This article original published in ScreenPlays Magazine (May 23, 2018)
May 23, 2018 – Ericsson is poised to put its Unified Delivery Network initiative on a new track as an independent operating company leveraging computerized edge facilities of Tier 1 network service providers worldwide to support the functionalities essential to meeting the requirements of a next-generation OTT video and IoT ecosystem.
The UDN initiative, announced two years ago, has signed on 84 of the largest NSPs, giving it the global footprint it needs to compete as a full-fledged next-gen CDN, says Marcus Bergstrom, general manager of Ericsson UDN. “CDNs as we know them are coming to an end,” Bergstrom says. “Implementation of compute at the edge is a total game changer.”
As recently reported, the build-out of mini datacenters with advanced processing capabilities at network edge locations has accelerated rapidly over the past two years, providing NSPs the means to support transcoding, just-in-time-packaging and other functionalities for multiscreen delivery of a much richer, more personalized set of services with advanced advertising support than can be done from highly centralized headend facilities. Helping things along has been industry-wide collaboration on a more systematic architectural approach to orchestrating virtualization of functionalities across the core, edge and deeper points of intelligence through the Open Networking Foundation and its offshoots, including the edge virtualization initiative known as CORD (Central Office Re-Architected as a Data Center), which facilitates aggregation of residential, enterprise and mobile services onto one platform.
But while such efforts enable NSPs to transform their own service portfolios and modes of operation, they leave untapped the revenue potential that could be realized were these computerized edge networks to be orchestrated to operate holistically as a next-gen CDN reaching far beyond the confines of each NSP’s footprint. Ericsson has developed a business model that plays into the NSP edge compute trend by enabling them to share in the revenue potential of such a CDN without incurring the software, back-office and operations costs of mounting such an effort, Bergstrom explains.
“We see there’s a market for deeply deployed compute capabilities, but trust and incentive is the issue impeding NSPs’ ability to capitalize on that market,” he says. “Right now, NSPs, whether fixed or mobile, invest in network expansion that’s generating revenue for third parties that’s not shared with them.
“This is an unsustainable, unbalanced value chain,” he continues. “So we need to rethink how to incentivize NSPs. That’s what we’ve done by creating a one-stop shop for content and applications providers that generates a shared revenue pool for NSPs. We’re not selling something when we go to NSPs. We’re giving them an opportunity to share in the value chain, which is why we’re getting a strong buy-in from NSPs all over the world.”
While Bergstrom contends that “all the big guys” among NSPs worldwide are signed on as revenue-sharing partners in UDN, the company has been reticent about naming additional participants beyond the 17 currently identified on its website, most of which were announced two years ago hailing primarily from the APAC region. The company has yet to name customers, although 20th Century Fox and Paramount Pictures were named as partners in the initial announcement. With the project now in preparation for rollout as a full-fledged operating unit more specifics about the participants may soon be forthcoming.
Bergstrom says the need to set up the soon-to-be rebranded UDN unit as a full-fledged business operation in its own right was recognized as an essential part of the re-organization of Ericsson now in progress under the leadership of president and CEO Börje Ekholm, who was appointed to the post in January 2017. Ekholm, commenting on Q1 2018 results in April, stressed that as the company awaits consummation of sale of a majority stake in its Media Solutions business to One Equity Partners, it is increasing R&D investments in existing 5G networking and other technologies within its core portfolio as well as financial backing for emerging businesses in the IoT and CDN markets.
The move into the CDN business is a major undertaking designed not just for the M&E market but for IoT as well, Bergstrom says. “From 2018 and onward we’ll be able to support live video at broadcast scales, AR, VR, 4K, 8K, low-latency IoT, third-party app hosting,” he notes. “It’s really about repositioning and rebuilding the value chain. Once we have that mindset, we can talk about industrialized IoT, smart cities and the other buzzwords people talk about but haven’t been able to execute on.”
The vision entails creating a computerized global edge infrastructure capable of supporting all the functionalities in the UDN software stack, which are built on open standards and implemented as Kubernetes containers on datacenter hardware. They include analytics, caching, transcoding, just-in-time-packaging support for advanced advertising and personalization of UX and much else, Bergstrom says. “We can spin these up as containers on top of an edge platform in a matter of minutes,” he adds.
Analytics plays a huge role at the core and edges in all aspects of the new CDN. For example, Bergstrom says, the involvement of NSPs allows the CDN to tap data collected from NSP as well as off-the-shelf connected devices to support end-to-end quality control and troubleshooting, ad targeting and UX personalization.
Advanced analytics is fundamental to load balancing across the new CDN’s edge facilities and to another key benefit as well. This has to do with the ability to provide UDN customers the benefits of other CDNs that affiliate with Ericsson’s operation. This brings those assets into the best-path selection process to ensure the broadest possible reach and redundancy for UDN customers, Bergstrom explains.
“We will also use the best delivery available without prioritizing options based on relationships with us,” he says. This depends on the ability to analyze real-time performance across data sources generated from UDN and third-party facilities. To facilitate interconnections within the UDN NSP group and beyond the company has partnered with global Internet interconnection and datacenter provider Equinix for co-location in 22 centers across Asia, America and Europe, according to Ericsson documents.
The UDN self-service interface with customers is designed to enable each one to choose what edge functionalities they want to implement for any given use case as well as the mode of transport they want to employ across the UDN backbone. If they want the lowest latency possible for live video and other latency-sensitive content categories, they can activate the UDP (Universal Datagram Protocol)-based Sye solution provided by UDN partner Net Insight, Bergstrom says, noting the solution is specifically designed to harmonize viewing experiences to ensure everyone sees the same content at the same time on first and second screens.
Support for different modes of multicast used by individual fixed and mobile network operators is another point of coordinated functionality on the UDN, he says, emphasizing Ericsson’s experience as a leading exponent of LTE Broadcast. In general, with the onset of 5G approaching, Ericsson sees its knowhow in next-gen mobile networking as a key advantage for UDN customers.
“5G involves a completely different mindset about how you structure the service model,” he says. “5G brings into play deployment of intelligence very deep in networks where the control plane is decoupled from the data plan whether for deploying cache or radio access functionalities. NSPs across the globe understand that as they virtualize these networks they will require a completely different level of collaboration industry wide so that all can take advantage of the platform.”
Indeed, as the decoupling of control and data planes extends to all types of networks, pinpointing where the edge resides will be a matter of latency and other requirements, Bergstrom notes. “With some of these apps you need to be within 10 to 20 milliseconds roundtrip end to end,” he says. Or, as another Ericsson official puts it, speaking on background, “Right now datacenters are being put in where there’s access to cheap real estate and copious amounts of energy. In the future we’ll definitely have compute functionalities positioned much deeper at key aggregation points like a cable node.”
It remains to be seen what level of cooperation Ericsson will achieve with established CDNs, who among OTT providers will use its services and much else. And there are still technical details to be worked out, including development of a client player, which is essential to full exploitation of the latest advances in transmission technology such as use of the QUIC (Quick UDP Internet Connections) protocol over the last mile and playback functionalities such as the Encrypted Media Extensions (EME) used with HTML5.
“We’re in discussion with all the leading providers in development of our own OVP (online video player),” Bergstrom says. “We envision having a third-party player to offer as part of the service.”
But it looks like major NSPs are ready to risk farther cannibalization against their own services that will come with enabling a high-quality live OTT viewing experience and other third-party applications rather than continuing to forego revenue participation in how OTT providers use their access networks to achieve their goals. If so, the year ahead could witness the emergence of the Internet as the dominant mode of transport for TV programming along with a transformation in the business models that have prevailed to date.