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KimPerdikou

Service Provider Business Model Evolution

by Juniper Employee ‎11-16-2009 11:01 AM - edited ‎11-16-2009 11:18 AM

 

In the past few months, I've been talking among my Juniper colleagues, customers and partners about what's taking place in the service provider industry. We often reflect on the belief that this industry is in the midst of a dramatic period of change. Many service providers are not only adding new services to their portfolio and new regional or national footprints to their customer bases, but are transforming their business models to thrive and grow profitably in a challenging market environment.

 

Over the last two decades, service providers have experienced a shift from a world where voice was the universal service to a world where that service is the Internet. As noted by a Silicon Alley Insider Chart of the Day which references a recent Online Publishers Association's Internet Index, the Internet has finally become a content platform.  Network services that used to connect us to each other are now dominated by services that connect us to experiences. 

 

 

Over the last five years, our expectations of the Internet as an experience have shifted just as dramatically. The Internet was once a platform for hypertext experiences and is now a platform for rich media that is challenging over-the-air television and even movie theaters. We now look to the Internet as a repository for our information, a source of raw computing power, a partner in our business applications and as a means to stay connected with family and friends.

 

The networks of the past and the global economy of the present were enabled by the global infrastructure built by service providers. The networks of the future will have to be built the same way, but service providers have not benefited from this ongoing series of revolutions sufficiently to generate adequate returns for their investors. The challenge is not to merely build a network that supports exciting new services, or one that provides operators with attractive ROIs, but to do both at once.

 

At Juniper, we believe that to meet this challenge we need to rethink the role of the network. First and foremost, the network of the future must be a technological palette with which new services can be quickly developed & deployed.  It must be a network that delivers dynamic scale in bandwidth, subscribers and service.  Our expectations as users grow from excitement of access and convenience to a demand for a high quality experience when the service or applications become part of our daily lives and table stakes for any supplier.  The new network must be simple to build and deploy, minimize operational costs, embrace and evolve legacy services, encompass both fixed line and mobile users, be fundamentally secure, have a low power and environmental footprint and dynamically react to the needs of its customers.  It must be not a temporary patch to the business models of service providers, but an enduring solution to creating and evolving those models.  We believe to meet these demands the New Network must be open for innovation and creativity to enable users to access what they want AND Service Providers to build sustainable business models for long term business success.

 

Over the next few months, I plan to outline where we believe the industry should focus in transforming their networks to a long term sustainable and profitable value proposition. I look forward to sharing this conversation with you.

 

 

Comments
by Jim Gregory(anon) on ‎07-24-2010 07:08 AM
This is spot-on. Most vendors think in terms of addressable cap-ex and locking in franchises. A better foundation is genuine interest in enabling dynamic, scalable, secure networks with operational simplicity that offer an appropriate ROI to investors - well said in the blog above. This mindset is not only what SP and large enterprise customers need, it's also in vendors' best long term interest as well. Keep it coming Kim...!
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