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M O R I A N A GROUP : Service Delivery Market 2009-2012 – SDP Analyst

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Technical Report · February 2008

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S DP M a rke t 2 0 0 9 -2012 Mo ria na Ana lys t Re p o rt
SDP Market 2009-2012

Moriana Analyst Report
Lucia Gradinariu, Kristofer Kimbler
The Moriana Group

February 2009
Preface
This new Moriana Analyst Report presents addition to the recently published SDP 2.0
a comprehensive and realistic analysis Moriana Free Operator Guide, together
of the Service Delivery Platforms (SDP) creating the most up-to-date overview of
business space in terms of market sizing, the SDP market from both Supplier’s and
segmentation, competition and forecasts for Service Provider’s perspective.
2009 to 2012. The report is based on Moriana’s
extensive market surveys performed among Moriana’s view on the SDP market
SDP suppliers and Service Providers, as well is expressed along the following key
as on its analysts’ hands-on experience and dimensions:
long-term industry involvement. • The real characteristics of the SDP
market including its structure,
This report is a valuable source of segmentation, and the main classes of
information for all suppliers of products, services supported by SDP
solutions and services already competing or
• A realistic estimation of the current
planning to enter the various SDP market
market size based on an inventory of
segments. Investors, VCs, Communications
real deployments from both vendors
Regulators, Economists, Strategists, CTOs,
and Communication Service Providers
CMOs and Product Managers from both
• The forecast of SDP market for 2009-
Service Providers and suppliers will get a
2012 per geographical region and per
good understanding – not just numbers -
© 2008 The Moriana Group. All Rights Reserved.
main classes of services supported by

of the SDP offering scope, the competition
SDPs
characteristics, as well as the opportunities
and the future growth of this market. • The competition characteristics and
competitive analysis of suppliers,
The Moriana group is the only independent acknowledging that market share is not
market analyst focused exclusively on enough to understand competition and
telecom services layer and next generation power in SDP market
of communication services. Moriana • Some important findings and
pioneered the SDP market analysis forecast recommendations for Suppliers and
as early as 2004. This report is a requested Service Providers
MORIANA 1
SDP Mar ket 2009-2012 Mor ian a Analyst Rep ort
At a time when economic crunch and lack The market data used in this report has
of investor appetite force considerable been collected from a survey extended
reductions in development and innovation to 60 suppliers, selected to cover all
budgets, Moriana SDP Market 2009-2012 representative categories in the SDP
Analyst Report brings a refreshing and market. The rate of response from suppliers
educative support for what this market is assured a margin of error of 10% and a
about, offering to all stakeholders in the confidence level between 90- 95% in the
SDP market a valuable aid for identifying results presented.
areas of growth and substantial evidences
to de-risk their decisions. The accuracy of the results presented in
this report has been improved and further
The report has been written to answer validated with other sources of information
many important questions ignored or such as direct interviews, financial reports
unclearly addressed until now, namely: of public companies surveyed, public data
• What makes a real Service Delivery available from other SDP market analyses
Platform? and previous Moriana surveys with Service
Providers.
• Is SDP a relevant market and what is its
level of maturity?
The 2009-2012 forecast for the SDP market
• How the SDP market will evolve in the
was created using Moriana’s own estimative
coming years?
and predictive models, specifically built
• What are the SDP investments per for this market’s characteristics. We
different classes of services? acknowledge that Application Providers,
• What are the real drivers and inhibitors Service Aggregators, SaaS and PaaS
for these investments? providers have been underrepresented in
• Who are the main existing and future this research and a more detailed analysis
market stakeholders? of this parallel SDP market will follow.
• What are the business models supported
by SDPs?
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MORIANA
Scope, Structure and Organisation

The main body of the report is organized the number of SDP deployments per
into the following sections: geographical regions and per class of
services split by the operator categories
Section One - SDP Market (Tier 1-3). We also include typical sizes
Characteristics In this introductory of SDP contracts per service types and
section we try to provide an answer to operator categories; Furthermore, we
important questions: what is the scope analyze the important factors influencing
of SDP market and what makes a ‘real’ the SDP market growth and provide an
SDP? We also analyze SDP market drivers; SDP market forecast for 2009 to 2012.
inhibitors of the SDP market growth; SDP
investment patterns and dynamics in Section Five – Competition in the SDP
operators’ decision processes. Market In this section, we introduce SDP
as a relevant market and analyze the
Section Two - SDP Market Structure characteristics of competing in this market.
In this section, we define the SDP market The results show the market maturity,
scope in terms of market offerings. We the importance of the SDP business for
provide in-depth analysis of the main SDP its stakeholders and the intensity of
market stakeholders and their impact competition among suppliers. A detailed
on the SDP market. This includes SDP SWAT analysis of different categories of
vendors, Network Operators and Service SDP suppliers is presented.
Providers as well as other stakeholders.
The SDP market segmentation based Section Six - Business Models
on geographical regions (matured vs. Supported by SDPs This Appendix
emerging), Service Provider types, and provides detailed analysis of different
classes of SDP services and applications service providers’ business models that can
are also introduced. be supported through SDPs. This includes:
open garden, retail, wholesale, SaaS and
Section Three - SDP Market multi-sided business models.
Segmentation The categories that define
specific needs and characteristics in the Section Seven - Key Findings and
SDP adoption are introduced to create Recommendations In this last section,
a good understanding of SDP market we summarize the key findings form our
segmentation. Geographical regions, analyst research such as: main reasons
Service Provider type and the classes of for the future SDP market growth; the
SDP services are the main dimensions for existence of parallel SDP market of
segmenting this market and further analyze Service Aggregators; unexplored potential
its realistic size and growth potential. of business models supported by SDP,
and others. We conclude by providing
Section Four - SDP Market Size and recommendation for the SDP suppliers and
Forecast In this section, we provide to the service providers and operators.
important market data including:
MORIANA 3
List of vendors surveyed for this report

Moriana would like to thank all the SDP vendors who directly contributed to the accuracy
of the results presented in the report by agreeing to engage their resources and interest
in this research.
Independent Software Vendors Network Equipment Providers

Aepona Alcatel-Lucent
Amdocs Cisco
Argela Ericsson
Artilium Huawei
ByteMobile Motorola
Comverse NEC
CoreMedia Nokia Siemens Networks
Jinny Nortel
jNetX Sitronics
Kabira ZTE
Materna
MobileAware IT Vendors
Mobile Cohesion HP
Mobixell IBM
Motricity Microsoft
OpenCloud Oracle
Openet Sun Microsystems
Personeta
RedKnee System Integrators
SmartTrust Accenture
Sylantro Atos-Origin
Telenity Cadence
Telcordia CapGemini
Computaris
Applications Comtel Integrators Africa
and Components Vendors Kapsch
Air2Web Orga Systems
Almira Labs SoftLine
AppTrigger TechMahindra
Gintel TelecomaxVAS
CA Wily Technology TietoEnator
Unipier Vishwak Solutions
Wipro
Service Aggregators
JamCracker
Jamba
4
MORIANA
Table of Contents
Preface 1
Scope, Structure and Organisation 3
List of vendors surveyed for this report 4
Executive Summary 7
Section One: SDP Market Characteristics 9
Introduction 9
SDP Definition and Scope 9
Key SDP characteristics – what makes a ‘real’ SDP 10
Business drivers for SDP adoption 11
Inhibitors for SDP market growth 12
SDP Investment Patterns 13
SDP Investments Drivers 13
SDP Investment Stakeholders 14
Section Two: SDP Market Structure 16
SDP Market Scope 16

SDP Market Stakeholders 18
Vendors of products, solutions and professional services 18
Network Operators 20
Communication Service Providers (who do not own a transport network) 21
Investors in SDP productsand solutions 24
End-users of SDP Services 24
Section Three: SDP Market Segmentation 25

Geographical Market 25
Segmentation 25
Service Provider Type Market Segmentation 25
Segmentation by Classes of Servicesand Applications 27
Section Four: SDP Market Size and Forecast 29
Commercial Adoption of SDPs 29

Deployments per Geography and per operator size 29
MORIANA 5
Deployments per Class of Service and operator size 30

Average sizes of SDP deals and required investment per subscriber 32
SDP Market Development 2009-2012 34
Market Evolution 34
Factors influencing the growth of the SDP market 34
2009-2012 SDP Market Forecast 35
SDP market forecast for different classes of services 35
SDP market growth in geographical regions 37
Section Five: Competition in the SDP Market 40
Significance of SDP market for the undertakers 41

SDP Market Maturity 42
Intensity of competition 44
Suppliers means to compete 46
SWOT analysis for SDP suppliers 48
Network Equipment Providers 48
System Integrators 49
IT suppliers 50
Independent Software Vendors 51
Applications and Specialized Components Providers 52
Service Aggregators and SaaS/PaaS Providers 53
Section Six: Business Models Supported by SDPs 55
Open Garden Model 57

Retail and Wholesales Models 58
Platform Mediated Business Models (2-ways or multi-sided Models) 59
Software as Service Model 60
Managed Services for SDPs 60
Section Seven: Key Findings and Recommendations 61
Key findings from the analyst research 61

Recommendations for Suppliers 62
Recommendations for Service Providers 63
Professional Profiles 66
6
MORIANA
Executive Summary
The Service Delivery Platform (SDP) gaming. In turn, this will drive adoption of
market has enjoyed substantial growth, SDPs for IPTV and VoD, first as part of service
from just $0.1 billion in 2002 to nearly $1 bundles such as Triple and Quad Play, offered
billion in 2008. Moriana recent analysis in competition by both incumbent CSPs and
shows that, despite the current global cable operators. In eminently technology
economic downturn, this market segment driven societies, some big Internet players
will steadily grow year-by-year and will will quickly become competitors for
exceed $3 billion in 2012. subscribers or for bigger revenue share
from similar or more attractive services.
The recent market consolidation among With their innate ability to creatively extort
SDP solution providers is a strong sign information technologies, these Internet
of global SDP market transformation to companies continuously increase the quality,
the next level of maturity. However, this diversity and affordability of their services
maturity differs in geographical regions while successfully managing, at much
and classes of services. Whereas Europe, lower costs, the demands and the loyalty of
North America, Japan, Korea, or Australia impressive customer bases. A new type of
can be classified as matured SDP markets, SDP buyers may emerge from this domain.
the other regions are either in infancy or
in early maturity phase, creating great However, the most important SDP market
potential for the growth. growth is expected to be in the emerging
markets. The global number of mobile
There are several factors that will drive subscribers will increase from 3.3 billion
the growth of SDP market in the coming in the beginning of 2008 to over 5 billion
years. Communication Service Providers in 2011-2012. This will mainly come from
(CSPs)1 will require more openness, markets such APAC, LATAM and MEA. Due to
extendibility and flexibility from such the increasing saturation, Mobile Network
service platforms to quickly boost their Operators (MNOs) in these markets will
service delivery capabilities and will be no longer enjoy rapid revenue growth
more alert in avoiding vendor lock-ins. from expanding subscriber base. They will
This will drive adoption of SDP for new have to find new ways of increasing ARPU
classes of services including VoIP, IMS through attractive service bundling, mobile
and NGN rich communications, IPTV, VoD, content and advertising and advanced
mobile commerce, mobile banking, mobile services to their prepaid customer base.
payment, mobile advertising, as well as Without ignoring what is necessary to build
convergent and real-time charging. for the specificities of these markets, the
SDP adoption rate though could be much
In the mature markets, the availability of faster as these models have been already
wireless and wireline broadband access will tested in developed markets and at this
stimulate the proliferation of bandwidth- time, suppliers are more mature in their
intensive services such as video and network offerings.
1 “Communications Service Providers” (CSPs) are the traditional telecom network operators. The broader term
“Service Provider”, includes cable operators (also known as “Multi-Services Operators” or MSOs) as well as
providers of content and applications as services who may not own or operate a transport network.
MORIANA 7
In particular, the rapid growth of mobile model. Better understanding of the various
subscriber in the emerging markets will business models and classes of services that
increase the global share of prepaid can be monetized in many ways will require
subscriptions from 60% today to 80% in new SDPs to support them with appropriate
2012. This in turn will drive the adoption of components and this is what will drive further
SDPs for real-time charging, and for value developments in the SDP market.
added services, such as mobile payment and
mobile advertising based on it. The lack of The SDP market, as it is today, has already
wireline infrastructure will also drive adoption attracted all leading Network Equipment
of mobile broadband in these markets which Providers, System Integrators and IT
in turn will allow MNOs to offer multimedia infrastructure suppliers as well as numerous
mobile content and Internet services, such as Independent Software Vendors and third
browsing, searching or instant messaging. party content and applications providers,
often backed by VCs and other investors.
The ongoing network convergence will
stimulate the adoption of SDPs enabling core Within this market, suppliers face many
voice services across legacy and IP networks. challenges, too. Some important ones
They will gradually replace network-specific IN are CSP’s aversion to the risk of change,
stove pipes. Convergence will also stimulate insufficient knowledge of the business models
adoption of SDPs supporting convergent supported by SDPs and inability to appreciate
charging and billing for mobile, fixed, their real economic value. Suppliers have
broadband, IPTV and other service categories. to work with Service Providers on assuring
The traditional distinction between prepaid clear understanding of the transition to
and postpaid subscribers will be gradually these new business models and be able
removed. SDPs adoption will also be part to explain how solution architectures such
of the required transformation of the OSS/ as SDPs de-risk the transition. These are
BSS infrastructure to migrate to broadband slow and difficult processes, delaying CSP’s
services, convergence of lines of business and investment decisions.
customer experience oriented management.
The report concludes with key findings
Today’s investments in SDPs still represent that are discussed and detailed together
just a fraction of the overall Communication with recommendations for Suppliers and
Service Providers spending on the access Service Providers:
and core networks and associated OSS/ • The SDP market will continuously grow
BSS infrastructure. However, these SDP despite the current economic crisis
investments are considered the prime
• The SDP market is broadening,

vehicle for business model transformation
proliferating into other areas of telecom,
and the enabler for bridging telecom with
enterprise and Internet domains
Internet services as potential new sources
• Understanding the business models
of revenue for the CSP.
supported by SDPs will be key to their
adoption
The adoption of new business models to
create fresh revenue streams and sustainable • Competition in the SDP market has its
competitive strategies, builds the strongest own characteristics of more importance
case for SDPs. Today we finally start talking than market share
about “Open Garden” as an evolution from • There are important differentiators in
the traditional CSP’s “Walled Garden” services SDP offerings and classes of services
8
MORIANA
A Service Delivery Platform is an environment, defined at system architecture

level, which enables rapid and cost efficient creation, deployment, execution,
orchestration, and management of new services.
Section One: SDP Market Characteristics
Introduction
The Service Delivery Platform (SDP) as IMS, SOA, and Web Services. Today’s
market can be defined as a market for ‘third generation of SDP, often referred
products, solutions and professional to as SDP 2.02, puts more stress on the
services used in designing, implementing business and management aspects. It
and operating SDP architectures as well as also plays a key role in bridging Telecom
services running on these architectures. with the Internet and Web 2.0 and in
The SDP market is a part of the Telecom helping Communication Service Providers
Service Layer and IT Infrastructure to transform their business models.
market. Unfortunately, there is still a lot
of confusion and misunderstanding around The concept of SDP is so general that it can
the SDP market and SDP as such. be used for a broad range of services that
are not strictly communication services.
In this introductory section we provide an For example, these include: IPTV, Video-
answer to two important questions: what is on-Demand, social networking, Web
the scope of SDP market and what makes search engines, or emerging Software as
a ‘real’ SDP. We also analyze SDP market a Service (SaaS) platforms.
drivers and inhibitors, SDP investment
patterns and dynamics in operators’ Horizontal, layered architecture, abstraction
decision processes. of network and IT capabilities and the
use of standard technologies, enablers
and reusable components are paramount
SDP Definition and Scope characteristics that distinguish a Service
Delivery Platform from traditional ‘vertical’
The term SDP was coined around year stove-pipe solutions. IN-based Prepaid
2000 to describe a common service services, messaging services built on SMS
architecture designed to deliver mobile Centers and other vendor-specific service

content and mobile messaging services. ‘stove-pipes’ should not be considered as
Since then the concept and the scope of part of the SDP market.
SDP has evolved embracing new classes of
services such as voice, multimedia or real- The stove-pipe investments continue
time charging, and new technologies such today and will continue in the future.
2Please refer to the Moriana Free Operator Guide – “SDP 2.0 - SDP in the Web 2.0 Era” published in September
2008. It is available for free download at www.morianagroup.com
MORIANA 9
However, the pressure for new blended There is no standardized reference

services which can provide differentiation architecture for SDP that can yield
and improve customer experience pushes repeatable implementations. To qualify
telecom architects to consider SDP as a hundreds of service platforms deployed
viable solution for the long term. today, Moriana has created a test for a
‘real’ SDP based on five principles:
On the enterprise side, architects working • Use of standard technologies: SDP
on Software as a Service projects have software and hardware components
adopted from the beginning the SDP are based on commercial products
paradigm. This is a completely new SDP that expose open standard interfaces
market segment, superficially addressed facilitating extension, replacement, and
for the first time by this analyst report, integration.
and it deserves further exploration.
• Horizontal, layered architecture:
the platform consists of clearly defined
functional layers (see picture below)
Key SDP characteristics –
starting with the service enablers
what makes a ‘real’ SDP
which can spawn multiple networks and
protocols to expose a set of common
In Moriana’s view, a service platform
capabilities
must have certain characteristics to be
• SOA-based system integration:
classified as an SDP. It should provide an
distributed capabilities of an SDP are
open environment exposing network and
integrated using SOA principles applied
IT capabilities as well as intangible assets
either to components at a certain
(e.g.: user identity) in ways that enable
functional layer or to interactions with
cost and time efficient service creation,
external systems such as OSS/BSS or
composition, orchestration, execution and
Third Party platforms3
management.
• Common, reusable components:
Services running on an SDP should share Services running on an SDP share
common execution environments, data building components, execution
repositories, reusable service components, environments, management interfaces,
and standardized sets of service enablers. and data repositories
An SDP may also provide secured and • Open APIs for services creation:
managed Third Party access to selected Services can be easily created on SDP
network services. Each Service Provider using standardized open APIs. They
should be able to monetize services can be deployed on SDP execution
running on an SDP in one or more business environments or run remotely using

models. Third Party interfaces.
3Native code may be sometime needed for performance at network integration layer or for Web 2.0 exposure, but
open, flexible, interoperable services architecture is the way forward to attain automation and simplification.
10
MORIANA
During the past five years, the set of products, solutions and practices
compliant with SDP principles created a relevant market. Therefore, there is
interest in capturing and analyzing its characteristics and evolution.
Business drivers for SDP adoption
• increased customer expectations mobile and VoIP over broadband, the

and appetite for services available latter due to acquire poorer subscriber
on mobile devices and lately on the segments with incentives in free
triple screen: web, TV and mobile; by minutes and removal of traditional
adopting SDPs for serving such demands, fees such as roaming across country
CSPs are enabled to continuously borders;
increase the number of content and • the promise made with network
applications partners who can discover focused strategies, specifically the
new customer segments among their investments in broadband access
subscribers while the CSP can combine by attracting the new generation
new offerings through flexible packaging of broadband subscribers with a
and charging; substantial number of content sources
• increased competition among and a “long tail” of services realized at
various categories of Service the low additional cost of an SDP when
Providers (mobile vs. fix, telecom vs. compared with the CAPEX allocated
cable, entrants vs. incumbents, SaaS ahead to the broadband technologies
and Internet Services Providers vs. (3G, LTE/WiMax, fiber), IMS core
network operators) and pressure to network elements or end-to-end IPTV
compete beyond pricing within the same deployments.
subscriber base; SDP architectures
embedding intellectual property to Whether it is about creating, faster and at
differentiate in the way CSPs support lower cost, the “long-tail” of services for
new business models with exclusive the broadband access or about increasing
partnerships for services, content or revenue from specific classes of data
devices and leverage new infrastructure services, the SDP proved to be the right
investments are strategies in support of investment. The SDP solution strategy
this business driver; survived the challenge of advanced
• pressure on profit margins which Intelligent Network (IN) platforms, ready-
requires greater efficiency in offering to-deploy “stove-pipe” solutions with

new and personalized value services perceived high market traction and IMS
for well targeted subscriber segments services platforms hype that killed a few
at lower costs; services deployed SDP projects over the past years. The SDP
on SDP have higher margins; if is the solution for the CSP services layer
correctly exploited, this advantage can to accomplish network and IT capabilities
compensate the decreasing revenue convergence, rapid service composition
from voice services which happens in from reusable components, Third Party
both mature and emergent markets, access to create new services and support
the former due to substitution with for flexible business models.
MORIANA 11
Inhibitors for SDP market growth are offered for free as part of voice
bundles, diminishing the value of the
• Lack of an eco-system for “ready- SDP investment. There is no framework
to-deploy” services at SDP for common SDP services lifecycle
architectural level, able to bring a management and many SDP services
quick answer to each CSP expectations: do not count as assets for the CSP.
from those seeing the SDP as the With the exception of TeleManagement
vehicle for the next “killer application” Forum’s Service Delivery Framework
to those expecting their SDP to support (SDF) initiative, there aren’t any efforts
the “long tail” of services. Finding to show how SDPs enable Network,
the application developer and the Device and Service to come together
system integrator who can perform an in product offerings and how services
adequate job within a specified budget can be managed end2end for a rich
and a time-frame remains a challenge; Customer Experience. Consequently
every SDP project is different, the each SDP project requires a complex
design must meet specific needs of the integration plan preceded by a business
operator while there is no standard SDP consulting stage to explain how the
architecture and very few components SDP can enrich the current business
specified by industry organizations (e.g. and operations environment. On the
some of OMA’s Service Enablers). This bright side, the rapid adoption of SOA
is especially true for core telecom voice in Telecom for OSS/BSS transformation
services or services such as IPTV. For enables the third generation SDP to
example, the early adopters of voice- be designed around standardized IT
enabled SDPs faced issues with finding architecture which not only facilitates
Third Party application developers rapid integration but to great extent
who could create revenue-generating compensates for the lack of SDP specific
services while assuring the quality of standards.
core telecom services; this type of work • Conflicting Internal Interests
is not for “garage” start-ups and requires – business organizations who control
partners who can guarantee the quality, budgets will support a “stove pipe”
delivery and future maintenance of such solution with proven market traction and
services. coming from a known provider even if it
• Lack of a standardized and largely has a higher CAPEX than an SDP-based
adopted framework for CSPs solution because they must minimize
business and operation processes the time-to-market and limit the risks
which would include management for launching new services. This choice
of SDPs, expanding the value network conflicts with the recommendations from
and enabling new business models. CTO office and IT departments seeking
Today, each new service deployed on long-term advantages from a common
an SDP must be ”plugged” into existing SDP architecture and an open framework
OSS/BSS infrastructure and its lifecycle for service creation. This situation often
integrated through custom solutions, leads to indecision and unresolved
when possible, into business processes debates that have put many SDP projects
such as order management, fulfillment, into a state of limbo. Moreover, with
provisioning, charging and assurance. the push for the broadband strategies,
For this reason, many SDP services a new conflict between business and
12
MORIANA
operations is looming around monetizing “technology push” while 48% stated that
network usage: to invest in platforms their SDP investments were not driven by
that create an intelligent service layer any concrete business case.
for commercial content and services
managed by the CSP or to rely on the The strategic character of the SDP
abundance of Internet content and “over investment became obvious in the case of
the top” applications from other providers leading global MNO organizations such as
and increase the revenue generated by Vodafone, Orange, T-Mobile, Telenor, 3, as
their traffic demands? well as regional MNOs such as Mobilkom or
Singtel. These operators, running multiple
networks, could truly benefit from adopting
one harmonized SDP platform across the
SDP Investment Patterns
whole group. However, in many cases,
internal company politics, local interests
SDP Investments Drivers
and market demands combined with
technological challenges related to the
The vast majority of SDP deployments
variety of legacy IT and service platforms
(nearly 80%) surveyed by Moriana have
deployed across the operator groups, made
been justified by delivering new services in
such SDP deployment decision very difficult if
a time and cost-efficient way. 65% of CSPs
not impossible. Nevertheless, there are good
have identified the SDP as the only viable
examples of successful SDP deployments on
solution to reduce OPEX and CAPEX for new
group-wise bases such as Vodafone Live,
services. One, common service architecture
Orange SNE and MDSP or, on smaller scale,
can avoid the expenses of developing
Mobilkom Austria who successfully deployed
and operating services in “stove pipes”
one SDP platform across the whole group of
including the high costs of integrating each
seven MNOs in Central Europe.
new service into legacy platforms and the
high OPEX caused by annual maintenance
Innovative Tier2/3 operators took a more
fees on proprietary software and hardware
pragmatic approach adopting service
components. The cost of launching a new
specific SDPs to generate immediate
“stove-pipe” often exceeds the cost of
revenue and guarantee quick ROI. The
an SDP and perpetuates vendor lock-in
success of mobile messaging and content
situation. By acknowledging this reality,
delivery platforms is proved by a good 10%
one in three SDP projects capitalized on the
and sometimes even 25% of the overall
opportunity window opened when a legacy
ARPU in mature markets, for example the
service platform reached its end-of-life.
revenue from mobile content in Japan
and South Korea. These SDP investments

Not surprisingly then, SDP investments are
enabled the CSPs to build successful and
often perceived as pure “technology push”:
profitable business models, attracting
within this window of opportunity the SDP
Third Party content and service providers
is a replacement of obsolete technology;
in each specific market. In the area of
outside this window, an SDP is a new
next generation voice services, including
architecture for the services layer meant
VoIP, most of the SDP investments made
to future proof against changes in network
by Tier 2/3 operators have been based on
technologies. 23% of responders in the
concrete business cases and this resulted
Moriana SDP Market survey confessed
in quicker ROI from these services.
that their SDP investments were a pure
MORIANA 13
SDP Investment Stakeholders SDP investments can be driven by solid

business cases when better cooperation
In the beginnings of SDP as architectural among the participants in the decision
element of telecom services layer, process happens , when they are
investment decisions were the responsibility all committed to understanding both
of the network operations departments technology and business challenges and
and the CTO offices. As stated above, the can align their resources in making the
SDP was deployed as a pure “technology SDP a joint project across organizations.
push” with little emphasis on commercial Creating SDP Requests for Proposals (RFPs)
aspects. Too many complex projects and that reflect such collaboration, rather than
tougher economic times pushed for an just the technology requirements from
SDP investment to be a proven revenue- the CTO architecture team, will signal a
generator, rather than an elegant technical more mature understanding of the SDP
solution for reducing service related OPEX. investment among CSP stakeholders.
Budgeting SDP projects is currently under These stakeholders inside Service Provider
pressure from business organizations: they organizations are:
require low cost integration and proven • Product Strategy groups controlling
revenue streams from new services. This the budgets in collaboration with Product
is a difficult test to pass for SDP suppliers, Marketing groups who analyze demand
mainly because there is no standardized and create new offerings;
Product Lifecycle Management around • IT organizations whose strategy is led
SDP services that could be easily used by a CIO office; they have the knowledge
to make the integration and revenue of design and operation of SOA-based
generating case. Each operator has its own third generation SDP architectures, CRM
internal processes and decision criteria in and IT service management;
the workflows that create, provision and
• Network organizations whose strategy
operate services and resources. While
is led by a CTO office; they have the
many SDP suppliers have “out of the
control over the network resources and
box” components and applications ready
their management.
to deploy, introducing an SDP for one
or more classes of services into these
Increased customer expectations, the
processes requires intimate knowledge
need for more diversified services and
of both the operational environment and
lately the consolidation of multiple lines
the business strategy on the Service
of business as part of convergence, fuel
Provider side. A generic framework such
better collaboration between network

as TeleManagement Forum’s business and
and IT organizations on assuring the
operations processes map (eTOM) is useful
end-to-end service delivery, correlated
to understand the bigger picture but it does
on customer experience rather than
not carry the Intellectual Property and
on assurance operations at network
Business Intelligence each CSP puts in its
level. Similarly, business organizations
own business model. For the SDP supplier,
collaborate more with technical
what seemed to be a technology problem
organization on understanding the value
becomes a complex people and processes
and the cost of various network and
problem to be solved for each CSP business
IT assets, how they can be reused to
objectives and “modus operandi”.
14
MORIANA
generate new revenue streams and how IT system legacy, the decision process
to lower the OPEX by outsourcing their can be simplified although the customer
management. acquisition not the SDP investment is their
first priority.
The changing relationship and relative
importance of these three groups of SDP projects, together with broader OSS/
stakeholders in an SDP project may be BSS transformation projects, open a big
seen as an obstacle to SDP adoption opportunity for suppliers of methodologies
because it could overly complicate SDP and tools to help all these organizations
decision making processes. To simplify improve collaboration on the whole range
the decision process and crop long and of needs: from business analysis and
inefficient projects, several Tier 1 operators processes modeling down to specifying
(BT and Sprint for example) have recently systems and interfaces to expose
reorganized and removed the CTO and required services and evaluate costs of
CIO silos and oriented their business implementation and maintenance. There
model more around service design from is a definite lack of such suppliers in the
a holistic perspective (market strategy, telecom industry and this affects the speed
IT, network) and service delivery from a of SDP adoption, too.
customer perspective. For new entrants
who have small amounts of network and
MORIANA 15
Section Two: SDP Market Structure

This is a first time analysis of what needs application server platforms based on
to be included in the SDP market in terms technologies such as J2EE, .NET, JAIN
of scope, offerings, stakeholders, trading SLEE, and implementations of protocol
models and detailed segmentation, with stacks such as SIP, SMPP, etc.);
explicit references to what is not to be
included and what should be considered as Value added services and applications:
secondary market driven by the primary usually neglected by analysts, these are
SDP market. also components of the SDP market that
make up for the “long tail” of services; they
have value for the end user and justify
SDP Market Scope the ROI for the SDP. Several classes of
services are offered today on SDPs: Mobile
Offerings in the SDP market comprise content and messaging (WAP/HTTP, SMS,
SDP products, solutions, service enablers, MMS for mobile browsing, advertising and
middleware, software applications personalized content push or download),
(identified as SDP services) as well as SDP- Mobile commerce and payment (m-wallet,
related professional services. Depending virtual calling card, small payments), Voice
on which elements from these categories - NG IN & Telephony (free number, Centrex,
are included in the SDP market and which PBX, VPN, Home Zone, Number Portability),
not, the overall SDP market sizing and VoIP & Multimedia (packet voice, mobileTV,
forecast can vary significantly. Different video sharing, music, games), IPTV &
analysts have different opinions on the Triple Play, Third Party Access (exposure of
components of an SDP and use their own network capabilities in a wholesale model
view as the base for SDP market sizing. or on-boarding of applications running
on Third Party platforms), other services
The relevant SDP market can be subdivided (Presence and Location Services, Mobile
into three major areas of supply and Office Services, etc.)
demand:
Professional services and consulting
Software products and solutions: include business consulting to formulate
functional components such as service the strategy for adopting an SDP, design,
enablers, network gateways and third implementation and deployment of SDP
party gateways (Parlay gateways, Telecom architecture including integration with
Web Services/Parlay X components, the underlying network elements, such as
XML gateways), support components SMS-Cs, MMS-Cs, positioning systems,

common data repositories; identity and IN and IMS core elements, creation and
access management systems, optional deployment of service enablers and
content management systems or policy value added services to run on the SDP,
management and enforcement systems, integration between the SDP and Third
middleware and integration technology Party domains to allow access to service
such as SOA middleware solutions (WS enablers exposed by the SDP or to create
adapters, UDDI or other service registries, SDP service enablers that need access
Enterprise Service Bus/ESB, business to Third Party systems (this effort can
processes management, rule engines, be rolled under a certain type of service
16
MORIANA
enabler), integration of the SDP services instance device management services,

execution and management flows with but do not include mobile commerce or
Service Provider’s business and operation advertising services.
processes through new or existing OSS/
BSS elements such as charging platforms, A substantial number of mobile services,
service lifecycle management, customer including content-based services, are run
care systems, etc. This area requires a by third parties platforms using service
2-ways optimization and re-engineering capabilities exposed by mobile operators’
of existing processes: first to include SDPs. Third parties build and operate their
SDP services in the common Service own SDPs to run such services creating a
Catalogue so they become available for parallel SDP market, still to be analyzed. The
product management and marketing and whole market segment of SDP solutions for
second, to adapt current processes to Third Party service providers and service
the operation of an SDP and of services integrators is usually not included in the
running on it by adding new software and SDP market scope by market analysts.
service lifecycles management specific
activities. Similar issues occur when we analyze the
scope of professional services pertaining to
When it comes to SDP products and SDP projects. Professional services should
solutions, it is not decided if components, be assigned to business consulting creating
such as presence servers, identity the business case for an SDP, design of
management, policy management on one the SDP to meet CSP’s requirements,
hand and SOA related technologies such as custom development and integration,
Enterprise Service Bus (ESB) and service and eventually, project management.
registries on the other hand belong to the Consulting on business process re-
SDP or not. We consider the former set engineering is an example outside the
as service enablers exposed on the SDP scope of the SDP market excepting the
out of the CSP’s Services Layer, hence a case when they address integration of SDP
secondary market driven by SDPs. The latter services in the overall business model of
is generic IT infrastructure: investments the CSP.
in SOA infrastructure are in most cases
driven by operators’ IT departments to Lastly, the term SDP is often used (or rather
rationalize OSS/BSS systems integration misused) to describe service platforms
and support process automation. The that are “stove pipes” rather than “real”
cases when the adoption of SOA is driven SDPs for example cases of services using
solely by an SDP deployment are quite VAS interfaces of SMS Gateways. While
rare. The SOA components market driven they include SDP concepts, such platforms
by SDPs is limited to what is embedded in focus on exploiting a specific server
the SDP solutions. capabilities and should be considered
at most as service enablers when they
Likewise, it is not clear if all value added expose those capabilities to a real SDP. On
services and applications running on an the other hand, many cable operators and
SDP should be counted as a part of the other service providers build and operate
SDP market or simply as a part of the Service Delivery Platforms for digital TV,
global market for Telecom services and IPTV, Video-on-Demand, VoIP, etc. but
applications. Some analysts include for they simply do not call them “SDPs” when
MORIANA 17
architecturally these platforms comply Enterprise IT Vendors such as Oracle,

with the principles of an SDP and should IBM, HP, Sun, and until recently Microsoft,
be included in the market. moved aggressively into the SDP space
either by partnerships for the networks
and OSS integration or by M&As. They
SDP Market Stakeholders approach the SDP from the operator’s IT
infrastructure and OSS/BSS side, where
We consider the following segmentation of their position has traditionally been much
stakeholders in the SDP market: stronger than on the network side. IT
• vendors of SDP products, solutions and vendors create an SDP by extending their
professional services; Service Oriented Architecture solutions,
enterprise application platforms (J2EE and
• buyers of SDPs including Network
.NET) with telecom-specific components
Operators and other Service Providers;
(e.g. SIP Application Server or Web
• investors in SDP technologies and
Services based Network Gateways),
solutions; and
service enablers and support applications
• end-users and subscribers of SDP (CRM, Billing, etc.). These SDP solutions
services in business and consumer are based on standard middleware and
market segments. software products which create a low
cost, “ready to assemble” SDP from these
Vendors of products, solutions vendors (e.g. Oracle’s “SDP on a CD”).
and professional services Some IT vendors such as Oracle, IBM
and Microsoft “own” application developer
The SDP market represents only 2% share of communities, which can be leveraged in
overall telecommunications investments of the SDP space. HP and IBM play strongly
over $1.3Trillion per year. Nevertheless this with their Professional Services arms taking
is enough an opportunity for several types of over long term management contracts
suppliers to upsell their core competencies. after launching an SDP in production.
Network Equipment Providers (NEPs) System Integrators (SIs) such as

such as Alcatel-Lucent, Nokia Siemens Wipro, Accenture, Atos Origin, LogicaCMG,
Networks, Motorola, and Ericsson as well as Cap Gemini, TCS as well as regional SI
the new players on lower price points such players had a predominant role in the
as ZTE and Huawei offer comprehensive SDP initial development of SDP market. They
solutions. They approach the SDP from the leveraged the fact that an SDP is not a
network side which is their traditional area product, but rather a set of products that
of dominance. NEPs’ SDP offerings utilize needs to be integrated into the operator’s
SOA, middleware and other solutions, network and IT infrastructure. They build
e.g. identity servers, LDAP servers, and their SDP offerings from components and
databases from leading IT vendors. NEPs products offered by different vendors:
often partner with ISVs to offer high quality NEPs, Enterprise IT vendors or ISVs.
or highly specialized software such as In the future, network and OSS/BSS
telecom application servers, policy engines integration will still be required for every
or Content Management Servers (CMS) SDP, but new pre-integrated SDP solutions
as well as successful revenue-generating built on the SOA principles will require less
applications. system integration than before. However,
18
MORIANA
the SIs will keep very busy as the number banking), and adult content and services
of deployed SDPs and demand for new like SMS and voice chat all of which that
service creation and integration services generate substantial revenues for the CSP.
increases. According to Moriana market research, in
mature markets, an average operator has
Independent Software Vendors over one hundred Third Party providers
(ISVs) such as jNETx, Aepona, as partners. All around the world, there
OpenCloud, Personeta, Telenity, Bharti are well over 10004 voice, mobility and
Telesoft, Redknee, Artilium, Unipier, Web 2.0 applications providers potentially
CA Wily Technologies and many others, partnering with operators. These
offer specialized SDPs or specialized providers feed the Communication Service
components for SDPs. To increase their Providers need for creating large “all-you-
success on the market, some ISVs offer can-eat” packages for their subscribers
SDP solutions with add-on, ready to deploy resulting in increased revenue from data
applicators (e.g. mobile banking, Mobile traffic sparing them the effort to change
PBX, VoIP, etc.). Other ISVs specialize in or upgrade existing billing capabilities
key SDP components and technologies for voice and messaging. Prominent
(Jain SLEE AS, SIP AS, policy engines, examples such AT&T’s relationship with
Web Services Gateways, performance Apple around iPhone and T-Mobile’s
management, etc.). Their go-to-market relationship with Google around Android,
strategy in the SDP space is based on may signal that Service Providers are
close cooperation with large vendors and happy with this simplified “applications
system integrators to address specific over the top” model and ignore the fact
market niches (e.g. policy management that an SDP could also support per usage
or SDP performance management) that or per transaction charging.
are usually too small to be attractive for
the bigger players. None of the ISVs has The SDPs used to onboard Applications
yet become a dominant player in the SDP Providers need standard APIs with
space. management functions included to allow
secure and configurable access of these Third
Applications Providers (APs) Third Parties to the telecommunication capabilities
party applications providers (developers) exposed by the CSP. This gap is a source
help Service Providers to rapidly assembly of additional development costs, limiting
a rich portfolio of “long tail” of mobile the number of business agreements small
and multimedia services including music, Application Providers can engage into.
ringtones, wallpaper and video downloads,
premium SMS and voice services such The complexity of on-boarding thousands
as quizzes, contests, and tele-voting, of applications and Third Parties, created
information and infotainment services the business opportunity for yet another
including sport and event coverage, category of players in the content
mobile advertising services, specialized and applications value chain: Service
subscription services (e.g. mobile Aggregators. Together with SaaS and
4 Alan Quayle and “Idea and Plans” compiled an initial list available at http://www.alanquayle.com/blog/2008/07/01/
WebVoiceTelco2_AlphabeticalList.pdf
MORIANA 19
PaaS providers, they represent a potentially Mobile Network Operators - Large MNOs
big parallel SDP market as discussed were the early adopters of the SDP concept.
further in this report. These players typically lead investments in
new technologies. They have the necessary
The SDP as we define it in this report resources and budgets as well as internal
requires a considerable amount of telecom R&D and engineering staff to execute
network and operations “know-how” such complex projects. Vodafone, Orange,
combined with modern IT knowledge Sprint, AT&T, TIM, O2, or Telefonica are
such as SOA implementation and IT flagship examples. They were followed
Service Management. Specialized ISVs by smaller, innovative operators (such as
and traditional NEPs who play in this Mobilkom, Cell C, 3Austria etc.) who had
market have this type of knowledge. the required competence and management
ISVs developed it more from the software support to design and commercially launch
and IT world while NEPs built it up from an SDP.
the network experience. The sensitive
differences and the strategic importance Moriana research has shown that among
of the combined knowledge allow small the MNOs organizations that actively run
ISVs to compete with large NEPs over the SDPs projects, about 60% have already
same SDP projects (e.g. Ericsson would deployed their SDPs and the remaining
compete and also cooperate with JNetX 40% plan their deployments for 2009-
over components of an IN services SDP). 2010. Two thirds of deployed SDPs are
Small to medium size SIs (e.g. Atos- already in full commercial operation, 20%
Origin, Cadence LLC or TietoEnator) rather are still tested in an initial commercial
than big enterprise oriented SIs are also launch with a few services and 10%
sought after for such skills. At the same are in the lab trial or pre-launch stage.
time, big SIs and big IT are more involved However, it is estimated that 5% of the
in solution architecture and integration of operators that deployed and launched
the SDP with the more enterprise oriented SDP architectures, no longer use them
business processes support system. commercially. The main reason is a lack
of revenue-generating services.
Network Operators
Incumbent Network Operators.
Mobile Network Operators (MNOs) and Majority of incumbent operators own mobile
leading incumbent Network Operators networks and therefore also participated
are the most important stakeholders in in the SDP market. From the perspective
the SDP market. Recently, Cable Network of the SDP market evolution these players
Operators also started to adopt SDPs will have more and more importance.
for their triple play offerings. Network Incumbent operators are leaders in the
Operators make the biggest part of SDP network transformation towards NGN and
investments and hold the budgets for such IMS. SDP is often deployed as a part of
investments. While they are customers this transformation project. For instance
of the suppliers for the SDP technology, BT, who exceptionally does not own any
infrastructure and professional services, mobile network, has become one of the
they also build themselves core SDP leaders in the adoption of SDP as an integral
functionality needed for Third Party service part of their 21CN network transformation
and content providers access. program. BT is also one of the first
20
MORIANA
adopters of the open business models by Extending their offerings requires not
offering their service capabilities to party only upgrades of the cable infrastructure
service providers. Incumbents are also to support new standards such as
increasingly interested in convergent SDP PacketCable 2.0 but also transformation
platforms that can provide the services of their operations and business systems
to both the legacy SS7-based networks to adapt to the new business models.
and IMS/NGN networks. Such convergent SDPs as well as converged charging and
SDPs can assure the seamless migration billing platforms are key to making the
of voice services form the legacy to the connection between Web applications, TV
next generation networks. content, VoIP and various end devices on
customer premises, understanding what
Moreover, incumbents want to leverage the user is doing and what it should be
their existing wireline, broadband, billed for. Moreover, SDPs will play a key
mobile and cable network assets through role to onboard application developers,
broadband access services: IPTV, VoD as a partnership that cable operators who
well as triple and quadruple play offerings. traditionally dealt only with video content
All these service offerings require some providers must now put in place (e.g.
sort of convergent SDP platform or at least COX Communications in US is working on
a common Service Delivery Framework this aspects as they trial their converged
for managing the lifecycle of the service applications platforms atop IMS).
bundling.
Communication Service Providers
To provide service offerings using multi- (who do not own a transport network)
network capabilities and to decrease OPEX,
incumbents have to gradually transform There are several categories of
their IT infrastructure (OSS/BSS) from Communication Service Providers who do
network-oriented silos to service and not own a transport network. ISPs, MVNOs,
customer-oriented horizontal solutions. VoIP service providers, Third Party Service
This involves the adoption of convergent and Content Providers, SaaS providers of
charging and billing, and unified CRM collaboration and communication services,
systems across all business lines as well as PaaS providers and so-called Service
across Service Providers when the product Aggregators belong to this category. Their
is an assembly of services owned and involvement and importance for the SDP
operated in different domains. Adoption of market differs significantly.
convergent SDPs will certainly be a part of
this process. Internet Service Providers (ISPs). This
category typically offers basic Internet

Cable Network Operators (MSOs). These access, e-mail and Web-hosting services
operators want to leverage their existing on flat-rate basis. So far their impact on the
cable access to home and diversify their SDP market was marginal. However, some
CATV offering by leveraging the broadband of the leading ISPs expand their offerings
access to deliver triple play packages on with VoIP, IPTV and VoD packaged as full
competitive flat-rates. A parallel effort blown triple play service providers. Free in
is made to address the unexplored SMB France and ComHem in Sweden are good
segment with VoIP related services such examples. In general, the adoption of
as IP-Centrex or Unified Communications. SDPs by ISPs will be limited to this leading
MORIANA 21
group. Since the penetration of triple play network operators offering triple play
even in matured markets in the next five packages on flat rate basis. Therefore,
years will be still below 10%, and the ISVs the impact of the VoIP service providers
will only own a fraction of this market, on the SDP market will be growing but
their share in the whole SDP market will still marginal.
be marginal.
Third Party Service and Content
Mobile Virtual Network Operators Providers and Service Aggregators.
(MVNOs). In general, the MNVOs model This group will have a significant impact
has not been a great success. Majority on the SDP market. These players
MVNOs are focusing on providing basic already provide the majority of mobile
mobile voice and messaging service on content and messaging services. Moriana
discounted rates. They will not adopt market research shows that in a mid-
SDPs, in opposite they will utilize charging, size country with three mobile operators
provisioning and CRM capabilities offered there are typically 5 to 10 serious Service
by MNOs through the MVNEs (Mobile Aggregators as well as several smaller
Virtual Network Enabler) of their SDPs. ones. The simple mathematics shows
From the SDP perspective ‘second that the number of Third Party SDPs
generation of MVNOs’ is and interesting significantly exceeds the number of SDPs
group. It consists of well established hosted by operators. Surprisingly, there
enterprises such as retailers, media and are no commercial solutions targeting the
banks that have recognizable brand and Third Party SDP market segment which
stable customer base. They base their uses today open source technology such
MVNO offering on their brand and value as LAMP (Linux, Apache, MySQL, PHP) or
added services such as content, banking .NET technology. The mobile penetration
and special retail offerings. Auchan retail in the emerging market will be certainly
chain in France, mBank in Poland and followed by the growing scale of mobile
Virgin Mobile are good examples of such content and messaging services offered
MVNOs. Unfortunately, such successful by MNOs as well as Third Parties. This is
MVNOs going beyond basic mobile access why we consider this group as having a
offerings are rather exceptions. Therefore significant impact on the SDP market. A
in the next five years the MVNO share in Third Party Service and Content Provider
the SDP market will also be marginal. or Aggregator typically has Service
Level Agreements (SLA) and Revenue
VoIP Service Providers. Offering VoIP Sharing Agreements with all mobile
services to consumers and enterprises operators in a country as well as with
require a service delivery platform. The other service providers (e.g. VoIP). It
larger VoIP providers typically invest aggregates the incoming and outgoing
in Softswiches or SIP-based platforms SMS, MMS and WAP traffic from and to
offering IP Centrex and residential VoIP the operators’ networks and often offers
services. Smaller players (including cable single numbering plans to all mobile
operators) often resell VoIP services networks for premium services (this
offered by carriers on wholesale basis. feature is not available in all countries).
The number of VoIP service providers It also offers voice capabilities for IVR-
will grow, however they will face a strong type services (televoting, and marketing
competition from incumbent and cable campaigns) and specialized call
22
MORIANA
centers. A CSP wholesales its network on their capabilities and targeted

capabilities to the Service Aggregator market. Using architectural principles of
using eventually an SDP with Third Party an SDP, these ASPs have extracted and
access capabilities. A CSP cannot fully exposed application capabilities from the
substitute a Service Aggregator because computing cloud they own to be able to
it can only address its service offering combine them, configure and monitor
to its own customer base, but not to per user usage and obviously offer them
the subscribers of competitors while an over the Internet under a Portal or Web
aggregator can reach all subscribers in a 2.0 APIs paradigm. Jamcracker’s Services
country and even beyond. Another class Delivery Network (JSDN) or Microsoft’s
of Aggregators is those who aggregate Azure platform with its own Service
content from Content Providers, owning Management and Delivery Platforms
a platform to store and distribute content are flagship examples of leveraging the
through channels (e.g. Jamba). One of concept of a Service Delivery Platform
these channels is represented by the to evolve even beyond SaaS/PaaS.
CSPs who act as retailers of the content. They managed to create marketplaces
A CSP can further offer adaptation of the where capabilities of many internal or
content to the type of transport, device, external applications are exposed as
or consumer preferences. It can also add services, developers can also get on
advertisement using its own SDP in a these platforms and develop their own
multisided business model where it shares applications which can be offered further
revenue with the content aggregator but down the chain to direct consumers of
charges the advertiser for distribution. SaaS or to retailers who can broaden the
In this value chain, the CSP takes around reach into more targeted markets such
50% of final price paid by the content as SMBs. NEC has recently announced a
consumer. Service Aggregators host and similar offering. Several Tier 1 operators
operate their “custom-built” SDP, CMS are already evaluating the triple-
and multi-channel portal solutions that in advantage of on-boarding services from
many cases have advanced functionality such providers and retailing them to
and demonstrate high performance and their own subscribers as part of various
reliability. At their turn they offer these bundles. These advantages are: cutting
capabilities on whole-sale basis to their their own operations costs, creating
Third Party service provider customers, new sources of revenue and increasing
including TV and radio stations as well as subscriber “stickiness” with their own
other media companies; mobile content network services. The SDP revolves
resellers and producers; marketing to the SaaS provider side to support
agencies, etc. a business model where the network

operator acts as retailer who owns the
Software as a Service (SaaS) customer relationship and the SaaS
Providers. The evolution of IT to business provider acts as the Service Provider who
service has created an opportunity for owns and operates the service. When the
nimble Application Service Providers economics of this business model will be
(also known as hosters) to morph their well understood to be advantageously
data centers core business into that of exploited in practice, SaaS/PaaS may
Software as a Service (SaaS) or Platform become another significant SDP market
as a Service (PaaS) provider, depending segment.
MORIANA 23
Investors in SDP products from the Service Provider perspective is

and solutions usually based on the number of active
or concurrent subscribers they count
Investors are important stakeholders in the on having for each class of service. This
SDP market as they have financed many metric is used for both enterprise and
of the ISVs who started in the late 90s to mass market subscribers.
develop components of Service Delivery
Platforms such as Parlay Gateways, A question that is not addressed in any
Telecom Application Servers, Mobile Portals SDP market analysis is whether end-users
or Device Adaptation servers. Aepona, of SDP services should be considered
Appium, Volantis, Elata, Drutt, Leapstone, stakeholders in this market. Are consumers
jNetX, Telenity, OpenCloud and many really affected by the decision of an
others are such ventures. Companies operator to invest in an SDP and is their
who managed to become leaders in their reaction to this decision so powerful to
categories have been acquired at several influence operator’s strategy?
times their annual revenue from sales
during the 2006-2007 peak of M&A in the We argue that they do and the reason for
SDP space: Elata was acquired by Qualcom, that is the network effects end-users create.
Drutt acquired by Ericsson and Leapstone They make days of high revenues around
by Motorola, to name a few. This peak major sports events or political events just
marked the entry of the SDP market in its by texting to each other. At the same time
current early maturity phase, confirming they may remain reluctant to hundreds
the results from SDP suppliers’ survey. of other services such as greeting cards
by MMS or mobile commerce, making an
The current rounds of investments go SDP investment look unsure. The type of
mainly towards ISVs with products in the content and services subscribers would
content management and delivery areas like to interact with is unpredictable as are
suggesting venture capitalists’ confidence the congestion effects that high interaction
in the growth of content services due to may create for the operator. When more
broadband access, distribution of DVB sophisticated, platform based business
licenses and commercialization of IPTV. models, will be adopted by CSPs, these
For example, Motricity and mFormation network effects will really impact revenues
have risen over $100M in VC during the the same way social networks impact
past 2 years. Other areas of investment web business today. Even without much
are is the advanced convergent charging, understanding of the network effects,
mobile commerce and banking, etc. several operators report healthy revenues
of around $1M/day from mobile portals

End-users of SDP Services while others estimate almost $2M/day
for more complex services that combine
Most SDP solutions are priced based on search and advertisement making the case
the number of transactions supported. for end-user push for more data services.
The reason for this is that investment
24
MORIANA
Section Three: SDP Market Segmentation
The following categories define specific (www.4billion.org) to the day of 4 billion

needs and characteristics in SDP mobile cellular subscribers, which they
adoption: estimated to happen before the end of
• Geographical regions 2008, although it did not happen.
It is estimated that the number of mobile
• Service Provider type
subscribers in the world will grow to over
• Classes of SDP services
5 billion in 2011-20125, and this rapid
growth will come mainly from the emerging
Geographical Market markets.
Segmentation
Service Provider Type Market
The most advanced SDP markets are in Segmentation
Europe and developed Middle East, North
America and selected mature markets in Asia Different categories of operators and
such as Japan, South Korea, Australia, New service providers have different needs and
Zeeland, Singapore, Hong Kong, etc. Without strategies for SDP. From the perspective
assuming too much, we can say that nearly of the SDP market, the following
all mobile operators and leading incumbent categorization is used by Moriana:
service providers in these regions have
• Tier 1 mobile operators including multi-
already rolled out some sort of SDPs mainly
national operator groups
for mobile content and messaging, but also
• Tier 2-3 mobile operators (not belonging
SDPs supporting voice and VoIP services,
to any operator group)
Triple Play, mobile commerce and advertising,
and convergent charging and billing. • Incumbent operators (running fixed,
mobile, cable and IP networks)
Other regions including Latin America • Cable network operators (offering TV,
(LATAM), Asia-Pacific (APAC) and Africa VoD, broadband, and Triple Play)
(MEA) are still at the early stages of the • Other service providers (ISPs, MVNOs,
SDP adoption. These markets are not VoIP, etc.)
saturated yet, and mobile operators there
• Third party service providers including
still enjoy a strong revenue growth due to
Service Aggregators
rapidly expanding customer base. China,
• Software as Service (SaaS) Providers
India and Brazil are flagship examples of
such rapidly growing markets.
There are significant differences among

By the end of 2007 ITU-T reported over these Service Providers when it comes to
3 Billion mobile cellular subscribers, 1.3 the skills and resources they have in-house
Billion fix subscribers, 1.5 Billion Internet and can put on an SDP project.
users and 0.3 Billion broadband users. • Incumbents and Tier 1 Mobile
ITU-T also maintains a countdown site Operatros usually develop their
5Several market forecasts made in early and mid 2008 have predicted 5 billion mobile subscribers to be reached
by 2011. However, the current economic situation will slow down the mobile network growth in the emerging
market, most probably delaying this milestone.
MORIANA 25
SDP, embedding sometimes a lot of class, they either grow into Tier 1 or fall to a
Intellectual Property related to the small area and number of subscribers.
more complex use cases for their SDPs The level of ARPU could be another dimension
due to convergence, legacy or service for Service Provider segmentation but with
bundling. They launch complex RFPs for good approximation, ARPU is correlated
component suppliers and end up with to geography. In mature markets (US,
projects hitting the $100Million ceiling. Western Europe and developed Asia) ARPU
• Tier 2/3 Mobile Operators need more is over $40, while in emergent markets
pre-packaged solutions simpler to deploy (Eastern Europe, Africa, larger Asia and
and integrate, usually serving a specific Latin America) is less than $20. At the same
class of services; they work directly time it should be noted that three quarters
with suppliers to get the best benefits of the world population lives in emergent
out of relatively small investments ($1- markets (1B in Africa and over 2B in larger
3Million). However, there are many Asia). Following Informa’s mobile industry
examples of European Tier 2/3 MNOs report for 2007, in Africa, an emergent
that have successfully built their own market, the ARPU has decreased in the past
SDPs using local SIs. 2 years with more than 10% even though
the number of subscribers increased with
• Other Service Providers (ISPs,
more than 40%. Similar decrease happened
cable, MVNOs) who will use SDPs for
in other emergent market such as Eastern
some cases such as linking to content
Europe; Lithuania, Ukraine, Bulgaria and
providers, banks for mobile banking,
Russia. The ARPU from data services in these
supermarkets for topping up offerings;
countries is low and correlated with lack of
they will rather buy SDP components
deployments of Service Delivery Platforms
and services tailored to their specific
and availability of broadband access. On the
value proposition or class of services
contrary, in mature markets ARPU is poised
they want to offer.
to increase due to availability of broadband
• Third Party Service and Content
access (HDSPA, WiMAX and LTE) as well as
Providers and Service Aggregators
increased demand for multimedia content.
are more like the incumbents building
As a result, while more than 90% of the
and operating their own SDPs with the
new subscription in the past two years
difference that they use a lot of cheap
came from emergent markets, more than
hardware, virtualized operating systems
50% of the global revenue came from
and open source software (LAMP)
mature markets such as Western Europe,
minimizing their capital investment and
developed Asia and North America. These
simplifying operations. This segment is
facts orient operator’s strategies to invest
very much unexplored by SDP vendors.

in more in service and applications, mainly
in mature markets.
For the analysis in this report, Tier 1
operators are those with more than 15
The current size of the SDP market is
Million subscribers, Tier 2 between 5-15
very much driven by the needs of mobile
Million subscribers, and Tier 3 less than 5
operators to increase revenue from blended
Million subscribers. Obviously, the Tier 1 and
services, mainly messaging and content.
Tier 2 mobile operators from the mature
The table below collects the averages in
markets were the early adopters of the SDPs.
terms of mobile penetration and ARPU
However, Tier 2 operators are a volatile
from data services.
26
MORIANA
Messaging ARPU
Content ARPU
Avg ARPU ($)
Penetration
Subs. (Mil)
Operators
Countries
Region
North
2 28 276 70 38 2.1 3.4
America
Europe
59 317 1000 90 30 3.8 1.8
& ME
APAC 49 150 1400 66 21 0.55 4.75
Latin
38 100 376 60 15 0.8 1.5
America
Africa 47 127 275 30 13 0.2 0.1
TOTAL 195 722 3327 63.2 23.4 1.49 2.29
Table 1: Mobile Service Providers, Average penetration rate and ARPU per region as for
beginning of 2008
Segmentation by Classes of Services

and Applications
SDP solutions provide an architecture and Alternative segmentation of the SDP

the underlying set of technologies needed market can be based on classes of services
for one or more classes of services. The supported by the SDP. Currently the
actual set of functional components of an following categories can be distinguished:
SDP depends on the classes of services • Mobile content and messaging services
deployed in the SDP execution environment
• Mobile commerce and advertising
and the business model the SDP serves,
• Third Party access management
including service supply chain and revenue
model. If we take the examples of IPTV • Voice (VoIP) and multimedia

and mobile commerce, in each case one • IPTV, VoD and Triple Play
ends up with different type of components • Convergent and real-time charging
to build the SDP. However, these different
SDPs can share the same technology,
Following table details more on the classes
middleware, software components and
of services giving also some examples.
platforms.
MORIANA 27
SDP Service Class Examples
Ring Tones, Music and Video downloads, games,

Mobile content and messaging
Premium SMS, Televoting, Quizzes, Chat, Mobile TV
m-wallet, micro banking transactions, money transfer,

Mobile commerce and advertising
mobile advertising and marketing
NG IN services (VPN, Virtual PBX), IP Centrex,

Voice (VoIP) and Multimedia
Multimedia Conferencing, Residential VoIP
TV and Video content, voice and data over IP,

IPTV, VoD and Triple Play
IPTV caller ID, MeOnTV
Third Party on-boarding, Policy and SLA management,

Third Party access management
Parlay X GW, Web2.0 interfaces,
Convergent Prepaid Service, Real-time charging engines, Mediation,

and Real-time Charging Convergent pre-paid/postpaid charging
Table 2: Classes of SDP services
Traditional service providers are more voice calls, mainly when the user
more comfortable with services that accesses them from a web interface.
complement the voice offering developed Another more pragmatic reason is the
in the traditional “Walled Garden” model. inability of the CSPs involved in the web
Moriana surveys show growth in “Next initiated call to figure out a viable charging
Generation IN” or next generation of model. Yet another reason may be that voice
telephony applications supported by SDPs communication is still based on identifying
specialized in integration with SS7 or IMS the parties through their phone numbers,
networks and tuned to perform to the level a very impersonal, “old” paradigm similar
of “carrier-grade” requirements for voice with identifying information on the web by
services. knowing the IP address of the publishing
site. A lot of Internet business has been
However we can say that SDPs missed developed after people started to access
the mark on influencing voice ARPU and, the Internet through search engines
to this day, there is no SDP service that to guide them to targeted information.
will substantially increase usage of voice Similarly, a specific SDP architecture may
services, which represent CSP’s top line. be able to change the paradigm of placing
“Click to Dial”, “Push to Talk” or “3rd Party
voice calls and open this traditional service

Call Control” services have not seen the to new growth opportunities by injecting
expected success. There is something into the basic call model the power of
missing in these applications that fail to social graphs combined with search and
incite the end-user to use them to place recommendations engines.
28
MORIANA
Section Four: SDP Market Size and Forecast
Commercial Adoption of SDPs
To build a realistic assessment of the SDP various operators around the world make,
market size, this report combined a bottom- including the differences in pricing based
up sizing, based on the data collected from on the class of service and the adoption
suppliers and operators, with a top-down rate among their subscribers.
analysis based on Moriana’s knowledge of
the eco-systems created by SDP projects. Deployments per Geography
This analysis takes into account for the and per operator size
first time to estimates such as the real
SDP investment per subscriber and per SDP aggregated deployments per region
type of SDP service - CAPEX, OPEX and as reported by suppliers:
Total Cost of Ownership (TCO) - that
Deployments per Region Tier 1 Tier 2 Tier 3 Total
North America 25 13 24 62
Europe & ME 71 40 56 167
APAC 48 13 10 71
Americas 9 2 3 14
Africa 3 3
TOTAL 153 68 96 317
Table 3: Estimated total number of SDP deployments per region
It is very probable that the number of operators who have built their in-house
deployments is higher, mostly in Europe. SDPs which are not accounted for in our
We estimate there are a number of mobile supplier reports.
MORIANA 29
Deployments per Class of Service and operator size
Deployments per SDP type Tier 1 Tier 2 Tier 3 Total
Mobile content and messaging 78 45 43 166
Mobile commerce and payment 6 2 8
Voice - NG IN & Telephony 23 11 18 52
VoIP & Multimedia 18 10 26 54
IPTV & Triple Play 17 6 5 28
3rd Party Access 8 4 1 13
Other services 1 2 3
TOTAL 150 79 95 324
Table 4: Estimated total number of deployments per class of SDP Services
Services are the main business driver for and Turkcell’s SDPA are examples of
investing in an SDP hence it is enlightening substantially large projects that started to
to reveal which services are frequently address this area of opportunities. They
deployed by CSPs of various sizes. The revealed not only the complexity of the
sample analyzed by Moriana is relevant to business models behind but also the still
the current situation in the marketplace: heavy technology solutions with many
mobility drives the marketplace for moving but interdependent parts, lack of
numerous services around content and openness and easiness from developers
messaging. The majority of the other perspective (very different from the
service classes develop in the walled garden experience of a Facebook, Yahoo or Google
model exploiting operator’s basic voice platform) and the larger implications they
service and migration to IP networks. have on the many CSP’s organizations that
do not communicate well.
CSPs opening to Third Parties and adopting
new business models around content and Furthermore, the classes of SDP services
services are still an “under development” create significant differences in deal size
area, as per our survey results. While this and in the solution complexity because of
is the way to attract large sets of creative the specific performances required by each
developers in a continuously evolving eco- class and subsequent engineering efforts

system that generates the “long tail” of required to attain those performances. For
services and creates dynamics in service example, mobile content services run at 4-
adoption, spiking revenue to be harvested 500 transactions/s and the platform itself
at the right moment, these business should be dimensioned for over 10 million
models are still under discussion, slowing subscribers with possibly 1000 service
down investments in the SDP solutions instances active at any time. An SDP for next
that could support them. BT’s 21CN, generation of IN and voice applications needs
AT&T’s CARTS and previous Cingular to support up to 3-4000 transactions/s with
Wireless DSDN, Telefonica’s RAS platforms possibly up to 16000 service instances.
30
MORIANA
Figure 1: SDP services by market share and potential growth
Based on the answers received from Services related to network convergence

SDP suppliers and operators using such as triple play, convergent charging or
commercial SDPs, we built an adaptation fix to mobile substitution are in demand,
of the traditional Growth-Share Matrix bring in revenue and will continue to
and Portfolio Analysis for SDP classes grow. Traditional SDP services such as
of services, presented as an aggregated mobile content, messaging and access for
overall SDP market perspective rather than Third Party are still revenue generating
a per specific SDP supplier perspective. without requiring much investment SDP
The matrix analyzes services from a in development. It is interesting to see
revenue perspective (larger the circle, what will happen with the NG IN and IPTV
larger the revenue), market penetration services which seem on the rise but are
(more on the right, more adoption) expensive to deploy. VoIP, Mobile Portal,
and also what services are the growth multimedia conferencing and m-commerce
opportunities but still need investments have not brought in the expected revenue
(“question marks”) versus those who did even though services such as Mobile Portal
not really lived up to the promise and have been adopted almost by every mobile
may be left behind (“dogs”). operator. M-commerce is another unknown
MORIANA 31
as it may grow based on demand for micro- or slightly higher than for mobile
transactions which banks can not handle content and messaging. For now the
but it also requires investment in specific level of usage of mobile commerce and
SDPs. Basic telephony service (call control advertising services is rather limited
based or Third Party call control) have not even in the matured markets. However,
taken off. in the emerging markets the popularity
of mobile commerce and mobile money
Average sizes of SDP deals and transfer will be growing. Also mobile
required investment per subscriber advertising will be used as prime tool
for increasing ARPU from prepaid
In an effort to better understand CSPs’ subscribers who are dominating the
investments for specific classes of services emerging markets. For these reasons
and SDPs, Moriana has analyzed over 30 the overall share of such services in the
different SDP real investment cases and total SDP market will become significant
derived the following estimations in the in the future.
main two SDP categories, namely: • Third Party access management -
• Mobile commerce and advertising the level of investment is lower than
• Voice and Multimedia (incl. VoiP) for mobile content and messaging, with
typical initial investment of 1-2M$ for
The figures in Table 5 include the initial Tier 2/3 service providers. Tier 1 service
investment (CAPEX) as well as the follow providers, such as BT or Sprint have
up investments and maintenance costs of invested substantially in SDPs for Third
the SDP over a period of 5 years. Internal Party access management and service
service provider’s operation costs (OPEX) exposure. However, penetration of such
are not included here. SDPs is still very low and adoption of such
Following is a more detailed characterization solution for voice services is marginal,
of the level of investment needed for even in mature markets. The majority
various classes of SDP services: of MNOs uses native or proprietary
protocols rather than standardized Web
• Mobile commerce and advertising
Services for exposing their SMS, MMS,
– the level of investment is the same
Typical sizes of contracts (M$)

Tier 1 Tier 2 Tier 3
Mobile content and messaging
Small - e.g. pre commercial deals 1-3 1 <1
Medium - typical deals 10+ 5-10 3-7
Large - biggest deals you made 100+ 50+ 20+

Typical sizes of contracts (M$)
Tier 1 Tier 2 Tier 3
NG IN, VoIP, and Multimedia
Small - e.g. pre commercial deals 0.4-0.8 0.4-0.8 0.4-0.8
Medium - typical deals 0.8-2.5 0.8-2.5 0.8-2.5
Large - biggest deals made 10 5 2.5
Table 5: Deal ranges for various classes of SDP services
32
MORIANA
WAP and charging capabilities. It is rather this situation. First, in the matured
unlikely that they will make significant markets incumbents as well as MNOs
new investments in such infrastructure. are gradually replacing their legacy
Therefore, the overall share of Third (silo) charging systems for different
Party access management SDP in the types of networks, services (voice,
total market will be marginal. data, CATV) and subscribers (prepaid,
• IPTV, VoD and Triple Play - the level postpaid) with next generation
of investment is similar to the SDPs convergent solutions adopting layered
for voice and multimedia with the SDP architectures. Second, rapidly
exception of the set-top box which is growing subscriber base in the
more expensive. Of course, an SDP for emerging markets is prepaid based. It
IPTV and Triple Play is just a fraction is estimated, that in 2012 80% of all
of the investment in the network and mobile subscribers in the world will be
OSS/BSS infrastructure necessary to charged on prepaid or real-time basis.
deliver such service end-to-end. Since This requires real-time charging SDPs
the penetration of IPTV and Triple Play with active mediation and possibility
will still only be in the range of 10-15%6 of creating flexible charging schemas,
in the mature markets in 2012, and service bundles and value added
much lower in the emerging markets, services such as mobile commerce
the overall share of this type of SDPs in and mobile advertising (special offers
the total SDP market will be low in the and stimulations related to the user
next 5 years. actions). The leading vendors of such
solutions, such as Ericsson, NSN,
• Convergent and real-time charging
Alcatel-Lucent, Comverse, Amdocs,
– the level of investment in this
Acision and several others already today
category is similar to the SDPs for voice
have such solutions in their offerings
and multimedia. However, the usage
and will aggressively push them in the
of real-time and convergent charging
coming years.
services will dramatically grow in the
coming years, so will be the share of
such SDPs in the overall SDP market. Down to the real numbers, Moriana estimates
OSS Observer predicts that in 2012, the cost (the CAPEX allocated to the SDP
the total market for real-time charging only) of mobile content and messaging or
solutions will reach nearly $2.8 billion. NG IN and VoIP services as being around
Whereas still a significant percentage $4 per user while for Third Party access or
of the deployed solutions will be still convergent charging around $1 per user.
These services are unequally used hence
IN-based, it is expected that in 2012,

the market share active mediation and CSP’s ROI per service is affected. For
convergent charging will be higher example charging services may be used by
than legacy IN pre-paid platforms. up to 80% of the subscribers while mobile
There are a number of reasons for content only by 15%.
6 A recent IPTV Global Forecast Report from MRG shows IPTV subscribers growing from 24.4 million to
92.8 million between 2008 and 2012; and service revenue totaling $37.1 billion by 2012, with CAPEX growing
to $5.5 billion.
MORIANA 33
SDP Market Development with telecom services SDPs. Similar to

2009-2012 existing Service Aggregators, they also
include light network adapters to tap into
Market Evolution exposed telecom network capabilities.
Of the total telecommunications The SaaS service providers can potentially

revenue of $1.5Trillion in 2007, almost become a sort of global Service Aggregators
48% represented mobile revenue, up for SDPs solutions (most probably for
from 40% in 2004, and only 28% was content, messaging and mobile commerce
revenue from PSTN lines, down from solutions). The SaaS model can be
48% in 2004. Out of the total mobile potentially drive the SDP adoption in the
revenue, the revenue from data services emerging markets as the investment
was around 20%, up from 12.8% in decision and the actual rollout of SDP will be
2004 and almost 66% of it came from much simpler than for telcos. The analysis
services based on SMS and premium of this new market for SDPs is the subject
SMS. During 2006 and 2007, the total of future reports and Moriana anticipates
number of mobile subscribers increased that beyond the next 5 years it can outgrow
at CGAR of 21-23% outpaced only by the telecom Service Providers SDP market
the growth of broadband subscribers becoming an important source of licenses
(27-28%). Broadband access revenue revenue for IT and ISV suppliers while
represents today almost 20% of total generating enough revenue for the new
telecom revenue. Service Providers owning such platforms
to offset the high initial investments.
These trends will drive SDP adoption in
new areas, namely new types of services, Factors influencing the growth
new classes of service providers, and new of the SDP market
geographical regions. In parallel to these
“traditional” SDPs, cloud computing and As discussed in Part 2 of this report, the
SaaS services providers will start defining main business drivers for an SDP are:
a new market for Service Delivery • Increased customer expectations and
Platforms product and solutions. Initially appetite for services
perceived as a market less interesting for • Pressure on margins and prices for basic
suppliers of integration services because voice and data services
of its strong COTS IT foundation, the
• Increased competition among various
realities of implementing and operating
categories Service Providers
a Service Provider business model
may change the nature of the demand. • Need to fulfill the promise of the network
According to Gartner the global SaaS focused strategies
market is expected to grow to $19.3
billion by 2011, from the $6.3 billion in The market growth statistics and the
2006. IDC predicts SaaS will be worth market trends analysis presented above
$10.7 billion by 2009. While the classes indicate that demand for Service Delivery
of services offered by these platforms Platforms will be continuously growing
are much more enterprise related, the rather than plateau-ing. The three major
technology components are very similar influencing factors are:
34
MORIANA
• Application of SDP for new classes However, the current global economic
of services. Service providers require downturn can postpone SDP projects and
more openness, extendibility and especially affect further developments in
flexibility from service platforms and the Service Aggregator, SaaS and PaaS
are more sensitive to vendor lock- market where substantial cash infusion
in than before. Therefore, beside is needed to sustain such businesses
traditional areas such as mobile before they become profitable. This is a
content, messaging and voice, SDPs will significant factor that must be taken under
be also gradually applied for VoIP, IMS consideration when forecasting the SDP
rich communication applications, IPTV, market in the coming years.
VoD, Tripple-paly, mobile commerce,
mobile banking, mobile advertising and
marketing, as well as convergent and 2009-2012 SDP Market Forecast
real-time charging.
• Growing penetration of mobile and The Service Delivery Platform (SDP)
wireline broadband access in mature market has enjoyed substantial growth,
markets will enable proliferation of starting from $0.1 billion in 2002
bandwidth-intensive video services such and reaching over $1 billion in 2008.
as mobile TV, IPTV and VoD as well as According to the Moriana research SDP
their bundlings, such as triple and quad market will exceed $3 billion in 2012.
play. The penetration of broadband However, the current global economic
mobile access in some emerging downturn can postpone SDP projects
markets will also be growing rapidly. For and affect the adoption of SDP in the
instance, HSPDA penetration in many emerging as well as mature markets. This
African countries such as Rwanda, is a significant factor that must be taken
Mauritius and Reunion, Tanzania, is under consideration while forecasting the
already beyond South-Africa. SDP market in the coming years.
• The mobile saturation in the
SDP market forecast for different
emerging markets will reach the level
classes of services
where mobile operators will no longer
enjoy the rapid revenue growth from
Figure 2 shows the Moriana SDP market
expanding subscriber base and will have
forecast for 2009-2012 including different
to find new sources of revenue and
service classes.
new ways of increasing ARPU through
service bundling, advertising and offering
advanced services on real-time charging.
MORIANA 35
4 000
IPT V & T rip le Pla y
3 500
3 000 C o n ve rg e n t & R e a l-
T im e C h a rg in g
2 500
Vo ice - NG IN & Vo IP
2 000
1 500 3 rd Pa rty Acce ss
Management
1 000 M o b ile C o m m e rce &
500 Ad ve rtisin g
M o b ile C o n te n t &
0 M e ssa g in g
2008 2009 2010 2011 2012
Figure 2: Cumulative view of SDP investments across different service types ($Million)
The estimate for each class of services real-time charging market. Such solutions
represents only the SDP part of the overall will be more and more needed as the
investments necessary to deliver these business models in which SDP services
services. In the case of advanced services are monetized will further diversify and
such as rich-voice communications, the percentage or prepaid subscribers will
multimedia, or IPTV it is once again visible significantly grow in the coming years (see
that, SDP accounts only for a fraction of next section).
the total network and IT infrastructure
investment, including for instance There will be also substantial growth in
deployment of IMS. the traditional ‘mobile’ SDPs supporting
mobile content and messaging services
The most significant growth will be as well as new types of mobile SDPs
observed in the area of SDPs supporting supporting payment, banking, commerce,
convergent and real-time charging. advertising and marketing. The growth in
Moriana predicts that by 2012 the market this market segment will mostly come
for SDP-based convergent and real-time form the emerging markets. This SDP
charging solutions should reach nearly market segment should exceed $1.2
$1 billion, i.e. one-third of the $2.8 billon billion in 2012.
SDP Service Type 2008 2009 2010 2011 2012

Mobile Content & Messaging 212 269 342 445 580
Mobile Commerce & Advertising 169 241 364 529 651
3rd Party Access Management 33 47 72 104 131
Voice - NG IN & VoIP 236 330 427 533 693
Convergent & Real-Time Charging 231 297 436 675 980
IPTV & Triple Play 74 97 147 225 311
TOTAL 956 1 280 1 789 2 511 3 346
Table 6: SDP investments per service type ($Millions)
36
MORIANA
Voice and rich-communications is another SDP market growth

interesting SDP market segment. It should in geographical regions
reach $0.7 billion in 2012. The replacement
of legacy IN systems with NG IN (mainly Figure 3 shows the forecast for SDP market
JAIN SLEE) platforms as well as adoption in different geographical regions.
of VoIP and IMS will be the main drivers of
this growth. This growth will be primarily The main contribution to the SDP market
observed in mature markets. In emerging growth between 2009 and 2012 will come
markets this segment will be still dominated from emerging markets. These markets
by the traditional IN platforms. experience today dramatic growth of the
mobile subscriptions. Even if this growth
As mentioned above, investments in IPTV is slowed down by the current crisis it will
and other broadband services seem low remain significant. It is estimated that the
because the SDP part of realizing such global number of mobile subscribers will
services is smaller compared to the overall exceed 5 billion in 2011/2012 from 3.3
systems involved in the end-to-end IPTV billion at the beginning of 2008, and over
and VoIP services. This SDP segment 90% of these 2 billion new subscribers will
should reach $0.3 billion in 2012. come from the emerging markets.
There are also relatively low figures for Third Mobile content, mobile commerce (including
Party access because such solutions are money transfer), mobile advertising and
only a ‘thin’ layer in the SDP architecture. real-time charging will be main classes of
Nevertheless, the return from enabling SDP applications in the emerging markets.
hundreds of Third Parties, with appropriate Operators will also look for cost efficient
support for security, policy management, SDP alternatives to IN-based solutions
accountability, etc. can be pretty high. for voice services including both Next
Hence a Service Provider investing in such Gen IN and VoIP platforms. There will be
SDPs will attain a good ROI. substantial growth from data services over
4 000
3 500
3 000 Africa
2 500
L ATAM
2 000
AP AC
1 500
1 000 E ME
500 NA
0
2008 2009 2010 2011 2012
Figure 3: Cumulative view of investments per region ($Millions)
MORIANA 37
mobile networks because in many places Africa and Latin America are other
in Asia, Africa or Latin America wireless is, geographical areas where the SDP market
and for many years to come will be, the is poised to grow. For example, once the
only access to Internet. basic mobile voice service gets deployed,
there will be demand for personalized
More than 90% of new mobile subscribers content services (prayer time alerts,
in these markets will be prepaid. This horoscope, etc.) and content download.
situation opens a great potential for the Real-time charging, advertising, content
modern SDPs solutions supporting real- downloads and mobile wallet-type services
time charging and value added services. will have also significant impact on the SDP
Mobile advertising and some specific market growth in these regions.
services such as mobile money-transfer
will have also significant impact on the In the mature markets including Europe,
SDP market growth in these regions. North America and developed APAC
countries, the growing penetration of
According to the Moriana forecast, APAC will broadband access and services over IP such
be the single biggest contributor accounting as IPTV, VoIP and rich-communications
to nearly 50% of all SDP investments in as well as ongoing network and service
2012. Except for mature APAC markets convergence will be the main drivers for
such as Japan, Korea, Singapore, Australia SDP deployments in the coming years.
or New Zeeland, the APAC region is still in
an early stage of SDP adoption. Judging by In mature markets, SDPs for mobile content
the success of mobile content and games and messaging services have been already
in these matured APAC markets, the same deployed by the most of mobile operators.
pattern should be repeated in other rapidly Therefore, in this segment we will observe
growing markets including China, India, steady but not increasing demand.
Indonesia, Pakistan, and others.
Region 2008 2009 2010 2011 2012
NA 99 150 213 255 265
EME 358 480 605 697 715
APAC 351 463 716 1 166 1 807
LATAM 90 113 158 238 327

Africa 58 73 98 154 233
TOTAL 956 1 280 1 789 2 511 3 346
Table 7: SDP investments per region ($Millions)
38
MORIANA
However, many CSPs in mature markets However, the SDP part will be just a
will be replacing their aging Intelligent small fraction of the overall investment in
Network (IN) infrastructure. This will drive the service delivery infrastructure, so in
the adoption of SDPs for rich voice services: absolute figures this segment will not have
Next Generation IN (NG IN), VoIP and IMS a significant impact on the overall size of
(or pre-IMS) services. These services will the SDP market.
be offered by CSPs to cable operators,
ISPs and other Service Providers in the Likewise, Third Party access SDP solutions,
wholesale model. including automatic on-boarding, will also
grow in the mature markets, but in absolute
IPTV and Triple Play will be another area figures will be the smallest segment of the
of the growth in the matured markets. SDP market.
MORIANA 39
Section Five: Competition in the SDP Market

The SDP market is a relevant market its SDP play and of Elata by Qualcomm to
because it consists of a set of clearly complete its deliveryOne™ suite created
identifiable products and services which strong offerings for feature-rich mobile
are substitutable in the eye of the customer content SDPs. The merger between
in terms of price, intended use and Aepona and Appium to create the Universal
characteristics. The scope of this market Service Platform, the acquisition of BEA
is also well defined. We gave examples by Oracle and substitution of products to
of primary and secondary SDP market create the new Oracle Communications
products, solutions and services in Section Service Delivery Platform, set the stage
Three of this report. for the SDP 2.0 wave of offerings, able
to address network convergence and
SDPs is a competitive market with more migration to IP based NGNs, transport
than 100 suppliers7, a number appreciated independent service creation and
as being still too high for the size of the execution and the blending between
relevant market. This creates high internal telecom and Web 2.0 capabilities. The
market competition between suppliers of Service Delivery Frameworks from Nokia
similar solutions and services. Siemens Networks or Wipro Technologies,
topped with the experience in business
However, because SDP market is consulting and network integration, the
predominantly a buyer market, an new IPTV offerings from Alcatel-Lucent
important level of competition comes also and Ericsson, the Convergent Services
from outside the relevant SDP market. In Platforms for voice from jNetX, AppTrigger
some service areas, such as carrier-grade and OpenCloud and the SDP 2.0 solution
voice (IN) and real-time charging (Prepaid), offering from HP are all part of this
legacy solutions still dominate the market. maturing market.
Therefore, when a CSP investment is
driven by a specific class of service, the As mention before, SDPs develop a secondary
biggest competition to the SDP solutions market of products, solutions and services,
comes not from alternative SDP offerings, many of them addressing the integration of
but rather from legacy, “market-proven”, SDP services into business and operation
“stove-pipe” solutions. processes specific to each CSP or specific
to the business model chosen around those
Another aspect that speaks to the services. Components such as self-service
relevance and the maturity of the market and service customization, policy, identity,
is the high level of M&As that happened charging or quality management and Third
around 2006-2007. The acquisition of Party B2B relationships management
Drutt by Ericsson to create Ericsson’s SDP, components are needed in each SDP project.
of Leapstone by Motorola to strengthen As standardization in this area matures
7 This number does not include numerous 3-rd party content and application providers, local services aggregators,
local system integrators as well as emerging SaaS providers.
40
MORIANA
and more CSPs transform their OSS/BSS Significance of SDP market

environments to become a service oriented for the undertakers
enterprise, a broader market definition for
SDP products may emerge. For some leading NEPs, large Enterprise IT
suppliers, and big SIs, the SDP business
While service innovation and adaptation may be perceived as a niche market in
to customer expectations and preferences the context of their overall revenue from
is the strategic direction through which the telecom sector. However, ISVs such
operators can draw further revenue from as Aepona, Artilium, jNetX, OpenCloud,
their network assets, the SDP and the Telenity or AppTrigger draw nearly all
management of the complete service their revenue from the SDP market, based
lifecycle are the means through which on their capabilities and differentiators.
they stay in control of how resources and Moreover, due to strategic importance of
partners are used to deliver value to the SDP investments for many MNOs and SPs,
end customer. Known vendors in the OSS the above large suppliers do consider SDP
sector such as Telcordia, Amdocs and market as key to their business, because
NetCracker (recently acquired by NEC) or it is “added value” driving the sales of
specialized vendors such as Unipier (policy their core offerings. This is also becoming
management) or CA Wily (applications apparent for “new” NEP players such as
performance management) are currently Huawei, ZTE, or Samsung.
exploiting such opportunities. We may
also see more acquisitions such as Oracle A significant sample of suppliers from
made in the areas of service fulfilment all categories has given the following
and management or customer experience answers that confirm the SDP market as
management. a mainstream marketplace rather than a
niche market:
What is the contribution of the SDP business How strategic is the SDP business
for your company's total revenue? for your company?
some contribution key to our business
major contribution very important
nearly all revenue

slightly important
very little not that important
0% 10% 20% 30% 40% 50% 0% 10% 20% 30% 40% 50% 60%
Figure 4: The SDP business is very Figure 5: Supplier revenue from SDP
important for all categories suppliers business as part of overall revenue
MORIANA 41
SDP Market Maturity real time performance management,

context awareness or event collection from
The level of maturity of the SDP market service execution environments are not well
differs in geographical regions and by classes understood at this stage. This, however,
of services. Nevertheless, the recent market creates an opportunity for specialized
consolidation in the SDP space is a strong SDP components suppliers to grow in
sign of global SDP market transformation the coming years as the market reaches
to the next level of maturity. maturity in the global perspective.
In some geographic areas such as Europe, Most suppliers indicate that their SDP sales
North America, Japan, Korea, or Australia cycle takes between 12 and 18 months
and for some classes of services such as even though deployment and launch of
mobile content and messaging, SDP market their offerings only takes between 3 and
is definitely matured. For other markets 6 months. When asked about the reasons
and service types the SDP market is either for a long sales cycle (multiple choice
in its infancy or in early maturity phase. answers), top two reasons indicated by
From SDP components perspective, value a majority were related to the buyer’s
propositions such as policy management, decision and procurement process.
How do you assess the level of maturity of the SDP market?
Obsolete, resale market only
Mature, several dominant vendors

Early maturity, 3rd generation, OOB,
methodologies
Adolescent, 2nd generation, less
customization
Emerging, first generation, high price,
high customization
0% 5% 10% 15% 20% 25% 30% 35% 40%
Figure 6: The SDP market is in a “pre-maturity” stage
42
MORIANA
What are the challenges in selling your SDP offering?
The operator organization – decision process
Lengthy tender and procurem ent process
Finding a solid business case for the SDP
Alternative solutions – e.g. service stove-pipes
Motivating CAPEX vs. potential OPEX savings
Pressure from com petition
Lack of ready-to-deploy applications for your SDP
Lack of application developers w ith SDP know ledge
0% 10% 20% 30% 40% 50% 60% 70%
Figure 7: SDP investment decision and procurement processes are slow
Buyers’ investment in the SDP is viewed majority of their revenue coming from voice
as strategic although there is a perception services and do not feel yet the pressure
among suppliers that buyers do not to diversify their offerings. Even when
fully understand how to leverage these there is a broadband long term strategy,
investments. This is another indication the way it is executed is not automatically
about this market being in a “pre maturity” conducive to new services monetization
or “adolescence” stage. The root cause and the role of the SDP in fulfilling this gap
of this situation is that CSPs still see the is largely ignored.
How would you characterize buyers in the SDP market?
Buyers’ investm ents in SDPs are strategic
Buyers do not know how to leverage their SDP investm ents
SDP tenders are large and infrequent

Only operators are buyers for SDP solutions
Buyers m ake inform ed choices of suppliers
Buyers have a strong negotiating position

Buyers m ake m ore profit/m argin on SDP services than other
services
Most buyers can build their SDPs from COTS products
Buyer can easily replace one SDP w ith another
0% 10% 20% 30% 40% 50% 60%
Figure 8: SDPs are strategic investments for the buyers
MORIANA 43
What in your view is the future of the SDP concept?
The SDP w ill not live up to dem ands, the concept w ill fail
SDP w ill be adopted m ainly for em erging services, IPTV, LBS,

m Com m erce
Traditional voice services w ill be delivered on stove-pipes
SDP w ill be only used only for a few types of services, m ainly
m obile
SDP w ill be used only by a lim ited num ber of operators
Majority of operators w ill eventually adopt SDP but it w ill be a very

long process
0% 10% 20% 30% 40% 50% 60% 70% 80%
Figure 9: SDPs will be adopted by the majority of operators
Another finding from the recent vendor Intensity of competition

survey confirmed that many suppliers are
concentrating only on network operators The SDP market is a buyers market
market for SDPs and do not address the because buyers have choices and intensify
parallel SDP market identified by Moriana. competition among suppliers by purchasing
This may be motivated by the strong belief through competitive tenders. This situation
of the majority of suppliers that operators has the advantage of fairness in vendor
will finally adopt SDPs as part of their selection but is a process through which
strategies for growth. buyers exercise their power on prices,
too. However, in the current economic
The survey conducted by Moriana in 2008 downturn, putting too much pressure on
among Service Providers also showed that suppliers may result in starvation of the
50% of those responders believe that the supplier chain (e.g.: fewer and fewer NEPs
concept of SDP will be eventually adopted and ISVs), a phenomenon CSPs must take
by most Network Operators and other into account for the sake of their own
Service Providers, but this will be a long- evolution.
term process. Only 15% respondents in
that survey think that SDPs will be used The SDP (suppliers) market is fragmented,
by a small number of operators and will with no one dominant player, making
be used to deliver a limited number of difficult to assess if there are undertakers
services (mainly mobile). with real power in this market. Even
after the intense period of merger and
acquisitions, including those happening
among Network Equipment Providers, there
is still healthy and intense competition in
the SDP market as shown by the number
of SDP deployments claimed by various
categories of suppliers.
44
MORIANA
SDP Suppliers market share

by number of deployments
2% 14%
SIs
ISV s
45% ITs
31% NEPs
A SP
8%
Figure 10: Suppliers market share in terms of deployments
When asked about the impact of recent choose their suppliers through large
consolidations, most suppliers indicate and infrequent tenders, which gives all
that means the need to innovate more suppliers enough time and opportunity
and at the same time it decreases buyer’s to bid with their offerings, are clear
power. The need for more innovation indicators of intense competition in the
combined with the fact that buyers market.
What is the impact of recent consolidations among

SDP suppliers?
Increased pressure to innovate
Decreased buyer pow er in the m arket
Higher barrier to enter in the SDP m arket
Less com petition – easier to sell
0% 5% 10% 15% 20% 25% 30% 35% 40% 45% 50%
Figure 11: Consolidation is perceived differently among SDP suppliers
MORIANA 45
In such a market, when a supplier maintains suppliers” rather than traditional stove-
high market share it is an indication pipe solution providers, IN vendors or NGN
of continuous innovation, even though (VoIP/IMS) system vendors, demarcating
in many cases innovation came from once again the SDP market as a relevant
acquisition. That is the case of the leading new market where the position and market
NEPs and recently Oracle’s dominance share of a supplier is not the same as in
among IT providers in this market. other markets where that supplier happens
to compete (e.g. Ericsson competes with
The majority of SDP deployments are Cisco in Network Equipment and with
build-outs of combinations of offerings Oracle in SDP).
from various suppliers and this indicates
presence of product differentiations. This
situation allows undertakers with relatively Suppliers means to compete
low market shares to have a certain degree
of market power because other offerings Offering differentiation clearly exists in this
in the market are not close substitutes. market also because suppliers compete
through technology leadership, quality,
Within a population of over 100 suppliers services and specialization.
for this market (excluding Applications
providers) 67% responders see only 2- Beside differentiation in offerings, suppliers
5 direct competitors in each SDP tender, realize that partnering with other suppliers,
indicating differentiation. When asked having a strong local presence and long
about their competitors in the market, 80% term business relationships with buyers,
of the responders indicated “other SDP strengthen their value proposition.
What are your strategies to win business in the SDP market?

Technological leadership
Quality
Services offering
Specialization
Low developm ent cost
Com pleteness of solution

Brand identification
Vertical integration
Channel selection
Cost position
0% 10% 20% 30% 40% 50% 60% 70% 80%
Figure 12: Innovation and quality execution win SDP business
46
MORIANA
What is your value proposition for the SDP market?
Excellent professional services and delivery
Highly perform ing SW/HW infrastructure and products
Best of breed specialized SDP com ponents
Strong local presence and partnerships
Global relationships w ith operators
Com prehensive end-to-end SDP offering
Strong com pany com m itm ent to invest in this m arket
Rich portfolio of services and applications
Working business m odel (e.g. big developer com m unity)
Effective distribution and delivery channels
Focus on specific classes of services (e.g. IPTV)
0% 10% 20% 30% 40% 50% 60% 70% 80%
Figure 13: SDP suppliers differentiate in their value proposition
When analyzing the entry barriers to this of operation is needed to make profit, the
market (which would limit competition if capacity to innovate and the confidence
they were high) the answers to the survey to respond to demand can overcome the
indicate that even through a certain scale entry barrier to this market.
How would you characterize Suppliers in the SDP market?
Some suppliers set predatory prices

Suppliers’ profits from SDP market exceed
investments
Suppliers’ offerings are NOT differentiated

SDP deployments are labour intensive and this
fact limits suppliers’ negotiating leverage
Innovation may overcome barriers to entry in this
market
Suppliers can build lock-ins into their offerings
Some suppliers have privileged access to buyers

Suppliers need a certain scale of operation
(capacity, channels, geography) to make profits
Suppliers have to continuously innovate
Suppliers have the capacity to respond to SDP
demands
0% 10% 20% 30% 40% 50% 60%
Figure 14: The SDP market has healthy competition characteristics
MORIANA 47
SWOT analysis for SDP suppliers Network Equipment Providers
The majority in each category of suppliers NEPs have a long tradition of doing
aligns behind the idea that technology business with telecom service providers.
leadership and continuous innovation They have the first chance to know about
make their SDP business to strive. There good windows of opportunities for new
is a lot of focus on performance, scalability investments (e.g. technology “end-of-life”)
and reliability. SDPs are increasingly because of their heavy role as suppliers
involved in key revenue generating for network equipment or end-user
services and must therefore truly be devices. NEPs are also better positioned to
“carrier grade” as any other core systems understand the business scenario around
in CSPs environments. The pressure to an SDP solution as it usually grows from new
innovate is always there, if an SDP vendor network developments (broadband access,
does not continuously move forward it will addition of core IMS or new messaging or
eventually be discarded. positioning services). For example Ericsson
can become leader in convergent charging
Following is an inventory of SDP because they bundle this offering with
deployments from the suppliers surveyed their core network offering. Such position
for this report. SDP deployments are offers NEPs the opportunity to deliver
build-ups and several suppliers may on the whole range of their capabilities:
refer to the same deployment in their equipment, products, solutions, system
response. Consequently the total number integration and management services (e.g.
shown below is different from the total managed SDP is a new business service
deployments taken into account when from Nokia Siemens) achieving usually a
calculating the SDP market size. 50% to 50% split between product and
services from the total deal.
NEPs have global reach and play with end-

Total SIs ISVs ITs NEPs ASP to-end SDP solutions. While their solutions
648 92 199 52 295 10 are really diversified, spawning from mobile
content delivery to IMS services and IPTV
Table 8: Number of SDP deals per type
platforms, they became more sensitive
of surveyed suppliers
to the limited budgets allocated to SDP
projects and adjust their selling strategy
to this situation. For example, both Nokia
Suppliers also agree that operators will Siemens Networks and Alcatel-Lucent
adopt SDPs because they represent a take a framework based, project lifecycle
strategic investment, even though it will approach with the customer, explaining the
be a along process. There are positive value proposition as a business consulting
signs for a growing market. In quest to engagement and starting the project with
win more business, there are differences small, ready to prove value solutions that
in opportunities for each category of can be expanded for future needs.
suppliers as well as specific ways they
can play their strengths and respond to Some of NEPs such as Huawei and ZTE
threats, some of them outlined in the have a geography focused strategy, they
following analysis. started to grow in emergent markets (e.g.
48
MORIANA
ZTE claims to own 50% of the SDP business to build complex solutions and to switch
in two major Chinese telecoms) and now and swap components based on each
expand in other markets (ZTE in Latin particular engagement. Their strength is
America, Huawei in Europe) putting pressure the broadness of skills they can put in the
on prices for their competitors. Creating game: from business consulting to project
packaged SDPs and reaching the emergent management, to custom development and
markets is an immediate opportunity that deployment backed by quality certified
follows major infrastructure investments in methodologies such as ISO 9000 and
these markets. CMM. Some SIs are better positioned for
complex SDP projects because of their
It is hard to assess the NEP’s sales cycle deep expertise in network integrations
specifically for an SDP deal because it which gives them advantage in large
usually is included in a larger network projects (e.g. Wipro). Smaller ones are
infrastructure development. The sometimes subcontracted for specific
deployment of the SDP itself takes usually integration aspects (e.g. Atos-Origin and
between 3-6 months while a release Kapsch with expertise in Next-Gen IN and
cycle takes around 1 year. The number IMS services integration or TietoEnator
of deployments per year is significantly with expertise in various mobile network
higher (10+) with deals in ranges from equipment VAS interfaces integration).
$500k to 20M for the SDP only. Accenture claims the leadership in the
SDP market with over 40 deployments
The SDP market in general is a good and demonstrated agility in choosing
opportunity for NEPs when pressure on the technology and product partners to
equipment prices drives down their core create reference implementations for their
business revenue. Nevertheless, in the area customers while adding new capabilities
of SDP architecture and specifically in the such as IMS or IPTV to the core design of
area of new services lifecycle management their communications solution.
NEPs will see a threat from IT providers:
while operators acknowledge NEP’s ability SIs close between 2 and 4 SDP deals per
to understand their environments and year, averaging between $1-10M per deal.
execute on complex integrations, they The length of their sales cycle can be as
also feel the need for more creative and long as 1 year and they may evolve their
open solutions which would come from the main solution blueprints once every two
IT suppliers. years following market demands (e.g.
introducing IMS or IPTV in the solution
System Integrators architecture).
Systems Integrators bring to this The opportunity for SIs comes from their
market thought leadership and complex ability to articulate well thought solutions by
architectural blueprints that they customize combining architect skills and flexibility in
based on their customers demands. Their choosing components and vendors. Mainly
customers are mainly Tier1 operators the architecture makes a big difference;
with whom they have longer term Wipro for example uses a rationalized
relationships based on other network approach where many components
operations or Enterprise IT projects. SIs from the secondary SDP market (device
partner with NEPs, ISVs and IT providers management servers, charging platforms,
MORIANA 49
messaging and location platforms, IMS in the end2end SDP solution. Although
servers, etc) are considered enablers that Oracle has a global base of telecom
are exposed through a thin integration customers and a good ecosystems of
layer in their framework for an SDP. This partners and developers it still needs a
approach facilitates phased testing and strong professional services and business
rolling to production as well as simplifies consulting addition to win large SDP
platform management and governance. tenders. The “SDP on a CD” message can
attract Tier 2/3 operators looking for fast
IT suppliers launch of an SDP with simple classes of
services but when it comes to IPTV or Next
All big 4 Enterprise IT providers (Oracle, Generation of IN services, Oracle may
IBM, HP and Sun) play in the SDP market need to concede to other players such as
with comprehensives offerings, although big NEPs.
the balance between product, solution and
service is different in each case. IBM’s play at product level is different as
IBM does not have a line of products that
Microsoft is in a slightly different situation can be assembled in a comprehensive SDP
here. Until recently Microsoft has been solution, rather relaying on its generic
promoting its Connected Services enterprise IT components. Nevertheless,
Framework that has been adopted by 30 IBM is committed to addressing CSPs
Service Providers. At the end of 2008, needs with next-generation network
Microsoft announced end-of-life of its own solutions and products (e.g.: VoIP, Voice
SDP offering. This can be motivated by and Video Conferencing, Fixed-Wireless
the inability of scaling this business area Convergence) comprised of IBM and partner
to the Microsoft standards and difficulties products and topped with IBM’s global
with integrating CSF with network services particularly active in the area of
elements. However, Microsoft is aiming at Next Generation OSS. This gives IBM the
approaching the SDP market using other advantage of a system integrator and the
business models such as SaaS and PaaS ability to secure long term management
with its new Azure Platform. contracts around SDP deployments.
Oracle’s new SDP combines the key HP’s play is more complex, their Service
elements of the former BEA WebLogic Delivery Framework (HP Service Delivery
Communications Platform with Oracle Platform 2.0) contains many types of service
Fusion Middleware and is comprised of five enablers including rich communications
main components: Oracle Communications capabilities on the OpenCall Media
Services Gatekeeper; Oracle Platform. Although not as comprehensive

Communications Converged Application product offering as Oracle’s, HP’s
Server; Oracle Communications Presence; differentiator is its Service Governance
Oracle Communications Virtual PBX Framework, a secure, central interaction
and Oracle Communications Residential point for content and application providers
Telephony. Combined with the Oracle to access telecommunication and network
business suite of applications including services and its methodologies for testing
CRM, Billing and Revenue Management, and certification of new SDP projects. With
Fulfilment and management tools, this the OpenCall line of products, HP has the
offering gives Oracle clear leadership best network and signalling competences
50
MORIANA
among the IT suppliers, which definitely is a SIs and NEPs solutions and applying their
great advantage. HP also plays with strong deep understanding of enterprise and
professional services and experience in the web IT architectures for SDPs supporting
OSS/BSS integration. mCommence, mBanking and Web2.0
applications. They can also leverage their
Sun’s Open Service Delivery Framework strong relationship with the telecom IT
(OpenSDF) facilitates the creation, organizations.
provisioning, execution and management
of multiple types of services across Independent Software Vendors
different types of networks. Open SDF
provides the key software foundation for a ISVs come with a variety of specialized
service provider’s Service Delivery Platform solutions trying hard to differentiate among
(SDP): the core creation and execution themselves and from the other categories
environment, combining delivery and of suppliers through the business case
service functions with connectivity to the they make for the SDP adoption. In this
rest of a service provider’s infrastructure category we find the largest variety of
including comprehensive SOA solution. value propositions: Aepona’s providing
Recently Sun has launched SIP Application the crucial bridge between the Internet/
Server that is a result of cooperation with Web 2.0, and Telecoms and embedding
Ericsson. The SIP AS is offered as freeware, business processes related to service
which may boost its usage. Sun’s strategy delivery; Telenity’s Canvas SDP with
in the SDP market is strongly driven by its readiness for IP converged services
specific customers’ demands. solutions; Artilium’s Arta Mobile Services
Platform opens mobile networks for the
The typical size of a deal for IT suppliers is coming wave of third-party development
in the range of $1-5M, excluding services. including advertising, social networking,
The number of deals closed per year is search and pre-enables access for MVNOs
between 5 and 8 with a sales cycle that while JNetX and OpenCloud offer carrier-
lasts between 6 and 9 months and a grade service execution environment
deployment cycle of 3-6 months, short for realizing a Next Generation Service
due to a products based solution. Delivery Platform (NG-SDP).
Big IT companies have the financial power ‘In a nutshell, the SDP role for the future
to support strategies for SDP offerings even development for NG IN is to enable delivery
though the revenue from this business line of rich communication services. Voice
is very small compared with their overall and messaging services remain under-
revenue from the telecom sector. They exploited and shall continue to represent
have also the opportunity to transform the majority of the operators’ revenues
their competitors in distribution channels: over the next couples of years. [For
when they loose in an SDP tender they example] Subscribing to a Conferencing
may still win because the competitors service, a HomeZone or a Parental Control
embed one or more of their products in will soon simply consists in selecting its
the winning solution. icon on the app store and to click “Next” >
“I Agree > Next” ... until it is installed and
The core opportunity for IT suppliers is in ready to use’ says Michel Arrede, Director
providing generic components for ISVs, of Marketing at JNetX.
MORIANA 51
Interesting ISVs are Telcordia, Comverse ISVs have very good solutions but, with
and Amdocs who are examples of matured a few exceptions such as Telcordia or
and large ISV enterprises and have their Amdocs, the majority of them does not
well defined spectrum of products and have global reach and can not serve remote
solutions for the telecom sector out of markets. Many times their bigger partners
which they have evolved an SDP market (NEPs, ITs) can become competitors and
specific offering. Telcordia builds upon bite into their niche part of the deal.
their strong presence as provider for the Successful, profitable ISVs are those who
Advanced IN and GSM Service Control have put a tremendous amount of work
Points developing platforms for mobile in demonstrating directly to the customer
payment, pre-paid charging, VPN and their specific value proposition and have
number portability. Comverse offers a continuously sharpened their skills in
number of BSS solutions and value added certain areas (e.g. JNetX in convergent
services including convergent charging, Fixed, Mobile, IMS, circuit switched and IP
personalized content, messaging and based networks).
IP-based communications (through
Netcentrex acquisition). Amdocs comes Applications and Specialized
also from the BSS and OSS side where Components Providers
they provide platforms that embed
many SDP concepts but offers also their This is an even larger category of suppliers
own content service delivery platforms than ISVs which did not get proper attention
and capitalize on the opportunity of in the SDP market, mainly because of the
integrating SDP services into product estimated small share they have in the
catalogues, convergent charging and market. Moriana starts to research into
billing and CRM. this market because this “long tail” of
suppliers may in fact capture a larger part
Another interesting group of ISVs of the shares than initially thought.
focusing on the SIP/IMS service market
are Broadsoft and Sylantro. They offer For the application providers, the very
service platforms with a number of key IP- precise value proposition of the application
based communication services, such as IP they deploy measured by the revenue
Centrex, Mobile PBX, residential VoIP, and they can draw for the operator, is key to
others. Other ISVs, such as AppTrigger survive.
offer solutions enabling provisioning
of advanced voice services across SIP/ “Small specialized SDP developers,
IMS and SS7 networks on a single SDP such as Almira Labs, represent a major
platform. breakthrough in the market. With our

positioning, we can create services on
ISVs products roadmaps is much longer, the telco domain based on a mix of IT
24 to 36 months, as they need to drive principles and technologies. Nobody else
profitability by replicating the same can have such an expertise in both worlds
highly valued solution many time between and be so fast and innovative. With such
investing in changes. They may close 3-4 premises, size does not matter, but capacity
SDP deals per year with a sales cycle also of innovations and service execution […]
around 12 months. Service providers must foster communities
52
MORIANA
around open platforms, tumbling down Service Aggregators

the actual walls for small providers’ and SaaS/PaaS Providers
collaboration” says Miguel Monforte Nicolas
Chief Marketing Officer, Almiralabs. Service Aggregators are well positioned today
in the services market. Unlike the Internet
There have been and still are many and Web 2.0 players such as Amazon, Skype
specialized Applications Providers: Erico, and Google, none of the telecom service
Cicero, Rococo, SurfKitchen, etc. They providers has a global reach, some of them
all need to find a way to mass deploy do not even have overall country reach!
their applications, using channels and
increasing visibility of their precise value Aggregators are an important element of
proposition directly to the CSP. Survival SDP value chain as they enable distribution
is difficult for this supplier category in the of services and content to all mobile
SDP market mainly because CSPs have not subscribers in a country, which cannot be
found the easy, standard and scalable way achieved by CSPs themselves.
to establish direct B2B relationships with
these providers of value, unfortunately to Many Service Aggregators have built their
both sides’ disadvantage. own aggregation platforms out of open
source technologies (LAMP). As this market
In the same position are suppliers of specific matures, standardization of components
components for SDPs. CA Wily Technology will happen. Without displacing the
for example with their offering for real- Intellectual Property specific to each
time transaction oriented monitoring of any Service Aggregator, the door will open
Java or .Net software components of an to SDP suppliers to show the efficiency
SDP may see real success once operators of their offerings over or related to open
realize the benefits they can draw from source technologies.
such deep insight into transactions that
happen on their platforms. Jamcracker, Microsoft and NEC have
built service aggregation and application
‘The proper functioning of these SDPs is development platforms of their own aiming
now an imperative that can no longer be at operating them in more complex business
treated as an afterthought. A CSP must models such as SaaS and PaaS. For example
ensure the SDP is delivering on its SLA’s using the ability to aggregate and compose
to end users, Third Party content providers services on their platform, they participate
and to the CSP organization itself. The only in retail, syndication or wholesale business
way to ensure the SDP is delivering on its relationships with telecom service providers
promise is to monitor all user transactions and enterprises. Some Service Aggregators
at the application level, in real-time, in may migrate to such models, too.
the production environment. The CSP has
to detect and resolve problems before SaaS and PaaS providers are a “wildcard”
users are affected’ says Richard Schmaltz, in expanding the SDP supplier market.
VP Telecom Business Unit at CA Wily Major concerns are the early stage of their
Technology. offerings which already required large
investments to be started and also their
inexperience in the business of being a
Service Provider.
MORIANA 53
All these examples, together with the Third that platforms are revolving from the CSP
Party content and application providers who side to the side of other type of Service and
may be using SDPs of their own, represent Applications Providers but the question is
a parallel SDP market to be further explored how lucrative is this parallel market for the
from supplier perspective. It is undeniable current SDP market suppliers?
54
MORIANA
Section Six: Business Models Supported by SDPs
The traditional business model for CSP Trying to replicate the voice service
data services is usually known as a “walled business model with text messaging for
garden”: the operator is defining the example, had its ramping revenue period
geography and structure of the service as then, in a few years, it reached a plateau,
well as taking the responsibility for operating much faster than it happened with voice.
(or inter-operating through agreements This simple example signals that the
with other parties) the infrastructure for lifecycle of profitable services in the era of
providing it to its customers. high-tech, Internet and globalization tends
to happen much faster and is incompatible
Deregulation of the market especially with the long term subscription model of
in the areas of network access and type doing business around voice.
of service offerings, combined with the
growing competition from the Internet and The service delivery chain is a complicated
Web 2.0 players forced operators to open integration of islands of systems: access
their service delivery chains by adopting and core network elements, operations
more flexible business models involving and business support system, platforms
Third Party providers. and services (communication and content
applications), gateways to partner
Currently, many CSPs are challenged to domains, etc. This complex technology
understand which offerings and which eco-system as well as the value network
business models better fit their revenue created around it (partners, suppliers,
targets, how to adapt to markets that are aggregators, developers, etc) must adapt
culturally and economically different and to changing market requirements. The
in times when content and communication structures that we identify today inside
services can be easily and even freely these technology eco-systems are not
procured from different other providers. prone to such flexibility.
Many operators fear that their role will
be in the future reduced to “bit pipes”. A platform, in the larger acceptance of
Therefore adopting open business the term - a set of reusable components
models allows them to fill their “pipes” with standard interfaces that can be used
with attractive content and services and in common across many applications - is
effectively compete with other players. an evolvable pattern contrasting with the
These new business models push them tight integration pattern which produces
also to enhance their own infrastructure rigidity and increases costs when changes
to be more “service oriented” and become in business models are required. Major
“smart pipes”. Internet players such as Google, Yahoo,
Microsoft, eBay and Amazon have all
Beside figuring out what business model understood and embraced this approach
works best in certain market circumstances, and this is why they were able to swiftly
transitioning to a new business model and evolve and diversify their business.
being able to switch between business
models are the biggest challenges those It is no surprise then that 40% of the
CSPs who are conscious of this necessary operators surveyed by Moriana expect
business transformation, are facing today. SDPs to help them to transform their
MORIANA 55
business model and drive new revenues a wide range of innovative applications
from Third Party applications and services combining Telecom and Web 2.0 services.
by providing standardized access to
network capabilities. The SDP can allow The following table is a first review of various
developers to quickly and easily create business models supported by SDPs.
Strategies
Customer SDP role and
for increasing Business models Type of services
Segment components
profitability
Service Creation
environment,
Service
Walled garden NG-IN, Telephony
Execution,
network protocols
adapters
Browsing/i-mode,
Web servers, AAA
Open garden over the top
servers
applications
Increase ARPU Third Party access Mobile content,

Retailer of Third
- add value on gateway, SLA m-commerce,
Party services
the top; decrease management m-banking
churn Rules driven
charging and
revenue sharing,
service enablers, IPTV, Triple/
Mass service execution, quadruple play,
2/3-ways
Consumer content support for
Platforms
management, injecting targeted
device advertising
management,
profile
management
Unified user
repository,
On-demand - automation of Bundled services
Customer driven applications configured on
Decrease OPEX
– optimize services fulfillment, demand
exploitation and multiple charging
operations of models
resources to drive (weak case)
down costs Management
Outsourced and
components, Managed SDPs
managed services
service catalog,
SLA management
56
MORIANA
Network
capability
exposure, policy Bulk SMS,
Wholesale management terminal status
and location
Possible SDP on
the SMB side
VoIP and
Multimedia
Service conferencing,
Execution, Wireless PBX
Increase
Mobile Office,
customer base On-demand
Service enablers, Fix-Mobile
SMBs through low cost, - Multi-tenancy
Substitution,
high business platforms
SLA management, Storage on
value services
customer profile Demand,
management Billing Services
(Business
services)
Rules driven
charging
and revenue CRM, Office
2-ways Platforms sharing, SLA Applications
management, (SaaS)
customer profile
management
B2B agreements,
SLA management, Mobile Workforce,
customer profile Mobile Office,
2-ways Platforms
Preserve management, Unified
customer base cross domains Communications
Large Enterprises while growing QoS
new lines of (weak case)
business Management Managed SDP,
Outsourced and
components, Mobile device
managed services
service catalog, management
SLA management
Table 9: Business models supported by SDPs

Open Garden Model
The “open garden” model may have been in their web access gateways. The growing
pushed by Internet democracy but it has usage of Internet applications from mobile
been finally adopted once it became obvious terminals, which started with the ‘i-mode’
that it increases revenue from data traffic. browsing model, now includes e-mail,
CSPs had to open access to any Internet searching, instant messaging, content
site by unlocking their default settings on downloads and streaming performed
mobile devices and making other changes from device based clients. Overall these
MORIANA 57
applications drive significant data traffic at revenue sharing model and the ownership
least in some regions of the world. Moreover, and responsibility to operate the one or
the growing usage of bandwidth-intensive more platforms are part of the challenges
Internet applications such as video and faced when migrating to these new
P2P rapidly increased the demand for business models.
broadband access over both wireline
(e.g. DSL) and wireless (e.g. HSDPA). As
CSPs do not usually own the content or Retail and Wholesales Models
the device client application, they need to
build partnerships with Internet players In a retail model, Third Party services and
and content or media providers at least to content sit on hosted SDPs on a Third Party
understand the nature of the data traffic side. The third party sells the service or
they carry over the network and decide content to a CSP as a product. The product
on strategies and regulations moving may be offered as such or aggregated with
forward. other services running on an SDP on the
CSP side to create bundles of combined
Exclusive deals around Internet enabled services that are more attractive to
mobile devices such as iPhone or G1 as certain segments of subscribers (e.g.:
well as broadband access over fixed create a mobile office and mobile voice
and mobile lines generate new revenue communication package for SMBs).
streams but they employ really simple SDP
components. Consequently the CSP role in In a wholesale model, a Service Aggregator
the value chain is reduced and most of the will buy at volume discounts access to
value the subscriber is willing to pay for capabilities exposed by CSP’s SDPs (e.g.
the service goes to the Third Party (e.g. bulk SMS packages). Aggregators may
Apple’s iTune store or a creative device have SDPs blending telecom and Web/
applications developer). Web 2.0 services that they sell directly
or through partners to their subscribers.
The real opportunity of the “open garden” One of these channels can be again a CSP
model stands in platform mediated who will retail the end Service Aggregator
interactions that will capture this value product.
within particular business models. One
example would be retailing Third Party The “long tail” of services can be created
services with additional benefits for through such business models with Third
subscribers, added by the platform (device Party providers. The economic advantage
adaptation, anywhere delivery, quality of the “long tail’ is disputed today. A recent
of transport, etc). Another example can study around digital music downloads
be syndicating services from various carried by a chief economist at MCPS-PRS
sides engaged in transactions across the Alliance showed that the revenue is still in
platform to generate positive network the “head” rather than the “long tail”. The
effects (e.g. attract more subscribers to reality is that the business model analyzed
buy sports events tickets with ads during is just the retail one, where all tracks are
live transmissions) and increase overall aligned for sell on the infinite Internet shelf
revenue while appropriately charging each and there were no capabilities attached
side. Each of these two business models to the platform supporting this service
employs SDPs. The roles of the sides, the to generate any kind of network effects
58
MORIANA
that can move services from the tail to Having the flexibility in the way to charge
the head (e.g. peer recommendations, ad for services and the possibility to monitor
insertions, etc). A CSP owning a platform in real time how revenue flows from
has more capabilities to influence the one side to the other (e.g.: what the
revenue from the long tail. This is where subscriber is willing to pay and how much
the transition to the third generation of is shared with the content provider or
SDP may prove useful. where is the subscriber interest and how
much ad revenue that interest generates)
become extremely important capabilities
Platform Mediated Business Mod- in running platform mediated networks.
els (2-ways or multi-sided Models) Demand for various services can be driven
by unpredictable network effects (social
The SDP is not just a platform for services influences inside subscriber segments
that are part of new product offerings or increased demand for certain mobile
but also the eco-system for developing applications due to economic or natural
value networks. For example attracting conditions) or sometimes the interest
Third Party providers to develop services must be boosted by subsidizing one side.
for the platform and at the same time Detailed studies may even prove that
monitoring the demand from the bundling is a revenue loosing strategy for
subscriber population and play with the specific services and that there are products
economic leverages of various charging that can be unbundled and commercialized
models can increase the overall revenue. differently to different sides of the platform
Note that in this model, the revenue is in a model where the overall revenue is
calculated across all sides- content and higher than from selling the package (e.g.
service provider, ad provider, subscriber the Adobe Acrobat reader and distiller
- not only from the subscribers side. selling model or the unbundling of services
from the ticket cost that several airlines
The key role of the SDP in this category are practicing today).
of business models is to support many
charging models such as: Internet players have already experienced
• Pay per Use (e.g.: ring tones, MP3; the relatively new two-sided business model
wallpapers, videos, games and lottery, both from a technology architecture and
chat) commercial viability perspective. Google’s
Software Infrastructure, Microsoft’s Azure,
• Pay per MB (e.g.: video streaming)
eBay’s auction platform are examples of
• Pay per transaction (e.g.: m-commerce
multi-sided platforms living today through
and m-banking)
the economics of such models where the
• Flat rates (unlimited access to voice and owner must figure the balance between
data services) market size and market share, which side
• Subscription based (e.g. alerts and to charge and which side to subsidize and
information services) what strategies to employ for growth and
• Free service access (e.g. advertising dominance in a certain market segment
sponsored) (e.g.: unified communications for SMBs).
The economics of platform mediated
• Package deals (bundling, triple play,
networks have been studied only for
quad play, etc.)
the past 5-10 years which makes this a
MORIANA 59
young model, still an area of exploration. examples are: Billing and CRM as a service,
At the same time, the architecture and SLA monitoring and SQM as a service
technologies used on these platforms are and even plain computing capacity as a
much closer to SDP principles than to service. CSPs still have to figure out how
traditional Enterprise IT applications suites to do this because their IT organizations
opening the opportunity for SDP market have more Enterprise IT experience than
growth. Web and Internet IT experience. Here is
an area where CSPs must collaborate with
Internet SaaS providers, either by building
Software as a Service Model shared platforms or by a fair exchange of
experience. This is yet another area of
This business model is commonly demand and growth for SDPs. It is also
associated with Service Providers heavily an opportunity for established industry
involved in the Internet business, not organizations which lead business and
network operation business. SaaS operations evolution in Service Providers,
and PaaS offerings relay on platforms such as TeleManagement Forum, to offer
exhibiting many similarities with SDPs, a safe and knowledgeable environment
only drawing their exposed capabilities for this exchange of skills and experiences
from the computing cloud rather than the and contribute to the creation of richer
mobile or broadband network or a mixture. services marketplaces than what we see
SalesForce.com, Amazon’s Web Services today from CSPs on one side and Internet
and Google Apps are such examples. players on the other side.
Coming from a pure IT background
characterized by “do it yourself with cheap
hardware and open source software”, Managed Services for SDPs
these companies want to grow into real
Service Providers so enterprises can rely When the business case for an SDP is
on their services to conduct their business. well understood and the project has
They want to learn from CSPs how to be been successfully deployed, there is an
successful in subscription based business opportunity to reduce operational costs and
model although on their operations side increase efficiency of such investment by
they deal with different aspects than those outsourcing the management and operations
of operating a network: allocating capacity of the platform, completely or just some
on demand, federated identity across aspects of it. Because the SDP market
enterprise and Service Provider domain itself is young, the managed SDP market is
and multi-tenancy. even younger but some suppliers such as
Nokia Siemens Networks or Accenture are

Nevertheless, telecom incumbents have considering such new business lines. These
been sensitive to this model and realized decisions may accelerate the best practices
the possibility to draw revenues out of for integrating SDPs into OSS/BSS and
their IT systems and software assets by ultimately increase the profitability from
exposing such capabilities as SaaS. Possible SDP supported services.
60
MORIANA
Section Seven: Key Findings and Recommendations
Key findings
from the analyst research
Key finding #1: the SDP market will grow only. Market analysts do not account this
because of the growth in the emerging mobile market segment for sizing and forecasting
markets and because of the broadband (including this report). One reason for this
access need for content and services. There situation is that most of them use today
is a great potential in providing a standard- open source software, cheap hardware
based, pre-integrated SDP with pre- and custom architectures.
packaged set of services for Tier 2/3 MNOs
and other Service Providers, especially in Key finding #4: SDP architectural concepts
the emerging markets. This includes mobile (horizontal layer exposing capabilities
content and messaging, mobile commerce as reusable components, open APIs for
and payment and convergent and real-time service creation) are successfully used by
charging. Later, IPTV and Triple Play, NG IN Internet based businesses such as Google,
and VoIP enablement will be added. There Yahoo and Amazon even though they do
will certainly be many new types of services not use the term Service Delivery Platform.
that will require SDP architecture. Within These are among the best SDPs ever built.
the SDP domain of solutions there is still Their platforms support 100% customer
the opportunity to discover some services facing application availability assured by
for saving the voice revenue decline. several layers of failure and infrastructure
redundancy, thousands of transaction per
Key finding #2: There is not enough second assured by multiple data centers
knowledge of the business models around the world and response time that
supported by an SDP and consequently, goes into 100ms range with several layers
their economic value for the CSP. When of caching. Yahoo’s front page drives around
talking about the new business models, $1million of ad supported revenue per day
suppliers must first take into account CSP’s equivalent to the revenue Sprint generates
aversion to the risk of change. They have from services delivered through their
to work on assuring clear understanding mobile portal. What is different is the way
of the transition to these new business their systems support hundreds of millions
models. This is a very slow and difficult of customers. The adoption of new, open,
process, delaying investment decisions. web and social networking based means to
communicate with their subscribers gives

Key finding #3: A parallel SDP market for them immediate visibility into customer
Third Party Content and Service Providers experience. Their applications can be
and Aggregators has been created. This easily un-deployed or reconfigured on their
significant market segment (Moriana platforms adapting to customer demands
estimated 2-300 serious providers and and preferences in a matter of minutes.
thousands of smaller ones in Europe only)
has been overseen by the SDP suppliers Key finding #5: There is no standard
who target their offerings and services SDP architecture but this will not
towards mobile operators and other CSPs discourage all type of Service Providers
MORIANA 61
to deploy and use SDPs. The lack of of the multisided markets, the SDP will
standard architecture drives innovation in discover new functions in understanding
this space. The concept of an SDP is well and influencing customer experience to
positioned to support innovation coming generate positive network effects that
from anywhere: telecoms, Third Parties, create rewarding spikes in revenues for
and even customers. CSPs who believe the platform owner.
in revenue increasing strategies based
on diversified services and applications
put their Intellectual Property into SDP Recommendations for Suppliers
architectures with the same interest they
have built their networks: starting from Suppliers with pre-packaged SDP solutions
specific business objectives. Suppliers should address Tier 2/3 operators to rip
of products, solutions and professional most of the benefits from this market.
services as well as market analysts are
there to assist during the lifecycle of In mature markets and for the future,
the project, from business consulting to suppliers must look into providing
user acceptance tests and managed SDP management and architecture flexibility
services. for their SDP solutions, map the selling
cycle to the entire SDP project lifecycle
Key finding #6: There will be a shift (including business consulting). In case of
from SDP as architecture for opening up a niche supplier, after the SDP is in place,
networks to many more usages for the SDP the value proposition must come with the
architectural concepts: shared delivery right business case, usually around a new
platforms for supporting multi-sided class of services.
business models, SDP as architecture for
convergent charging platforms, SDP as Certain areas of SDP solutions are
platform on-demand or SDP as support problematic today and offer a chance to
for SaaS. In many cases the SDP may not differentiate for suppliers:
even interact with any kind of network • On-boarding hundreds of Third Parties
and in other cases the SDP will be used to for new business models proved to be
expose OSS/BSS capabilities (e.g.: quality a difficult SDP project for a few mobile
of service, billing or order fulfillment). operators who have tried it. Towards
There will be more mixture of technologies the Application, Content and Services
between J2EE, JSLEE for network Provider side, there is a need for APIs that
integration and LAMP or Microsoft .Net for contain management and configuration
cloud computing blurring the distinction functions that can be automated while
between “the transport network” and “the the CSP maintains control over access
cloud” and moving the debate on which rights, SLAs and usage. Automation of
one is more important at business outcome deployment and customer facing support
level. All this will make it easier to build for applications developed by thousands
flexible SDP architectures, providing time of Third Party developers requires new
to value by starting with the minimum solutions in the area of integrating SDPs
required components, decreasing with CSP’s OSS/BSS.
integration costs by automating operational
• Creating the content delivery value
processes through more standardization of
chain raises the problem of owning
management interfaces. With the adoption
and operating content platforms that
62
MORIANA
aggregate content from many providers our concerns with the immaturity of these
on one side and dispatch content over new providers in terms of knowing how
various networks to various devices to support an end2end service delivery
on the other side. Solution needs vary, model, there may be indeed an attractive
from integrating streaming or IPTV opportunity, mostly for IT and ISV suppliers
platforms as service enablers in an SDP who already have an SDP offering, to sell
architecture owned and operated by into the parallel market created by Service
the CSP, to supporting partnership at Aggregators and SaaS/PaaS providers.
Product level with a Content or Service
Aggregator who has its own content SaaS is less of an opportunity for SIs and
oriented SDP, while the CSP assures only NEPs suppliers although emerging Unified
transport resources for the content. Communications and entertainment over
• Adopting multisided platform models IP, when offered as SaaS, may become
will require flexible revenue models profitable markets for vendors such as
applied to the “sides” who participate in Alcatel-Lucent, Nokia Siemens and Cisco.
the service delivery chain. There will be UC market sees an important growth in
combined needs for prepaid, real-time the next years: 74% CAGR growing from
or ad sponsored charging on subscriber $71Million in 2008 to a $2 Billion market
side, usage based charging or no charging for services and $ 0.5 Billon market
at all on the Third Party provider side as for products in 2012 (estimates from
well as various forms of payment and Frost&Sullivan).
settlements on the ad provider side. The
complexity of this model will solicit a
large spectrum of supplier abilities, from Recommendations for Service
allowing or offering flexible charging Providers
together with service aggregation and
composition in their SDP offering, to The forces driving the competition in the
more sophisticated business consulting communications industry, mainly the
capabilities to help the CSP in analyzing number of providers within the same
the profitability of adopting a multisided market which spurred after deregulations
platform, understanding the cost of and the substitute real-time or near-real
single ownership of the platform vs. time communication products available at
using shared platforms or syndication of much lower costs, have driven the profit
services, as well as other alternatives. margins very low and, at the same time,
slowly reduced the scale of the demand
IT industry analysts envision a shift in (e.g.: for fix lines). Even in emerging
the next 2-5 years to a predominantly markets where there is important grow
Service-based model to support business for the next 5 years, penetration with
needs: pay-per-use consumption of IT basic service is difficult because of the low
from a multi-tenant model operating price that subscribers are willing and able
services, versus technology components. to pay. Despite the cost of infrastructure
This will raise the importance of Service and devices going down, it is hard to stay
Aggregators and SaaS providers competing profitable at $1-2 per month subscriptions
and substituting enterprise services and most of the operators deploying in
offered today by telecom service providers these countries must brace for the long
(e.g.: communication over IP). Despite term to recoup their investments.
MORIANA 63
Today’s world wide penetration of mobile designed to exploit its existing OSS/BSS
services is over 60% with a CAGR of 25%. assets as business services. This approach
At the growth rate from the past 20 years brings telecom Service Providers even
(first 25% of mobile market covered in closer to IT Service Providers. Capabilities
15 years, next 25% in the next 5 years) such as Billing, CRM and SLA or Service
the wireless penetration gap of 40% will Quality Management can be offered as
be covered quickly in the next 5 years. services to enterprises that need them to
Put in this perspective, strategies based support their own business model but do
on applications and services must get a not have the skills or do not want to invest
larger share of the budget today in order in the infrastructure and operations of
to yield new revenue streams beyond such capabilities. Amazon’s Web Services
this timeline. and Google Apps are examples of such
business models in the IT world. The
The first strategy to be explored is the advantage of telecom Service Providers
retailer of Third Party services in a simple is that they own both the assets and the
business model that offers subscriber access knowledge of running a Service Provider
to services such as Microsoft Windows Live, business, they only need to expose the
Apple’s iTune Store or Google’s Search capabilities of their OSS/BSS components
engine – to name very few - from their using an SDP.
mobile phones or as part of a bundled
broadband product. This is a two prongs Further exploration to grow revenue
strategy: firstly acquire new subscribers requires understanding of the multisided
with attractive bundles and new mobile platform based business models and
device capabilities and secondly increase reorganization of business and operational
data traffic. The business model requires systems to fully benefit from SDP
less complex SDPs and more support from architectures supporting such models:
the business level: Product catalogues, • Simple, manageable and standard
billing and CRM systems. access to attract contribution from
more Third Parties in a fair and mutually
A stronger strategy is based on content responsible revenue sharing model
delivery as content becomes more
• A flexible charging capability (either
important for the consumer market. Such
based on usage events or on a charging
strategy involves a larger value chain,
API) with rules and policies attached for
one that includes content aggregators,
rating and mediation
because traditional telecom service
• Intimate understanding of customer
providers do not have the infrastructure
needs by exploiting internal sources

or the skills to interact directly with
(e.g.: data collected from network
content providers and aggregate and
access and service instance) and
store content. The question remains
external sources (e.g.: partner with
open for advertising as mobile devices
local organizations such as healthcare,
may not become a substantial channel
government who are also providers to
for such content compared with the Web
the sane customer base) to offer more
opportunity.
value to the customer
A CSP can also become a SaaS provider • Continuous interaction with the
by building services on SDPs specially customer using electronic, Web 2.0
64
MORIANA
means to create network effects that The decisions that Microsoft must have
move services to the head, where the taken when entering this new business
real revenue is. model around the Azure Platform could not
be much different from those a traditional
To understand why the platform- CSP must make when starting to offer
mediated business model is interesting, services using an SDP atop its network and
we can look at what market analysts’ creating complex business models around
findings revealed for the business of services:
an IT supplier such as Microsoft: IDC • When to partner and with whom and
estimates that “for every $1 spent on how to share revenue
Microsoft Vista, there will be $9.75
• To own or to partner for a larger, more
spent on HW, $4.60 on SW, and $3.65
complex platform - maybe it makes
on services representing an 18:1
sense to share costs between CSP and
ratio of benefit to the ecosystem as a
Service Aggregator in building a joint
whole”. Microsoft understood the loss of
SDP?
opportunity and diversified its growth
• How to reorganize business, IT and
strategy through new investments
network operations around the platform
in becoming a platform and services
mediated business model assigning the
provider around its own software: the
roles of sponsors, providers, operators
Microsoft Azure platform.
and suppliers of content and applications
for the platform
A similar situation happens when the
broadband network operated by a • How to choose architectural and
telecom service provider is used for technical vendors after understanding
delivering Internet video or “over the top the profitability of the business model
applications” for devices that are smart and the existing internal skills and
and based on open software platforms. resources.
The network operator does not see a big
part of the revenue which goes directly In organizations restructured to easily
to the Internet content and services adopt multisided business models,
providers. In contrast, becoming a marketing and product management
services platform sponsor or provider become sponsors and make informed
and recouping revenue from owning and decisions on which services to distribute
operating more of this ecosystem by and how to charge each side using real-
enriching their own services layer can time business intelligence extracted from
be the salvaging long term strategy for the SDP and other monitoring points. This
many network operators. is the future in SDP developments.
MORIANA 65
Professional Profiles
Lucia Gradinariu
Founder, LGG Solutions LLC
Lucia Gradinariu has twenty years of combined IT and Communication

Networks experience, acquired while holding senior technical and
management roles with Internet Services Providers and IT vendors,
working in Data Center Operations, Client Consulting, Product
Development and Business Strategy. She has pioneered multimedia
communications over IP and built web conferencing tools in the early
90’s for the largest Research and Academia network in France, consulted
on strategic customer accounts, developed Oracle’s first SDP offering
with technology partners initiating new strategies for competing in the
telecommunications sector, and drove CA’s Service Management solutions
strategy for Communications, Media and Entertainment industries.
With a strong portfolio of business and technology expertise, Lucia created
her ICT consulting practice at LGG Solutions, LLC. She collaborates as
analyst and editor with the Moriana Group and contributes as advisor to
ICT industry organizations such as TeleManagement Forum, OASIS and
IMS/NGN Forum. A frequent speaker, writer and educator on Telecom
Services Layer and Enterprise IT topics, she holds an MSc in Electronics
and Telecommunications from Technical University of Iasi, Romania and
a PhD in Computer Sciences from INSA de Lyon, France.
Kristofer Kimbler
The Moriana Group, Senior Analyst and Executive Editor
Kristofer Kimbler has over twenty five years of experience in the

telecom and software industry. His domain of expertise include
telecom service layer, network intelligence, service delivery platforms
and service creation in the areas of mobile networks and NGN/IMS.
Kristofer has been the founder and CEO of a number of successful,
high-tech start-ups in the telecom space including HDS and Appium
- acquired by Aepona in 2007. Kristofer cooperates on a regular basis

as a consulting editor with the Moriana Group – the leading telecom
service layer analyst. Before Kristofer made his career in academia
and consulting. In the 90s, he also actively participated in several pan-
European telecom R&D projects. Kristofer is the author and co-author
of over 30 papers, books and reports in the area of telecom software
and services. He is a regular presenter on international events and
conferences and a member of Technical Program Committee of the
ICIN conference series. Kristofer is MsSC in Computer Science, from
Warsaw Technical University and Technical Licentiate in Telecom from
Lund University, Sweden.
66
MORIANA
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M O R I A N A GROUP : Service Delivery Market 2009-2012 – SDP Analyst

Technical Report · February 2008

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SDP Market 2009-2012

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Scope, Structure and Organisation

List of vendors surveyed for this report

Independent Software Vendors Network Equipment Providers

Scope, Structure and Organisation 3

List of vendors surveyed for this report 4

Section One: SDP Market Characteristics 9

Section Two: SDP Market Structure 16

SDP Market Scope 16

Section Three: SDP Market Segmentation 25

Section Four: SDP Market Size and Forecast 29

Commercial Adoption of SDPs 29

Deployments per Class of Service and operator size 30

Section Five: Competition in the SDP Market 40

Significance of SDP market for the undertakers 41

Section Six: Business Models Supported by SDPs 55

Open Garden Model 57

Section Seven: Key Findings and Recommendations 61

Key findings from the analyst research 61

• The SDP market is broadening,

A Service Delivery Platform is an environment, defined at system architecture

Section One: SDP Market Characteristics

architecture designed to deliver mobile Centers and other vendor-specific service

However, the pressure for new blended There is no standardized reference

running on an SDP in one or more business environments or run remotely using

Business drivers for SDP adoption

• increased customer expectations mobile and VoIP over broadband, the

requires greater efficiency in offering to-deploy “stove-pipe” solutions with

and South Korea. These SDP investments

SDP Investment Stakeholders SDP investments can be driven by solid

better collaboration between network

Section Two: SDP Market Structure

XML gateways), support components SMS-Cs, MMS-Cs, positioning systems,

enabler), integration of the SDP services instance device management services,

architecturally these platforms comply Enterprise IT Vendors such as Oracle,

Network Equipment Providers (NEPs) System Integrators (SIs) such as

category typically offers basic Internet

centers. A CSP wholesales its network on their capabilities and targeted

agencies, etc. a business model where the network

Investors in SDP products from the Service Provider perspective is

of around $1M/day from mobile portals

Section Three: SDP Market Segmentation

The following categories define specific (www.4billion.org) to the day of 4 billion

There are significant differences among

very much unexplored by SDP vendors.

APAC 49 150 1400 66 21 0.55 4.75

Africa 47 127 275 30 13 0.2 0.1

TOTAL 195 722 3327 63.2 23.4 1.49 2.29

Segmentation by Classes of Services

SDP solutions provide an architecture and Alternative segmentation of the SDP

model. If we take the examples of IPTV • Voice (VoIP) and multimedia

SDP Service Class Examples

Ring Tones, Music and Video downloads, games,

m-wallet, micro banking transactions, money transfer,

NG IN services (VPN, Virtual PBX), IP Centrex,