Mavenir is a business which has been growing steadily over the last few years, capitalizing on the virtualization buzz, though future prospects could ultimately be out of their control.
One aspect of the business model for Mavenir is simple. It is somewhat reliant on the process of decoupling hardware from software, the emergence of standardised NFVi, which in turn will allow operators to reduce spending on hardware, placing more emphasis on software, which is the dream situation when rolling out the 5G world. Mavenir does of course have some pretty handy technology outside this grand plan, but this seems to be the general thesis.
This trend of decoupling hardware from software is already underway, though admittedly progress has been lethargic to date due to resistance from today’s heavyweight vendors and some operators clinging to the strategies of yesteryear, but staggered steps forward are being made. This is where Mavenir can enter the fray with the knockout punch; because its business model is not associated with hardware, it can offer software products and services cheaper.
The overarching theory is sound. Companies like Huawei and Ericsson, despite becoming software players in their own right, will have to protect total revenues; the transition from an integrated hardware/software solution to purely software will drop revenues, therefore in the first instance prices in the pure-play software business will be inflated. These are companies which will not want to shock investors with a plummet in revenues, therefore the transition into the virtualized world with be ‘managed’. With the traditional heavyweights overcharging, Mavenir can swoop in and undercut because there are no legacy hardware business revenues to worry about.
This all sounds like a very effective business model, but a lot of it is dependent on factors which are outside the control of the company itself. As it stands, Mavenir is profitable, with revenues of roughly $500 million and plans to grow this number to more than $1 billion in four years, but this all depends on virtualization trends picking up pace, operators embracing the new dynamics of the digital economy, 5G deployments to be as optimistic as currently being preached, and of course the assumption they can undercut the bigger boys on price.
But this is only one part of the Mavenir story, the other is focused on RCS, and looks incredibly promising. To date, RCS has been somewhat of a dirty word for the operators, with the webscale player plundering the bounties. But the tide is turning. Recognising the potential for RCS when delivering new services in messaging and multi-media content, it is embraced by operators in North America, with trends slowly beginning to sail across the Atlantic to Europe.
In the RCS world, Mavenir has been one of the first to get to the party. The team has already developed cloud-based applications, allowing easier integration for the operators, but more importantly, these applications aren’t just focused on the consumer services. This is where the webscale players have been reaping the benefits, but with an eye on the enterprise services market, Mavenir has the potential to make solid progress.
Another very important factor is the procurement process. The team already count 240 companies around the world as customers, and many of these customers are fickle beasts. They don’t like the unknown and fear change, the fact Mavenir is already a known entity is a positive. But known under what name…
This has been the plague of the business for the last few years. It was known as one name, then another brand, before adopting a new logo. Consistency has not be a major play, which will certainly make some nervous. A big question is whether Mavenir has permanently solved its identity crisis.
The theory about being able to undercut competitors is believable, but until competitors start talking about pricing models, we’ll never actually know. The assumption here is competitors will be defensive of hardware revenues, not aggressive on the software side. However, trends in the VoLTE world, where Mavenir is arguably knocking the likes of Nokia and Ericsson off the pedestal, and RCS are looking promising for the business.
A large component of Mavenir’ success seems to be heavily reliant on the deviousness of today’s mega-vendors and whether they will abuse relationships with customers, as well as adoption trends with are largely uncontrollable. A lot of future success seems to be dependent on moving cogs functioning smoothly and in a timely manner, but the team is confident… some might even say cocky.
Telecoms.com periodically invites third parties to share their views on the industry’s most pressing issues. In this piece John Baker, SVP, Business Development at Mavenir looks at the benefits of the Virtualized Media Breakout Controller.
Operators are facing a dilemma – How to remain profitable while cost-effectively meeting rapidly escalating network capacity demands. Nearly 80 percent of user data that transits an operator’s network is encrypted video that only benefits OTTs. It is in each operator’s best interest to architect the network to off-load this traffic at the nearest point possible.
The Virtualized Media Breakout Controller (vMBC) is the answer – allowing user traffic to offload to the cloud as soon as physically possible. “Approximately 40 percent of video content could be cached at the edge,” according to Iain Gillott, President and founder of iGR. “The trick is to be able to benefit from the feature and operational cost benefits without having to upgrade to 5G architectures.” vMBC makes this possible with an innovative, new white box platform designed to be positioned for cost-effective function at the edge of the network.
Defer Bandwidth Increases for Two years
With bandwidth consumption growing exponentially each year, the vMBC breaks out local traffic and directs it from the network edge, instead of moving it back through a typically centralized packet core. This offloading conserves transport and centralized packet core network assets on both control and user planes.
What does this mean for operators? In one feasibility scenario, iGR estimates that if operators can offload 32 percent of the data from a network site (using a solution such as the vMBC), then they can defer spending on increased bandwidth for more than 25 months. On top of offloading traffic, the vMBC can be combined with additional virtual network functions (VNFs) that provide video optimization and caching as well as virtualized base band Units (vBBUs) for Cloud RAN. This opens the door to using previously excluded fronthaul solutions and processing of the radio interface on COTS processors, with each incremental function significantly and positively impacting Total Cost of Ownership (TCO).
Deploy Anywhere, Even Crowded Cell Sites
A local breakout solution offers the ability to host virtual routing, firewall, and user plane data offload in a single white box routing platform, deployable anywhere at the network edge including cell sites, near-edge data centers, local data centers and enterprise locations. With most cell sites being too crowded to add additional network equipment, the vMBC, along with other VNFs, can be loaded on a compute platform that can directly replace a traditional cell site router, ensuring the integrity of the existing network and seamless integration into next generation MANO operational systems.
Leading the Way to MEC and IoT
vMBC is a key part of MEC (Multi-Access Edge Computing) and IoT initiatives, improving next-generation core network services and providing a path toward 5G and edge computing. The ability to scale network functionality using virtual elements and COTS HW platforms allows network functionality to be deployed at any location.
vMBC is also optimized by design and architecture to support low latency use cases by enabling small form factor user plane deployment at the network edge. This greatly reduces network latency by allowing applications to be located close to where they are deployed, automatically replicating and synchronizing databases across multiple sites, providing complete failover capability. The solution is inherently fault tolerant and can scale without limits.
It’s all happening at the edge.
Telecoms.com periodically invites third parties to share their views on the industry’s most pressing issues. In this piece Guillaume Le Mener, GM of Enterprise Solutions at Mavenir argues that there may still be a lot more to RCS than you think.
We have taken it for granted. When we use our smartphone, it is just another icon on the screen but, believe it or not, SMS is more than 35 years old. It was first proposed for the Global System for Mobile Communications (GSM) in 1982, although its most popular time was the late 90s and early 2000s, when entire generations mastered the art of compressing ideas, passions and conversations into small snippets using the most ingenious abbreviations in order to fit within the 160 characters limit. And its popularity generated a significant amount of revenue for mobile network operators (MNO) worldwide.
Then the mobile internet exploded, data plans became ubiquitous and over-the-top (OTT) applications usurped the throne that SMS had held for more than two decades and the MNO’s person-to-person (P2P) messaging revenue was severely diminished. However, SMS continued to live on as the platform of choice for application-to-person (A2P) or business-to-consumer (B2C) interactions. You have been using SMS to receive your two-factor authentication codes, confirmations about flight reservations, links to download mobile boarding passes, discount codes and coupons, or alerts every time your credit card was not present for a transaction. Mobile messaging is a part of our lives, even though we don’t pay much attention to it anymore: we have taken it for granted.
But mobile messaging has been going through a complete transformation. Originally embraced by the GSM Association (GSMA) in 2008, a new messaging protocol was developed with the goal of succeeding SMS as the mobile messaging application of choice: Rich Communication Services (RCS).
RCS was initially an industry response to the threat of the OTT messaging applications that were eroding their P2P SMS revenue and so it focused on introducing the features that made these applications popular—conversations, images, video, audio, typing notifications, read receipts—while ensuring the global reach that SMS provided.
For many years, RCS struggled to grab interest from MNOs and handset manufacturers because the business case wasn’t favorable. The OTT applications had taken over the P2P business almost completely—except on the markets where all-you-can-eat SMS plans were already in place—and it was uncertain that RCS could retake the throne. But recently, RCS introduced the Universal Profile—which enhances its capabilities by laying out the common functionality that needs to be supported by every player—and there has been a sudden interest to use RCS for A2P applications, a scenario that provides a profitable business case. Moreover, there is a push by mobile handset industry giants such as Google and Samsung. All these developments have infused RCS with new life.
A major improvement in A2P messages
The RCS open platform provides developers with everything they require to implement and deploy advanced communication applications. The message richness, combined with its universal reach, make it a very attractive delivery vehicle for brands, and offers new revenue opportunities for MNOs.
RCS solutions have been in mobile networks for several years provide major improvements in A2P scenarios such as:
- Sender identified by name, not a short-code or MSISDN
- Integration of graphics and QR codes
- Hot-buttons to websites replacing links
- Executable code embedded in the message, enabling customers to take action immediately without going to a website
- Spam protection and privacy control measures to maintain customer trust
And by combining it with solutions like messaging-as-a-platform (MaaP), RCS provides the basis for up-selling A2P SMS now, and a chatbot platform in the near future, as well as P2P message monetization and data sponsoring opportunities.
With Google pre-installing the new Android Messages app on Android 8.0 Oreo and Samsung adding their own RCS capable messaging application on their smartphones, almost all the Android devices launched in 2018 will be RCS compatible and most major networks have deployed or are deploying Universal Profile compliant RCS solutions in the market — 55 operators and 11 OEMs globally as of January 2018, according to GSMA, with a forecast of 200 operators by Q1 2019.
What about the iPhone?
Even though the iPhone represents a smaller market share—around 20% globally according to Statista—Apple is the second most popular smartphone vendor after Samsung and their flagship device is still considered one of the trendsetters in the industry. Therefore, it is only natural that key industry decision makers look at their positioning around RCS.
iOS 11, the latest version of the iPhone operating system, does not support RCS capabilities in their Messages application. Apple did not wait for RCS to become popular and invested in their own multimedia messaging solution that was named iMessage. The Messages application on the device automatically detects if a contact has the iMessage service and utilizes it in the conversation—the user knows because the messages are blue. If the destination does not support iMessage, the application falls back to utilize MMS or SMS, presenting the user with a green messaging interface.
But this doesn’t mean that RCS cannot be used on Apple devices. It is still possible to provide a downloadable application that allows users to benefit from RCS’ message richness and universal reach. In some cases, other iOS applications may utilize RCS as a messaging mechanism within a specific user experience. For example, amobile-native unified communications and collaboration (mUCC) solution uses RCS in the mobile network as the instant messaging delivery mechanism. RCS can deliver everything a unified communications solution needs—such as typing and delivery notifications, message store and forward, conversation synchronization, or image, video and audio assets— and more—for example, rich cards and carousels—with the ability to deliver messages to any phone number in the planet by downgrading to an MMS or SMS message when needed, just like iMessage does.
And although Apple does not usually advertise their roadmap, past experiences show that they normally adopt technologies once they are mature enough—such has been the case with WebRTC—which makes it likely that iOS will support RCS in the near future.
RCS has already permeated into the networks and is about to take the center stage in the mobile messaging theater.
Unbeknownst to most of the people, MNOs and device manufacturers have been implementing RCS within their solutions. The GSMA claims there were 159 million monthly active users of RCS globally, as of January 2018, forecasting 350 million by the end of 2018, representing a $74 billion market by 2021.
In the US, for example, T-Mobile is already claiming that 30 million customers are sending over 250 million RCS messages every day across their network.
With the closure of the Universal Profile 2.0 and the strong push by Android, in the next few months users will begin to see RCS in every aspect of their daily lives. Although they will not know it as RCS, for them it will be just messaging.
Meet Mavenir to discuss RCS implementation at 5G North America 2018, May 14-16, in Austin, Texas.
Telecoms.com periodically invites expert third parties to share their views on the industry’s most pressing issues. In this piece Bejoy Pankajakshan, SVP, Technology and Strategy at Mavenir, take a look at what Multi-access Edge Computing will bring to the table.
Rapid advances in mobile computing power are pushing machine intelligence to the very edge of the network. Known as Multi-access Edge Computing (MEC), this development is a critical success factor in the rise of the new 5G mobile networks that will deliver unheard of data speeds to an exponentially larger user base, and all at a fraction of the cost-per-bit expense.
The primary advantage of moving processing out to devices at the edge of the networks is that it delivers the ultra-low latency needed to communicate efficiently; essentially eliminating the need to constantly query centralized intelligence engines every time a device requests information. Instead, the device can perform the computation itself, extending applications and services to the very edge of the network, and in close proximity of the user.
When you combine that kind of decentralized computing power with the web-scale platforms that allow companies like Amazon, Facebook, and Google to efficiently manage billions of users with minimal resources, then you have a recipe for huge commercial success. A good thing too, because by some estimates, as many as one trillion devices will be connected to the internet by 2030.
To deliver connectivity to anything near that kind of user pool, CSPs will need to adopt a radically new operational approach towards service roll-out, maintenance, and support functions. Fortunately, with the promise of MEC and 5G, this approach will address both human and machine-to-machine (M2M) connections.
In this bright, new, hyper-connected world, applications such as enhanced personal assistants (e.g., Siri, Google Assistant) that perform truly complex “smart-home” tasks are moving into the mainstream. And this is where the exciting machine-to-machine part comes in. With MEC, your personal assistant will go even further – it will step out of the home with you and into your car and literally drive you to work in the morning, communicating with city sensors and other smart-devices along the way.
Anticipating the applications that MEC enables, pioneering companies have already built an end-to-end portfolio of software-based, open hardware, web-scale solutions that make the 5G vision a brilliant new reality. For example, enabling MEC with software solutions in the cloud, such as Cloud RAN and vEPC, enables the creation of a virtualized, cloud-centric mobile network. Now operators can leverage back-end infrastructure while placing intelligence and local storage out at the edge of the network. With technology like this, living on the edge is exciting.
Meet Mavenir and learn more about progress towards 5G in the Middle East and North Africa next month at 5G MENA 2018, the largest event in the region to focus on advancing and commercialising 4G and 5G networks.