2014/09/15 Service delivery platforms are crucial to creating sticky personalised services in the new digital economy

Communications service providers (CSPs) are looking for ways to reap the benefits of their expensive network infrastructure investments through innovative services, while simultaneously competing with over-the-top (OTT) players to prevent erosion of their established revenue streams. Service delivery platforms (SDP) play an important role in protecting current revenue streams and creating new ones by helping CSPs to develop, deliver and manage new and established services and charging models. SDP solutions enable the delivery of a wide spectrum of telecoms services, ranging from traditional voice and messaging services to new and high-growth services such as multi-screen video and VoLTE.

Analysys Mason's Service Delivery Platforms research programme tracks four sub-segments of the SDP market that collectively serve the crucial business and technical objectives of CSPs:

• telecoms application servers (TAS)
• content management and delivery (CMD)
• subscriber data management (SDM)
• policy management (PM).

We provide annual market share and forecast data as well as in-depth analysis of market trends, vendors and their solutions, and use cases.

The SDP market will grow from USD5.2 billion in 2013 to USD8.3 billion in 2018, at a CAGR of 10%, according to our Service delivery platforms: worldwide forecasts 2014–2018 report (see Figure 1). This article discusses some of the key SDP market trends and growth opportunities highlighted in the report.

Figure 1: Service delivery platform revenue, worldwide, 2013–2018 [Source: Analysys Mason, 2014]

CSPs are investing in VoLTE, UC and IoT/M2M to remain relevant in the new digital economy

Voice and messaging revenue is declining in most parts of the world, and access to the revenue from OTT services and other third-party applications is becoming increasingly important for CSP's top and bottom lines. To remain relevant and competitive in this new market landscape, CSPs are replacing their closed, complex and costly legacy service platforms with next-generation open environments that improve service agility, reduce costs and enable service exposure for B2B2B/C business models.

CSPs will need to spend on TAS to support VoLTE, the replacement of legacy intelligent networks (IN), and new IoT/M2M and unified communications (UC) platforms during the next 5 years. VoLTE deployments started to gain momentum in most developed markets in 2013, and are expected to have a larger impact on the market in 2014 and onwards. We will explore VoLTE migration options, identify its challenges and benefits, analyse its impact on TAS and other systems, and examine its drivers and inhibitors – as well as its alternatives – in a forthcoming SDP report in 2014.

Spending on multi-screen video services is increasing as CSPs strive to compete with cable and OTT providers

CSPs are investing in video content management and delivery solutions to enhance their IPTV services with multi-screen capabilities, which enable their users to consume content on mobile devices such as smartphones and tablets. This is a response to competition from cable and OTT providers, as consumer demand shifts to personalised video services that can be consumed anytime and anywhere. Analytics-enabled targeted and contextual mobile advertising solutions are also becoming popular as CSPs aim to monetise increasing mobile device take-up and data usage.

CSPs face increasing pressure to deliver bandwidth-intensive content to multiple devices via their congested networks. Mobile networks pose further challenges to operators as rapid growth in mobile data traffic squeezes their limited network capacity. This is increasing the demand for video optimisation solutions in content delivery networks (CDN) to maximise the availability and performance of services and ensure customer satisfaction and loyalty. A forthcoming report in the SDP programme will feature a detailed analysis of the CDN market, which will include a forecast of video traffic and CMD spending, details of drivers and inhibitors for mobile and fixed CMD, and a review of the impact of OTT CDNs on CSPs.

Personalised services will help CSPs to improve the customer experience and create new revenue streams

SDM solutions are crucial elements that support the execution of CSP services by providing real-time and near-real-time access to subscriber data. CSPs continue to deploy and expand home subscriber server (HSS) systems, driven by LTE roll-outs and expansions, as well as growth in their subscriber bases. Policy management adjunct subscriber profile repository (SPR) and Wi-Fi authentication, authorisation and accounting (AAA) server deployments also contribute to the growth in the market.

Vendors are upgrading and replacing end-of-life SDM with new solutions equivalent to the user data repository (UDR) in 3GPP's User Data Convergence (UDC) architecture for unified subscriber data. CSPs began to adopt these solutions mostly for internal use cases, such as using analytics and customer experience management (CEM) to reduce costs and gain incremental revenue. However, more CSPs are likely to implement SDM in the near future in a bid to improve the customer experience, and to monetise rich customer and network data through collaboration with third-party service providers and partner ecosystems, such as identity management (IdM) solutions, IoT/M2M services and mobile advertising. Our forthcoming report on SDM and IdM will include an in-depth analysis of the SDM market, the growing trend towards the 3GPP UDC/UDR concept and the role of SDM in IdM for enabling new third-party services.

Policy management solutions are moving beyond traffic management to revenue-generating use cases

Rapid growth in mobile data usage is driving the adoption of numerous PM use cases – such as network protection, bill-shock prevention, tiered pricing and family/shared plans – to monetise this traffic through new services and charging models while reducing the network cost per bit. Application-based pricing, which is the inclusion of third-party content and services (applications) as part of a CSP's tariff structures, has gained popularity in recent years as CSPs try to maintain ARPU against the decline in mobile data prices and per-user spending on digital content.

Analysys Mason analyses the role of PM in delivering service revenue to CSPs and tracks the evolving policy control and charging markets, as well as trends such as application-based pricing, in a series of reports, vendor profiles and case studies.

Source: Analysys Mason