When I meet with clients, I am sometimes asked to explain briefly what this NGN thing is all about. Sadly, they don’t get a snappy answer because there isn’t one. Here is my attempt to provide the simplest, most concise answer which is accurate enough to be useful.
The Next-Generation Network (NGN) is first of all a technical innovation in three parts.
1. A new version of the Internet with added gold, silver, bronze service classes. (IP/MPLS transport with Diffserv).
2. A multimedia phone service which can also be used to download music, video-clips and TV programming as well as make voice or video calls and check your house surveillance cameras. (IMS).
3. A carrier platform which can be used by companies to supply application services over the Internet. For example, where companies now have to install a lot of software to run their businesses, in future their employees can just point their browsers at Internet sites which will supply these business functions as a service. These sites will be provided by ASPs - Application Service Providers (not quite the same as e-Retailers like Amazon, which sell books and things). Even desktop functions like word processing, slide-pack creation and spreadsheets will be available as Internet web services, as an alternative to running programs on your PC. (Hosted Java EE or .NET platforms + AJAX)
The NGN itself is really middleware. To make it profitable, it has to be used to provide new services. But powerful companies like Microsoft, Google, Yahoo, Sky and the BBC already have applications and content which they will want to distribute over the NGN. Will they use the carriers to do this, possibly via an alliance, or will they forwards-integrate into the carrier business themselves?
The carriers have a similar dilemma. Should they become ASPs, Internet Portals and TV broadcasters, should they try to extract value (rents) from the Googles, Yahoos and Skys, or will attempts to do so simply persuade these powerful upstream players to sidestep the carriers and build their own NGNs?
NGN services also have to be delivered to customers. Simple services like those delivered on mobile phones today require just a straightforward retail operation. But delivering complex business solutions to enterprises requires business and systems analysis and design, and complex implementation and configuration. Value-Added Resellers (VARs) and Systems Integrators (SIs) do these jobs today, often in competition with the carriers. Should the carriers beef-up their professional services arms? If not, do they risk commoditisation?
And finally, the investment in NGNs is really in three parts.
1. Buy new network and IT equipment.
2. Redesign the organisation’s products, processes and roles, and migrate from the old.
3. Close down the legacy company and release large numbers of redundant staff.
The reduction in headcount is where the real saving come from. However, to accomplish steps 1-3, especially 2, requires a huge expenditure of both capital and effort. It is probably beyond the abilities of ‘old alternate operators’, those who still have legacy networks today. Are they doomed? Probably, unless someone with very deep pockets can find a reason to buy and fix them.
The world after the NGN has all the big players: ASPs, content-aggregators like Sky, sleek and large NGN carriers, SIs and VARs. Things will be open enough to allow smaller, more innovative plays, but competition will be tougher. After 2010, telecoms will look more like IT today.
To probe further, check here.
