Managing Usage-based Sales Models in Virtual Environments

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Telecom Operators and Equipment Suppliers Face Challenges with the Transition from a Hardware-Centric to a Software-Defined Sales Model

Today’s mobile and broadband operators are facing unprecedented challenges driven by consumer behavior – with the increasing demand for high bandwidth, network quality and new, over-the-top (OTT) services – and by decades-old infrastructure that requires constant repair and upgrades. Managing the proliferation of features, capacities, licenses, access rights and services in this chaotic, fast-moving and increasingly virtual world seems close to impossible. Operators who intend to compete effectively must find new ways to sell usage-based and subscription-based software services. This could only be achieved with the support of an end-to-end entitlement management mechanism that helps them measure and monetize the usage of data, bandwidth and network use.

Virtualization of the wireless network infrastructure (in everything from the backhaul systems to the radios) offers the promise of allowing telecommunication companies to replace aging hardware, test and upgrade networks more easily, and to offer segmented services in ways that will create more market opportunities, reduce overall capital and operation expenses, and simplify the roles of the players at each level in the industry.

As mobile operators move to a 5G standard for virtualized networks and the Internet of Things (IoT) where connectivity is key, they increasingly need to manage more software-defined products and what is a new revenue stream for them. To this end, operators want to reuse hardware which is already deployed in the network from telecom equipment suppliers. At the same time, telecom equipment suppliers are still trying to sell hardware in the traditional way, which operators want to reuse as much of the hardware as possible to only buy software features (i.e. OTT). While some providers have succeeded with their software-defined networking (SDN) offerings, the issue is that operators are heavily competing with other operators in the same market and they are expanding with usage-based models, which will have an impact on the telecom equipment suppliers as well.

Now, more than ever, competition in the telecom industry is fierce and rapid differentiation is key to survival. Carriers are driving suppliers to provide diverse features to satisfy customer demands, and it is more profitable for both parties to provide these features through software, instead of constantly swapping out hardware with new features. How best can carriers exit the business of swapping out hardware to provide their customers new features through software is the question. If a supplier cannot provide the features, the carrier will go to another channel that can.

The Industry Requires a Reliable Mechanism to Effectively Manage a Pay-Per-Use, Software Ecosystem and Drive Business Value

As telecom carriers push more and more to provide differentiating features to customers through software – rather than dealing with the costly process of exchanging the hardware to provide these new features – managing the software is next to impossible without the right tools to handle the challenges that come with mass customization, licenses and upgrades. The reality is:

  • Customers must understand the advantages and limitations of each of the packaged products.
  • System owners must ensure that customers do not use features, capacities and functionality they haven’t purchased.
  • System owners will want to allow customers to try new features (often initially for free) and easily add the new features to their systems.
  • System owners will need to provide online- self-managed reporting of usage, entitlements and the ability to manage, move, limit and otherwise control the use and distribution of the entitlements they’ve purchased across the virtual systems.
  • System owners will need to track licenses that are fixed to hardware across virtual systems supported by that hardware.
  • Software publishers and service providers will need a mechanism to enforce licenses.

They require a platform that supports:

  • Control
  • Analytics
A Telecom Success Story
A $29 billion global telecommunications company sought to register, service and maintain thousands of IoT devices. By employing entitlement management technology, the company has taken advantage of post-hardware sale opportunities to sell upgrades (incremental orders). It has also gained insights into how devices are being used. Further, this telecom operator is able to build one product and package it in several ways with many values, depending on features enabled for customers.

A Sophisticated Entitlement Management Platform Can be Invaluable in the Complicated Telecommunications Environment

Unlike a single-purpose license management system, an entitlement management system, in addition to connecting to operations support systems (OSS) in the field, can connect directly to front-end business support systems (BSS). This allows the entitlement management system to provide both validation to field systems on the features and capacities left in the purchased pool of resources and a path for adding additional features and capacities through billing or immediate purchase.

Entitlement management is the BSS function that facilitates the virtualization on the OSS side. By moving towards entitlement management, telecom operators will be positioned to monitor, verify and track the use of resources, software features and capacities in those virtual environments.

Without the ability to track usage and verify provisioning against customer purchases provided by an entitlement management system, many of the advantages of a virtualized network will remain unrealized.

The New-Generation Solution:

  • Single platform for all entitlement management needs
  • Supports commercial and home-grown licensing technologies
  • Available as a private cloud or SaaS offering
  • Role-based securities
  • Online, check-in/check-out processing of licensed software
  • Customer self-service entitlement management
  • Subscription tracking and self-service maintenance
  • Consumption tracking and reporting
  • Multiple web services for integration
  • Localizable and customizable UI
  • Single-sign-on ready
  • Sophisticated upgrade management engine
  • Batch activation
  • Customizable email notifications

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The Power of Entitlement Management

Entitlement Management is securing, distributing and validating the intangibles of our commercial world. Learn about 5 key aspects of Entitlement Management in this free whitepaper. These key aspects include multi-license management, streamlined upgrades, flexible usage tracking, content download control and real-time reporting.

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