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Analyzing the Network: Tapping a Growing Opportunity by Harnessing Big Data Matt Davis, Debra Osswald
May 2012 - Doc #234783 Insight

IDC Opinion
IDC believes facilities-based network broadband providers have a unique and highly enviable position as the owners and operators of the access network. When combined with the rapidly expanding capabilities delivered by network and business analytics solutions, the information flowing through this critical part of the broadband network can be harnessed, creating new opportunities and capabilities for these service providers. Network equipment vendors take different approaches to help their communications service provider (CSP) clients better harness and exploit the tremendous value inherent in the massive volumes of data that traverse their networks. Ultimately, two network equipment vendors, Cisco and Calix:

Have invested in solutions that bolster their ability to equip CSPs with insight gleaned from network data that can be put to many uses throughout the CSP's organization. Are elevating their position in the vendor value chain by offering network analytics solutions that assist CSPs with improving vitally important functions such as network operations, marketing, and customer support, to name just a few. In This Insight

This IDC Insight examines how two network equipment vendors take different approaches to help their communications service provider clients better harness and exploit the tremendous value inherent in the massive volumes of data that traverse their networks. The power of advanced business analytics combined with other new tools give CSPs greater visibility into their networks and is laying the foundation for a smarter approach to network troubleshooting, better customer support, and more effective marketing.

Situation Overview
According to Worldwide Internet Broadband Bandwidth Demand 2012-2015 Forecast (IDC #232596, February 2012) over 30,000PB of Internet-generated traffic traverses wired and wireline global broadband access networks in an average month. This phenomenon is regarded by communication service provider engineers and network planners as more of a challenge than an opportunity. The main issue is while building, maintaining, running, and ultimately upgrading these networks is squarely in the court of the facilities-based provider, much of the value being extracted goes to benefit other participants in the digital media ecosystem.

This leaves facilities-based providers with a few options: move to a usage-based metered services model – essentially getting paid by the megabyte after a certain threshold is reached, and/or getting into the over-the-top content delivery game themselves – basically if you can't beat 'em join 'em.

However, another opportunity to leverage the highly valuable position of providing broadband access is by gaining benefit from network visibility. The ability to analyze traffic flows has long been associated with network control and policy enforcement issues — basically identifying practices that slow or harm the network, like dramatic overuse by a small percentage of users, large volumes of spam, or a variety of viruses. In addition to controlling these unfortunate realities of broadband networking, service providers began thinking about other ways to leverage their unique network insight. To support this, a number of service provider network vendors have developed tools that translate network data into digestible reports that don't require doing a 10-year stint in the NOC to decipher the data extracted from network analysis tools.

While many network equipment vendors provide analytical tools and reporting solutions that leverage network data, IDC is profiling two vendors: Calix and Cisco.

Calix and Cisco are at different stages of development with respect to their analytics initiatives and offerings, and while they have taken different strategic approaches, we believe they are both attempting to achieve the same two important goals:

Elevate the value their products provide to CSPs and, by doing so, elevate their position in the vendor value chain, not to mention their profit margins (by virtue of now having more software in their offerings portfolio) Offer solutions that assist CSPs in exploiting their unique ability to access and use network data to gain customer, network, and operational insight. Additionally, by doing so, these vendors are also helping the CSP raise its differentiated value proposition to customers in a variety of ways spanning improved network performance to more targeted and effective campaigns and promotions that drive new revenue and enhance customer loyalty. Calix Flow Analyzer Calix developed and engineered the Compass Flow Analyzer internally and launched the product in October 2010. As of April 2012, over 70 service providers are using Flow Analyzer. Calix does a good job of communicating and supporting its customer base, which is made up primarily of tier 2 CSPs operating in North America. However, the company has been steadily pushing into Latin America and South America and has been diversifying into the cable MSO space as well.

Essentially, Flow Analyzer is a network diagnostic software platform that allows a service provider to gain greater visibility into network performance in the access network and at the customer premises. Specifically, it enables a service provider's customer service representative (CSR) to monitor endpoints, ports, and other interfaces when troubleshooting issues such as network congestion or identifying malware that may be impacting performance. Effectively, it enables the service provider's CSR to conduct a real-time troubleshooting session with the customer in order to resolve issues relating to "my Internet is slow." In some cases, the issue belongs to the customer, with multiple users in the home downloading or streaming at the same time or using a suboptimal wireless router. At other times, the issue could simply be a case where the customer is using his/her broadband service to run a Web server or consume an inordinate amount of bandwidth using peer-to-peer or other bandwidth-intensive applications. Flow Analyzer helps the service provider determine root cause and take appropriate action. In many cases, in particular for malware-related issues, the service provider can proactively identify a problem and inform and advise the customer. The service provider manages data collection, reporting, and analysis as well as customer-specific issues such as configuration, data backup, and authentication. Calix manages the operation and updating of the cloud-based servers.

In addition to troubleshooting, the Flow Analyzer platform lays the foundation for more intelligent marketing campaigns by generating profile information based on a customer's data service usage. By tapping into information about the type of application and volume of bandwidth being utilized, time of day usage and more, it is possible to develop an intelligent segmentation of users in order to upsell and/or cross-sell new services and capabilities or provide highly relevant and targeted information to customers about other services.

Flow Analyzer is delivered as a licensed software as a service (SaaS) product and is not tied specifically to Calix hardware.

Cisco Prime
Cisco has taken a different approach to entering the service provider support and network analytics/diagnostic market by recently acquiring two very different but synergistic companies. The first acquisition was ClearAccess, a Vancouver, Washington-based company that provides TR-069 standards-based software to service providers for the provisioning and management of residential and mobile devices. This acquisition closed May 1 and strengthened Cisco's software portfolio and talent pool in this area, allowing Cisco to more ably support the fast-growing need of mobile and fixed/broadband network operators to have better visibility and management of an end-user's device and the applications and content on it.

As business users and consumers alike are increasingly connecting to remote sources to download or access applications and content using an increasingly diverse device set, service providers are challenged to support these higher-value users and their service experiences. This first acquisition of ClearAccess will give Cisco an additional set of capabilities to offer CSPs to better enable them to manage and support the new digital media challenges being thrust upon them by a rapidly growing base of tech-savvy customers.

The second acquisition, announced on May 3, is Truviso, a small California-based analytics software vendor specializing in network-driven solutions that provide users with continuous, advanced analysis of live production data, an urgent need of CSPs. The financial terms of the deal were not disclosed, and we understand that this is a very small acquisition done for the intellectual property and engineering team more than anything else.

Truviso brings Cisco scalable, real-time network data analytics and reporting software, and we believe it is a strategic play for Cisco, one that helps elevate Cisco's value to CSPs and lends further credibility to Cisco's claims that is now very serious about becoming a software and solution provider and not just a box vendor. We see this deal as a clear sign that Cisco recognizes the value of investing in strategic software assets for its Network Management Technology Group, and we believe this deal, combined with the ClearAccess deal and any other deals that are likely occur, will help enhance and expand Cisco's value proposition to CSPs by helping address some of the most pressing network management and customer experience issues as well as holding the potential to help drive end-user revenue growth.

Specifically, we understand that, for example, Truviso can process over 20TB of data per node per day (on average), and that its rapid in-memory processing combined with its inherently distributed deployment architecture (that uses low-cost commodity hardware) will allow Cisco to provide the sort of highly scalable, real-time, distributed network analytics solution that CSPs require. And the software can go even further to provide much-needed network and customer information to marketing, customer support, product managers, network operations personnel, and many other user communities within a CSP that will perform more effectively when armed with insight gained from a robust real-time network analytics solution.

Additionally, what we understand makes Truviso rather unique is that it performs analysis on streaming data in real time with no latency and it can do so for both structured and unstructured data. So, effectively, Truviso's software performs continuous monitoring of live data and allows instantaneous query processing as well. CSPs will also gain the flexibility to combine current and historical data in real time for more accurate visibility and action for their marketing, sales and operations teams as well as their partners and customers. This type of analytics solution can provide a service provider's personnel with the ability to begin to create a more integrated view of service-affecting data and possibly develop predictive models enabling CSPs to be more proactive about how they manage their networks, services, and customers. This data can also be used as input to policy management and real-time charging platforms, thus enabling CSPs to rapidly alter pricing models and policies based on real-time data and market dynamics so they can offer an improved and more differentiated and attractive service experience to their customers and possibly combat some of the revenue erosion they are experiencing from over-the-top providers.

With Cisco's deep domain expertise and knowledge of the network from both an equipment and a traffic perspective, we believe Truviso will be a core component of Cisco's very strategic move into network analytics, and we see great value and synergies in this acquisition. Truviso's real-time data analytics can help enable Cisco's CSP customers to improve their network operating efficiency and monetize new revenue streams. Insight gained from real-time network data can enable better network performance monitoring and management, more informed customer care, and more targeted, real-time marketing campaigns and promotions, all of which serve to help improve a CSP's bottom line.

The Truviso acquisition also serves to reinforce Cisco's commitment to its vision of delivering a more intelligent network by acquiring unique technology assets that enable streaming analytics. As part of Cisco Prime, this technology supports Cisco's five foundational priorities by providing solutions for the core, the datacenter, virtualization, collaboration, and video, now enhanced with network analytics. The Truviso team and technology will serve to accelerate Cisco's analytics efforts and will be integrated into the Cisco Network Management Technology Group.

With all this said about Truviso, we understand that a new product will not be generally available from Cisco until fall 2012 as we understand that Cisco is electing to invest in integration with some existing assets and development of some additional functionality.

Future Outlook
We expect to see more from Calix, Cisco, and other network equipment vendors and others in the area of real-time network analytics as it is such a rich and yet largely untapped source of unique value for CSPs. And while large and well-equipped analytics software vendors like IBM, SAP, and others offer a host of robust solutions, few vendors we are aware of offer software that can rapidly and cost-effectively process massive volumes of live, continuously streaming network data and enable instantaneous query processing. So we see opportunity for Cisco to carve out a new analytics solution niche for itself with Truviso, and we wouldn't be surprised if there are more software acquisitions on the horizon for Cisco to further strengthen and/or complement Truviso.

From a service provider perspective, IDC believes that employing analytics platforms creates new opportunities for CSPs to enhance their operational and marketing effectiveness and improve the all-important end-user experience. By creating an environment that allows for real-time diagnostics and has the potential to take customer support to a new level, analytics solutions furnish facilities-based broadband providers with the tools necessary to do more informed and proactive network performance management and create superior customer segmentation reports. A higher level of network visibility and a better understanding of customer needs and network usage can also ultimately lead to more effective customer care and marketing to consumers and businesses, leading to lower churn and higher ARPU.

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