Tuesday, October 23, 2012

Managed Services and the Public Safety Broadband Network

One topic that will be of concern when it comes to the Nations Public Safety Broadband Network will be the long-term operations and maintenance aspects. Who will run the State’s PSBN for the long-term? Who will run the internal State agencies and State entities that will access the States PSBN network? Would it be the carriers? Or the OEMs? Or would it be a State P3?

There are a lot of things that come to mind when thinking about this topic like…will it look like a private-sensitive-classified network, or will it be a private ensemble of statewide networks more relying on the “plumbing factor” and leaving the intelligent classified portions to the entities that ride the piping infrastructure?  If it were just a handful of entities then I would go with the highly classified, but given the necessity of multiple statewide entities requiring the access, I would say its better fashioned to a more open architecture with reliance of protection falling on the entities themselves. With that said one has to ask, “then who will run these networks?” After all it’s a lot more than just deploying layers 1-4 in the State PSBN …most of the hard work will actually be with the application layers 5-7 (reference OSI Stack).

The obvious answer lays in the hardening aspects and control of the entities own proportional network concerns. In essence, it is the entities that ride the network that will depict its hardening features. The beauty of it is they don’t have to rely on pacifying a subscriber business model of a typical carrier. Another area of concern is the actual management of the platform in general. In the context there is a lesson to be learned from the carriers.

The carriers, for the last 3-4 years, have been outsourcing the operational control and maintenance of their own networks to a host of third party vendors. This outsourcing is termed “Managed Services”. The term was coined by the Original Equipment Manufacturers (OEMs) as a way to isolate the actual design and operational services that is required to run their own equipment. The difficulty comes when they integrate the complex relationships of high-level applications across multiple platforms. This is something the OEMs do not do…or at least not very well. But the OEMs managed to convince some of the national carriers that it was in their best interest for them to manage their own product versus someone else.

Why would the carrier do such a thing? There are a host of reasons, but it’s all about consolidation, market potential, cost and the impacts on the ARPU (Average Rate Per User)… as well as the comfort of long-standing relationships. The carriers see more money in the content of the services they provide than the actual commoditized Internet access model. The overhead of their multiple physical infrastructures is loading their capability to affectively keep up with the decline in their ARPUs, which is forcing the carriers to look for ways to off-load their infrastructure to sustain or increase profit margins. The carriers were faced with a dilemma, so they turned to their long-standing OEM relationships to try and fix the issue.  The OEMs and the carriers came up with a plan to relinquish the risk of running the infrastructure by letting the OEMs managed their own gear. The issue with that is that the overheads for an OEM are more than twice the industry average for service providers, so the figures became a wash…and remain a wash today. In fact some of the largest Managed Services contracts out they are actually losing money. But that’s another topic. The big integrators, i.e. IBM, HP and the likes, stepped in, but their overheads exploded even beyond the OEMs, so the issue still exist today. My opinion the only real answer is to sell or dismantle some of that infrastructure. Good luck in finding a buyer for an old 2G or 3G platform when 4G is now the game.  

So why would managed services work for the PSBN?

The PSBN, more specifically the State run P3 entity, is not an OEM. It is in fact a true service provider for the PSBN. It’s overhead will be managed through a cost + Plus model using man-hours and materials. There are no margins to sustain for product development, research, or marketing and sales.  The State P3 only exist for the deployment, operations and management of the State Public Safety Broadband platform. There are no competing business models except for the resources that have “Public Safety Service” responsibilities within the State…and that competition is only limited to prioritization within the LTE solution itself…which is actually not an issue at all. In essence, the State P3 contractor/awardee will be the Build, Operate and Own model of execution whose primary business model is to run the State PSBN for the long-term.

The attraction of the State P3 Managed Service contract will be the terms of service that are established with the State internal agencies and entities. As an example: a State Transportation Department covering the Highways may sign-up for 20 years terms of service for LTE service from the State P3 PSBN; where as a Power Utility may sign up for 30 years terms of service for its LTE Service. These are definitely terms of service that any managed service provider would love to win. On top of the terms of service mandates there will also be mandates for maintenance activities on hardened tower locations or communication nodes throughout the entire State.

What about the data and control center elements? What about Cyber Security controls? There will be a hoist of “other” managed service plays as well. Someone will have to run the various State agency and entities own data and communication solutions. Why wouldn’t there be an opportunity for a Managed Service contract with the Department of Homeland Security, or the Department of Transportation, within the State? There are a host of opportunities that lie within the State’s PSBN effort…all of which are great for the State, great for the economy and great for the Nations employment numbers. 

The necessities to run the physical infrastructure are evident, but what’s more impressive is the opportunity to manage the applications horizontally between the agencies, of which all communicate through the State PSBN. The developments within the application space start to present themselves, structurally, through the process and data control elements that are essential to the hardening/protected applications themselves. There will be a whole ecosystem of data centralization, manipulation and storage requirements that will integrate across multiple functioning enterprise solutions. Developing “Apps” is only a small piece of the much larger picture.

Just some guy and a blog…

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