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The Big Slice

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VoicenData Bureau
New Update

Telecom is one of the hottest verticals that vendors across all categories

target. For IT services players a significant amount of revenue comes from the

telecom vertical, which means that telcos are aggressively buying solutions in

OSS and BSS. When solutions are deployed, a significant amount of the investment

goes in creating an infrastructure, of which servers is a key component.

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As per V&D estimates, the size of the telecom software space was around Rs

20,018 crore in FY 2008. And factoring investments like base stations by a

telecom company, there is high degree of computing in this space. So at the back

end, servers assume a mission critical position, both for internal management

and for managing the customer base. The capex on IT is very high in the telecom

space and every application deployment means a ramp up in the servers.

What's on Offer



All server vendors are focused on the telecom space. Market leader HP gets huge
business in this space. HP has got some of the leading names in the telecom

space like BSNL, Vodafone, and Idea Cellular, among others. It has the Advanced

Open Telecom Platforms (AOTP) solution framework based on modular,

standards-based business technologies and provides common middleware

architecture across multiple types of underlying hardware. This enables the

creation of an adaptive infrastructure through blending the necessary software,

hardware and services aimed at a cost-effective and fast time-to-market

deployment of services in voice, data and broadband networks.

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Another key component of HP's telecom offering revolves around the Next

Generation Operations Support Systems Solutions (NGOSS). Here HP offers a

portfolio aimed at meeting the ever-growing OSS demands in a converging

marketplace.

HP is taking a total approach to OSS transformation by addressing the steps

required to build NGOSS, and supply the software, hardware and services needed

as part of its full NGOSS solution. The solution includes reference NGOSS

architecture and integration modules, built-in management capabilities for a

multi-service and multi-vendor environment as well as pre-packaged solution

accelerators to address carrier initiatives such as IP/MPLS, IPTV, mobile, VoIP,

and IMS/SDP.

Move to Convergence



Market trends indicate that it is not just the server rather it is an

architecture-based framework that integrates customers' requirements and creates

an agile and stable back-end infrastructure. According to sources, at Sun

Microsystems, which is advocating the unified network platform, the

architecture-based platform is aimed at lowering the cost of the first

subscriber. The move to converged networks has forced network equipment

providers to aggregate a wide variety of hardware, software, and operating

systems.

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In the past, when large national network build outs were the order of the

day, higher costs could be justified by the large subscriber base being enabled.

Breakeven points of a million subscribers were acceptable. In today's

competitive environment, however, carriers seek much more flexibility in their

deployments. They want to establish national reach while being able to

cost-effectively deploy networks in evolving markets that may only have few

subscribers. The trend to deploy networks on a more granular basis combined with

the convergence of wireline and wireless networks is prompting service providers

to seek new ways to design their network elements. Without such change, they run

the risk of designing a solution that costs too much, takes too long to develop,

and one which does not scale well.

According to Sun, organizations looking to stay ahead of migration from 3G

networks to 4G networks-WiMax, HSDPA, or long term evolution (LTE)-can gain

insight into the expected developments by examining how many of the same

fundamental technology trends have shaped comparable markets.

“Telecom is one of

the biggest verticals for us. We dominate the billing and mediation and VAS

side of things with a range of offerings cutting across UNIX to x86”

Pankaj Mathur, country manager,

communications, media and entertainment, TSG, HP India

“Almost all service

providers use our Netra and the ATCA servers. The vertical has huge

potential still and aggressive spending will continue to happen.”

Kapil Sood, director, industry sales

organization, Sun Microsystems

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For instance, as processor technology has made it more cost effective to move

computing away from the traditional data center's expensive mainframe and onto

the desktop, the same advances in processor technology continue to flatten

network topologies by moving functionality away from traditional Class 5

switches and out to the network's edge. Similarly, the inevitable explosion in

network bandwidth is fueled by user demands.

Sun believes a better, far simpler, easier-to-use, higher-performing, and

lower-cost solution to these computational challenges can be derived from

standards-based commercial off-the-shelf (COTS) technologies.

What Lies Ahead



Meanwhile, IBM also has a slew of servers in the telecom space. A survey

conducted by IBM threw an interesting pointer: with the decline in revenues from

voice-based services and the convergence of new media and online, the

telecommunications players are reassessing their business models. The survey,

conducted by the Economist Intelligence Unit for IBM's Institute for Business

Value, found that 69% of telecommunications service providers expect a change of

their business model to be the main source of value over the next five years.

That compares to only 34% with the same expectation in the preceding five years.

An overwhelming majority of executives (72%) expect collaboration with external

partners will be critical as they structure these new business models.

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"Service providers demonstrated a new recognition that business model

innovation is paramount, yet many of our survey respondents still pointed to

traditional strengths as their differentiators," says Noel Taylor, general

manager and global communications sector leader, IBM Global Business Services.

Telecom leaders are also more bullish on video-related services, with 44%

predicting major-to-moderate revenue from it, either in the form of

subscription-based revenue or through advertising. More than half the executives

(68% in the Asia Pacific and 56% in North America) expect such non-video content

services like ring-tones, text voting, and music download to make

major-to-moderate revenue contributions.

So the way ahead for server vendors is offering hardware more tuned to the

future demands like streaming video and seamless network management. The server

vendors are creating an ecosystem of solutions. The priorities that top their

agenda are aspects like agility, scalability and processing power. Analysts are

bullish about the adoption of new servers and every vendor will have a

significant say in this vertical with their product offerings.

Shrikanth G



shrikanthg@cybermedia.co.in

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