Interview with Mike Manzo, CMO of Openet

Timon Singh

While the capacity of 3G networks is limited and the current surge in data-hungry gadgets such as the iPad, a capacity crunch is feared unless mobile networks can optimise their services.

The capacity crunch and upcoming LTE networks, combined with the demands of regulations being introduced at national and EU levels, are creating a significant demand for intelligent policy management solutions. Openet is a key player in this space and provides a policy management platform that allows operators to dynamically control network resources in real-time, empowering operators with intelligent, scalable and flexible policy products.

At the TM Forum Management World Conference in Nice, CXO were able to speak to Mike Manzo, CMO of Openet:

CXO: With real-time searches dominating every aspect of social media technology, the growth in popularity of Twitter and the iPad and the upcoming release of 4G networks, how is Openet responding to such an expansion in the market?

Manzo: Good question. With Openet, pretty much the entire business centers around the concept that operators in general are going through a change in their underlying businesses, moving away from being acquisition engines that focus on providing content and applications directly to consumers to being retention engines that understand that over-the-top content and services will dominate the marketplace and that their job is to enable the best user experience possible for using those applications, which has lots of implications around the devices and the network, but also to be able to monetize and control what happens on the network in such a way that they receive revenue for the value delivered to consumers.

We are a software company at our core - if you are in the operator business, every piece of software you deliver ends up getting customised. We talk about ourselves as a solutions provider but the core of what we do is develop software for operators that help them do three basic things:

The first is to get visibility into who their subscribers are and how they're using services; the product technology behind that is referred to as mediation and it comes down to being able to collect and process data off of an operator's network - data being data about consumers, with their billing plans, all the data that's stored about what they paid, what they're paying for, but also all the consumption data.

Every service a person uses, being able to collect and process that and then do something useful with it, whether it produced insights from it by business intelligence applications or whether it's feeding a real-time subscriber profile that gets used to deliver personalised services.

And we build mediation - our charging and policy management suite of products that allow an operator to - I'm not sure how familiar you are with the terminology - but charging is the engine an operator uses to do real-time billing. It's the component in a network that authenticates and authorizes users to access services and determines how much they pay for them, when they're paying for them in an other than flat rate monthly basis.

So the easiest example of the charging implementation is prepaid.

Before I let you to make a phone call, let me check, see who you are, make sure you've got money in your bank account, your prepaid accounts, and then allow you to use the phone call, make a phone call, depending upon how much money you have.

Charging today is being deployed to do lots of new things relative to over-the-top, though, the iPad is a pretty good example. The iPad is that over-the-top device with over-the-top content and the business model the operator are deploying is 'pay upfront'.

So it's prepaid but it's also a service path that buy 30 days of - buy a month of access on your iPad, automatically recurring and pay a certain amount for it either for an unlimited plan or for a limited plan and if there's a limited plan there's usage charges when you go over that threshold.

So that's an example of a charging business model, charging as well as policy management are behind that. Policy management being used to control the activation process meaning you want to be able to do over the air activation, so the only access to the network you want to allow before a customer has signed up for service is that which is required to sign up for service. And then once they sign up for service, the billing model I just described kicks in. So a good example of how innovative operators are embracing over-the-top is that iPad service.

CXO: In terms of software that you developed that tells the business specific user information, is that mainly specific for the telecommunication companies or have you found that certain marketing firms find such technology just as useful?

Manzo: Glad you asked. Both, is the short answer. So we've introduced, last week as a matter of fact, our subscriber data management solution which uses the mediation technology to aggregate data, both for the use of producing insights and we've played it with a couple operators but one in question, which happens to be a cable operator in the United States, but there's nothing there but the business, but that aspect of what we do that's specific to cable, but what they're doing is being able to use consumption data, specifically a video services in their case to be able to provide advertisers and content providers, meaning TV channels, a view of how many people are watching certain TV programs

So it's essentially a supplement, if you will, to the Nielsen Data. Nielsen Data's incomplete, so you actually have data for many of the channels that are out there. So if you're a media sales organisation at an operator or at a third party content provider that wants to be able to monetize inventory on lower rated TV channels, you have no data today and so it becomes a very emotional sale, meaning they're selling it based on the correlation of the users set to the content that's being viewed and they're kind of estimating the viewership. Well, this data we're producing enables that content to be monetized more accurately. So the long-winded way of saying absolutely.

CXO: I saw the press release, released by OpenNet saying that FusionWork's policy manager is going to Orange France. Is there anything more you can tell us about that because that's a fairly big development for the company.

Manzo: Sure. So policy management as a market is heated up faster than any I've seen in a decade in the telecom sector. It went from being a standards discussion as part of the 3G, PT, IMS standard to being a commercially deployed solution by hundreds of operators very, very quickly.

With policy management, policy management is all about allowing an operator to control how resources on their network get used by consumers in a subscriber aware or personalised fashion. So you're trying to use service XYZ, which requires quality of service to be turned on. Are you paying for quality of service? Am I supposed to throttle bandwidth? Are you able to get to a certain piece of content? Is there a fair usage policy in place that's supposed cap usage at a certain level? So all those are examples of policy.

In the case of Orange France, there's two specific use cases. The first is fair usage which virtually every operator in the world has been deploying, which is with my data plan, I'm supposed to only allow N number of gigabytes usage per month. Let me track it per subscriber and when they reach it, cap that and then allow them to buy more, allow the consumer to buy more if they reach that, but don't give them everything for free.

The second case is device tethering, where they've got a fair number of people that are tethering laptops to wireless devices. And of course a laptop uses infinitely more data than a smart phone does, so essentially what they're doing is turning their smart phone into a modem, which violates contract terms but heretofore they've had no ability to control that and they're using policy management to actually stop that behavior.

So, in the case of Orange France, as with most operators, what they're doing with policy today is fairly basic stuff, very good stuff. I mean things that need to be done to help them make sure they realise the revenue they should be realising on their network and if they're not, their costs are not higher than they should artificially be. But in the future your privacy policy use for many more creative things. If policy is a capability, especially when combined with charging that enables a very broad array of use cases that help operators create new revenue streams but also control their costs for the revenue stream that they already have.

I'll give you one example of an interesting use case. That's an application we call partner service controls but the concept is pretty simple, which is if you want to enable a bidirectional business model, a Telco 2.0 style business model where the over-the-top content providers paying you as opposed to the consumer themselves for a given service, imagine for a second that you've got a service such as Skype, where if you want to use voice and video to make phone calls at the same time, you need a certain level of quality on the network because otherwise I don't know if you've ever tried to use it on a wireless broadband card, but if you have, what you'll know is that it drops the calls very frequently, but the bandwidth utilization is too intense.

Well, imagine for a second that could be controlled by the operator where bandwidth was throttled up and quality of service was turned on such that the session was able to go through. But rather than charging the consumer to do that, they went after Skype and said, "Look you pay me for that. We will do this for you as a premier partner, but you need to share your revenue with me. When you guys get a revenue stream from the service, you're going to share that revenue."

With that ability to control the network but also to share the revenue, to do the charging behind it is a fairly complex business model that many operators, most operators, haven't deployed today but the combination of policy control, as well as charging together would enable them to do that. And so those types of use cases are the reason that customers are buying OpenNet versus the competitors. Most of the competitors we have in the policy space can do the basic things like varied usage and device tethering, but to be able to handle many of these new business models, especially those that require both charging and policy as an integrated solution, those are things that set OpenNet apart. That flexibility in our use case deployments is really where we stand apart and the reason Orange picked us was not just because of what they could do today, it was because they wanted a partner and an infrastructure in place that could help them deploy futures without having to buy an augmented infrastructure or replace the infrastructure in the future.

CXO: Where do you think telecommunications will go over the next 12 months? How would they take off, or not take off, how will they change for businesses and companies?

Manzo: I think the biggest overarching change that you're going to see or at the start to see in the next 12 months is that the operators will either began or in some cases in the process of viewing over the top content and applications as a threat and begin viewing it as an opportunity. This is not a European specific example but it's worth mentioning. About a year ago the CEO of Verizon made a public statement that he would never embrace Skype operating across his wireless network.

And then a year later they announced a partnership with Skype to enable access to Skype over the wireless network. So why is that? You know, is that guy, should we look at that CEO and say, "Gosh, he flip-flopped. He doesn't get it."

No, I look at it and say he does get it. What happened in that year is that his view of over-the-top and content shifted. That his strategic approach to the market changed because he finally understood the role of an operator in the future will be an enabler, not the content and application provider. Their job is to take a very large pool of subscribers that they can know everything about and be able to enable them to access contents and services and devices that are provided by over-the-top providers in a manner that delivers a great user experience and a lot of value and where the operator is able to get revenue they deserve for the value delivered to the consumer.

And I think at the highest level what you'll see is a shift in the thinking, not of a few operators but most of the operators in the way that they think about it and that will be - that will manifest itself in the deployment of technologies and business models that embrace over-the-top. The iPad is perhaps the best example of that, where you've got an over-the-top device and over-the-top contents and services and you've got operators around the world beginning to embrace the concept that they needed new business model, they need very granular control over the network and what people can use on it, and they need to embrace Apple as a partner in doing so. And I think you're going to see a lot more of that in the next 12 months.

As Chief Marketing Officer, Michael Manzo oversees all aspects of marketing and product management. Prior to joining Openet in July 2006, Michael worked in the Enterprise Solutions group at Nokia, where he consulted on M & A integration and marketing of enterprise mobility solutions. Michael has also held executive positions at Traverse Networks (acquired by Avaya), Omnisky (acquired by EarthLink), Telocity (acquired by Hughes DirecTV), and Notify Technology Corporation. Michael has a BA in Journalism from the University of New Hampshire.

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