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Virtualization isn't a buzzword, it's a business enabler

Vanilla Plus

Vanilla Plus

February 25, 2015
VanillaPlus: Virtualisation is the buzzword of the moment. What is its impact on BSS and how will virtualised BSS deliver the flexibility CSPs need?

Lucas Skoczkowski: To me, virtualization became a buzzword within the last year, but we’ve been engaged in this space for at least five years. For us, virtualisation is a reality and it addresses so many of the issues CSPs face. One of the benefits of virtualisation is that it has the ability to keep capital spending in line with revenue and it provides the flexibility to add or reduce computing capacity as needed, helping to serve customers well and keep costs in check.

In addition, from an operational perspective, virtualization allows a vendor like Redknee to continue upgrading our customers with the latest version of our software. In telecoms, software upgrades have traditionally been slow and somewhat painful. But with virtualisation, if you choose to get upgrades continuously – for instance, every month or so – you can do so without a huge operational impact on your business.

Another benefit, from a business perspective, is that the CSP can go after new business opportunities without the heavy lifting that has been required from traditional BSS. Many of our customers have opted to use a software-as-a-service (SaaS) approach with their enterprise customers, utilising more agile BSS systems to enable new capabilities, such as energy rating, or to provide loyalty systems for retailers. That becomes very exciting and different, enabling CSPs to think outside their traditional businesses.

Virtualisation is also great for smaller CSPs because of the cost benefits it provides and the flexibility it can deliver. It also has huge relevance for larger CSPs. In the last 12 months, Redknee customers such as Oi and
Vodafone have used virtualised solutions to address their large, high value subscriber base. In short, virtualisation is for all types of CSPs. It’s not just a buzzword, it’s a business enabler.

VP: How is the Internet of Things (IoT) changing the market for CSPs and placing new demands on their BSS?

LS: The Internet of Things, as with everything in telecoms, is probably over-hyped for where we are right now, but in the coming years, we will see the business cases emerge. There are definitely more and more things becoming connected. For instance, at the CES show this year, Samsung said that all of its domestic appliances will be able to connect to the internet. The barrier now is really about human adoption, so I think the business-to-business market will be where we see the most growth in IoT and where we will see the initial return on investment. 

From a CSP perspective, they have a choice. They can be a fundamental pillar in the IoT ecosystem or just a passive connector. Many CSPs we engage with today want to play a role beyond the bit-pipe provider and offer a platform for business interconnections. The increased deployment of platforms and sensors in IoT will create a plethora of new business models for the future.

The IoT drives tremendous volumes of data and CSPs have the capability and systems to process this data, so there’s a natural role for them in IoT - if they want it. There is an impact on BSS as well, because IoT drives the need for enormous configurability and a more product-oriented approach. In contrast to legacy BSS, systems will need to be more agile and real-time.

VP: Why is real-time agility so important to billing? We've got this far without it, so why does it matter now?

LS: Real-time provides a lot more flexibility in terms of how CSPs can address the market. They need the flexibility and agility that real-time charging provides because OTT services are deployed much faster than CSP services. We’re now seeing CSPs use real-time charging to interact with businesses and subscribers to improve the targeting of campaigns and create more automation in how businesses and consumers are experiencing a service.

Real-time allows you to respond directly to your customers in the moment, when it matters, while also using business tools to provide a constant feedback loop so you can be efficient in how you deliver services to different constituencies within your customer base. 

Without the agility of real-time capabilities, the industry has to spend large amounts of money and time creating customised solutions to achieve the same end; now, with real-time BSS, it’s slowly coming together. We have seen that some LTE launches have been the catalyst to accelerate the move to real-time.

VP: Customers interact with their providers across many different platforms and through many different channels. What challenges do CSPs face in enabling consistency and how is the industry making progress towards the connected customer experience?

LS: It has been an evolving challenge and one that will continue to be prevalent. As CSPs provide connectivity to more and more devices, the consistency of how the services are experienced across different platforms will become a greater challenge. We see big data becoming increasingly critical in this area, but actionable data will be even more important. As CSPs move beyond traditional communications, we see them partnering and delivering new services and working to create a better customer experience. One example is retail loyalty programmes, which use a points/rewards system across devices, businesses and platforms. This consistently creates more value for the consumer, but it relies on end-to-end systems to correlate all this data into actionable events or rewards points, and makes it available in real-time to the end-user.

Traditional BSS systems have historically lived in a more fractured or siloed environment, but integrated cloudbased systems are becoming available. CSPs can provide more interconnections using BSS systems that are open – and we will see that these are capable of far more than the monolithic systems of the past.

I’m really excited about moving service expectations beyond what has been a typical response/react situation, to taking more of a proactive approach to what can be offered to customers.

VP: How will Redknee develop to address these changed and continually evolving needs over the next five years? 

LS: I continue to be excited about the opportunities I see. Redknee has a strong technology core that we’ve developed over the last 15 years. We’ve created this in order to address complex real-time needs in charging, policy and analytics, and we continue to build on this as we see the market evolve.

At Redknee, we see CSPs planning for their new roles in the digital ecosystem and we see our customers continuing to diversify. We’re working with non-telecoms industry customers, as well as CSPs, and have done quite a lot of work to understand the requirements of other organisations.

Redknee continues to spend significantly on research and development – the R&D team is 60% of our organisation. I also understand the growing importance of business partnerships and see a real need to continue to improve how we approach and grow in this area. You can also expect to see us acquire companies that will help shape our organisation to be more responsive to where the CSPs will be in the future.

In five years, I believe Redknee’s customer base will be comprised of 80% CSPs and 20% across other verticals, and we’ll certainly be seen as one of the top three software platforms in the market. At the same time, we’ll continue to build awareness so that we can be the platform of choice for connected businesses that use IoT platforms. 

This goal puts significant demands on us as a company and ensures that we don’t rest and sit back on our laurels. We’ve recently completed a deployment at Vodafone India, which was one of the most complex and demanding projects in the history of Vodafone Global. This was a challenging and daunting engagement, but it’s really exciting to serve a CSP of that size - with over 170 million users.

I envision in the next five years that we will have built a business that is approaching US$1 billion in revenue, and I believe we’ll achieve this in great part through our virtualisation and cloud offerings. It will be a tall task, but we have the energy and the passion to get there, and to help our customers along their journeys to be successful. There’s lots to do.

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About Redknee:
Redknee monetizes today's digital world for communications service providers. Our market-leading portfolio of monetization and subscriber management solutions includes real-time billing, charging, policy and customer care modules and is available on premise, cloud-based, or as Software-as-a-Service. With a central focus on driving customer success, Redknee's products power growth and innovation for operators globally. Established in 1999, Redknee Solutions Inc. (TSX: RKN) can be found on the Toronto Stock Exchange. For more information about Redknee, please go to

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