The Future of Connectivity

By Stephen Singlar, President, Single Digits Inc. Last year, I was logging on to the Wi-Fi at a major hotel & casino, and it was incredibly slow. As I got frustrated and resorted to using a cellular connection, I thought, There has to be a better way. And there is. This paper describes the future of networking and connectivity.

The Current State of Networking Challenging and Changing In the classic movie Animal House, Dean Wormer warned the Delta house, Fat, drunk,
and stupid is no way to go through life. Similarly, we believe that fat, costly, and rigid is no way for modern networks to go through their life cycle. And, in fact, a new life cycle is beginning for networks. The traditional networking approach is bloated, and its being crushed under its own weight. While CIOs scramble to respond to changes in technology and customer needs, they nd themselves locked into contracts with vendors and their host of products, unable to integrate with other players in the ecosystem. Their hardware requires constant technical attention and is outdated almost immediately. Changes are glacial in pace, and can take six months to push through a vendor. Organizations are also crushed by the sheer cost of maintaining their networks. Networking hardware, although down from what it was even ve years ago, is still expensive. In fact, it accounts for 40% of the average IT budget for companies up to 1000 employees.i While networks remain fat, costly, and rigid to change, the world around them is shifting fast. For example, the use of mobile devices to access the internet nearly doubled from Q1 2012 to Q1 2013. ii iii

Device Share of Website Trafc

5.95% 5.42% 10.58% 10.44%

88.62%

78.99%

Q1 2012 Traditional Tablet

Q1 2013 Smartphone

And this is only the beginning. Signals Research Group projects mobile data trafc in the US to grow anywhere between 53x to 154x between 2010 and 2020. However, US cellular network capacity will only grow by approximately 25x by 2020, leaving a signicant capacity gap. These demands are particularly acute in hospitality, retail, education, healthcare, and commercial real estate buildings, where Wi-Fi usage can spike, and networks are not always well equipped for concurrent use.

The good news is that cellular and Wi-Fi technology are converging. Wi-Fi access can be tightly integrated with a cellular network to offer a common service platform and optimize network resource utilization. The even better news is that properties have the opportunity to own and prot from their own optimized network. The bad news is that seldom happens. Instead, as demand increases today, administrators generally increase their networks capacity by either A) replacing their existing gear with higher density hardware or B) simply adding more hardware.

Capacity Gap
25X
Available Macro Network Capacity

AGGRESSIVE

153X

53X
CONSERVATIVE

Mobile Data Trafc Growth

This is sub-optimal for several reasons. First, the hardware loses value the same day it is installed. Secondly, in todays static networks, properties must prepare for maximum demand, however infrequent. For example, suppose your network supports one hundred people. However, if you have a room on your property that ve hundred people use one time per year, youll need to build a network that can support ve hundred people. (Ouch.) To sum it up: with customer demand for bandwidth exploding, networking hardware has become too expensive, too resource-intensive to maintain, vulnerable to power outage and attack, static and sub-optimally scaled, and rapidly outdated. In other words, it is fat, costly, and rigid.

RELATIVE GROWTH 2010- 2020

What if we had some type of intelligence to dynamically expand capabilities to leverage the full capacity of the network?

If that sounds like a problem whose time is up youre right. Forward looking CIOs see this happening, and ask: What if we had some type of intelligence to dynamically expand capabilities to leverage the full capacity of the network? As a rst step in response to this problem, many organizations have virtualized nearly every layer of the infrastructure . In a 2012 InformationWeek Global CIO Survey, 92 percent of IT executives planned to increase their virtualization initiatives, and ranked virtualization as number 1 of 14 possible initiatives to be funded in 2012 and beyond.iv
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Given the benets in cost, efciency, and exibility, spending on hosted private cloudservices will experience a compound annual growth rate (CAGR) of more than 50% over 2012-2016. Indeed, the virtual private cloud will be the predominant operational model for companies wanting to take advantage of the speed and lower capital costs associated with cloud computing, said Robert Mahowald, IDCs Research Vice President, SaaS and Cloud Services.

Roaming between networks is inconsistent, and guests soon develop password fatigue needing to remember yet another password to get on a network. Guests will soon have zero patience for todays GUESTS approach. They WILL SOON HAVE want their preferred ZERO PATIENCE hotels to FOR TODAYS remember their identity, preferences APPROACH and rewards status after a single-sign on, and automatically connect them with the proper bandwidth settings no matter where they roam across their properties. Oh, and they want to be able to log in via whatever application they most prefer. Sound impossible? Its not. Companies, particularly those with three or more SaaS or internal web apps, increasingly use a cloud-based Single Sign-on and Identity and Access Management (IAM) solutions to enable employees to quickly access appropriate data, sites, and apps through a single sign-on, improving their productivity. The need is growing; IDC sized the total IAM SaaS market as $702.7 million in 2011, reaching $1.4 billion by 2016.v These solutions work ne internally. But what about managing guest access across properties, with the best available network, and by whatever external database service provider the guest chooses to use to log-in? This would take full advantage of the openness and exibility a cloud-based solution has to offer, and the user experience would be turned on its head. This is exactly what is happening in next generation networking architectures. Several trends are converging to make this happen.

71%OF EXECS ARE SEEING SIGNIFICANT BENEFITS OF THE CLOUD

If Everyones Moving to the Cloud, Then Whats Missing?

Although CIOs are virtualizing much of their infrastructure - the mail, storage, applications, active directories, and so on - many are not yet virtualizing the controls and administration of the network. This approach provides some cost and efciency plays, but leaves many issues unaddressed. For starters, what about the customer? Aside from potentially decreased latency, how does any of this cost-reduction and efciency help them? Take guests at a hotel, for example, where accessing the internet can be tedious and frustrating. Logging in to a Wi-Fi hotspot is a completely manual, error prone, and tedious process that often contains way too many steps. Further, it can be particularly difcult to connect with a cell mobile devices.

Several trends are converging to make this happen. The rst is Passpoint. Based on the Hotspot 2.0 specications, Passpoint enables password-free, seamless access to Wi-Fi internet, with EAP-SIM authenticationvi. Where Wi-Fi is available, Smartphones switch to it to get a faster or free connection. Users, who are currently very much involved in the manual, tedious, and error-prone process, would not be involved at all. Their device communicates with access points (which are all the hardware required onsite), automatically selects the best Wi-Fi network, the device and the network negotiate capabilities, and policies are pushed to the mobile device. The second trend is Software Dened Networking (SDN). SDN is a new approach to designing, building, and operating networks that supports business agility. In fact, what virtualization has done for agility in server infrastructures, SDN will do to promote business agility in networking. In the SDN architecture, the control and data planes are decoupled, which enables network administrators to program network trafc through a controller without requiring physical access to the network's switches. Network administrators use software for work previously done manually, simplifying the task of connecting to different applications and network devices. This feature alone allows for scalable and exible networks that readily adapt to changing business needs. But SDN also has the advantage of open standards, meaning that it can theoretically operate with any vendors network hardware. So, organizations wont need to be locked-in with any one vendor or their expensive switches. Combined, these trends form a sea change in network connectivity. Passpoint simplies the connection to the best available network, while SDN reduces dependence on hardware vendors and increases the ability to monetize ones network through the integration with specialized players (various manufacturers, database service providers, carriers, application partners). They provide the intelligence to dynamically expand capabilities to leverage the full capacity of the network, and overcome the fat, costly, and rigid malaise endemic in static networks. However, several major impediments remain for IT departments: Keeping Application Integrations Up to Date Truly centralizing access control and management requires building integrations with numerous applications and keeping track of the shifting maintenance requirements for new versions of each application. Staying current is critical to ensure that application integration, and thus guest access, is always up to date and function. For the vast majority of organizations, having their IT department maintain its own collection of connectors across that constantly changing landscape is unrealistic and inefcient. Managing Access Across a Multitude of Browsers and Devices Users want access to the internet anywhere, anytime, from any device. IT departments must facilitate user access across multiple devices and platforms without compromising securitya difcult feat. Wireless Infrastructure Market Disruption As cellular and Wi-Fi coverage converge, properties equipped with Wi-Fi networks are in the unique position to ofoad bandwidth from the Cellular network (and be paid handsomely for it). However, they need to be positioned to deploy. For example, they often do not have the backhaul infrastructure necessary to provide quality of service, manage bandwidth trafc, or integrate subscriber authentication and billing. In short, IT departments have neither the time nor the resources to take advantage of these opportunities.
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This is the Future of Connectivity: The Open Network Exchange

Passpoint and SDN are substantial shifts in networking. Another major shift is the sheer mass of application providers and database service providers (e.g. Facebook, Google) that have ooded the market, vying for users. Since revenue equals clicks, naturally these companies seek large networks of users to use their services. But because so many applications exist a few big ones, many small ones no one can implement them on their network easily. No one can test drive them. There is no iTunes Store-equivalent, or central marketplace.

Our Software
The need for a central aggregation point or exchange is obvious. An exchange is a centralized hub connecting a network, property, or user to their credentials and other services. Our Open Network Exchange is the hub connecting users to a network, database service providers and app creators to large networks of users, and property owners to new revenue streams from their network. Through the easily congured interface, network owners can peruse the menu of options and easily ip the switch to turn on new services in their network. These services include advertising partners like Jiwire to drive revenue, rewards programs to drive loyalty, or social media partners to drive ease of authentication and revenue options. Single Digits operates the network as a neutral party to authenticate users, store credentials, set up policy and assign bandwidth, determine pricing and payment, track clicks, and allocate and distribute revenue appropriately.

An exchange is a centralized hub connecting a network, property, or user to their credentials and other services.

The implication for property owners is enormous. If they can bring these applications into their network, guests can authenticate using their preferred application (thus improving their experience), while property owners share in the revenue associated with log-ins, downloads, and advertisement clicks while online. Network users, too, can centralize and consolidate their authentication options. Passpoint enables users devices to scan the environment and discover a range of information, including the hotspot operators domain name, roaming partners accessible via the hotspot along with their credential type and EAP method supported for authentication, IP address type availability, and other useful meta-data for network selection. The device then selects best way to get on the network. But, in order to take full advantage of Passpoint, property owners need to make a marketplace of services available. With its deep menu of options from which to choose, the Open Network Exchange makes it easy for property owners to simply plug and play. And, as the control plane, the Open Network Exchange also removes the burden from property owners to ensure that the technology works between their network and the variety of services.

Our Network
If our software is the brain, our 1Cloud network is the backbone. It is the delivery mechanism, the data plane. 1Cloud is a nationwide, private network anchored by three data centers in Boston, Indianapolis, and Los Angeles. All of the switching, routing, policy, and authentication decisions live in these ultra-secure, centralized and redundant data centers, and off of our clients premises. Our data centers are co-located with other major carriers like AT&T and Level 3, which means we can cross-connect and exchange IP trafc with each other. This provides us with the infrastructure to deliver integrated backhaul deployment, which is critical to leverage the Cellular/Wi-Fi convergence. Also, accessing these networks directly at the exchange (rather than taking several network hops through other carriers) increases the speed and performance of our clients internet performance. It also decreases network costs, and makes the network more redundant by providing several routes through which trafc can be sent. These advantages aside, there are really two real key ways our network enables clients to exploit technological shifts. The rst is control. We control the network, from end to end, at the lowest OSI layer possible. Our Los Angeles to Boston connection is layer 1. This is important in creating an ecosystem of providers; we can create private networks and link to various applications databases without ever touching the internet. So, for our clients, we can create virtual layer 2 networks amongst their various properties, connected back to our data centers with a virtual rewall. Their speed and security are improved. With control comes exibility the second key to our network architecture. We are not bound to one technology (e.g. MPLS), which gives us exibility in how we design cloud-based networks. Clients service providers, hotels, class A ofce buildings, malls, or casinos each have slightly different needs and priorities. As a neutral operator, we do not push video, or voice, or any other network application. Instead, we make sure that client priorities are delivered, reliably and consistently. If a client needs voice, we have a robust, unied communication voice platform. If burstable internet bandwidth is a priority, we have a high quality internet offering, with multiple upstream BGP peers at each data center. If access to a carrier is required, we provide it through a cross-connect at our data center.
With its deep menu of options from which to choose, the Open Network Exchange makes it easy for property owners to simply plug and play.

The cloud-based architecture provides the private connections needed to facilitate emerging business models and coming technologies like SDN, which will allow the network to be built dynamically. Take, for example, a hotel guest who wants to watch a movie on Hulu. The network will recognize what that guest wants to do, and dynamically optimize the connection for the guest and ask if theyd like to upgrade to a video-optimized connection for an additional fee. This intelligent, dynamic network will enable hotels to capture new revenue. And as we incorporate more application partners (like Hulu) into the Open Network Exchange, the network could dynamically link the user to Hulu and the hotel joins on that revenue as well.

Our Support
So, while SDN, Passpoint, and the proliferation of apps are major shifts, there is a need for an operator in the middle to unleash their collective power. That neutral operator is Single Digits. Our software is the control plane, our network infrastructure is the private data plane, and our support center makes sure the whole operation stays, well, operational. Our US-Based, 24x7 technical support staff provides Level 1, 2, and 3 support to any technical challenge that may arise for our clients guest internet users or management staff. In fact, 100% of our clients user calls come to us. Our staff is trained to provide high-touch customer service to each call, representing our clients brand and freeing up their resources to focus on other pressing business issues. Additionally, our software remotely monitors the network via SNMP with immediate alarm notication of device fail, and property owners management staff have direct access to our Level 2 escalation support team should a problem arise with their network infrastructure. Yesterday vs. Today: Clear Advantages This new model with an operator dynamically conguring the network based on user is the opposite ofthe outdated fat, costly, and rigid model (See Table 1).

Yesterday
Fat Costly Rigid
Hardware is installed on each property Extensive hardware required for maximum user demand, however infrequent

Expensive CapEx outlays for hardware that lose value immediately Hardware needs to be monitored, maintained, supported by IT resources

TODAY
Thin
Hardware is virtualized, network tra c shaped through software Access points are only hardware needed onsite to deliver Wi-Fi Monthly OpEx model reduces upfront costs and IT resources needed to maintain network Network monetization o set expenses

Static networks Locked into multi-year contract with one vendor, unable to seize new opportunities

A ordable

Flexible

Dynamic networks allowed to scale bandwidth and capabilities without adding hardware Operator model allows work with any vendor, providing unlimited services
Table 1

With all the brains in the cloud, it is a thin hardware-lite approach. It certainly reduces the cost to deliver the network, and its not rigid at all its not congured for anything until a user logs on. And when they do, theres a plethora of services available, just waiting for them.

Whats Standing in the Way?

Despite these benets, a few mindset shifts are still required for some IT executives to see the possibilities. The rst embedded mindset in need of shifting is what we call the Pareto Principle of networking. That is:

IT executives are quite willing to spend 80% of their focus and funding on selecting hardware, and 20% on an operator. When, in fact, once its installed, 80% of the success of the network stems from the operator!

With that in mind, the second mindset in need of shifting is the traditional thinking of what a HSIA provider does. Many think of HSIA providers as just the portal, or the features (e.g. guest billing) that get people out onto the network. But the whole process of getting people onto the network is changing, thanks to SDN and auto-authentication. Think bigger. The network is not just about the guest user anymore. Your network is becoming an on ramp to the cloud. Single Digits interest is in provisioning the network, providing the right access control to the network, and connecting you to the world of services. Thats why we dont offer apps like video you can get that anywhere. Its a commodity, a feature. Thats the old network. The users bring their own video apps. The new approach allows us to dynamically build the network for that users application. HSIA is dead. Picking any vendor based on their business model thats dead. Some features that traditional HSIA providers deliver such as tracking usage, allocating bandwidth - are still relevant, but you need exibility to connect to this tremendous marketplace of software providers and apps. You also need the ability to dynamically control the network to provide the app with an optimized connection. Without an operator connecting you to the marketplace, its too complicated. And if you choose just one vendor and their business model, youre locked into their contract and locked out of other opportunities as the world shifts around you.

The Open Network Exchange: Open, for Business

With this solution, property owners become the Virtual Network Service Provider. This enables them to:

1. Own the network, but not the headaches. Their IT issues wireless backhaul, network moni-

toring, guest support, keeping APIs up to date vanish. They require fewer resources. Single Digits team ofoads the technological heavy-lifting away from your IT department, so they no longer have to track dependencies between connectors and application versions. By plugging into the Open Network Exchange, adding a new application into your network is as easy as adding a new app to your iPhone. With only nominal conguration, you can integrate new applications into your networking environment within minutes. be virtualized to Single Digits data centers, saving thousands of dollars per property. In the near future, thanks to SDNs ability to virtualize the IT infrastructure, only access points will be required onsite. A user can authenticate once, and that person will continue to be logged in no matter where they are on property (or even what network they are on!) Technology advances have made CapEx investments in technology too costly, particularly when they are so rapidly outdated. Virtualization lowers the operating expense of a network and increases product efciency, thus extending the life of the network investment. Properties now simply pay a monthly fee for the IP services and updated hardware. The exibility of this OpEx model is attractive to property owners.

2. Reduce the cost of the network. Today, much of the hardware (e.g. gateways) in a network can

3. Add a revenue stream. Today, property owners now generate revenue off of their asset through

selling tiered bandwidth, advertising options, guest log-ins through database service providers, 3G/4G ofoad from carriers cellular networks. Tomorrow, as advertising on portals fades away, theyll make money on users clicks on the internet after theyve authenticated through a database service provider. user. Their connectivity is easier and more uid. Their credentials and preferences follow them across properties.

4. Improve guest experience. Portal pages are aligned with the brand, and customized for each

5. Keeps the handcuffs off. Flexibility is crucial. Over the next few years, the technology will not
change dramatically, but the way we use and access it will. Smart property owners realize that getting stuck with one vendor, or one business model, is an unnecessary handcuff. Dont choose vendor based on a model. Choose a vendor who allows you to run different models based on whats happening in the marketplace. These monetization strategies can be easily customized and can scale to any size property.

These monetization strategies can be easily customized and can scale to any size property. For example, remember that hotel mentioned at the top of the paper? That hotel is one of Top 10 biggest hotels in the world. And they are now a client. We developed a Wi-Fi authentication strategy that scales to support tens of thousands of concurrent users. In fact, we have increased the capacity of their network by a factor of 20x. This, combined with the integration of third party application providers into their network environment, provides them maximum exibility.
To nd out how to join in the Exchange whether you are a property owner, application developer, database service provider, or whatever role you play in the digital ecosystem - in a way that aligns with your brand and goals, please contact sales-us@singledigits.com or dial 603.580.1539.

Sources
i ii iii iv v vi Beyond Cost Savings: Four Compelling Reasons to Virtualize your IT Environment http://www.smartinsights.com/mobile-marketing/mobile-marketing-analytics/mobile-marketing-statistics/ Ciscos visual networking index: Global Mobile Data Trafc Forecast Update, 2012-2017. Global CIO 2012. Murphy, C., InformationWeek Reports, February 2012 This data is from Worldwide Security Software as a Service 20122016 Forecast: Delivering Security Through the Cloud, IDC #238553, published in December 2012. Carrier Wi-Fi for mobile operators: A TCO model assessing the cost benets of Wi-Fi and cellular small-cell joint deployments. Paolini, M. 2013.

Single Digits is the white label network operator for property owners. We help our clients connect consumer devices to their private networks and position them to take advantage of emerging revenue opportunities. Based on our partnerships with clients and innovative solutions, Single Digits was honored to receive Gaming and Leisures 2013 Platinum Award in Gaming Hospitality.

Copyright 2013 Single Digits, Inc. All rights reserved.

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