Online charging: how to scale massively while keeping TCO low?

Telecom operators are facing a tremendous increase in transaction volumes related to the widespread adoption of IP communications. Consequently they need to bring massive scalability into their systems at the lowest possible cost. Nigel Upton, HP BSS Products General Manager, at Hewlett Packard and Fergus O’Reilly, Chief Technical Officer at Highdeal, explore various possibilities offered to these operators and present the benefits that the combined HP and Highdeal solution can offer.

Nigel Upton , HP BSS Products General Manager, at Hewlett Packard

Fergus O’Reilly, VP Product Strategy Highdeal

Transaction Reporter: What are the drivers that motivate telecom operators to change their existing prepaid and billing systems to online charging?

Nigel Upton: From what we see, our installed base of 150 tier-one and tier-two clients using HP IUM for mediation are under tremendous pressure to introduce, change or remove services very rapidly. The market is becoming more dynamic, more competitive and content is driving more and more traffic. In order to provide new services rapidly, change them quickly, introduce promotions and have the flexibility to support many other initiatives, operators need to upgrade their prepaid and billing systems to online charging to stay competitive.
Most operators do not want to change anything in their infrastructure because it is expensive and painful. Therefore, what we offer is very much a modular approach, where we complement and supplement their existing systems. In fact, HP IUM’s online charging capability supports their existing systems and gives them the charging flexibility they need. From an architectural point of view, most operators believe in the value of having an IMS-compliant architecture.
They turn to HP to provide the capability to capture, aggregate and correlate records and feed them to the rating and balance engine, all within the IMS architecture, including support for Diameter. Our clients tell us they want a flexible solution that can talk to multiple billing systems and to multiple devices producing records. In summary, they are looking to build an SOA-based architecture with the flexibility to switch components in and out instantly.

Fergus O’Reilly: The fact that we work with this best-of-breed online charging approach, which does not require operators to replace their entire back-end infrastructure, differentiates us from our competitors. Typical large billing vendors come in with a project that includes a complete replacement of the back-end infrastructure in order to obtain a better pricing system or to work in an online manner, resulting in a project that is long, complex and expensive.
We, at Highdeal, tell our clients that they can keep their back-end system if they are happy with the way it handles their bills, their accounts receivables, their collections, etc. What is changing is their pricing catalogs, their offer catalogs, their promotions, their bundles and therefore the different types of network elements that they are addressing. In such a highly dynamic and changing environment, all they need is flexibility and rapid reaction at low cost, and they can leave the rest of the infrastructure as is. That is quite a different message compared to what telecom operators usually hear.

TR: What are the main differences and benefits when we consider a horizontal vs. a vertical approach for scalability?

Nigel Upton: HP and Highdeal have an innovative approach in comparison to the legacy billing companies. To summarize, our vision is that operators should have a standard architecture that allows them to plug and play and bring in services rapidly. This can really only be done with a horizontal approach where best-in-class components can talk to each other through a set of standard interfaces, such as those defined in the IMS standards.
As we have proved to our customers, we can help them very quickly deploy and bring in new services and provide a tremendous amount of flexibility across a range of solutions and between different systems. This is not at all the case with the vertical approach that some legacy billing companies continue to use, which is to create a new vertical stack every time you introduce a new service to support the offer. Such an approach is extremely expensive, very complex and also an inflexible way of dealing with the rapid change that operators have to respond to.

Fergus O’Reilly: Today it is generally accepted that when you move to IMS types of services, you introduce many new layers in your network, and each of these different layers sends information to the charging system, for instance, to request authorizations. In such network configurations, the number of transactions which are coming and hitting IUM’s Charging Manager and then going back to Highdeal is multiplied between three and five times. These multiplied transaction rates mean that the existing infrastructure in place has to scale to that level of traffic, and operators then have to change their systems.
Alternatively, they may question what scaling model they are going to use: large servers (typical legacy model), proprietary and expensive platforms, or the horizontal HP/Highdeal model which can scale very gracefully and cost-effectively, as recently demonstrated by a performance benchmark in the HP Solutions Center.

Nigel Upton: Furthermore, IP traffic is growing very quickly and becoming increasingly complex, as the number of records being processed dramatically increases for an IP event versus a voice transaction. Our customers themselves tell us that they are facing massive transactional volumes as they launch IP services. For them, scaling information is much more difficult to do on vertical systems that require huge hardware upgrades, and the only pragmatic way they can see to sort this out is the horizontal scaling.

TR: What are the main benefits of the combined HP and Highdeal solution?

Nigel Upton: The key advantage of our common approach is that we provide our customers with the flexibility to bring in new services, which is much easier to do on a best-of-breed component architecture than in a tightly integrated vertical solution. We enable dramatic price reductions, particularly for the cost of hardware and software infrastructures, as well as for the services required to support the system, because it is all based on industry standards. Also, thanks to the flexibility we bring, operators are able to quickly modify their systems, presenting a significant competitive advantage for them as they rapidly roll out new services, change existing services, and ultimately realize new revenues. Operators who have a monolithic legacy system cannot enjoy this flexibility because such systems are frequently too complex and too expensive to change.

Fergus O’Reilly: Our value proposition is that we have always tried to follow industry standards. When integrating the systems, we provide open Java-based and XML-based APIs which are widely understood and easy for our partners and customers to use.
Once the solution is integrated into the overall IT systems landscape, the Highdeal approach has always been “configuration, not code,” which means that it is easy to configure the system on an ongoing basis, minimizing the involvement of IT staff, thus reducing not only costs but also the time spent updating pricing models and plans.

TR: How do you see the evolution of online charging systems in the future?

Nigel Upton: As we look out over the next three years, we see operators moving everything to IP, which greatly increases the volume and the complexity of transactions. Therefore, being able to introduce new services and to charge for them or to rate them, becomes more and more crucial. The tremendous traffic increase is staggering: a IP event generates seven to 100 times the number of records than a voice event, and the rating and charging systems will have to deal with these massive volumes of data.
With IP deployments increasing, we are starting to see a real convergence between different devices, home and office solutions and a proliferation of services on offer. The implication for the systems that provide the rating, the charging and the account balance capabilities is that as the volume of data increases quickly, so will the need for flexibility. We particularly see this in Asia, where telecom operators launch new services extremely rapidly and may offer promotions for a period of just one week.

Fergus O’Reilly: We also see that our customers are increasingly running multiple pieces of their business models through the same engine, for example, multiple lines of business such as quadruple play fixed and mobile offers, or retail and wholesale businesses on the same platform, or multiple partners involved in one offer. With our HP/Highdeal solution, they are confident that the infrastructure offers the flexibility they require and can scale to the volumes that they need.

TR: Finally, what are the shared values that HP has found in Highdeal’s business approach?

Nigel Upton: HP and Highdeal view the market, and the approach to solve the issues of our clients, in a very similar and complementary way, because our technologies are supporting each other. This approach is modular, flexible, standard-based, best-in-breed and quickly deployed. We share the same views of how technologies should be applied to solve our customers’ issues, and our approach is very widely applicable.