusted developers in a controlled and secure environment. By securely sharing key enabling technologies, service providers and developers gain access to new markets, business models and revenue-generation options — and feed a consumer base that is clearly hungry for new and compelling Web and mobile applications. The Application Exposure Suite is an integral element of a comprehensive, industry-wide application enablement vision that is being advanced by Alcatel-Lucent. This vision combines the trusted capabilities of service providers with the speed and innovation of developer communities to provide end-users and enterprises with richer and more trusted service experiences. Challenges for service providers As traditional telecommunications services become increasingly commoditized, service providers continuously search for new and reliable sources of revenue. Service providers can no longer expect to increase revenues by offering nothing more than powerful fixed and mobile data transport services. Instead, service providers now need to support two-sided business models that enable them to increase revenues from subscribers and generate new incremental revenues from third-party sources such as content providers and advertisers. Forward-thinking service providers are already moving to take advantage of the tremendous interest in applications for smart mobile devices and the Web. These providers want to occupy a strong, relevant position in the application value chain and attract more subscribers by providing a more exciting and secure end-user service experience. To gain an advantage in the application market, providers need to harness the breadth and speed of service innovation that exists in the Web 2.0 world. In other words, providers who want to offer innovative, compelling applications need to attract talented developers and build vibrant developer communities. Turning Network Assets into Market Opportunities | Technology White Paper 1
  4. 4. Factors that impede application innovation programs Some service providers are willing to collaborate with third-party developers and content providers, but many more are hesitant to give outsiders access to their valuable network capabilities. Many service providers fear that giving third-party developers access to their network assets will disrupt the quality of experience they provide with their own services. Others worry that applications created by third-party developers will supersede or cannibalize their own services. Smaller Tier 2 and Tier 3 providers may be concerned about their ability to attract significant developer communities. These concerns are legitimate but there are different types of developer communities with different levels of partnership to service providers and trustworthiness ranging from their own development teams via preferred partners to the thousands of Internet developers. Some service providers begin with exposing their assets to internal developers first. This already helps to accelerate service introduction through the simplified access to enablers and service onboarding. Other service providers reach out to larger, more independent developer groups and take the necessary precautions for that. Most service providers simply find it difficult to define and execute application innovation programs. In a market full of new applications, differentiation is difficult. Contracts with developers and content providers can be unwieldy and hard to navigate when time-critical opportunities arise. Device-centric innovation can create fragmentation and prevent the mass adoption of applications. Real or self-imposed bandwidth limitations can limit the effectiveness of application features. These challenges are valid and they illustrate the need for solutions that protect service provider networks while fostering advancement, innovation and agility. Risks and rewards for service providers Service providers face many challenges when they adopt application innovation programs. The rewards for perseverance are potentially great: Research suggests that providers could soon collect up to 10% of their revenue through sales of applications and access to enablers. The risks involved in inaction or continued pursuit of ineffective programs are also great: Providers who fail to capitalize on thriving, growing markets typically settle for second place or worse. Challenges for developers Like service providers, application developers operate in a highly competitive and constantly evolving market. To thrive within this market, developers need to monetize their innovative and outstanding applications and differentiate them from those of their competitors. Developers that create good products, choose partners wisely and get timely exposure to consumers can reap the benefits of their efforts and move on to additional releases, products and revenue. Developers that cannot achieve one or more of these objectives are likely to fail. Application developers often encounter roadblocks as they attempt to navigate relationships with network service providers. Service providers are often developers’ most important partners because they control access to important enabling technologies such as location-based services, presence information and short message service (SMS). Despite the potential for mutual benefit when developers and service providers collaborate, developers consistently run into different sets of policies, practices, requirements and capabilities whenever they encounter new networks and providers. To create and deliver applications with broad appeal to enterprises and consumers, developers need to obtain hassle-free access to the network capabilities of more than one service provider. Developers repeatedly face difficult battles just to win the trust of service providers. Concerns over network security and proprietary data often compel service providers to implement cumbersome contracts — even for trusted developers — that slow development processes. Unfriendly service provider contracts, policies and practices can combine to drive development costs upward, lengthen development cycles and slow time to market, making it more difficult for developers to hit required 2 Turning Network Assets into Market Opportunities | Technology White Paper
  5. 5. delivery and revenue targets. In a market where timing can be as important as innovation, many developers find these sorts of barriers difficult to overcome. Challenges for enterprises and end-users Enterprises and end-users have countless choices in today’s application market. Applications from thousands of developers and service providers compete for their business, and there are always new and interesting applications to try. Choice can be a burden, however, and conscientious consumers face difficult decisions as they attempt to determine which applications will give them the best combination of value, function and security. Enterprises are charged with the task of providing superior service and support to customers who are increasingly knowledgeable about the capabilities of mobile and Web services. Today’s enterprises must constantly search for ways to optimize their business communication processes. Optimized communication processes typically save money and help enhance employee, partner and client satisfaction levels. Enterprises need applications that are secure, useful and widely applicable to their employees and customers. End-users of applications typically look for compelling, personalized services and seek a simplified experience that integrates their Web and telecommunications services. Although their appetite for new applications and content is significant, end-users often worry that the cost of enriching Web experiences is reduced privacy and security. Consistent with this concern about the “cost” of free services, Alcatel-Lucent Market Advantage research shows that a significant percentage of users are willing to pay for high-quality access to content, security, privacy and service access across any screen. Application Exposure Suite: uniting service providers and developers Recognizing that the success of any application innovation program hinges on effective collaboration between service providers and developers, Alcatel-Lucent now offers the Application Exposure Suite. This suite provides all the functions that service providers need to monetize their network assets — including communication, location and subscriber data — by making them available to developer communities and the applications they produce. At the same time, the Exposure Suite provides the mechanisms that developers require to access enabling technologies that can give their applications broader appeal and a better chance to succeed. The suite enables service providers to expose their networks to application and content providers in a mutually beneficial way, and this creates new opportunities for innovation, revenue generation and revenue sharing. A closer look at the Application Exposure Suite The Application Exposure Suite is a set of tools sold to service providers, which is customized based on their business priorities and integrated with their network environments. It offers application programming interfaces (API) to trusted developers while simultaneously protecting service providers’ valuable network assets. In addition to providing secure mechanisms that developers and applications can use to access enabling technologies within service provider networks, the Exposure Suite transforms network- internal protocols of service provider assets from different vendors into a coherent set of lightweight Web APIs. If required, service providers can use the suite to build custom composite APIs that optimize system performance and enhance user privacy. Service providers can also use the suite to build and generate flexible usage reports and collect statistics and billing information. Turning Network Assets into Market Opportunities | Technology White Paper 3
  6. 6. Figure 1. Logical architecture of the Application Exposure Suite Web APIs (REST/SOAP) Application Exposure Suite API exposure System management Composition Monetization Normalization Provisioning Visibility and reporting Internal protocols (multivendor) Rapid, easy development The Exposure Suite facilitates the transformation of low-level network-internal protocols into well-known and easy-to-use Web APIs. These standards-based APIs meet the requirements of developers that want to build applications and mash-ups that take advantage of service providers’ valuable enabling technologies. APIs that provide access to useful, valuable enablers attract developers who are seeking faster, easier development opportunities and reduced time to market. APIs available through the Exposure Suite include representational state transfer (REST), simple object access protocol (SOAP), Parlay X 2.1 and 3.0 and native protocols. These APIs support access to a variety of enablers, including location-based services, presence information and geofencing. The Exposure Suite gives service providers the ability to deploy a coherent and flexible set of APIs without compromising network security. Support for mash-up APIs Using the Exposure Suite, service providers and developers can create custom mash-up APIs that build on or combine other APIs. For example, a service provider can create a mash-up API that enables developers to access combined presence, location and roaming status capabilities. Mash-up APIs provide flexibility and can be used to meet a variety of needs, including optimizing network access, improving privacy and supporting service provider differentiation. Protection of network assets and management of privacy policies Many service providers want to foster innovation but are rightly concerned about protecting vital network assets and controlling bandwidth usage. The Exposure Suite ensures their protection by enabling secure authentication of applications as well as filtering and throttling of transactions. These capabilities protect the network from actions — intentional or unintentional — that could have potentially adverse effects on revenue-generating services. Subscriber privacy and security are also critically important to service providers. To help providers protect their subscribers, the Exposure Suite provides flexible policies that control application access rights to subscriber data, location and other subscriber-related services. Visibility of usage and flexible business models Service providers who make APIs available to developers need to be able to monitor these APIs so that they can manage usage and charge for services. The Exposure Suite enables service providers to collect information on API usage for internal and external reporting, analytics, diagnostics and billing. These information-gathering functions help generate revenue and support richer user experiences. 4 Turning Network Assets into Market Opportunities | Technology White Paper
  7. 7. The information-gathering functions provided by the Exposure Suite also help give service providers the flexibility to choose from a variety of business models, including one-time revenue share, recurring revenue share, pay-per-dip, indirect revenues and e-commerce. The suite can help service providers employ the business model that best suits each given opportunity. Support for multiple vendors and ease of integration Many service providers use equipment and systems from a variety of vendors and experience problems when they try to integrate new systems, services and content. The Exposure Suite helps solve these problems by providing normalized access to network enablers from multiple vendors and standardized operations support system (OSS) and business support system (BSS) interfaces. These enablers and interfaces help providers achieve compatibility when they deploy new applications within existing network infrastructures. Complementary application enablement technologies The Exposure Suite is one component of a larger vision of application enablement that also includes enablers in areas such as control, content, communications and context. Alcatel-Lucent offers a uniquely rich set of such enablers. Traditional network enablers, such as messaging and call control, are complemented by the Genesys dynamic customer engagement and Motive digital life manage- ment solutions. The Exposure Suite is part of an end-to-end offer from Alcatel-Lucent that extends from the High Leverage Network™ to a rich application layer and leading professional services. The Open API Service is of particular interest to application developers and service providers. The Open API Service is a cloud-based aggregation service for application developers and service provid- ers that is operated and offered by Alcatel-Lucent in selected markets. The service provides develop- ers with secure access to network enablers — such as location, geofencing and opt-in APIs — owned by one or more service providers. Having access to multiple service providers gives developers oppor- tunities to reach a more extensive customer base. The Open API Service provides an end-to-end development experience that includes service registration capabilities, application interface testing support, payment and settlement functions, network access and an application simulator (or “sandbox”). Developers benefit from the Open API Service because it gives them access to the unique assets and customer bases of multiple service providers in one place and eliminates the work involved in establishing relationships with multiple service providers. Service providers benefit from the Open API Service because it allows them to scale developer programs without incurring the expense of registering, provisioning and supporting large communities of users. Professional services support To support the transformation of service providers toward open business models and the secure exposure of APIs, Alcatel-Lucent offers extensive professional services that include business consult- ing, application integration services, lifecycle governance of APIs and support for the onboarding of partners and applications. Alcatel-Lucent customers benefit from a proven track record in trans- formation projects, primary research in business models with third-party developers, and work and lessons learned in the application of standards. Alcatel-Lucent has experienced consultants who can help seamlessly introduce new applications into service provider networks without disrupting operations infrastructures or creating technical and commercial risks. Alcatel-Lucent consultants work with providers through market trials and commercial launches, helping them reduce time to market and increase success rates. Turning Network Assets into Market Opportunities | Technology White Paper 5
  8. 8. Who benefits from the Application Exposure Suite? The key players in the application marketplace — service providers, developers, end-users and enterprises — can all benefit from the application enablement vision supported by the Exposure Suite. Service providers Service providers that use the Exposure Suite enhance their ability to generate new and effective sources of revenue by making their valuable network assets easily and securely accessible to developers and their applications. Each application created through the Exposure Suite can help create a more compelling service experience that will attract subscribers, reduce churn and help sell service bundle subscriptions. Each new application can also give service providers chances to increase direct revenues through future up-sell opportunities. By using the Exposure Suite, service providers can take advantage of mutually beneficial revenue streams created through relationships with content providers and advertisers. The suite helps service providers attract developer communities that want the value provided by network capabilities such as presence, network address books, advertising, content management, identity management and single sign on. Relationships with new developers will enable service providers to explore the use of different business models. The Exposure Suite also addresses service providers’ concerns about quality and security. The suite provides a single security and subscriber privacy solution, transaction filtering and throttling to protect the network, easy access to usage information and system management capabilities. The suite also gives service providers the ability to monitor and manage applications and their impact on network performance. Service providers that use the Exposure Suite can ensure that they provide coherent services across any network enabler. Service providers that use the Exposure Suite can also realize direct benefits from their relationship with Alcatel-Lucent. Alcatel-Lucent is a leader in many vertical industries; this leadership can help service providers enhance enterprise applications with network capabilities and serve enterprise information technology (IT) departments as developers. Alcatel-Lucent also offers extensive and comprehensive professional services that leverage its experience, leadership and diverse enterprise portfolio. Developer communities The Exposure Suite gives developers the power to innovate by providing access to rich network enablers that are not typically available through client-based applications. Using the Exposure Suite, developers can create compelling applications that include network capabilities. This added value will help them stand out from thousands of other developers who are vying for consumer attention. The Exposure Suite provides additional value to developers with its support for different business models and access to payment APIs. This support helps developers monetize their innovative applications and reduces time to market. Enterprises and end-users Enterprises benefit from the Exposure Suite because it helps them differentiate customer experiences, reduce costs and increase flexibility. When they offer applications and services that use network capabilities, enterprises stand out from the competition. When they integrate network assets, enterprises optimize business processes, maximize efficiency and increase employee and customer satisfaction. When they offer hosted services like interactive voice response (IVR), contact center, application marketplace and advertising, enterprises gain flexibility and save money. 6 Turning Network Assets into Market Opportunities | Technology White Paper
  9. 9. End-users benefit whenever developers and service providers share ideas and capabilities. For end-users, collaboration between developers and service providers typically results in more compelling service experiences, higher quality of service and more effective integration of their Web and telecommunications services. Conclusion As the market for advanced applications expands, service providers will need to implement workable application innovation programs and business models so that they can attract subscribers with more exciting and secure user experiences. Although the need to adapt is apparent, many service providers lack the development, onboarding and delivery infrastructures they require to meet consumer demand for new and better applications. To gain a foothold in the application market, providers will need to increase their interaction with external developer communities and overcome the fear that this interaction will create risks for their assets and services. With its Application Exposure Suite and comprehensive application enablement vision, Alcatel-Lucent addresses the needs of service providers and developers that are seeking new revenue sources and a strong position in the application value chain. In combination with Alcatel-Lucent industry-leading professional services and a series of complementary technologies and services, the Application Exposure Suite gives service providers the power to differentiate their applications, foster innovation among developer communities, provide coherent services across any network enabler, support new business models, and monitor and manage applications and their impact on networks. By opening their valuable network enablers to developers in a mutually beneficial way, service providers gain reliable revenue sources — and give developers opportunities to create the rich applications that consumers crave. Acronyms API Application Programming Interface BSS Business Support Systems IVR Interactive Voice Response IT Information Technology OSS Operations Support Systems REST Representational State Transfer SMS Short Message Service SOAP Simple Object Access Protocol Turning Network Assets into Market Opportunities | Technology White Paper 7
  10. 10. www.alcatel-lucent.com Alcatel, Lucent, Alcatel-Lucent and the Alcatel-Lucent logo are trademarks of Alcatel-Lucent. All other trademarks are the property of their respective owners. The information presented is subject to change without notice. Alcatel-Lucent assumes no responsibility for inaccuracies contained herein. Copyright © 2009 Alcatel-Lucent. All rights reserved. ASG9718091106 (12)