Bill Diotte is chief executive and president of BroadHop Inc., a provider of policy control systems to more than 75 operators across the world. Diotte holds a degree in engineering from Queen’s University, a Masters in Business Administration from the Ivey School at the University of Western Ontario and is a graduate of the Stockholm School of Economics’ International Business Programme. He has previously served as president and COO of IP-based electronic payments company, Amigo Systems and has held executive positions at CAT Technology, SRI Consulting and Gemini. Here, he discusses the exciting service innovation capabilities that Policy 2.0 brings to operators and explains how the market is upgrading from Policy 1.0 to Policy 2.0.
Bill Diotte is chief executive and president of BroadHop Inc., a provider of policy control systems to more than 75 operators across the world. Diotte holds a degree in engineering from Queen’s University, a Masters in Business Administration from the Ivey School at the University of Western Ontario and is a graduate of the Stockholm School of Economics’ International Business Programme. He has previously served as president and COO of IP-based electronic payments company, Amigo Systems and has held executive positions at CAT Technology, SRI Consulting and Gemini. Here, he discusses the exciting service innovation capabilities that Policy 2.0 brings to operators and explains how the market is upgrading from Policy 1.0 to Policy 2.0.
VanillaPlus: BroadHop has emphasised the need for service providers to make the shift from a Policy 1.0 bandwidth centric viewpoint to a Policy 2.0 application centric viewpoint. How far are we along in the shift from Policy 1.0 to Policy 2.0?
Bill Diotte: We’re still in the early stages of the Policy 2.0 shift. For example, two years ago at Mobile World Congress, most CMOs and CFOs were talking about how to use policy management to protect the network. That defensive use is the origin of Policy 1.0 but by last year’s Mobile World Congress the situation had flipped and I was asked how to use the technology for service innovation. Policy 2.0 is definitely at the top of service providers’ minds and approximately 20% of our customers are looking to deploy these services and an application centric approach now. Operators are starting to look for ways to engage with the customer other than just throttling them. The dialogue on fair use and net neutrality misses the point because the intelligent application of policy can add to the end user experience and that’s something we – as an industry – have to focus on.
Everything offered by Policy 1.0 still applies in terms of protecting the network but enabling service providers to create quality of experience is what makes the case for Policy 2.0. We see the market rapidly moving to Policy 2.0 during 2011 and 2012 and driving better customer experiences as well as acquiring compelling experiences. If an operator can only offer speed and price, that road eventually leads to zero.
VP: Are there geographic differences in the way operators are implementing policy?
BD: Yes, there are changes based on the competitive nature of the markets that service providers serve. India and Ireland, for example, have very different profiles. We have over 75 customers in 30 countries so we truly have a broad perspective. In hyper-competitive, emerging environments, like India, the pressure on ARPU is enormous, churn is high and the majority of users are pre-paid so there’s a Darwinian battle for the customer. In those situations we’re seeing the use of BroadHop’s technology in very innovative ways to deliver sticky services. These service providers are very innovative and very rapidly deploy new services – and that puts a lot of pressure on technology.
In America and the EU, the market is much more focused on tier one operators that are looking at fewer use cases. Their approach is more basic and centres on aligning use with revenue generated. Operators are more interested in high revenue use cases and the demands placed on their networks. That’s why we designed the Quantum Network Suite – to provide massive scalability for these operators, whose policy is about limited use cases and scalability.
VP: What are the most compelling use cases you are seeing today?
BD: In emerging markets, we see a couple of very interesting examples. In Malaysia and India we offer individualised service every time a user creates a session. Every time a user gets access to a service they are able to control their networking experience. They can select the speed they require for a session. For example, they can select speed for video or bandwidth for email or they may choose to have premium speed. Users are able to adjust everything they consume on the network and this type of proposition really supports the concept of the smartphone becoming a remote control for users’ experiences of the network.
Another example is Policy 2.0 for parental controls. The parent has control in the sense that they can specify the parameters of their child’s account and, for example, set the account for no text messaging, no chat and limited surfing within school hours or that internet ‘lights out’ is at 10pm. There is also content filtering capacity to ensure only age group suitable content is viewed. The key is to give that filtering capability to the parents and make it highly tailored. These are some of the services we are seeing in the more competitive markets that are innovative and compelling.
In the US and the UK it is more mainstream with classic Policy 1.0 services such as congestion management, bandwidth capping, tiering and mechanisms to prevent bill shock. However, that is now starting to shift to provide services like video optimisation. Operators can profile the network in a time of congestion based on individual subscribers and will be able to maintain a high service level if users wants high resolution video.
Another example in developed markets in which we expect to see strong interest over the next two years is in managing multiple networks from a single control plane. Fixed and mobile networks can be controlled from a unified policy control plane and about one third of our customers operate multiple fixed and mobile networks. That obviously provides a lot of advantages and opportunities for service providers to create competitive solutions and also provides opportunities for unique services to be brought to market.
VP: What are the requirements to enable the shift from Policy 1.0 to 2.0?
BD: The old tools of Policy 1.0 simply aren’t sufficient to deliver Policy 2.0. Current modes of technology and installations are inappropriate. If you start from the top, there’s really the level of scalability required to deliver Policy 2.0. Our previous generation architecture was monolithic so that scaling up meant larger servers and databases were required. The problem with that is, as transactions move from 3,000 transactions per second to 5,000 and 10,000, scaling up becomes more expensive than the policy management software itself. If the hardware and the databases start to cost more than the value being delivered, a serious question arises which we set out to address with our Quantum Network Suite’s fully virtualised architecture.
This next generation architecture means blades can be added and operators can scale out in a very linear way so the cost per transaction remains uniform and linear.
The second aspect is in enabling the application interface for the service provider to create an applications gateway. This allows internal, on- net applications to access bandwidth and change the features of the network via an additional layer with an intelligent interface that is developer friendly rather than using the rougher, stricter telecoms protocols.
The ability to monetise and have real time charging capability within the framework is also critical. Real time charging simply must be included in the policy management because if you can’t monetise, you’re really falling short of the potential. The ability to control, monetise and personalise is very important from the end-to- end solution point of view.
The final element is the ability to configure new services without a requirement to develop new code. New service development can take 10 to 12 weeks and 10,000 to 20,000 lines of customer code. This really inhibits operators because of the time and complexity of development involved. More often than not, the policy vendor must do this development and the operator has very little leverage over the timeframe or price. With Quantum Network Suite, we break through that captive vendor model, providing tools that allow operators to create their own policy definitions and publish unique and special features separately. That gives feature freedom to the operators and allows them to deliver against the feature requirements that they receive more effectively.
VP: What is the TCO of policy? Is there a cost to taking a wait and see attitude?
BD: There are a number of different ways to look at this question and we’re currently in the process of taking a hard-edged scientific approach to defining the TCO of policy. Policy typically costs four to five percent of the total cost of network build out and that’s a reasonable expectation. That makes it the icing on the cake and in terms of the intelligence and flexibility it brings the network, it has more impact than the cost suggests. TCO becomes more important from an architecture and scale perspective as we measure the monetary impact.
Some would look at policy as an element that could be given away to enable a sale of radio equipment or gateways. There’s nothing wrong with policy as a deal enabler but you certainly get what you pay for. With the disproportionate impact that policy can have on an operator’s competitiveness and bottom line, the four to five percent is well spent on a vendor neutral Policy 2.0 platform that can drive not only the use cases of today, but also those of the future.
