It was a sign of the times that Ericsson chose to launch its Unified Delivery Network (UDN) at Mobile World Congress 2016 rather than a broadcasting show. But it was at NAB this week where Ericsson revealed that its bold and ambitious strategy to take on the likes of Akamai, Limelight and Level 3 at their own game had attracted significant partners. These came under the three key categories of Telcos, content providers and suppliers of relevant technology.
The main focus was on shoring up network capacity in the key fast growing markets of SE Asia, with new partners China Telecom, both Chungwa Telecom and Far EasTone Telecommunications covering Taiwan, SingTel for Singapore, SK Broadband in South Korea, XL Axiata in Indonesia and Globe Telecom straddling the Philippines.
Then on the content front, Paramount Pictures and Twentieth Century Fox have signed up, while in the technology side of things, Dolby Laboratories has joined to contribute in audio and Vubiquity for monetization.
The slightly odd one out among Ericsson’s new UDN intake is Mavshack, a SVOD (Streaming Video On Demand) subscription service that distributes Asian movies, music videos and TV shows to a global audience. Mavshack’s role is to help ensure the UDN meets the needs of potential global OTT customers.
These all added to the original launch partners which included Hutchison Global Communications, Telstra, AIS, Vodafone, Brightcove, DailyMotion, EchoStar, Deluxe, LeTV and QuickPlay, along with Ericsson’s own OTT platforms, Ericsson Managed Player and MediaFirst.
The UDN is really a turbo charged global CDN with the main differentiator being that it can provide end to end service and offer guaranteed QoS, which is where the Telco partners distributed across key markets come in. Of course Telcos are also required to provide the global capacity, but that might be on a wholesale basis.
The difference for the last mile is that Ericsson is seeking revenue sharing arrangements with broadband service providers such as the new recruits from the Far East. The UDN is pitched as a fully-managed global CDN service where Ericsson deploys equipment inside the operator’s last mile networks. Ericsson then manages the CDN and business operation including monetization, giving the network owner a revenue share. That is where Vubiquity fits in.
So for network capacity Ericsson is operating as an aggregator, reaching deals with individual operators stationed around the globe to provide ubiquitous coverage on an end to end basis. Ericsson clearly believes the time is right to strike against the traditional CDN providers, calculating that its UDN dovetails well with the strategies and aspirations both of national or regional Telcos and content providers, while naturally appealing to consumers by streaming content at high quality to their connected devices wherever they are. There is also scope for partnerships with pay TV operators for cross border TV Everywhere services, in the light for example of the EU’s campaign to allow users access anywhere in Europe to content they have paid for.
National Telcos are the primary target since they are adding the key missing piece of the last mile and are also seeking the most cost effective way of delivering high quality service to their customers wherever they are on a global basis. They have been finding it difficult to contain costs and boost profits as their networks have come under pressure from proliferating data and at the same time revenues have been creamed off by OTT providers from Netflix downwards. Many such operators initially started utilizing established CDNs within their own services to reduce transport costs and improve quality of content delivery. Over time the larger operators became CDN providers themselves to varying degrees as a tactic to claw back some of that leaking OTT revenue by providing that as a service to broadcasters and content providers.
But this all had limited success as it became clear the major content providers wanted to work with just a few major CDN providers which they could rely on for delivery on a large scale both geographically and in terms of volume as well as users. A few such as Netflix started to build their own CDNs.
This gave Ericsson the cue to score by bringing Telcos back into the picture through revenue sharing, while appealing to content providers by offering a global one stop shop which would take care of all technical, contractual and operational aspects. Ericsson also appreciated that the major studios as well as sports rights holders wanted to stream their content at UHD quality as soon as possible and so the UDN is being steered in this direction. On this front Ericsson is working with one of the new partners Twentieth Century Fox over optimizing the UDN to fit in with the whole end to end ecosystem for UHD content, incorporating the recent recommendations from the Ultra HD Forum and UHD Alliance. The aim is to enable low latency video for gaming, while providing a proof of concept for intake, processing, storage and distribution of all of Fox content, including new release and library movies, 360° Audio/Video, Virtual and Augmented Reality. There is a particular emphasis on HDR (High Dynamic Range) and on reducing bandwidth requirements within the UDN infrastructure.
According to Hanno Basse, CTO at 20th Century Fox and head of its Fox Innovation Lab, the initial aim with the proof of concept is to overcome bandwidth constraints and create a clear technical framework for creating UHD content. Fox is also looking for the ability to optimize the UDN to the specific needs of individual content as well as to target different device categories such as smartphones automatically. There should be a benchmark technology stack orchestrating both the creation and delivery of new content.
Another aspect of the UDN where Fox is involved is the analytics, relating to QoS, service management and especially user engagement. Ericsson says it will be able to give content providers visibility through the CDN that is currently unavailable, through having control right to the device. This will enable more precisely targeted content as well as advertising.
The other key component is Ericsson’s “OTT Cloud Connect” service specifically for mobile operators, which indicates why the launch was at MWC. This is designed to help MNOs get some revenue from the growing numbers of OTT services riding over their networks, which includes messaging, voice and social media as well as video.
The idea is to provide a bridge between MNOs’ networks and OTT services by exposing the OSS and BSS capabilities of each party to the other. Operators then get some revenue while the appeal for the OTT providers supposedly is superior QoS and the ability to offer specific features that exploit insights about the user the MNO can provide. This is more likely to appeal to video providers than souped up messaging services like Facebook’s What’sApp, which are doing very nicely without any cooperation from MNOs, although features such as Internet voice calling are blocked in some countries.
There is just one partner for this service so far but at least it is a big one in Google, which says it hopes it will enable more innovative features around mobile delivery of YouTube, as well as improved QoS.
The main competitors for UDN are the content providers, with Cisco being perhaps the most significant force among rival infrastructure and technology providers. But Cisco has been taking the alternative Federated CDN line rather than the one stop shop, involving interconnection between multiple existing CDNs to provide scale, resilience and reach. The upside of this is the avoidance of reliance on specific providers as well as the scope for growth but interconnection, handover and billing involve greater complexity when there is no direct partnership between the service providers involved. It had looked like the Federated CDN idea had been petering out but it is still chugging along under the auspices of various standards bodies, especially the Internet Engineering Task Force (IETF)’s CDN Interconnection working group, within which Cisco plays a dominant role as co-chair.
But federated CDNs can only become a reality through collaborations of the same sort Ericsson has established and this has happened to an extent as Cisco has been working with content providers and Telcos to build pilots. One difference from the Ericsson approach is that existing global CDNs as well as Telcos are involved, although of course there is major overlap now between some of these in any case. Another difference is that Cisco is more entrenched in the enterprise arena, where it has been working with Akamai for example over optimized WAN (Wide Area Network) provision with an emphasis on rich media and reaching mobile devices, including those of customers. So that will be a source of competition for Ericsson’s UDN, but has yet to make the same impact in the broadcasting arena.