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Mobile Data Overtakes Voice In Revenue

Thursday, June 10th, 2010 by Jon Linden

Only 18 months ago I was sitting with a mobile operator who told me that their main objective was to ensure that data services didn’t cannibalize their voice revenue. The reason was simple – data service generated about 5% of the revenue.

Fast forward to June 2010. The sun is shining and the World Cup in soccer is just about to kick off, but more importantly Softbank Mobile Japan announces that data services for the first time overtook voice services in revenue in Q1! Japan has always paved the way for mobile data services, and NTT DoCoMo are expected to follow suit during the second half of this year.

But Japan is no different (at least not in this specific sense) than any other country in the western world. I see mobile operators here in Sweden spend the majority of their TV advertising on promoting mobile data services. It has become a differentiator and a big enough piece of the pie. We will shadow Japan and probably break the 50% marker in 2011 in many cases. Mobile data is a $50bn+ business this year in the US according to Chetan Sharma Consulting; a significant business where minor changes and adjustments in packaging, pricing, production cost and ARPU has a substantial impact on bottom-line.

Chetan Sharma also said that the US mobile subscription penetration was approximately 94% at the end of Q1 2010, and past 100% if we take out the demographics of 5 yrs and younger. Growth won’t come from winning new voice users, but from making the ones you have more profitable and to steal customers from the competition – e.g. with compelling data offerings. And you’ll have to control production cost since they’ll constantly expect more at the same price.

The conclusion is that mobile operators must take a seriously look at the packaging of their data services. “All you can eat” is not the best for (almost all) your customers, and it’s certainly not the best for your business case – especially as access speeds go up. That’s why we see more and more mobile operators moving away from flat rate data packages, as Cam referred to in his recent blog post. Tiered services are happening – thank God!

Eventually we will have options for people with different needs. But let’s stop for a second and consider what you’re trying to accomplish. Tiered services can either be a customer incentive or a cost insurance – or both. Don’t get too introvert in controlling potential exceptions with caps and limitations. This will add complexity, customer concern (even if they’re not even close to any limit/cap), and you’re up against some serious competition out there. But still, as said, small changes can have a big impact. Offloading peak hours to better utilize your network, attract new customers, or offer added value services that can boost ARPU can boost your profitability and ability to invest even more in your services and customer support.

I hate to say it, but we know from experience that devices (e.g. iPhone launches or subsidiesed phones) actually sell more subscriptions than any packages we produce. But service packages will support the devices and add to the differentiation. Make sure you know who your customer is, where he is, what applications he’s running, and what device he’s using – in order to accommodate his then current and general needs. Make sure your information is reliable since accurate intelligence enables proper business decisions.

So what are my recommendations? I’ve said it before (Do’s and Don’ts in Bandwidth Control) – keep it simple! Your biggest challenge will be to communicate it, implement it, and justify it (“is YouTube video or web?”). Know your customer. Define your target group and offer applicable services. Serving young savvy nerds with the same offering as unsophisticated 65+ Internet users won’t work. Don’t become too technology-driven and introvert in your business model. And avoid too many options since they will cause confusion.

So, do I need to say that we know this space and offer the solution you’re looking for? Well, we are, and we’re darn good at it! I look forward to you reaching out to me to discuss this further, but in the meantime I’ll kick back and enjoy some seriously good World Cup soccer. Sweden didn’t qualify this year, which gives Swedish mobile operators another four years to work out a business model that supports the network being flooded with real-time streaming video. Good luck (no irony intended).

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Mobile Data Plans that Work

Monday, June 7th, 2010 by Cam Cullen

Mobile data plans have been in the news quite a bit lately, with Verizon (LTE plans) and AT&T (iPad and iPhone plans) updating the market on their mobile data positions. Verizon has all but announced that there will be no unlimited data plans on their LTE network, which is now scheduled to go live in 30-40 cities in Q4 2010, and people will pay based on their usage. AT&T announced that they are doing away with the unlimited iPad plan (already) and will now support tethering for the iPhone (but only for a 2GB/month plan). Other mobile operators also would rather have data plans based on usage rather than unlimited plans, but it remains to be seen how long or if operators with rich data devices can hold out, or if the pain of congestion will hit their network as it has for AT&T.

But is the ideal answer for mobile data to always bill based on usage? Although I understand the issues that are driving the operators to implement usage based plans (cost control, congestion management, etc.), I think that there are hybrid plans that could significantly accelerate the adoption of mobile data usage (and fixed mobile substitution for some users). Mobile operators could serve their customers better by offering flexible plans that were targeted towards different “consumer” types on their mobile network that were sensitive to application usage and time of day. These plans would be ideal for the new generation of rich media devices (Android phones/tablets, iPhone, iPad, and laptops) and accelerate their adoption by the consumer groups that covet the devices but are still afraid of bill shock (which will be even higher now that overage charges are going to be pervasive). It has been proven that devices can sell data plans, but the plans can also stunt the usage of the devices if using them becomes too complicated and expensive.

What would these plans look like? Most plans would be similar to the existing plans, with usage meters for the majority of data and separate usage meters for the applications that are attractive to specific consumers, with streaming video, audio, and file sharing leading the pack. Although web pages can be a lot of data (I once read an analysis that said the BBC front page was 1MB of data, which could cost you a pretty penny when you are roaming!), the real problem for mobile operators are long-lived streaming or downloading applications that can cause persistent congestion in a cell or on the network. Some examples of targeted plans:

  • Streaming Video: Monday through Friday 8 a.m. to 6 p.m., 25GB of data, unlimited nights and weekends
  • Streaming Audio: Monday through Friday 8 a.m. to 6 p.m., 10GB of data, unlimited nights and weekends
  • Unlimited Web: Unlimited web browsing and email, 2GB streaming media and other applications
  • Social Media: Unlimited Facebook/MySpace/IM/email, 2GB other applications

These plans could either be an add-on to an existing data plan, or part of different bundles for users. A very attractive iPad plan would offer unlimited web browsing, but a usage meter on other applications. I don’t see these plans as being negative towards Network Neutrality, since they will be selected by the users – as an alternative to the pure usage-based plan that the mobile operator would also offer. Time-based plans are already popular among mobile operators for voice, and could easily be popular among students and business travelers (i.e. Nights and Weekends plans).

My concern is that placing restrictive limits on bandwidth usage will stifle or limit the potential of the nascent market for rich data devices, or limit their use to Wi-Fi networks, which completely misses the goal of upgrades to LTE and other high speed mobile data networks – which is to make access ubiquitous for users (and not ubiquitous just for email). The challenge of implementing these plans is on the systems that would be used to meter the different applications (i.e. DPI systems) to ensure that the application classification is accurate.

An innovative mobile operator that offered these plans as an alternative to a more restrictive plan could tip the scales in their favor when competing for the “high value” users for mobile data. In the highly competitive mobile market, operators that think outside the box and find ways to best leverage the technology that they are already deploying in their networks will emerge victorious and profitable. Flexibility will be a key success factor.

As a user – would you be more likely to purchase a plan that gave you flexibility in how you used your mobile broadband?  I know that I would.

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DPI – We’ve got an app for that!

Thursday, May 20th, 2010 by Cam Cullen

As you can tell from my past blogs, I am a bit manic about devices and applications. The new business models created out of thin air by Apple – starting with iTunes, carrying forward with the iPhone, and now the iPad – have either saved or revitalized the music industry, small application/game developers, and the mobile handset market. There have a been a number of articles written on these topics, so I won’t dwell on it, but I think it is fair to say that entirely new options exist for innovation and revenue now that these products are on the market. They also inspired other vendors to attempt to compete with Apple, and the overall market for similar devices has grown as a result (the size of the smartphone market alone has grown at astounding rates).

What does this have to do with DPI? In the past, DPI was used to manage traffic (Peer-to-Peer mainly) and to provide visibility into what was happening on your network.

But this is not your father’s DPI …

With the advent of subscriber management for DPI systems, network operators have an entire new universe of possibilities on how to use DPI. We have operators around the world that have come up with very clever uses of DPI that enable them to operate their networks more efficiently, comply with regulatory mandates by governments, or generate additional revenue. It has also allowed them to create new types of service plans, not only ones that cost more money for subscribers, but also ones that SAVE money for subscribers.

A perfect example of this might be a service plan that voluntarily restricts the bandwidth for file sharing or video streaming in exchange for a lower monthly fee. A provider could offer this plan for potentially half (or less) the cost of a normal plan, because that user would introduce a much lower load on the network than a “normal” user.

Another hot topic is flat rate plans versus usage based plans, with some users being extremely vocal and speaking with their wallets. Why not combine the two? Offer a flat rate for web browsing and email, but usage-based pricing for streaming video or file sharing? This would increase the overall market for data services, as more casual users would be willing to purchase these data plans versus being afraid of the big leap in price for an “unlimited” data plan. This could even be extended between mobile service providers for reduced data fees for roaming – a huge sore spot for smartphone and data users that travel internationally.

An interesting application is the ability to offer multiple services simultaneously for each subscriber. Hmmm….what exactly does that mean? What if a subscriber wants a Parental control service, a managed security service, and to take advantage of a video caching service all at the same time? In most current network architectures this is not easily achievable – especially if the decision is made per-subscriber and per-application (i.e. Parental Control only on web browsing, video caching only on streaming video, and email to the virus scanner). DPI understand both applications and subscribers, and can effectively re-direct traffic as needed to the correct service (and even load balance between the servers!) – vastly simplifying the network operations, and enabling a service combination that is not possible today for operators.

We love it when our customers bring us new ideas. More than one customer has taken a look at what capabilities we have inside our LiewView application and came up with an entirely new idea for a service plan or a new network report that directly led them to a new service offering since they can better understand how their subscribers are using the network.

Got any ideas?

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Does Network Neutrality impact DPI?

Friday, May 7th, 2010 by James Brear

FCC Chairman Genachowski’s recent letter has instigated a lot of talk about Net Neutrality, some of it apocalyptical (“The end of the Internet is here!”), some of it reasonable (“Nothing has changed, business as usual”). Both sides of the discussion have valid points to their arguments, but what really is the impact?

Without going into details (I will leave that to the experts), the FCC has reset the status quo to what it was before the Comcast court decision. As Genachowski himself states in the document “…this approach would restore the status quo”, resetting the ability of the FCC to manage broadband as they have in the past, preserving the FCC’s mission.

This is not “the nuclear option” that had been proposed by some, which would have made every aspect of broadband service open to regulation and restriction, and it is also not a capitulation to the Comcast ruling which would essentially make the FCC powerless against ISPs. Instead, as Genachowski himself headlined in his letter, this was a third way to look at the problem. Under this framework, the FCC would ensure that open access to networks is maintained, and focuses on the connections to the network, and not the content or services that run on that transport.

So now we are back to where we were before the Comcast ruling. However, there still are some concerns about stifling innovation and curtailing investments in broadband, but I think much of the uncertainty has been removed for ISPs (Procera customers) that want to continue to invest in their infrastructures because the evolving needs of their customers require it.

But….we are not exactly back where we were two years ago. Several changes have already come about because of this whole exercise.

  • ISPs know that they MUST be transparent in what they do on their networks, and consumers are watching them very closely, so no funny business is likely to slip by end users. This is a very good thing for consumers, and will force ISPs to think twice before they implement new policies, as they will be tried in the court of opinion well before any court case could be filed, and consumers will vote with their wallets and switch if practices are not to their liking.
  • There is general agreement that applications should not be discriminated against during normal operations (I qualify that because congestion management is still a problem, especially for real-time services).
  • Reasonable network management is OK. Although “reasonable” is open to interpretation, I think again the court of public opinion and consumer’s wallets will guide ISPs to a mutually agreeable definition (and this is also where congestion management is again an issue).
  • The door is open to ISPs that want to be creative and find ways to have service plans that innovate new services and deliver LOWER cost options for subscribers that use the network less and higher cost for the users that consume more resources.

So what is the impact of Net Neutrality on Procera?, neutral to positive. I don’t see any ISPs “behaving badly”, and no application vendors claiming discrimination. I do see smart phone customers still complaining, and some broadband customers concerned about video and voice performance, but our “reasonable” network management solutions can help ISP’s take their service to the next level.  Creating better customer experiences and evolving their networks to keep up with the innovations of technology.

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iPad – Telecom Armageddon or Savior?

Monday, April 19th, 2010 by Cam Cullen

I was having a discussion with a service provider (wireline broadband, interestingly enough) and he asked me if I thought that the iPad would have a significant impact on his network. My initial reaction was no, but as we talked through the issue, my opinion shifted.

When asked that question, my first thought was that the iPad would not affect a wireline broadband network that much, right? It is only a small number of devices (relatively speaking), and it is not like it can be used for file sharing. Sure, it can stream video, but how often are you going to sit and watch video on an iPad?

Then I started thinking about the real impact of the iPhone. Although the iPhone is a great device, and has certainly caused ATT issues in the US, and other operators abroad, as users take advantage of the media capabilities of the phone, it had a much broader effect on the industry as a whole (that incidently led directly to the iPad). Before the iPhone, phone-based data usage was mainly email (ala RIM and Blackberry devices) and light web browsing. The long lasting effect of the Blackberry was that people became used to being connected, and with the scarcity of Wi-Fi hotspots, people began to want always on mobile broadband, and business users began to purchase the data plans from mobile operators. Once the iPhone was released, it kick started the smartphone market like never before, and brought more users to the mobile broadband buffet. Every vendor wanted an “iPhone-killer”, and Android, Palm, Microsoft, and other operating systems began to proliferate on handsets at reasonable prices. These devices gave users a taste of what high quality media and browsing experiences could be had with mobile platforms, and even a taste of some really useful applications (phone-based GPS and mapping applications) that took advantage of the mobile data connections – including some streaming media and VOIP applications. The advent of flat rate mobile data plans (at least in name) for reasonable prices has spurred the demand for mobile broadband, and with so many devices able to connect to the mobile broadband network, has driven operators to invest heavily in the infrastructure to meet the increasing demand.

So the impact (I think) of the iPad will be similar. The “iPad-killer” race is on, with HP, Dell, Google, and many others racing to release devices based on Android or Windows that will compete with the iPad. There have already been application releases for Kindle and Netflix on the iPad, and more streaming applications will follow on these alternative platforms. I am not sure I want to watch all my TV on an iPad-like device, but it is easier than watching on a laptop or an iPhone. Add a camera and a USB port (hint, hint) to a device like this with a 10 hour battery life, and the potential for a truly portable media device is not a future – it is the present.

This is the future I see coming out of the iPad – one that has the potential to dramatically increase the usage (especially streaming media) on both wireline and wireless broadband networks. People will use their wireless at home and mobile broadband while traveling. If you are a heavy media consumer, traveling with an iPad and a laptop makes sense – I can read or watch movies on the plane with the iPad, do email on the laptop, and even multitask in hotel rooms – watching media on the iPad while working on the laptop.

So if you are a provider that is ready for this – and can deliver a high Quality of Experience to your users (and monitor it to make sure that you are delivering a high QoE) – you have a bright future ahead of you.

Me – I can finally have a data pad like I always saw on Star Trek.

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Economy of Scaling To 10G Networks

Tuesday, April 6th, 2010 by Jon Linden

“PacketLogic is now available with gigabit interfaces!” This is not today’s announcement, but it’s also not ancient history. We launched the second generation of PacketLogic with (almost) gigabit capacity in April 2004. Four years later, in May of 2008, we released our high-end PL10000 family with 10G interfaces and what is still the highest capacity of any DPI system available in the market today.

What I’m saying is that we love breaking speed records. Now we’re doing it again; but in a very different way. The new PacketLogic PL8720 is the first 10 Gbps DPI system that comes in a slick, real estate and power efficient 2RU appliance with the market’s highest port-density per rack unit. Most importantly, it’s cost efficient.

Numbers typically speak louder than words. I happened to read the following earlier today: “Market tracker Dell’Oro Group says 10G, which makes up 25% of the market in terms of revenue, will drive growth in Ethernet switching this year. […] Dell’Oro expects 10G to reach $3.6 billion in revenue for 2010, up from $2.8 billion in 2009.”

This means that not only big carriers deploy 10G these days. Tier 2 and 3 operators, even higher education institutions, deploy 10G. And they will have to in order to cope with a growing traffic volume and to ensure that the Internet remains the innovation engine it is. More speed means more traffic, which means an even bigger need to understand what’s going through your network, and automate detection of potential threats to both users and the performance of the network.

Doing deep packet inspection at a 10 Gbps rate is computing intensive. This is why it historically has been done in chassis-based solutions – products that are and still will satisfy the large operators’ requirements for resilience and upgrade capabilities. The extensive computing intensity is the reason why DPI has been such a big investment that many small to mid size network operators have postponed this decision. Not deploying DPI puts them in an unfavorable competitive situation. We saw this gaping market demand and set out to develop a cost efficient product that’ll upgrade all the way to 10 Gbps – without compromising on functionality.

Are you getting the dignity of this? Do you see why cost efficiency is so important? I’d say this is flat out a game changer! You’ll see. PL8720 will have first-mover advantage in a rapidly evolving market where we put DPI in the hands of a new set of service providers and higher education institutions. They, and their users, will experience the benefits of a full-blown DPI product. Many of these have hesitated to make this investment, though they’re fully aware of the need, because they know they’ll still make further network upgrades and will transition from GE links to 10GE. Now this is not an obstacle anymore.

I just wanted to let you know what we’re doing to change the world of networking. Pretty interesting, huh?!?

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Deloitte Says 2010 Looks Great

Thursday, March 11th, 2010 by Jon Linden

The very nature of predictions is that they can be wrong. But sometimes they’re more substantiated, sometimes the source is more credible, and sometimes you just want them to be true. The former two apply to Deloitte Touche Tohmatsu’s “Telecommunications Predictions” that I read every year. When they predict, for this year, a 100% growth for products that help decongest the mobile bottleneck, then I also confess to wish for them to be true.

While over-all mobile operator spending is expected to grow 7% in 2010, some pockets of technology – where one of the first segments they point out is deep packet inspection (DPI) – can grow more than 10x thanks to a pressing need. In 2009 the last walled gardens were torn down, smart phones became data smart, user interfaces encouraged use of data services, and 3G connections became a true option to fixed broadband (I use it as such at my summer home and when travelling). Data volume has grown and will continue to grow accordingly.

I’ve pointed out in the past that mobile operators are more sensitive to bulky traffic due to higher cost per megabit and fewer available megabits in the access network. Mobile networks become bitpipes, hence it’s more important than ever to know if, what and when the network is being clogged up. The ability to build out network capacity fast enough, and to do it with an intact and feasible business case, drives a great demand for mobile DPI; a demand that will grow this year according to Deloitte’s predictions.

Deloitte says that “at the start of 2010, there should be about 600 million mobile broadband connections between laptops, netbooks, and smartphones” and they predict that “cellular data wireless networks will have gone from underutilization to congestion”. Most mobile operators have designed their networks for some growth, but congestion, also known as over-subscription in this case, is part of the equation. Deloitte predicts an access network issue. My experience is that this is not a big issue since new technologies, like HSPA+, are constantly released. End-users also expect and accept a lower speed when going mobile.

However, the underlying network is typically not dimensioned to support constant increase in access speed or a changing user behavior with longer and more frequent sessions. “Congestion issues sometimes have less to do with providing very high broadband download rates to a few users, instead, they often revolve around providing highly variable two-way bandwidth to many mobile users whose usage requirements change from minute to minute” to once again quote Deloitte. This has an impact on the entire network – from access to backhaul, and all the way up to core and peering.

There will always be overloaded cells due to design, subscriber take-rate, and the dynamic nature of roaming users who occasionally are in the same geographical location. Capacity is a constant game of catching up. DPI is the tool that helps you to plan capacity, identifies issues and resolves them – long-term or until a long-term solution is in place. A DPI deployment pays off almost instantly through better customer satisfaction and timely infrastructure investments. A pretty easy investment decision, right?

Light Reading predicted in 2007 that mobile DPI would be the growth engine for DPI. They expected mobile DPI to catch up with fixed DPI in 2010 and exceed it in 2011. This seems to be a pretty accurate assumption. Especially since we hook on a second locomotive to the mobile DPI train this year – LTE. Thought LTE might resolve access bandwidth constraint, it causes the same challenge for the rest of the network – at an even higher degree.

I suppose all of this is primarily of interest to our investors. Mobile operators are a prioritized market segment for us. No one is actually better positioned than Procera for success in this space. We have the leading technology, we have traction with strong references, and we’ve grown at a healthy pace that beats the competition. To me the above says that we stand a good chance of delivering yet another year of extensive growth, following two remarkable years of 75%+ growth while in a global financial recession. Stay tuned for how this prediction comes true.

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Mobile World Congress…It is all about the Apps!

Thursday, February 18th, 2010 by Cam Cullen

I have spent the week in Barcelona attending the Mobile World Congress event. Anyone that thinks that there is no vibrancy in the networking world should have been here to see the show. The halls were packed, the booths were busy, and the meeting rooms fully booked. There is a lot of excitement about where the mobile industry is going, and the opportunity that exists for mobile providers going forward.

One thing that jumped out at me during the show was the growing focus on the applications that are driving mobile usage. Yes, there was plenty of LTE hype, and lots of platform and operating system buzz (you should have seen the line for the Android developers lab as well as the push Microsoft made for Windows 7 Mobile), but focus seems to be shifting towards the applications that are driving mobile usage. The operators are keen on pushing new applications, because they will drive up data usage and increase the urge for users to upgrade their devices and service packages.

There is a clear recognition that mobile success may be won or lost on the application front. In the US, Apple has done a good job with marketing the iPhone by focusing on the everyday things that it can do to make your life easier with mobility (finding restaurants, checking on movie showtimes, etc). Google did a great ad during the SuperBowl (American Football for those outside the US) that showed Google search used to progress a storyline for a person’s life (http://www.youtube.com/watch?v=nnsSUqgkDwU) which is not specifically targeted at Android, but can be applied to Android and mobility. Microsoft was showing the same type of applications and integration at MWC as part of their booth show. Ericsson announced an applications store (eStore) with more than 30,000 applications that carriers can offer those apps to their own customers.  A new alliance was formed between 24 operators (including ATT, China Mobile, Orange, etc) called the Wholesale Applications Community (WAC) designed to simplify how application vendors get their applications to the end user.

Why is this important to a DPI vendor? Mobile operators who want to understand what applications are clicking with their users need to look no further than to a “robust” DPI system to understand what applications, clients, and software their users are running – even down to the device level. Application vendors obviously want the operators to know that their application is popular, since it will open up more opportunities to sell that application, whether it is through the operators own application store or the mobile OS store (iTunes, Android market, etc). The DPI “lite” solutions provided by some vendors will never keep pace with the ability of a dedicated DPI solution. At Procera, application recognition has always been a core element of our solution, we release updates every two weeks to keep pace with the new applications our customers encounter in the wild, and this includes mobile applications.

The applications that really jumped out at me are the “useful” applications that can simplify or make life easier for people. Simple navigation capabilities can be helpful even if you are walking through a large city – looking for a specific location for a meeting, searching for a restaurant, looking for a store. VOIP applications (which are finally being approved for mobile use by some operators) can be cheaper than international calls in some instances (or using the VOIP over wi-fi is even better). Even bar-code scanners that allow instant internet price comparisons are really useful if you are shopping and want to make sure you are getting a better deal.

As mobile operators look to understand what they need to do to generate revenue, I am certain that going forward, applications will be a big part of that plan – whether it is enabling some of the applications in real-time (even if it is not sold by the operator – like GPS), or form a retail perspective in their application stores. DPI can help them understand where their greatest opportunities are – and will allow them to service their customers better by meeting their expectations.

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Does LTE ♥ DPI?

Monday, February 8th, 2010 by Cam Cullen

There is a lot of talk in the industry about DPI and mobile operators. There was an article on Light Reading in 2008 titled “DPI (hearts) LTE” that explored this topic. The general belief is that mobile operators MUST have DPI in their network to survive and compete, due to a number of bandwidth and usage challenges. Operators are bracing for users that will treat their mobile connection in the same way that they use their fixed broadband networks today (i.e. streaming video, file downloads, peer-to-peer, etc). Since laptops are expected to be one of the earliest LTE devices supported in many of the early LTE deployments, the data requirements of LTE must be addressed from the initial deployment.

The debate has been stoked by the inclusion of a loose requirement in the SAE-GW for Deep Packet Inspection, aimed at application classification and QoS at Layer 7 (not traditional router-style Layer 4 filters). Many traditional GGSN/PDSN gateway vendors have begun to message that DPI is a part of their LTE solutions, and the expectations of mobile operators are rising daily. RFPs are coming at a rapid pace from mobile operators, and every one includes a request for information on how DPI can be deployed in an LTE network.

At Procera, our experiences working with mobile operators have convinced us that DPI will be a key technology for LTE deployments. Mobile operators need network intelligence on what is happening on their network, and the ability of DPI to reach back into the access network and correlate individual subscribers to their location in the Radio Access Network and manage congestion is a vital requirement to ensure a good Quality of Experience for operators. Tight integration with the BSS and OSS backoffice systems ensures that the DPI systems provide a single point of contact for network visualization that includes subscriber, device, location, service plan, and application knowledge. This information can also be used for billing, allowing service providers to create flexible billing packages based on location, time of day, on-net or off-net application, roaming, or usage volume.

That is all well and good, but how does it relate to LTE? These requirements are also valid for 3G deployments, and are even deployed on some 2G networks today. The challenge for LTE and DPI pushes the boundaries of the DPI that is deployed on networks today because the scalability, performance, and service expectations will exponentially increase with LTE deployments over 3G. 10G links are a minimum performance requirement, and the bandwidth and session count per user will skyrocket as mobile devices become more capable of multi-tasking and cloud-based applications take hold. It will not be acceptable to do “a little” DPI, as all traffic will be required to receive DPI treatment. LTE networks will be service and application oriented, as operators will push new applications as a way to justify the higher rates for LTE services, and DPI will be required to recognize and prioritize real-time services.

Many providers of Mobile Gateway solutions will also claim this functionality, and try to convince operators that their integrated DPI solution is “good enough” to provide equivalent functionality for a LTE deployment. But there are some issues with integrated solutions that should cause operators to pause before deploying an integrated solution. The first is that an integrated solution ties you to a single vendor for your deployment, and ties your upgrade in capabilities to what your integrated solution can be upgraded to. Standalone solutions provide more flexibility, and give you more leverage as best-in-breed solutions increase in performance and capabilities. Integrated solutions also tend to suffer from performance and scalability decreases when additional functions are activated in the systems, of which DPI has traditionally been one of the most processor intensive applications on a CPU module. The “single chassis” argument that is commonly made by integrated vendors is also often an invalid one, as the performance and scalability requirements of a full DPI deployment often exceed the capabilities of an integrated chassis. Although LTE deployments will start small, requiring additional chassis systems just to activate DPI functionality will negate any advantage of an integrated solution.

The story of LTE and DPI is just starting to be written, but we are sure that the two will be tightly intertwined together going forward.

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Don’t Invest In DPI Until Net Neutrality Has Been Resolved

Monday, January 25th, 2010 by Jon Linden

Sorry, there should be a question mark at the end of that heading, and the answer is No!  The fact is you need to invest in DPI now. I know I’m biased, but that’s why I possess hands-on knowledge and facts of what our customers do and why.

DPI does not equal P2P throttling and Net Neutrality infringement. P2P control originally presented itself as an opportunity for DPI with a quick ROI on a hair-on-fire issue where P2P filesharing rampaged at an exponential growth rate, which meant exponential cost. But today we’re in the second, or I would even argue the third generation of DPI, and both products, and the use of these products, have evolved and become much more sophisticated.

Today the most common request is visibility. Visibility of what traffic is traversing the network in order to detect changes early in user behavior to avoid surprises on the core business and business models. Today’s rapid increase in streaming video is both a threat and an opportunity to cable MSOs, whose core business is TV distribution.

This is a good illustration of why network traffic intelligence is so important. Today we don’t watch TV as we did before. We don’t watch in real-time since we have TiVo and subscribe to episodes as they are “released”. It’s just a small step to Hulu and the broadcasting companies’ Play services. Early detection of these phenomena gives the operator the ability to offer relevant packages, change pricing, and develop new services without being left far behind.

In all honesty, very few of our customers and prospects even consider limitation of competing over-the-top (OTT) services. Savvy end-users catch what they do, draw attention to it, and the operator is caught with their pants down. You don’t “get away with it”.

But knowledge is power. Based on proper network intelligence you can make proper decisions. For example reach out to emerging services and join them instead of trying to beat them, look at the value add of your paid-for services compared to free OTT services, see the impact on your network of new applications, and project the investments required to accommodate these new services.

You could actually go as far as to say that DPI is required to enable Net Neutrality. Transparency is a cornerstone in Net Neutrality and DPI offers the tools that verify that you are transparent, that you’re not preventing good service levels due to obsolete policies supporting an old reality.

We, Procera, have not seen an impact on our DPI business from Net Neutrality, and I think it’s due to the above. Operators understand this, have understood why DPI is necessary, how it’s used properly, and are able to discard the background noise of an infected discussion while listening to creative and reasonable input.

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