The Transition from a Basic Highway to a Value-Add, Personalized Toll Way
Executive Summary
As intense competition continues to erode their profitability, service providers are accelerating their transition to an IP-based next-generation network (NGN). Service providers require innovative, converged infrastructures to improve delivery of current services and provide a scalable framework for tomorrow's new, bandwidth-intensive services. Solutions that provide greater network intelligence, integration, and flexibility will not only give carriers short-term relief but also position them to seize new market opportunities.
These solutions are part of a larger vision - the Cisco® IP NGN - encompassing a broad transformation of not only the service provider's network, but its entire business. The IP NGN empowers service providers to meet the needs of all customer segments efficiently and economically while providing the basis for delivering applications that enable sustainable profitability.
The phased development of the Cisco IP NGN involves creating an intelligent infrastructure from which application-aware services are delivered by service-aware networks. This type of intelligent, IP-based NGN will open new opportunities for service providers to offer advanced and personalized all-media services over any type of connection. Because it provides convergence in three interworking layers - application, service, and network - intelligent IP can be the technology foundation of the NGN.
With the Cisco IP packet architecture as the foundation technology and Cisco proven leadership and commitment to enhanced IP-based solutions, Cisco is well positioned as a vendor and supporting partner to service providers as they transition to an IP NGN. Service providers that partner with Cisco will benefit from the networking solutions, real-world experience, and technical and marketing support they need to succeed. Cisco is prepared to support every step of the NGN transition - conceptual planning, network design, service deployment, and beyond.
Cisco leadership and wealth of experience uniquely positions the company to serve as both the ideal technology and business partner to support service providers on their critical IP NGN migration. This white paper gives an overview of the IP NGN and describes how Cisco can help service providers transform their networks as well as their business.
Introduction
The impetus for the transition to IP NGN stems from several significant requirements:
• Offering new value-added services (far beyond connectivity) for top-line revenue growth, greater competitive differentiation, and increased customer loyalty.
• Achieving greater efficiencies in operating and capital expenses to help increase profitability.
• Regaining control of networks and the services that run on them to increase control over the business.
In short, traditional services are under intense price pressures that threaten to impact newer services as well. Service providers need to build a more flexible, lasting, and economical infrastructure to support both existing services and new, richer services over time.
To use an analogy, carriers must move from a basic "highway" service structure to a "toll-way" service structure to reap the benefits of their broadband investments (refer to Figure 1). And that toll way must provide far more than a means of transportation - it must deliver the value and personalization to significantly improve the user experience.
Figure 1. Highway to Toll-Way Transportation Analogy
The Cisco Vision for Service Providers
Cisco has a comprehensive vision for the service provider market: to provide intelligent, efficient, and flexible solutions that connect customers with services, services with networks, and networks with each other (refer to Figure 2). This vision encompasses all of a service provider's market segments - consumers, small and medium-sized businesses (SMBs), large enterprises, and wholesale customers.
Cisco understands that although some common standards and mandates apply to all segments, there are unique requirements for each segment as well. For example, in the consumer market, gaming, network-based personal video recorders, video on demand (VoD), Wi-Fi home networks, and mobility are growth areas. SMBs are likely to increase their use of all sorts of managed services such as hosting and security. The enterprise segment will experience increased demand for Layer 2 and Layer 3 VPNs, remote access, storage, security, and Ethernet services. For their part, carriers will seek revenue from wholesaling access, local and long-distance voice, and services including co-location, peering, transport, and content delivery.
Figure 2. Cisco Service Provider Vision: Connecting Customers with Services, Services with Networks, and Networks with Each Other
To address these diverse markets, service providers need a single infrastructure, capable of evolving without disruption to provide new integrated offerings that will increase service flexibility and long-term growth potential. A single multiservice infrastructure brings efficiencies in operating expenses (OpEx) and capital expenditures (CapEx) compared to the multiple disparate networks of today. Cisco understands that transitioning to a single multiservice infrastructure poses a significant challenge for many carriers. To realize the significant possibilities and profitability that a Cisco IP NGN can help to enable, service providers must transform themselves into "experience providers." This transformation will require service providers to redefine themselves as something greater than merely their access technologies to more of the branded, rich, integrated experiences they provide. Leaders of this movement will be rewarded with greater customer loyalty, brand recognition, increased revenue, and premium margins.
IP NGN Defined: Cisco Perspective
For Cisco, the IP NGN is a sweeping transformation of both a service provider's entire network and its business. This transformation does not end at a single point - service providers cannot simply buy an IP NGN. Like carriers' business and service plans, the IP NGN constantly evolves to adapt to customer demand and new technology opportunities. Nevertheless, it is still possible to give specifics about this transformation:
• The Cisco IP NGN is about more than voice; it encompasses all of a service provider's current and future services. It is important to recognize that most growth will occur in services such as data and video. Although voice services, in their current forms, will initially be a significant aspect of the service portfolio, it will give way over time to richer all-media services involving voice, video, and data.
• The movement toward IP NGN involves the entire service provider network. It concerns not only the bandwidth in the access network, but also high-quality bandwidth delivered throughout the network.
• The IP NGN is about more than making changes to one network - it is about creating a single network for delivering all services.
The IP NGN that Cisco is delivering to service providers helps enable them to offer their diverse end customers (in all market segments) the features and benefits shown in Figure 3.
The IP NGN should also serve as a platform for creating innovative services and content. It should be service-aware with the flexibility to efficiently support a wide range of existing services.
This vision closely matches the ITU's concept of the IP NGN. The ITU has specified the fundamental characteristics of the IP NGN as follows:
• All kinds of services over all kinds of media
• Decoupling services from networks so that a service is neither defined by nor limited to the type of network providing the service
• Interworking existing networks into a single network
• Open interfaces that offer flexibility to service providers
• Generalized mobility, enabling end users access to services wherever they may be
• End-to-end quality of service (QoS)
Though some service providers might use different terms for NGN, broadly speaking, these organizations share many of the same basic concepts. AT&T, for example, is pursuing the NGN vision through its "Concept of One, Concept of Zero" initiative. Similarly, British Telecom (BT) characterizes NGN as the "21st Century Network (21CN)."
Services of the Future: Making Today's IP NGN Vision a Profitable Reality
The IP NGN evolution is an ongoing transition. Services and applications will be made available in an interactive manner - any time, anywhere. The Cisco vision of how the intelligent IP NGN will enhance the way people use their preferred devices to access content and communicate with others is captured in the following examples:
• At Home - People remotely monitor their home to verify its security, control various house systems, and watch their children; service technicians remotely diagnose and upload software fixes to appliances.
• At Work - Desktop videoconferencing is commonplace; application portability is available sitewide and worldwide, enabling users to switch from one device to another with little or no effect on their voice, data, or video sessions.
• On the Delivery Route - Deliveries are scheduled dynamically with real-time package tracking, real-time records of receipt of goods, and real-time capacity planning.
• At the Store - Advertisements are targeted to specific customer interests, and radio-frequency identification devices enable real-time inventory taking and expedited checkout.
• In the Doctor's Office - Physicians perform surgery with telerobotics and have real-time access to patient information even when the patient is in transit.
• At Play - Home entertainment expands to real-time gaming across continents.
These kinds of services are more than just within the realm of possibility, and some may be available within a few years or sooner. Leading service providers are envisioning and delivering these types of services today.
The Transition to IP NGN: Three Types of Convergence
Convergence is central to the IP NGN, and it occurs in three fundamental ways: application convergence, service convergence, and network convergence (refer to Figure 4).
• Application Convergence - Carriers can integrate new IP data, voice, and video applications over a single broadband infrastructure for increased profitability. Application convergence opens the doors to "all-media services" such as videoconferencing, which is effectively a new service being not simply voice, video, or data, but an integration of all three. This and other innovative value-added services can be delivered over any broadband connection. Service providers will have a range of new possibilities for revenue and portfolio differentiation.
• Service Convergence - The Cisco IP NGN makes a service available to end users across any access network. For example, a service available in the office can be available over a wireless LAN, a broadband connection, or a cellular network. All these access networks can transfer the service and the state of connection transparently as the user roams, using the most efficient and cost-effective means possible. This kind of "service agility" creates a stronger relationship between the carrier and end user and can help increase customer retention.
• Network Convergence - Creating a converged network is a goal that many carriers are already pursuing through their efforts to eliminate multiple service-specific networks or to reduce multiple layers within a network. A "many services, one network" model in which a single network can support all existing and new services, will dramatically reduce the total cost of ownership for service providers.
Figure 4. Cisco IP NGN Involves Multiple Areas of Convergence
Different service providers will prioritize the layers of convergence in different ways. For example, many mobile operators focus on service convergence, whereas cable operators target their efforts at application convergence so they can deliver video, data, and voice services over a single connection.
However convergence is prioritized, one factor makes the transition to IP NGN an imperative for all service providers - business success. Quite simply, service providers need to increase revenue and profit while reducing cost of service delivery to create sustainable profitability. They can do this by offering services that are increasingly customer-centric. These services require an intelligent infrastructure, which service providers must begin building now to keep pace with demand.
The Cisco IP NGN Architecture: Achieving a Whole Greater Than the Sum of the Parts
The Cisco IP NGN architecture supports rich, personalized, value-add multimedia services (refer to Figure 5). To deliver these services, service providers need a service control framework that supports the critical transition from a basic "highway" type of service structure to a more valuable, personalized "toll-way" structure. This transition will provide an unprecedented opportunity for service providers to transform their multiservice networks into intelligent infrastructures that offer a sustainable competitive advantage.
Figure 5. Cisco IP NGN Architecture
The Cisco IP NGN architecture consists of three distinct layers, discussed in the following sections.
Application Layer
With computers being used as phones, and phones being used to browse the Web, the capabilities of end devices are expanding. Many devices can be used to provide a range of mobile voice, video, and data services. Cisco refers to this growing trend and consumer demand for blended services to multiple devices as "Any Play" - any service, to any device, to any location, at any time. Mobile phones, for example, can display downloaded video clips, take and share photos, play music files, and manage e-mail, in addition to providing traditional voice-related services. Residential broadband is another example. Although originally established to provide high-speed Internet access, it is now the foundation for such services as voice over IP (VoIP), television and video delivery, VoD, music distribution, home security video, and much more (refer to Figure 6).
Figure 6. Consumers and Businesses Moving Toward Any Service, Any Device
These flexible, customizable services for integrated end devices provide a multitude of new service opportunities to service providers, dramatically increasing their average-revenue-per-user (ARPU) potential. Offering more services also increases competitive differentiation and decreases customer turnover, because users no longer have to look to multiple providers for various services.
For all of its benefits, however, delivering "any service to any device" places even more demands on the network. No longer can services be delivered over dedicated networks, but rather, to maximize efficiency and profitability, all services need to be delivered over a common network. As a result, the following characteristics must be pervasive throughout the network:
• Resilient - To manage the increased scale and availability requirements.
• Integrated - To provide the flexibility to deliver all current and future services efficiently over a single network.
• Adaptive - To adjust to the changing demands and requirements of new applications.
And finally, the network needs to be intelligent, or else the migration to IP NGN may never be realized.
Service Control Layer
To deliver a rich variety of services to a broad range of devices over multiple access means the network must have access to, and be able to process, granular customer information. For example, it needs answers to such questions as:
• Who? Who are the users? What devices are they using, and which services are they are trying to access?
• What? What are they allowed to do? What is the policy directing the delivery of the service? What timeframe can they do it in? For example, if a customer accesses a service during peak times, should the customer be charged more?
• How? How can the network resources be dynamically controlled? How can it monitor and charge for a service on a per-user and per-usage basis? How can the network be fully aware of the demands on it? And how can the network interwork with other carrier networks to provide rich-media control?
• Where? Where can the user roam? Where are the user and device now? Where is the service offered, and can the session be maintained across other networks?
To help providers answer these questions, Cisco is developing a Service Exchange Framework with its technology partners, which allows service providers to control customer access and use of services, but puts no limit on the types of applications that can be deployed. The access-independent, open Framework delivers such capabilities as multidimensional identity, policy management, dynamic session management, and mobility management (refer to Figure 7).
Figure 7. Service Exchange Framework: Multimedia Service Control for Wireline and Wireless Convergence
The Service Exchange Framework enhances broadband and Mobile IP networks with an application-aware service control point that allows network operators to identify, classify, and guarantee performance and charge for limitless content services. By using this wire-speed and stateful approach, operators can profitably deliver an array of data services customized to individual subscriber needs.
Essential to the "highway to toll way" service structure transition, the open Service Exchange Framework for Any Play delivery (refer to Figure 8) offers service providers the following benefits:
• More Services - Helping service providers to more easily, securely, and economically deliver new, tiered services when and where they are needed while providing the means to move from a flat fee to a value-based revenue model.
• Greater Efficiencies - Facilitating the reduction of both OpEx and CapEx by increasing intelligence in the network through such mechanisms as application-traffic optimization.
• Better Control - Helping to control a previously uncontrolled network while protecting service provider infrastructure investments by providing a flexible, open API that accommodates evolving architectures and additional services.
Figure 8. Service Exchange Open Framework for "Any Play" Delivery
Secure Network Layer
At the very foundation of an IP NGN is the secure network layer. Comprising customer element, access/aggregation, intelligent IP/Multiprotocol Label Switching (MPLS) edge, and multiservice core components with transport and interconnect elements layered below and above, the secure network layer is also undergoing dramatic and fundamental change compared to only a few years ago (refer to Figure 9). IP/MPLS is being integrated throughout each section of the network. Edge and core areas are converging, with each adopting capabilities of the other and providing greater efficiencies to the service provider. Customer elements, whether they are end-user devices as discussed earlier in this document or routers at the network gateway of a business, are converging as well. Service providers can take advantage of this convergence to offer new, more, and better services.
Figure 9. Cisco IP NGN Technology: Spanning Secure Network Layer
However, one area in the network that is not converging is access and aggregation. In fact, this area of the network is doing quite the opposite - it is expanding. More and more types of technologies are being offered in the access realm - from third-generation (3G) and Wi-Fi, and Ethernet and cable to DSL, ATM, Frame Relay, fiber, and time-division multiplexing (TDM). The list continues to grow, and older access technologies from many years earlier are still in use. This, too, poses new challenges to the network because it now has to adapt to the access technologies through which customers choose to receive their services.
Another major challenge is security. No longer do customers consider security as a desirable option; it is now perceived as a necessity. As a result, security needs to be integrated throughout the network, crossing its own internal barriers to ensure that the services are delivered without compromise.
For both these challenges - and many more in the network layer - intelligence is once again the necessary solution. By fully integrating intelligence throughout the network, a service provider builds a platform on which to better evolve its business.
Cisco: Proven Partner for the IP NGN Transition
As each service provider begins the IP NGN transition, it will team with its partner in service strategy and networking solutions. As a partner, Cisco brings a collaborative approach to its service provider relationships (refer to Figure 10). Cisco has strong relationships with business customers worldwide and, through its Linksys® division, with consumers too. Cisco understands the needs of consumers and businesses that trust the Cisco brand and the experienced professionals who stand behind it. Cisco uses this knowledge in the proactive role it plays in the service provider's success.
Figure 10. Cisco Offers Comprehensive Support for Service Provider Success
Cisco takes a complete lifecycle approach with service providers. This begins with helping the service provider envision the strategic concept of an offering and assisting with the design, plan, development, test, and trial of a service. Cisco also has the marketing resources and expertise to help the service provider position and sell a service, and help match services to customer needs. This level of commitment and support not only distinguishes Cisco from the competition, but also gives Cisco insight into ways to continue to advance technology that goes into its products and solutions.
Cisco has introduced innovations in routing, switching, optical transport, security, VoIP, and other technology areas through its participation and leadership in various industry, national, and international standards organizations. Cisco innovations and the company's commitment to open standards benefit the entire networking industry and make it easier for complex, multivendor networks to interoperate.
The value Cisco delivers through its extensive portfolio of systems offers service providers flexibility in how they choose to deploy these platforms. Cisco combines system architecture, silicon processing, and software services into intelligent networking, allowing these components to be used in multiple different platforms, so service providers can mix and match different systems with confidence that they will all work together. Using common code, chips, and line cards across different platforms helps preserve service providers' investment even in an industry where rapid transformation is commonplace.
The Cisco Service Control Framework enhances broadband and Mobile IP networks with an application-aware service control point that helps network operators identify, classify, and guarantee performance and charge for content services. By taking full advantage of this exclusive wire-speed and stateful architecture, operators can profitably deliver an array of data services customized to individual subscriber needs.
Today's Cisco IP NGN network is built with these goals in mind from the start. It operates intelligently and is more efficient, economical, and flexible than competitive solutions, resulting in greater benefits and investment protection to the service provider and its customers.
Conclusion
Service providers understand that simply adding disparate overlay networks to expand service portfolios is not the answer to sustaining increased long-term profitability. The way forward begins with building a common infrastructure from which to deliver many services. The Cisco vision of an IP NGN is far more compelling because it will help service providers to begin evolving their networks and business so that they can support both traditional and new services, and increase their profitability while lowering operational costs. Over time, the transformation to an intelligent IP NGN infrastructure offers customers a totally new way of interacting with the network and providers a better way to build their business.
For new IP service delivery to be profitable, carriers need a flexible application- and subscriber-aware infrastructure that makes full use of their massive network investments and can quickly address new standards, protocols, charging models, or content-type classification. Otherwise, carriers are faced with large and unforeseen upgrades.
As the leader in networking, Cisco can provide solutions at every step of the IP NGN transition. The company's strategy for service provider success is consistent and comprehensive. Cisco can assist service providers in building extensible, efficient packet-based infrastructures that reduce total cost of ownership even as they can deploy new services that increase revenue and expand market share. Cisco can also help accelerate demand for services because of its knowledge of and relationships with businesses of all sizes and their consumers. Moreover, Cisco offers expertise that can help service providers to optimize their business.
With this kind of lifecycle partnership, intelligent networking, and comprehensive approach, service providers will be able to embark on the IP NGN journey and the transition from a basic "highway" to a value-added, personalized "toll way" with confidence.
