As cable operators continue to feel competitive pressure from OTT video providers such as Netflix, Hulu and Amazon, as well as telcos and satellite providers, they’ve realized that offering triple- or quad-play packages to consumers isn’t the only path to revenue and have branched out to business services to boost the bottom line. In fact, cable business services crossed the $10 billion revenue mark in 2014 as operators have become more savvy and aggressive about getting into areas that have traditionally been the domain of telcos.
But while cable operators are already finding great success in the realm of business services – including Ethernet VPNs, private lines and access lines as well as voice, video and broadband – these services are turning into commodity items, forcing cable companies to be more innovative than the competition and create even more compelling services and bundles quickly, cheaply and easily, all of which will be possible once they leverage virtualized services.
Telcos have been looking closely at SDN and NFV for their many business benefits, but so far cable operators have been a bit slower on the uptake. One area that should be very attractive to cable players, especially Tier 1 operators with large portfolios of enterprise customers, is virtualizing the network edge and customer premise.
If we look at the traditional CPE device itself, most providers are supporting dozens of distinct models, which makes it difficult to implement changes across all of them in the case of new service rollout, for example. By virtualizing this touchpoint, operators remove that complexity as well as eliminate the need for customer interaction with the device and the cost of upgrading them.
By relocating CPE functions into a data center, the device itself can become a standard, commoditized box that simply communicates with the network and delivers virtual services to customers. These can include firewall, routing, VPN, network address translation, intrusion detection and much more. Services are delivered as virtual network functions (VNFs), which run on virtual machines (VMs) on hardware and can be chained together to deliver advanced functionality.
This architectural shift also allows operators to offer cloud-based services in a cloud broker model. This includes office productivity applications, security, data storage and more.
Another area that is getting a lot of interest from virtualization proponents is the Converged Cable Access Platform (CCAP). By virtualizing this system for voice and video delivery, operators become better able to reach the goal of an all-IP network while speeding up service deployment and lowering overall costs.
But to get to this point of real-world virtualized services, operators have some work to do on their end, not least of which is developing an environment – most likely in conjunction with partners – that’s friendly to this new way of creating and delivering business services.
Most would agree that none of this will happen overnight or in a vacuum. Cable operators will need to work closely with vendor and supplier partners to create a roadmap for virtualization that includes the necessary resources – staff, budget, etc. – to successfully bring virtual service to life.
Once all of the pieces are in place for virtual services to become just another service, cable operators have a whole new world of possibilities ahead of them, including offering cloud-based security, file sharing and other services to small and mid-size enterprises that might not otherwise be able to afford them; enabling faster provisioning of Wi-Fi hotspots by circumventing the normal VLAN provisioning process; and lowering their overall costs by cutting down on truck rolls and other support requirements.
And given that cable operators are not weighed down with the same level of legacy infrastructure as their telco counterparts and offer fewer, more targeted services, they are in a great position to quickly embrace virtualization to bring differentiated offerings to their business customers.
Photo by Ricky Aponte via Flickr
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