Last week we launched a new whitepaper by Patrick Donegan of Heavy Reading, titled “Innovation in Communications Services: Breaking with the Past without Waiting for the Future.” The paper discusses a ‘third way’ to service provider digital transformation, utilizing DNS. Read the blog post below for an excerpt from Donegan’s paper, which you can download in its entirety here.
DNS: The “Third Way” to Digital Transformation
In one sense, the business landscape for communications service providers (CSPs) hasn’t changed at all in the last five years. As a global sector of the economy, the service provider community has found it consistently challenging to grow revenues and certainly to increase average revenue per user (ARPU).
In terms of the business models and tools available to grow service provider revenues, however, the landscape has changed very significantly. There is now a strong industry-wide consensus that the traditional approach of investing in new proprietary hardware- based solutions for new service innovation is starting to become outdated. The capex and opex costs are recognized to be too high. Moreover, the time to market that this approach typically required isn’t competitive in a market where more nimble Web-scale players such as Google and Facebook are able to spin up competing new services in days or hours.
Digital Transformation Is the New Means to an Old End – But When?
The last couple of years have seen an equally strong industry consensus emerge that digital transformation, modeled on what the Internet giants have done, and embracing cloudification of network functions through network functions virtualization (NFV) and software-defined networking (SDN), represents the new way forward. The vision that service providers are now aligned on is a single “cloudified” network architecture, including an NFV Infrastructure (NFVI) hardware and software platform. This is the new universal platform on which different revenue-generating applications or virtual network functions (VNFs) from multiple vendors can be introduced in software, hence very much faster, all supported by a next-generation management and orchestration (MANO) layer.
So, is it really a case of out with the old and in with the new when it comes to the approach to protecting and growing service provider revenues? Not quite. As the experience of some of the world’s leading service providers is showing, “cloudification” and digital transformation are going to be a multi-year process – perhaps a little more multi-year than some originally assumed.
A Third Way That Bridges Old & New Models
Service providers must be open to any cost-effective approaches to delivering new services and reducing customer churn, as well as continuing to leverage legacy dedicated hardware-based infrastructure models for new services and plotting a course for digital transformation.
Any such approach, which can be thought of as offering a third way in new service innovation, should deliver a better cost model and preferably faster time to market than legacy approaches. They should also be entirely aligned with the service provider’s digital transformation roadmap without necessarily being implemented according to the end target architecture from day one.
A “Third Way” Transformation Path Using DNS
One possibility is for service providers to leverage their existing domain name server (DNS) infrastructure as a means of providing new services to their customers. The DNS is the gateway infrastructure that mediates between the end user and their service interactions with the World Wide Web. Most service providers are used to thinking of the DNS as a passive infrastructure that provides impartial look-up functions and connects users to the Web server resources of their choice.
But with the right additional investment, existing DNS server infrastructure can also be leveraged as an active intelligent network resource that is capable of delivering new services that deliver value to the end user, as well as revenue protection or revenue growth for the service provider. Because of its gateway function between the end user and the Internet, the DNS infrastructure can have excellent visibility into cyber threat intelligence, especially when that threat intelligence is pooled and shared across DNS server resources throughout the world. Used correctly, that threat intelligence can then be leveraged by service providers for network level filtering to protect the end user and materially improve their online experience.
When you consider the insight that the DNS has into the online usage patterns and sites visited of individual users, that customer data could also be leveraged to offer personalized new service propositions. And when you consider the amount of attention that users pay every day to their Web browser, service providers can also leverage that as a messaging channel for enhanced customer communications.
Click here to download the entire whitepaper and watch the accompanying video series, to learn more about the third way to digital transformation using DNS.