White Paper A Perfect Storm for Managed UC Service Providers

The case for a specialist UC Service Delivery Management (SDM) solution for Managed Service Providers

July 1st, 2010

Copyright 2010 VisionOSS Limited. All rights reserved. No part of this document may be reproduced, stored or transmitted in any form without the prior written permission of VisionOSS. VOSS is a Trademark of VisionOSS Limited

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VOSS White Paper

Executive Summary
The managed unified communications (UC) services market, including premise-based or cloud-based services, presents a unique perfect storm for service providers because of two conflicting forces; the projected rapid increase in demand for these services, against the support capability to cost-effectively deliver and manage these services remotely on a much larger scale. Companies know that UC deployments enable them the opportunity to harness a significant increase in organizational productivity, rivalling those seen at the introduction of email. Unfortunately, many enterprises are conserving capital in this economy and therefore delaying their UC purchase, while others struggle to launch UC migrations themselves due to a lack of expertize. Given this environment, analysts are predicting the demand for managed UC services to rise between 20 and 30% on an annual basis. On the other side of this story, many service providers today are ill-equipped to support the delivery and management of UC, let alone handle the great number of customers that will want these critical value-added services. In some cases, service providers are no better than enterprises at supporting a UC deployment; relying primarily on a pool of highly skilled engineers to manually build and manage their managed services offering. The true managed UC services model requires service providers to support large numbers of distributed customers and users, with each customer having their own unique network infrastructure and business applications. Most services providers have not invested in UC operational management systems, nor in the integration of their back office systems, to manage such a large number of independent, distributed networks that managed UC services require. As a result, many service providers will struggle to succeed in this growing market if they continue with a business-as-usual approach of layering more engineers to support additional business. To take full advantage of this perfect storm, service providers need to invest in a UC service delivery management (SDM) platform, specifically designed for the delivery of managed UC services to large scale, multiple customers. SDM platforms enable service providers to minimize their total cost of ownership, while at the same time improving customer satisfaction, creating compelling competitive advantages over other managed service providers (MSPs). This paper addresses why VOSS Solutions is the best in class SDM solution, offering several unique capabilities that are essential for service providers wishing to succeed in this managed UC services perfect storm.

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Managed UC Services Demand

Organizations looking to thrive in the post-GFC (global financial crisis) era are taking a more focused approach to cost-cutting opportunities that wont negatively impact their competitive advantage. By doing so, businesses have limited spending for strategic initiatives and are seeking ways to outsource non-core areas of their business. As a result, the adoption of hosted and managed services are being strongly considered and chosen as a way of meeting IT & telecommunications needs. According to Forrester, demand for managed (premise-based) and cloud services is expected to grow at about twice the rate of the overall IT industry, reflecting a major shift towards this more cost-effective delivery option as we begin to come out of the 2009 recession. Forrester calls this a perfect storm for managed UC services.
Figure 1 Forecast Managed/Hosted IP Communications Demand

Source: Forrester Global Managed Service Market, March 2009

There are a few major underlying factors that are driving this shift to managed services. Chief among them are increased technology complexity, rapid technical evolution and the need to maintain system interoperability. Most notable in UC deployments is the shortening of the span of technical knowledge applicability. When coupled with the increased security needs and regulations around data privacy and management, the risk and cost to a company trying to maintain this technical expertize in-house is one of the major drivers towards managed UC services. As alluded to above, todays economic environment is forcing many companies to take a long, hard look at managed services in order to limit capital expenditure, reduce operating costs and address the over-extension of limited in-house IT staff. This is particularly true in downsized firms or companies that chose to focus solely on their core business in light of an uncertain future.

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Managed services have been around for some time, and as this approach becomes more accepted and mainstream, enterprises reluctance to adopt this approach will continue to diminish. As shown in Figure 1, the demand for premise-based managed services will continue to outweigh other forms of service delivery, primarily due to contract terms, migration barriers and strategic control. However, as companies comfort levels improve with cloud-based services, including the entry of new market players, it is anticipated that they will begin to adopt this deployment evolution. During this transition phase, hybrid models of premise-based call control infrastructure with cloud-based UC 1services will become more common. Lastly, history shows that we are due for another technology investment business cycle at some point in the near future. UC and collaboration (UCC) is well placed to be the next big thing - akin to the transformation of email that we experienced in the 90s and the world wide web in the 00s - since it can deliver the game-changing impact that businesses have been looking for. As an aside, a quick study of UC shows that the market will continue to demand the bundling together of multi-vendor best-of-breed products, to form a holistic UC value (e.g. IPT, email, IM, conferencing, UM, Presence, etc.).
Figure 2 Forecast Managed/Hosted UC Services Demand

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Source: Forrester Global Managed Service Market, March 2009

Concerns surrounding the security, reliability and performance of managed services still linger, though they continue to diminish with time. When you consider all of these trends together, you can see why it is such a perfect storm of opportunity for managed UC service providers, if they can handle the technical complexity of UC and successfully capitalize on the coming volume of business.

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Challenges for the Managed UC Service Provider

As stated above, many service providers are not ready for this perfect storm of managed UC services. According to Gartner, service providers have four main challenges in order to meet this market transformation opportunity:

Support the scale and complexity of new managed UC service models

Managed UC service providers must be able to support the delivery of UC services across thousands of customers, each with their own distributed network infrastructure, delivering smooth customer deployments and management processes. Customers will initially want a management service for their existing on-premise equipment, and the majority will not accept a service offering that requires them to rip-and-replace this legacy infrastructure investment. In addition, managed UC service providers will need to support both managed and cloud services, as well as hybrid models (managed premise equipment, combined with new UC services delivered from the cloud). This capability needs to include the ability to manage a combination of central SIP trunking, with the resilience of local breakout. If the central network fails or becomes overloaded, for whatever reason, calls must still be able to be received by the customer across their various sites.

Deliver new UC services and support service flexibility

One of the primary drivers for moving to managed services is the desire to access a complete, up-to-date range of UC applications. The reason companies purchased on-premise systems in the past was because they demanded service flexibility, and wanted to tailor the configuration of their communication system to their specific needs; not be limited to a service providers standard profile/template. Service providers will need to be able to absorb each customers customized configuration as part of the migration process to the managed service, without having to manually re-configure each customers unique situation. In many cases customers will have multi-vendor legacy environments that need to be managed and ultimately migrated to a fully IP environment. In addition, customers will also want to fully customize the new UC service offering provided by their new MSP.

Keeping TCO under control

In order for a service provider to successfully grow their business, they will need to minimize the deployment costs involved in adding new customers, as well as minimize their ongoing support costs for maintaining them. In addition, they need to ensure that the integration costs for adding new UC services to their customer base is containable. One of the keys to achieving this will be design and configuration standardization, without sacrificing feature flexibility, especially as advanced UC applications add configuration complexity. Equally important will be increased levels of automation to

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reduce the dependence on highly-trained staff for mundane repetitive administration tasks, accompanied by integrated flow-through processes for back office order management and billing systems.

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How to differentiate from new providers entering the market

Customers expect real-time, self-administration/self-care capabilities, and they will not tolerate a service administration that takes 2-3 days to complete. In addition, customers want service providers to provide not only the best suite of UC services, but also sophisticated business analytics and reporting to enable them to better operate their business. They will also expect service providers to guarantee that they will remain on the declining cost curve for basic call charges. In this transition to a service-based business model, it is inherent that service providers need to move away from a pure call-based (CDRs) model to an eventbased business model (EDRs) that enable customers to subscribe to new services online, within an e-commerce framework. Therefore, service providers require systems that will enable them to sell and bill customers based on these event changes, without being locked into long-term restrictive contracts.

The Solution - Service Delivery Management (SDM)

UC Service Delivery Management (UC SDM) Functionality
Until recently, there were only two viable choices for service providers looking to deliver a managed UC service: 1. invest in the development of their own process automation of UC services to create a scalable UC delivery platform, or 2. simply do nothing and continue to try to manually deliver a managed IP telephony service (dial tone and voicemail), adding UC applications with a systems integration effort for each customer. Neither is a great option for service providers facing the predicted rise in market demand for UC. Fortunately, there is a better option available today: UC service delivery management (SDM) platforms, is a new category of management tool that enables UC service providers to achieve scalability at a far lower TCO. SDM platforms provide service providers with the following feature set:

A provider-level, single pane of glass

A SDM employs a provider-level single-pane-of-glass view of the providers entire managed UC services business, including the ability to: Centrally provision and manage thousands of customer locations, simply and efficiently through managed operational and deployment tools Clearly view and configure all infrastructure elements under management Centrally manage provider resources (e.g. E.164 numbers, IP addressing, etc.) Easily drill down from the provider level to any one customer Centrally manage provider services (e.g. UC service catalog)

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Allow each customer to partition itself into multiple business units or agencies Enable provider-level reporting and business analytics

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UC Manager-of-Manager capability
SDM provides a manager of managers capability for multiple network elements, plus the full suite of UC services. Typically each one of these UC elements provides its own separate management interface today, but SDM platforms remove the need for multiple management steps on each of these separate systems. Best of class SDM platforms will support the full range of advanced UC applications (UM, IM, Presence, collaboration, mobility, etc.) and are specifically designed to support multi-vendor UC application interoperability. SDM also provides service providers with the ability to package services into bundled offerings, allowing each customer to customize their own services, including classes of service (executives vs. staff members).

Diverse customer network support

SDM enables service providers to not only support thousands of customers, but also their diverse networks on an individual basis. This means being able to support: Many thousands of IP-PBX clusters, gatekeepers, voice switches and UC application servers Shared (cloud) and/or dedicated infrastructure management A hybrid combination of deployment models: o Hosted (SP data center) or managed (customer premise) UC applications o Shared (multi-customer) or dedicated (single customer) UC applications Advanced gateway management: o Local and/or central gateway management (including SIP trunking) o Remote gateway access failover (SRST) configuration

Single point of integration

SDM provides a single point of integration to back office systems (order management or billing) across an architecture spanning thousands of managed customers, even customers with dedicated, on-premise networks. SDM should have a set of standardsbased APIs, with use cases that have been tested extensively for service providers. Most importantly, SDM should have an evolutionary approach to integrating into the service providers back-office systems that doesnt require a big-bang integration approach to launch initial services. The build it and they will come business case is no longer acceptable.

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VOSS White Paper

VOSS Solutions - Market Leader in UC SDM

VOSS Solutions is the leading UC service fulfilment system that provides full UC SDM capabilities. VOSSs SDM is in its 7th generation and has been specifically architected from its inception to support diverse, multi-customer, and remotely managed network architectures for service providers. The VOSS SDM was designed specifically to address the challenges involved in deploying and managing complex UC and managed IP telephony (IPT) systems. This means that VOSS inherently meets the above service provider feature-set to address the perfect storm in managed UC services. Most, if not all, competing UC SDM systems have been designed for the enterprise, and not for the service provider market. This is especially the case for IPT vendor management systems (i.e. Cisco, Avaya, Siemens, etc.), where these vendors havent historically focused on delivering integrated, carrier-grade operational management solutions. VOSS SDM automates the critical business flow and network configuration processes required to successfully deploy and operate UC Services. VOSS is ideally suited to support UC feature set management and deployment of multiple customer groups, their sites, devices and end-users on a massive scale.
Figure 3 VOSS Component Architecture

As a result, managed service providers can create, deliver and personalize a sophisticated suite of UC and voice services more swiftly and at lower cost, to enhance the benefits of converged service networks. In addition, through the selfservice portal, customers can perform their own moves, adds and changes, in realtime, giving them more control and immediacy of service.

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For all of these reasons, the VOSS SDM platform has been successfully deployed in many tier 1 service providers and major outsource companies around the world. VOSS is delivered on a pre-configured, appliance-based, clustered hardware platform, with high availability and no single point of failure, not as a software download where the provider is responsible for configuring the hardware platform. The design of the VOSS hardware platform ensures both ease of scalability as well as disaster recovery, and it has also undergone extensive security audits with tier-1 providers. Competing UC management systems, designed for the enterprise, will not have undergone such a deep level of security testing required by service providers. In addition, VOSSs platform can be virtualized, and has been load tested by Cisco NSITE labs, providing a high degree of confidence around scalability and redundancy.

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VOSS Solutions - Differentiators for Service Providers

VOSS provides three unmatched advantages to managed service providers. To date, each is unique to VOSS and offers an invaluable set of benefits to service providers:

1. Standardization of service configuration and dial plan

Standardization is fundamental to the VOSS Solutions approach. VOSS believes that it is only through standardizing business processes and configuration templates that a service provider can scale their business, lower operating costs and consistently offer a quality service. But VOSS standardization does not come at the expense of service flexibility, which has often been the experience in the past with Centrex solutions. VOSS standardizes the delivery and management of UC across complex, large-scale, multi-cluster architectures, without reducing the richness of the features offered. Nor does it limit the flexibility of the customization available to each customer, within a service provider managed/hosted UC platform. To achieve this high level of standardization, VOSS provisions the network components at the dial plan level. Other provisioning platforms manage service configurations independent of the network dial plan, therefore requiring a highly skilled engineer to perform many tasks, including the set-up of new customers and locations. Most competing management tools are not designed to impose any standardization because they still require engineers to change configuration directly on the myriad of UC infrastructure elements. In a service provider environment, experience shows that relying on engineers to follow standard scripts has rarely achieved the level of consistency required, and providers cannot always rely on the design implementation. The VOSS SDM platform delivers the following ancillary benefits: As a result of automating down to the dial plan level, VOSS automates close to 100% of the day-to-day business processes on the network, meaning lower operating costs. Unless a SDM platform includes the dial plan, only 60%-70% of the standard business processes for a service provider can be automated

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Improved flexibility through centrally managed, enterprise-wide dial plans that are no longer embedded in multiple systems across the network A unified, integrated dial plan ensures lower maintenance costs by eliminating separate dial plans for each business unit, or geography, and maintains customers dialling rules, across the limits of each and every country Cross-customer, inter-cluster trunking dial plans, with central administration, reduces operating costs and speeds up rollouts of new UC applications An integrated dial plan that includes customers legacy TDM sites, ensuring any user across a customer (legacy or IP) can continue to call any phone on the network the same way, regardless of whether a site has been migrated. No other SDM supports legacy vs. IP site integration, at the dial plan level VOSS has also developed a standardized set of migration tools and services which enable service providers to significantly automate the migration of customers onto their platform.

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2. Full lifecycle management and multi-vendor interoperability

VOSS is focused on managing the entire life cycle of a service provider UC platform, from initial design (day-0), to build and deployment (day-1), through support and administration (day-2), and finally to upgrade and enhancement (what we call day-3). VOSS provides a central management platform with a common data store, removing the need for different teams to enter and manage data for their own specific task. The data that is entered at the design stage becomes the same data used by the day-1 team, and the data added during deployment becomes the same data used by the day-2 team, and in turn, this is the same data that is also accessed by the endcustomer. At each stage of the UC platform lifecycle, VOSS standardizes processes and reduces the total cost of ownership (TCO), by removing the need for maintaining separate data stores and separate automation systems. System interoperability is managed not just for the initial deployment, but on an ongoing basis. This also greatly reduces the chance of data drift and lowers the cost of transferring ownership of a platform between the day-1 deployment team and the day-2 support team (one of the biggest issues faced by service providers) and then again, when enabling functionality to the end customer. Competing UC management systems typically provide only day-1 provisioning (adding new customers) or day-2 management (MACS), but rarely both. For a real world example, the VOSS SDM platform contributed to IBM achieving one of the fastest large-scale IP phone roll-outs known to date (70,000 phones and 2,800 sites in less than 12 months), plus an ongoing 50% saving in day-2 operating costs. This result has been independently corroborated by Gartner, a leading analyst firm. Subsequently, VOSS has enabled IBM to upgrade their entire Cisco IPT architecture to the latest release version, in order to support the addition of Microsoft OCS to their offering. This subsequent day-3 upgrade and system interoperability was achieved in a matter of weeks, without any major system integration costs.

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_____________________________________________________________________ 3. Support for business-driven, web portals (including reporting and audit), and new event based billing models
Increasingly service providers are providing web-based, self-care portals to allow customers to self-manage their communications services. VOSS provides a fully customizable self-care portal, which can be offered by the service provider. Alternatively, VOSS can provide APIs for the integration of its management system into the service providers existing customer care portal, if so desired. VOSS delivers an advanced, multi-level management hierarchy that provides superior flexibility and functionality to end-customers of the service provider. VOSS allows each end-customer to devolve the management of their UC platform to up to four standard layers of administrators within that customer, rather than the one or two levels provided by most other management platforms: 1. 2. 3. 4. Customer-wide administrators Business unit or agency administrators Building administrators (several agencies may occupy a single building) Single location administrators

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In addition, VOSS provides the following value-added benefits: Secure partitioning of multi-customer environments for shared services. Each customer can only see their own data Advanced access and privilege control on a user-by-user basis, for all levels of delegated hierarchical administration. This means that any administrator can have their access to the platform customized uniquely. This becomes hugely powerful for training and delivering administration portals to customers Self-care portal for end-users. This is a highly customizable portal to allow endusers to manage their UC services across multiple network devices, all from a common, secure, easy to use portal Resource and service management for customers Advanced reporting at both provider and customer management level Advanced audit capability of all transactions, where not only the transaction is recorded, but the changed parameters comparing both old and new settings The management of event-based billing from web-based portals in multi-customer environments is a specialty area for VOSS. Once a service provider adopts devolved customer administration (to lower costs and improve customer service levels) it is a logical consequence that customers will begin to make service changes that trigger billing events and service invoicing. Service providers will need systems to manage and bill for this event-based service data. While VOSS is not a billing engine, it does provide the ability to generate transactional events that can be aggregated on a customer-by-customer basis and sent to a billing engine. VOSS achieves this because it holds the service status as well as the service catalog information. This capability will become more and more important to service providers as a differentiator, and there is no evidence that any other SDM systems are offering this capability today.

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Conclusion
UC as a whole is in the early stages of becoming the next technology investment must-have, given its inherent organizational productivity value. Simultaneously, service providers around the world are seeing a marked increase in demand for managed IT and telecommunications services. Some of the major drivers for this include: Scarce capital expenditures, reducing operating costs and addressing the over-extension of limited in-house IT staff in an ever-more complex technical environment. With these technological and financial evolutions taking place at the same time, a once in a lifetime opportunity is occurring for service providers, especially those in the area of managed IP telephony and UC. The perfect storm brewing for service providers does present a potential double-edged sword due to the fact that many service providers are ill-equipped to manage the scale and technical complexity of the increasing market demand. However all is not lost in this sea of change. The right SDM platform will give service providers the ability to address the challenges presented by this managed UC services perfect storm head on. VOSS Solutions is the market leader in UC SDM platforms, specifically designed for the service provider market. VOSS offers service providers the ability to massively scale and automate their managed UC services business, therefore lowering their operating costs, while offering service providers and their customers a plethora of valuable and necessary ancillary service delivery improvements. Service providers who utilize VOSS Solutions SDM platform will not only be better able to capitalize on this perfect storm, they will be able to compete more cost effectively and provide deeper customer value compared to their peers in the managed UC services industry.

For more information about VOSS, please contact: enquiries@voss-solutions.com

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