The Dollars and Sense Behind Bandwidth on Demand
Last year, we wrote about how demand for Bandwidth-on-Demand (BoD) is rising in response to greater cloud and data center IP traffic, and the technical implications of offering BoD. Typical telecom OSS/BSS engines designed to track fixed bandwidth consumption don't cut it anymore. Plus, those technologies don't give telecoms the freedom to offer unique BoD services to distinguish themselves from competitors.
Your competition is already offering BoD solutions. AT&T Switched Ethernet on Demand, for example, allows enterprises to "ramp up bandwidth capacity" in real time. Verizon also offers a BoD service through its optical transport network. Did they jump the gun or enter the market at the right time?
"Bandwidth flexibility will be a key part of ensuring telecoms can retain business."
Why Enterprise Customers Want BoD
Think about the kind of flexibility services such as AWS, Microsoft Azure and Google Cloud Platform offer to sysadmins, database administrators and developers. You can scale up compute, storage and memory resources based on what you need. You don't have to overprovision servers to match hourly spikes in application consumption.
Put yourself in an IT director's shoes. If you work in a typical office, most network activity occurs between 8:00 a.m. and 6:00 p.m., Monday through Friday. Workers are using cloud-based productivity suites, conducting research on the web and (if we're talking about the IT department) managing hosted servers in the cloud. It stands to reason that bandwidth rates should be higher from 8:00 a.m. to 6:00 p.m.
The problem is, when you're locked into a fixed service contract, you only get one speed. So to ensure staff have enough bandwidth to get work done, you purchase a plan for 1Gbps. However between 6:00 p.m. and 8:00 a.m., that speed is going to waste. You bought a fairly expensive plan just to satisfy your peak needs in a small window of time.
What if you could structure your bandwidth rate based on the hour of the day? That way, you could ensure you get 1Gbps between 6:00 p.m. and 8:00 a.m., but scale back to 100 Mpbs or less during times when people aren't working at the office. Over the weekends, you could even turn bandwidth off or certain applications unless a group of weekend warriors decide to tackle a project on a Saturday.
At the root of all this, BoD can save your customers money. Therefore, by offering such services, you increase your competitive advantage and customer retention. In fact, a Heavy Reading Insider Report found that bandwidth flexibility will be a key part of ensuring that telecoms can win and retain customers over the next few years.
Setting up Consumer Adoption
As we've mentioned in the past, implementing BoD has major repercussions for telecom OSS/BSS solutions. You have to ensure they can track, trap and bill real-time bandwidth consumption behaviors across multiple customers while ensuring those users cannot exceed contractual minimums and maximums. Even liberal BoD plans don't give customers unfettered access to carrier resources (if you plan on doing so, good for you).
If you acquire the means to enable BoD for enterprise clients, then you can eventually roll out BoD to consumers. Telecom OSS/BSS engines designed to support BoD provide enterprise customers with user interfaces that allow them to allocate network resources as they see fit. Consumers could use that same application, or possibly an iteration of that technology that's more intuitive.
What if a homeowner had the option to set bandwidth thresholds just like an enterprise network admin? For example, he could allow for higher network speeds during the evenings and weekends, when he's more likely to watch Netflix, browse the internet and catch up on work.
As the telecom, you could also go one step further and automate bandwidth scalability at the home. This would turn your telecom into a sort of utility: Homeowners would only pay for what they consume.
BoD opens up the door to new types of business models. It gives you options in a world of frequently changing customer preferences both on the consumer and enterprise side.