White Paper The Role of Systems Itegrators i IPTV Much has bee said about IPTV ad the strategic ad competitive importace this video techology offers telecom service providers across the globe. Less has bee said about how to maage a successful implemetatio from the pre-deploymet phase to day-to-day operatios. This article idetifies the three key categories of IPTV vedors, their similarities ad differeces, ad what value they brig to a potetial IPTV service provider ad the value chai.
About the Authors Stephe Pag Stephe Pag is a aalyst i the IPTV practice, oe of several domais i TCS' Telecom idustry vertical for service providers. Stephe maages relatioships with strategic parters such as Microsoft ad its Mediaroom IPTV platform. As the lead for the IPTV go-to-market plas, he supports the TCS sales orgaizatio ad existig cliets with IPTV solutios ad services. Stephe joied TCS as a solutio aalyst i TCS' Media ad Iformatio Services idustry vertical. Previously, Stephe worked for 10 years i the U.K. for COLT Telecom, Vodafoe, ad Psio, a pioeer i mobile computig ad fouder of the Symbia mobile operatig system. Stephe holds a MBA from the Uiversity of Souther Califoria's Marshall School of Busiess (IBEAR program). Nire Moharir Nire Moharir is a telecom domai cosultat focusig o IPTV ad service assurace. He has bee with TCS for more tha 13 years ad has bee with the Telecom Busiess Uit for more tha 12 years. Nire has global resposibility for creatig ad deliverig IPTV plas ad heads the practice that rus the IPTV Ceter of Excellece. Nire has worked with multiple telcos worldwide as a OSS/BSS architect, busiess process cosultat, solutio desiger, ad traier of telecom domai ad treds. 2
Table of Cotets 1. Itroductio 4 2. The Ratioale for IPTV 4 3. The Challeges 4 4. The Risks 5 5. Players i the IPTV Ecosystem 6 6. Services Portfolio 7 7. No Oe Size Fits All 7 8. Early Adopters ad the Next-Geeratio 9 9. Task at Had 9 10. IPTV Service Delivery Iovatios 10 11. The Operatioal Results 11 12. Summary 11 13. IPTV Glossary 12 14. Refereces 12 3
Itroductio The IPTV udertakig is see as a vital strategic iitiative as it eables telecom service providers to stabilize ladlie losses ad provide competitive budled service offerigs (ay combiatio of televisio ad broadbad with mobile ad wireless) that eable telecom operators to challege cable ad satellite s video domiace i the home. However, IPTV is t easy. It s a uderstatemet to say that IPTV has lots of movig parts. The complexity is compouded because, although we are begiig to see some cosolidatio, there is still a plethora of IPTV middleware ad software systems i the marketplace. I Wester Europe, which has 55% of IPTV subscribers, early adopters of IPTV did t chose off-the-shelf solutios ad preferred to build their ow IPTV ecosystem. I 2007, a estimated 23% of IPTV subscribers were beig served by proprietary IPTV middleware at operators like Italy s FastWeb, Frace s Neuf, Swede s TeliaSoera, ad USA s Verizo. The alterative approach is to choose oe of may prove off-the-shelf IPTV middleware platforms with the tightly coupled ecosystem. I this category, Microsoft's Mediaroom has emerged as the Tier Oe telecom leader with over three millio of the 26.7 millio global IPTV subscribers ad it is begiig to wi Tier Two ad cable compaies over too, as the latter upgrade to DOCSIS 3.0. Whichever middleware path is take, there are three types of IPTV vedors who ca play a role i the deploymet ad operatio of a ew IPTV service. The Ratioale for IPTV The telecom service provider s traditioal ladlie voice busiess is beig challeged from every corer from mobile to VoIP services. A leadig market research firm has bee trackig telco reveues ad has see the subscriber base erodig by four to eight percet per year, which has doubled from earlier aalysis ad has led to flat reveues i recet years. Steve Rago, pricipal aalyst for isuppli says, They [telcos] ca t exist as bulk voice carriers ad must become multimedia cotet providers...they must reivet themselves. The Challeges For a telecom service provider to trasform itself from a access-based service provider of voice ad iteret services ito a triple-play that icludes televisio, it must corral together etwork elemets ad systems ito a sigle operatioal etwork. Aligig the etwork, access systems, video etwork (headeds ad video-o-demad servers), DRM (digital rights maagemet)/cas (coditioal access systems), ad IPTV middleware ad IT systems (OSS/BSS, Schedulig, MIS) is the oly way to deliver the quality of experiece (QoE) that customers have come to demad from existig cable ad satellite video services. Without this, IPTV customers will experiece poor TV quality ad service ad ultimately abado a telco-based TV service for oe of its competitors. 4
Headed Network Ed user devices Broadcast TV Digital Trasratig ASI mux Aalog ASHP streamers IP multicastig EPG/VOD Aalog Ecoders Ecoders ASI mux IP Iformatio (PS/SI) Cotet Provider Movies & other O Demad cotet FTP EPG iformatio server Video Server EPG Iformatio Cotet Maagemet / Scheduler Middleware/ Commad Ceter IP uicastig (VOD) / IP multicastig (NVOD) HTTP IP Network Trasactios Usage Records EPG/IPTV/VOD EPG/Previews Figure 1: Ed-to-Ed IPTV Ecosystem To a extet, some of this is familiar territory, but the itroductio of video etwork elemets ad cotet services requires a whole ew approach. Video services are brad ew to the majority of telecom service providers ad have trasformed them from utilities ito media distributors. This metamorphosis comes with sigificat chages across the whole busiess. Overight, the telecom service provider has to cosider its cotet maagemet capabilities, the etwork ad its readiess for pumpig stadard ad high-defiitio TV to thousads of homes, platform maiteace to roll out service ehacemets, traiig to keep istallatio ad maiteace costs low ad, whe there are problems, well-traied customer care specialists who ca idetify ad resolve thigs quickly. Ad this does t eve address the marketig aspects of ruig a video busiess, such as chael lie-up, cotet acquisitio deals, ad competitive marketig strategies to wi ad keep customers. The Risks Research shows that ivestmet i IPTV systems is estimated to grow to $5.5 billio by 2012, ecompassig access systems, video headeds, video-o-demad, set-top boxes, middleware, DRM/CAS, ad system itegratio/professioal services. Oe leadig bak estimated that telecom service providers lookig to deploy IPTV eed to commit at least 10% to 15% of their total capex budgets to it - ad the iitial ivestmet is just the tip of the iceberg. Aalysis shows that, oce lauched, IPTV service providers could expect to icrease their spedig o 5
IPTV to as much as 20% or 30% of their total capex budget. IPTV leaders i North America like AT&T ad Verizo Commuicatios have spet about 15% to 20% of their capex buyig access equipmet ad overhaulig etworks to deploy video. AT&T is upgradig its etwork for U-Verse ad replacig subscriber ADSL with VDSL; Verizo s FiOS is replacig copper by takig fiber to the home. With this level of activity, oe forecast predicted that the umber of global IPTV subscribers will grow from 26.7 millio i 2009 to 81 millio i 2013, a compoud aual growth rate of 32%, with developig regios like Easter Europe ivestig i higher etwork speeds for IPTV ad other value-added services. It is clear that ifrastructure is crucial i deliverig the badwidth eeded to lauch IPTV services, but IT services also play a sigificat part as the glue that brigs the differet compoets together to offer seamless service to customers. The software itegratio aroud fuctios like customer ad service provisioig utilize systems like CRM, orderig, ad billig. As expected, the majority of IT costs are icurred at the begiig of a IPTV project, but there are also IT service eeds as the service ramps up, alog with routie service maiteace ad IT ad middleware fixes ad upgrades. It s possible that some IT itegratio eeds are satisfied by iteral resources, but sice IPTV is oe of the more complex systems i the telecom space, specialist support is ofte sought, especially at lauch phase. IT itegratio services really come ito their ow with complex legacy IT eviromets that eed to accommodate the ew IPTV busiess. Expertise i the developmet, maiteace, ad support of IPTV processes will reduce major failures ad keep costs dow. Rolad Berger Strategy Cosultats estimated that IT developmet, if properly carried out, had a low impact o profitability (~3-6%), but IT itegratio costs ca icrease rapidly if mishadled, leadig to adverse fiacial results. Players i the IPTV Ecosystem There are three mai categories of system itegrator that help provide these IPTV professioal services. First are IPTV vedors that have wares for specific parts of the IPTV solutio, both hardware ad software, such as the access ad video etwork (e.g. Alcatel Lucet, Cisco ad Motorola), the middleware platform (e.g. Microsoft Mediaroom), the back-office software, (e.g. Oracle s Siebel CRM or Geeva billig) or the cotet aggregators (e.g. Avail Media) that fall ito this group; each of them provides a level of system itegratio for their specific part of the IPTV solutio. They may eve provide ed-to-ed services to reduce the deploymet hurdles for carriers. Secod are specialized IPTV system itegratio firms that focus o either equipmet istallatios or specific fuctioal solutios. Their mai focus is the recommedatio of IPTV hardware equipmet, istallatio, ad cofiguratio, although they may also have a IPTV solutio themselves that has bee developed over time. Professioal services may cover system plaig, project maagemet, ogoig maiteace, ad upgrades of that hardware. 6
The third ad fial group is either a ecosystem vedor or equipmet-focused system itegrator, but teds to cotai specialist telecom ad media egieers focused o the IT itegratio, daily IPTV operatios, maaged services, ad techical support eeded to esure IPTV is a viable busiess durig the lauch phase ad throughout its lifecycle. Tata Cosultacy Services (TCS) is oe of the leaders i this latter group of systems itegrators ad has bee focusig o IPTV for a umber of years, workig with some leadig telecom service providers to address the challeges of lauchig ad scalig a IPTV service to 100,000+ subscribers. Yet, the learigs, toolsets, ad accelerators TCS has developed o these large deploymets are applicable to smaller telcos with more focused ambitios for their IPTV busiess. Services Portfolio The breadth of services of this third category of system itegrator will iclude a broad rage of cosultig ad IT services, typically icludig etwork readiess, itegratio services for the middleware platform, ad back-office software suites. For greefield IPTV opportuities, these systems itegrators leverage valuable cosultig experiece to study orgaizatioal gaps i preparatio for maagig the processes required for a IPTV lauch. Where these system itegrators brig uique value is i "Day Two" services for operatig the IPTV busiess. Whether it is cotet operatios to maage SLAs tied to third-party cotet deals, BPO (busiess process outsourcig) of IPTV FAB (fulfillmet, assurace, ad billig) fuctios or, more typically, IPTV platform developmet ad techical support, this third group of system itegrators act as ivaluable i-house specialists ad help make IPTV profitable by reducig costs through their o-demad availability, operatioal efficiecy, ad cotiuous process improvemets. No Oe Size Fits All Although the approach of a service provider i oe coutry caot be directly mirrored elsewhere, the study of early IPTV services i both Wester Europe ad North America ca provide isight ito where the market is headig ad how to aticipate the forks i the road. New markets Tier Two ad Tier Three telecom service providers; multi-dwellig uits ad hotels; cable operators movig to IP Covergece mobile ad remote iteractivity ad features to deliver place-shiftig as well as timeshiftig; over-the-top video itegratio; iteret widgets (social etworkig, etc.) Reveue models traditioal subscriptio; VOD PPV; free-to-air Advertisig addressable ad persoalized adverts Costs capex: server virtualizatio, hosted models; opex: hosted models, outsourced operatios These shifts have affected each of the three categories of IPTV vedor (referred to i the ecosystem sectio) differetly. I the first group, some vedors have expaded horizotally by creatig cosortiums to tackle the market opportuities ad challeges. As the less experieced ad resourced telecom service providers look to provide their customers with IPTV, this first group of vedors has to do more of the 7
had-holdig ad systems itegratio to brig together key aspects like cotet aggregatio ad distributio to reduce the burde for smaller telecom service providers. The secod group s core busiess has t chaged sigificatly, although their partership portfolio may have broadeed to address the ext-geeratio services of IPTV. IT-based system itegrators, the third group, have see a icreased demad from IPTV service providers that eed to maage the IPTV platform (rapid fuctioality ehacemets ad product upgrade support) ad pressure to improve operatioal performace (cost ad effectiveess of quality). At oe leadig Europea telecom service provider, IPTV is cosidered a complemetary service to its DSL busiess. To miimize the impact across the whole of the orgaizatio - etwork/egieerig, IT, sales, ad marketig the telco iitially egaged TCS IPTV operatioal team to deliver faster time-to-market by esurig that the telecom service provider s techology architecture ad busiess architecture were aliged to eable ad operate a ew IPTV busiess. After this successful egagemet, TCS was brought i to maage the IPTV itegrated delivery ad support, which was a sigificat udertakig that required a supplemetal team to maage the 24x7 IPTV operatio withi a existig orgaizatioal structure ad operatios. However, as IPTV approaches maturity, we are seeig some clear differetiatio i the players i the IPTV ecosystem. There is a overlap of services offered by the three groups of vedors, but their core stregths are distict, so it is importat to recogize the differeces amogst them while uderstadig the complemetary ature of their services i the complex IPTV ecosystem. The good ews is that telecom service providers have a lot of expertise available to them to avigate the IPTV Lifecycle (see Figure 2). The challege is i kowig the right questios to ask before decidig which compaies to parter with. IPTV Moetizig Network assessmet ad roadmap for readiess Cotet - Brigig i the cotet orgaizatio, processes ad systems OSS/BSS - Readyig for IPTV Cotet packagig New reveue models Value added services Ehaced parter ecosystem ad parter agreemets Reveue assurace Cotet process re-egieerig OSS/BSS optimizatio Iovatio i customer support IPTV Lauch/Upgrade IPTV Operatioal efficiecy Figure 2: TCS IPTV Lifecycle 8
Early Adopters ad the Next-Geeratio A leadig IPTV research firm splits the IPTV market ito four regios aroud the world: Europe, Asia, North America, ad Rest of World. Sice each of these markets has differet requiremets, may IPTV solutios have emerged, particularly i Europe, which is projected to lead IPTV service reveues by 2012, with North America ad Asia followig. Regardless of whether a IPTV system is home-grow or a commercial platform, these early adopters may face techology obsolescece ad limited feature sets as cosumers demads shift. This requires ogoig developmet ad revamps to esure that the video offerigs ad iteractive features are competitive i the market place. Task at Had IPTV service providers have goe beyod providig a simple triple-play budle to wi customers. Today s IPTV services ow have additioal advaced features like Caller ID, Bill View, ad Remote DVR programmig beig offered as USPs (uique sellig poits). TCS sees a growig eed for its services i IPTV customizatio, developmet, ad itegratio as IPTV service providers grow their video busiesses ad begi to build i iteractive applicatios, covergece features, ad ew reveue models such as addressable advertisig. I the U.K., cotet owers like the BBC have built applicatios based o Microsoft Mediaroom to brig the richess of iteret-based cotet to the TV scree. The ext wave of iovatios that are begiig to emerge from the labs are brigig covergece to the IPTV home to allow more flexible viewig experieces betwee the TV ad mobile devices ad greater access to subscriptio TV cotet o the PC to compete with free cotet services like Hulu ad user-geerated cotet portals. Figure 3: Screeshots of BBC s IPTV Applicatios Look at AT&T s efforts to leverage its exclusive deal to distribute the Apple iphoe i North America. The U-Verse team developed features o top of Microsoft Mediaroom to icorporate iteractivity with the iphoe to icrease the stickiess of both subscriptio services. 9
These iovatios may require ehacemets to the IPTV platform ad smooth iteractios betwee the operatioal ad billig subsystems, etwork elemets, ad customer equipmet. This is where the third category of IPTV systems itegrator plays a ivaluable role i testig, platform upgrades, ad techical support. Oce the system is ruig, the IPTV systems itegrator cotiue to play a role with its Day Two services to maitai quality of service (QoS), maage cotet, ad oversee the service aroud the clock. Cosultig Systems Itegratio Test & Validate Deploymet & Maiteace BPO Network Techology Assessmet Network Readiess Architecture Desig Roadmap for Network Deploymet Network Migratio STB Stack Developmet ad Itegratio Network Testig STB Testig Network Bottleeck Aalysis Field Ttrials Network Lifecycle Maagemet NOC Operatios Cotet Middleware Evaluatio Cotet Operatios Strategy Cotet Maagemet Processes Cotet Maagemet Headed Deploymet VAS Developmet Cotet QoS DRM Evaluatio QoE CDN Testig Middleware Testig Cotet Lifecycle ad Operatios CDN Ehacemets ad Maiteace Middleware Metadata ad Maagemet Cotet Operatios Fallout Maagemet B/OSS Techology Assessmet B/OSS Readiess Reveue Assurace System Ratioalizatio Architecture Desig B/OSS Roadmap B/OSS Processes B/OSS Itegratio BAM o FAB Ifrastructure Middleware Itegratio Reveue Assurace B/OSS Testig for Compliace Test Executio B/OSS System Ehacemets ad Maiteace Ifrastructure Services Order ad Jeopardy Maagemet Maual Taskig Hadlig Applicatio Applicatio Service Strategy ad Developmet Competitor Assessmet SDK for Service Creatio Service Deploymet Scalability of Service Testig ad Aalysis Service Adoptio Maagemet Services Lifecycle Maagemet Ifrastructure Level 1-4 Support Cotact Ceter Operatios Figure 4: TCS IPTV Lifecycle Services IPTV Service Delivery Iovatios With such a importat role to play, the third group of IPTV systems itegrators has t goe uoticed. Tata Cosultacy Services has forged parterships with solutio providers like Microsoft (middleware) ad Motorola (service delivery platform) to exted the reach ad scalability of their IPTV platforms. Both of these platforms are istalled at TCS IPTV Lab i Hyderabad, Idia, with projects beig delivered worldwide. By deliverig systems itegratio ad BPO services, compaies like TCS are seeig opportuities to move alog the value-chai ad parter with IPTV software compaies to provide hosted software services to telcos. The busiess case behid this is that, as the IPTV market matures, sightigs of Tier Oe greefield opportuities become rarer ad the focus has moved to Tier Two telecom service providers ad other 10
o-telecom areas, like multi-dwellig uits ad hotels. Yet, i this space, purveyors of costly IPTV software (billig systems ad service delivery platforms) fid it harder to get the iitial budget past the CFO. A alterative approach that is gaiig some favor is for software vedors to parter to offer a SaaS (software as a service) model with compaies like TCS. As part of the Tata Group, TCS is able to deliver because it ca leverage close ties with Tata Commuicatios ad telco customers to budle software hostig, systems itegratio, ad operatios to IPTV operators. The Operatioal Results I the U.K., BT lauched BT Visio usig the Microsoft Mediaroom IPTV platform ad has worked with TCS sice 2006 to reduce BT s time to market for IPTV services, maage operatioal costs, ad improve customer satisfactio ad QoS. BT has see sigificat improvemets i cotet operatios ad subsystem delivery, testig, ad support. The results are a uplift i cotet volume ad availability (which are key drivers for customer acquisitio ad satisfactio), icreased efficiecy, ew customers, ad improved reveue assurace ad billig. I recogitio of its outstadig work, TCS wo a IPTV Excellece Award i 2009. Summary IPTV is a complex telecom offerig, but it is vital for service providers to remai competitive i a tripleplay eviromet. To deliver it well requires kowledge of the etwork ad video ifrastructure, software systems, customer premise equipmet, ad the operatios of a video platform ad its thousads of video assets. TCS has defied three key stages alog the IPTV lifecycle ad has successfully applied its IPTV ad VOD domai expertise ad flexible IT delivery ad support model to maitai IPTV service quality ad esure efficiet IPTV operatios. 11
IPTV Glossary ADSL (Asymmetric Digital Subscriber Lie) BSS (Busiess Support System) BPO (Busiess Process Outsourcig) CAS (Coditioal Access System) CRM (Customer Relatioship Maagemet) DOCSIS 3.0 (Data Over Cable Service Iterface Specificatio) DRM (Digital Rights Maagemet) FAB (Fulfillmet, Assurace, ad Billig) FiOS (Fiber Optic Service) Headed (equipmet facility where media streams are collected ad ecoded for IP distributio) IPTV (Iteret Protocol TV) Middleware (hardware ad software solutio that eables the delivery ad maagemet of video services) MIS (Maagemet Iformatio System) OSS (Operatioal Support System) PPV (Pay-per-View) QoE (Quality of Experiece) SaaS (Software as a Service) SLA (Service Level Agreemet) VDSL (Very high bit-rate Digital Subscriber Lie) VOD (Video-o-Demad) VoIP (Voice-over-IP) Refereces [1] Ecoomics of IPTV - Makig IPTV Profitable (2008). Bottke, Feiler, Iblher, Mogg, Mozka, Oertze, Sarbu. Rolad Berger Strategy Cosultats [2] IPTV Forecast 2009 2013 (2009); IPTV Global Forecast - 2008 to 2012 (2008). Multimedia Research Group [3] Iteret Telephoy (2009), Techology Marketig Corporatio 12
About TCS Telecom Idustry Solutio Uit TCS Telecom Busiess Uit is the secod largest vertical cotributig higher percetage to the overall TCS reveues. With a dedicated pool of professioals ad a accumulated experiece ad ogoig associatios with world-class Telecom service providers ad equipmet maufacturers, TCS has acquired uparalleled uderstadig of the Telecom domai. TCS helps wirelie, wireless, broadbad, ad cable service providers redefie their markets with iovative solutios that help them become more agile, reduce fixed operatios costs, ad itroduce ext geeratio services. TCS sets customers apart from their competitors with istat access to idustry solutios, best-i-breed techology, assets, ad frameworks. Cotact For more iformatio, cotact global.iptv@tcs.com Subscribe to TCS White Papers TCS.com RSS: http://www.tcs.com/rss_feeds/pages/feed.aspx?f=w Feedburer: http://feeds2.feedburer.com/tcswhitepapers About Tata Cosultacy Services (TCS) Tata Cosultacy Services is a IT services, cosultig ad busiess solutios orgaizatio that delivers real results to global busiess, esurig a level of certaity o other firm ca match. TCS offers a cosultig-led, itegrated portfolio of IT ad IT-eabled ifrastructure, egieerig TM ad assurace services. This is delivered through its uique Global Network Delivery Model, recogized as the bechmark of excellece i software developmet. A part of the Tata Group, Idia s largest idustrial coglomerate, TCS has a global footprit ad is listed o the Natioal Stock Exchage ad Bombay Stock Exchage i Idia. For more iformatio, visit us at www.tcs.com IT Services Busiess Solutios Outsourcig All cotet / iformatio preset here is the exclusive property of Tata Cosultacy Services Limited (TCS). The cotet / iformatio cotaied here is correct at the time of publishig. No material from here may be copied, modified, reproduced, republished, uploaded, trasmitted, posted or distributed i ay form without prior writte permissio from TCS. Uauthorized use of the cotet / iformatio appearig here may violate copyright, trademark ad other applicable laws, ad could result i crimial or civil pealties. Copyright 2011 Tata Cosultacy Services Limited TCS Desig Services I M I 07 I 11