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Dana KreitterMarketing Manager
Usage Management SolutionsHewlett-Packard Company
September 2002
Business Success Means Understanding Your Customers' Service Usage
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discussion framework
• service provider and enterprise IT challenges
• knowing the customer – tricky business for data services
• HP OpenView dynamic netvalue analyzer (DNA)
• case study and conclusions
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service provider objectives
revenue generation•identify new opportunities in a rapidly changing business
environment – understand how subscribers use services – influence subscriber behaviorprice evaluation
• test-drive new pricing structures and price points for services– charge by service value – charge by service delivery cost
profit maximization– pricing plan-service optimization– loyalty/churn reduction– lifecycle management– resource re-allocation
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service provider mobile revenue
voice
SMS
Enterprise Consumer
must assure this revenue
must growto achieve
ARPUtargets
Data
GamesE Mail
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challenges facing service providersand enterprises
• shifting priorities in the new business environment:
–profitability and return on assets
–consolidation and globalization
–customer retention
–revenue capture for new services
–cost containment and accountability
• business basics
–understanding customers’ usage of services
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why is usage management important?
revenue and cost benefits•billing, internal chargeback
•usage/tiered billing•desktop/ department accountability
•fair allocation of costs
•decision support
•service pricing, bundling
•outsourcing
•caching, storage, etc.
•“If you don’t measure it you can’t manage it.”
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data services differ from traditional telephony models
• vast diversity of services
• distributed nature of user data
• scale factor
• real time data processing
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the internet opportunity challenges timely business
decisions
• the Internet provides a rich environment for the rapid proliferation of customized services
• Internet customers generate vast amounts of usage data
• most current business analysis systems save all the raw data…then analyze it later.
• large storage systems= costly infrastructure = long delays in getting the results
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Internet Data Record Example (Configurable)
Internet DataRecord (IDR)
TimeSource IP(name)
Dest IP(name)
Port/Proto #
# of Bytes/Resources
Account
Market Trends– Daily
– Monthly– Seasonal
Promotions
Geographic Location
Types of Business
Class of Services
Geographic Location
Type of Vendor
Type of Product
Type of Service
Type of Product
New Product
Cost $$
Revenue $
Capacity/ Resource Planning
Customer Profile
1:1 Marketing
Market Analysis
HEWLETT-PACKARD CONFIDENTIAL
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With usage data in hand, operators can capture service value or better manage
costs• customer segmentation• pricing/ profit/ service delivery
cost analysis• service modeling, capacity
planning• evaluate new business models• churn reduction• usage-based billing• cross-sell/ upsell• service bundling
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interactive financial analysis
business models
real-timedata
collection
statistical models
live customer
usage data
business information
hp OpenView dynamic netvalue analyzerthe concept
hp OpenView dynamic netvalue analyzer
timely business decisions
interactive financial analysis
business models
real-timedata
collection
statistical models
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• understand customer usage
• evaluate pricing plans
• respond to competitive moves
• model new services
• influence customer behavior
hp OpenView dynamic netvalue analyzer transforming customer usage into profitability
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case study: Telstra Multimedia
question: can I lower prices to attract new customers without risking myrevenue stream?
background:• interested in opportunities to grow business, e.g.
increased market share
•fixed/usage-based pricing in place
issues:•better understand distribution of subscriber usage
• revenue growth through increased customer base
•up-sell high-end users to premium plans
HP Confidential
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DNA trial deployment at broadband ISP
Models per Intersection:• Measures x Intervals x Model
Types• 2 x 2 x 4 = 16
Models per “Hypercube”:• 18 x 16 = 288
Storage per snapshot: • 438KB ~= 1.5KB / model• Data Storage Ratio ~=
180,000:1
Dimensions 2:• Plans 9• Services 2
Measures 2:• Usage• Duration
Customer IDs: ~24KTime
Business Intersections:• 9 x 2 = 18
Fundamental Model Types 2:• Dynamic Distribution• Dynamic Profile
Rolling Intervals: 4• 1 hr• 1 day• 7 days• 30 days
StartTime EndTime CustID Plan Svc Usage
RouterIUM
Netflow Coll.
IUM Correlatio
n
Downstream Billing Systems
Storage / Day ~= 3GBStorage for 7 days = 21GB
Storage for 30 days ~= 90GB
Internet Traffic
Tracked ~7.3TB/ 30days
Existing Production Environment
DNA Correlatio
n
Customer Plan Data
DNA Statistical
Engine
DNA Environment
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DNA analysis tool
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DNA findings
• business analyst explored many different financial scenarios based on factual customer usage data.
• evaluated many fee-plus-usage pricing combinations, including prospect of significantly reducing fixed fees-an idea sure to capture the attention of dialup subscribers
• change could mean greater revenues, with no incremental investment in the network
• independent analysis found DNA models to be “extremely accurate!”
HP Confidential
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dynamic netvalue analyzer benefits
• identifies and quantifies revenue and profit opportunities
• better understand your customers and their usage behavior to increase loyalty
• supports the development of new, differentiated service offerings
• simplifies, speeds and improves decision- making by enabling you to:
– focus on profitable business growth
– identify, monitor and understand business changes and their impact in minutes
• instills confidence
– interactive profitability models when you need them
– information is always up-to-date
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for more information
www.hp.com/usage
thank you!
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IUM convergent mediation architecture
CORBA (SSL)
host D
admin. agent
admin. agenthost
B
host Aadmin. agent
application
interfaces
admin. agenthost
C
Configstore
IUMConfigServer
EncapDDS
IUMRule Engine
data source
s
businessapplications
Other
Operations
Encap DDS
IUMRule Engine
API
Encap
DDS
IUMRule Engine
EncapDDS
IUMRule
Engine
Other sources
Services
admin. agenthost
E
NetworkEquipment
Rating and Billing
BusinessIntelligence
Encap DDS
IUMRule Engine
Encap
IDR
IUMRule Engine Reportin
g
EncapArchive
DNAUsage
Intelligence
EncapDDS
IUMRule Engine
Session Sources
• Open• Distributed (scalable)• Robust (recovery,
auditing)• Extensible (plug-ins)
• Highly configurable• Manageable• Secure• Near real time