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Gateways & The
Telecom Carrier:
Middleware & Mediation Platforms for
Next-Generation Networks
2000-2004
a market research report
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The single greatest change in telecom in the years ahead will be the migration of carrier networks from analog circuit-switched systems to digital packet-switched systems capable of handling large volumes of voice and data traffic simultaneously. IP may be the end point in this next leap forward in communications––but easier said than done.
IP must first be smoothly integrated into the public network environment. Incumbent carriers cannot totally replace their legacy systems, and their migration to IP is complicated by the vastly different architectures and platforms now deployed in the PSTN. The internetworking solution: signaling gateways. Gateways will act as a bridge between the legacy circuit-switched PSTN, voice over IP (VoIP), and the other Internet-based services that will be offered over high-speed backbones. Gateways will also be widely deployed to interconnect vertical service platforms to IP networks.
The widening acceptance for IP in all service sectors will fuel the market for signaling gateways. Insight predicts that gateway revenue will grow to $2.8 billion in 2004 from $190 million in 2000––a compound annual growth rate (CAGR) of 96.3 percent.
Gateways and the Telecom Carrier: Middleware and Mediation Platforms for NextGen Networks forecasts the market for ten types of gateways, presenting data on annual revenue, shipments, and pricing through 2004. This 136-page study outlines the benefits of gateways to twelve types of service providers, plus it discusses use of gateways among private enterprise networks. Insight analyzes network architecture and technology trends and profiles leading middleware, component, and platform solution suppliers.
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Report Excerpt
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Background
These are exciting times for public network carriers
worldwide. Regulations that previously defined the limits
of what serving areas a public carrier could cover, what
services they could offer, and what prices they could
charge are rapidly disappearing. Despite macromarket
shocks--unending investment fluctuations, a continuous
stream of new technological options, expanding
telecommunications deregulation, and swelling Internet
use--the US telecommunications market is expected to
experience continued growth in all its key sectors. But
perhaps the single greatest change in telecom in the
years ahead will be the migrating of carriers' networks
from analog circuit-switched systems to make them capable
of handling large volumes of digital packet-switched
traffic.
Our thesis is that the incumbents' legacy systems cannot
be totally replaced, and that gateways will be installed
to bridge the gaps between the circuit-switched world and
the new packet-based networks. Because of the many types
of architecture that providers are using, numerous types
of gateways must be installed to handle the transition.
Today signaling gateways, as for example the X.25 to
Signaling System 7 (SS#7) or IS-41 to SS#7 gateways,
support the interworking of two specific native protocols
in a one-to-one interaction. Gateways will also be
required, however, to interface the legacy customer
premises equipment (CPE), typically installed in
enterprise networks, to the emerging high-speed Internet
protocol (IP) transports, to connect integrated services
digital network (ISDN) primary rate interface (PRI)
trunks to IP backbones, and to interwork cable TV
networks with asynchronous transfer mode (ATM) and IP
backbones. These gateways must be able to work with many
types of systems, ranging from PC-based platforms to
robust packet-switched systems which are able to handle
hundreds of links and hundreds of simultaneous calls.
It is IP and the vision of a converged network that is
driving new requirements for these gateway products. IP
is the springboard to the next leap forward in
communications. It is a true standard, embraced by all
the major equipment suppliers, computer companies,
applications developers, and public network carriers--not
just in one country, but worldwide.
But before IP takes over the world, it must first be
smoothly integrated into the public network environment.
Established carriers have billions of unamortized dollars
invested in their infrastructure. Gateways represent a
near-term internetworking solution between the legacy
circuit-switched public switched telephone network (PSTN), voice over IP
(VoIP), and the other
Internet-based services that will be offered over
high-speed backbones.
At the larger interexchange carriers (IXCs), an imbedded
array of SS#7, ATM, frame relay (FR), and ISDN PRI
devices are in place to support such services as 800,
virtual private network (VPN), voice response, calling
and prepaid card services, caller messaging services,
unified messaging, and other intelligent network (IN)
variants, such as single number and call routing. The
strategy of the incumbent IXCs is to use their core
circuit-switched and ATM infrastructures to support these
services as they slowly migrate to IP. The key issues
facing the incumbent IXCs are:
- interoperating two entirely different protocol
signaling systems--SS#7 and H.323, and
- maintaining the quality of service (QoS)
standards inherent in the connection-oriented PSTN.
Gateways are necessary in the IXC network architecture
to fill three key roles:
- to interwork incompatible signaling systems,
- to connect ISDN PRI-compliant CPE to the IP
transport, and
- to interconnect vertical service platforms to IP
networks.
As competition among the providers heats up, providers
will seek new service areas. In order to support
converging universal access, network providers and global
enterprises will depend on internetworked, integrated
platforms. We foresee no alternative to the convergence
of circuit and packet networks; the linking of IP to
SS#7's out-of-band signaling will create new
opportunities in the gateway marketplace.
The Market
The revenue from the worldwide gateway subsegment is
expected to grow to $2.8 billion in 2004 from $190.9
million in 2000 at a compound annual growth rate (CAGR)
of 96.3 percent. The primary factors fueling this
subsegment's upward growth are:
- increasing requirements for interworking
disparate network signaling protocols, such as
SS#7, IP, and ATM,
- the widening acceptance for IP telephony in all
service sectors,
- expanding requirements to use much of the
embedded core assets in the converging
infrastructure, and
- a growing desire to drive communications costs
even lower.
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Market Segmentation
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- x.25/SS#7 Gateway
- Gateway Shipments
- Gateway Revenue
- Gateway Pricing
- IS-41/SS#7 Gateway
- Gateway Shipments
- Gateway Revenue
- Gateway Pricing
- CPE Gateway
- Gateway Shipments
- Gateway Revenue
- Gateway Pricing
- Enhanced Service Gateway
- Gateway Shipments
- Gateway Revenue
- Gateway Pricing
- Wireless Mobile Switch Gateway
- Gateway Shipments
- Gateway Revenue
- Gateway Pricing
- Internet Telephony Gateway
- Gateway Shipments
- Gateway Revenue
- Gateway Pricing
- VoIP Packet Gateways
- Enterprise (Private) Network
- Public Network
- Gateway Shipments
- Gateway Revenue
- Gateway Pricing
- Hybird Fiber Cable Gateway
- Gateway Shipments
- Gateway Revenue
- Gateway Pricing
- Least Cost Routing Gateway
- Gateway Shipments
- Gateway Revenue
- Gateway Pricing
- CO Switch Gateway
- Gateway Shipments
- Gateway Revenue
- Gateway Pricing
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Table of Contents
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Chapter I
EXECUTIVE SUMMARY
1.1 Background
1.2 The Market
Chapter II
MARKETS FOR GATEWAYS
2.1 Customers and Markets For Gateways
2.2 Interexchange Carriers
2.2.1 Why IXCs Use Gateways
2.3 Incumbent Local Exchange Companies
2.3.1 Why ILECs Use Gateways
2.4 Independent Operating Companies
2.5 Competitive Local Exchange Carriers
2.6 Competitive Access Providers
2.7 Cable TV
2.8 Internet Service Providers
2.9 Wireless Providers
2.9.1 Wireless Use of Gateways
2.10 Utility Companies
2.11 Government and Educational
2.12 International Providers
2.13 Private Enterprise Networks
2.14 Summary of Gateway Use by Providers
2.15 The Explosion of the Internet and Data Traffic
Growth
2.15.1 Broadband Forecast
2.15.2 Drivers of Demand for Broadband Services
Chapter III
GATEWAYS
3.1 PSTN Migration to IP and ATM
3.1.1 IP Networks
3.2 Gateway Approaches and Solutions
3.2.1 Mandated Signaling Interconnection
3.3 Types of Signaling Gateways
3.3.1 X.25/SS#7 Gateway
3.3.2 IS-41/SS#7 Gateway
3.3.3 CPE Gateway
3.3.4 Enhanced Services Gateway
3.3.5 Wireless Mobility Switch Gateway
3.3.6 POTS to Internet Telephony Gateway
3.3.7 VoIP Packet Gateway
3.2.8 Hybrid Fiber Cable Network Gateway
3.2.9 Least Cost Routing Gateway
3.2.10 CO Switch Gateway
3.4 Recent Gateway Developments & Trends
Chapter IV
ARCHITECTURES, TECHNOLOGIES, AND TRENDS
4.1 Infrastructure Modernization
4.2 Transport Protocols
4.2.1 Internet Protocol H.323
4.2.2 Asynchronous Transfer Mode
4.2.3 ISDN PRI
4.2.4 SS#7
4.3 Gateways and Mediation
4.3.1 Gateway Middleware
4.3.2 Gateway System Hardware
4.3.3 Network Interfaces
4.4 IP to SS#7 Interworking Standards
4.4.1 IPS7 System Requirements
4.4.2 IPS7 Protocol Signaling Requirements
Chapter V
GATEWAY SUPPLIERS
5.1 Vendor Characteristics
5.1.1 Mergers & Alliances
5.2 Middleware and Platform Vendors
5.2.1 Middleware Vendors
5.2.2 Board Level Suppliers
5.2.3 Platform Solution Suppliers
Chapter VI
GATEWAY MARKET FORECAST
6.1 Gateway Opportunity
6.2 Signaling Gateways Forecast Methodology
6.3 Signaling Gateways Forecast
6.4 Protocol Signaling Gateway Opportunities
6.4.1 X.25/SS#7 Gateway
6.4.2 IS-41/SS#7 Gateway
6.4.3 Customer Premises Equipment Gateway
6.4.4 Enhanced Services Gateway
6.4.5 Wireless Mobile Switch Gateway
6.4.6 Internet Telephony Gateway
6.4.7 VoIP Packet Gateway
6.4.8 Hybrid Fiber Cable Gateway
6.4.9 Least Cost Routing Gateway
6.4.10 CO Switch Gateway
6.5 Market Opportunities
6.5.1 VoIP
6.5.2 Middleware
Appendix A
INTERNATIONAL SIGNALING PROTCOLS
List of Protocols
Appendix B
GLOSSARY
List of Terms
Table of Figures
Chapter I
I-1 US Signaling Gateway Revenues, 2000-2004 ($Millions)
Chapter II
II-1 US Consumer Telecommunications and CATV Services
Revenue, 1998-2003 ($Billions)
II-2 US Households with Personal Computers and Internet
Connections, 1998-2003 (Millions)
Chapter III
III-1 IP Architecture
III-2 Migration from PSTN to IP Transport
III-3 ILEC Competitive Access
III-4 Gateway Market Share by Type of Device, 2000
III-5 SS#7/X.25 Gateway
III-6 Signaling Gateway Architecture
III-7 CPE ISDN PRI/IP Gateway
III-8 Enhanced Services Gateway
III-9 Wireless Gateway
III-10 Hybrid Fiber Cable Gateway
Chapter IV
IV-1 H.323 Protocol Stack
IV-2 Virtual Paths and Circuits Within a Transmission
Link
IV-3 SS#7 Protocol Stack
Chapter V
VI-1 US X.25/SS#7 Gateway Forecast, 2000-2004
VI-2 US IS-41/SS#7 Gateway Forecast, 2000-2004
VI-3 US CPE Gateway Forecast, 2000-2004
VI-4 US Enhanced Services Gateway Forecast, 2000-2004
VI-5 US Wireless Mobile Switch Gateway Forecast,
2000-2004
VI-6 US Internet Telephony Gateway Forecast, 2000-2004
VI-7 US VoIP Packet Gateway Forecast, 2000-2004
VI-8 HFC Gateway Forecast, 2000-2004
VI-9 US Least Cost Routing Gateway Forecast, 2000-2004
VI-10 US CO Switch Gateway Forecast, 2000-2004
Table of
Tables
Chapter I
I-1 Protocol Gateway Operational Environments
Chapter II
II-1 Application Speed Trends
II-2 Some Advancing Technologies and Applications, 2000
II-3 Network Classification
II-4 Cost Savings Components of IP
II-5 Vertical Service Platforms
II-6 US PSTN Access Line Forecast, 1999-2003 (Millions)
II-7 Network Cost Components
II-8 Network Elements
II-9 Core ILEC Margin Analysis, 1996 and 1997
II-10 The FCC's 14-Point Competitive Checklist
II-11 Largest Independent Operating Companies, 1999
II-12 1996 Telecom Act's Definition of Rural or Small LEC/IOC
II-13 Competitive Local Exchange Carriers, 2000
II-14 Business Requirements and Systems Functions For
Emerging CLECs
II-15 Major Backbone ISPs, 2000
II-16 Summary of the Advantages of Gateways to Different
Types of Providers
II-17 Summary of Telecom Industry Data Cited in this
Chapter
II-18 US Consumer Telecommunications and CATV Services
Revenue, 1998-2003 ($Billions)
II-19 US Households with Personal Computers and Online
Connections, 1998-2004 (Millions)
Chapter III
III-1 Voice vs. Data Network Technology Development
III-2 SS#7 Signaling Traffic Characteristics
III-3 FCC's Local Competition Order: Required Network
Elements
III-4 Protocol Gateway Operational Environments
Chapter V
V-1 Industry Participants
Chapter VI
VI-1 US Signaling Gateway Shipment Forecast, 2000-2004
VI-2 US Signaling Gateway Revenue Forecast, 2000-2004
($Millions)
VI-3 US Signaling Gateway Pricing Forecast, 2000-2004
($Thousands)
VI-4 US VoIP Packet Gateway Shipments, by Type of
Network, 2000-2004
VI-5 VoIP Packet Gateways Revenues, by Type of Network,
2000-2004 ($Millions)
VI-6 SS#7 versus ISDN PRI Cost Comparison, 1999
Appendix A
A-1 Signaling Protocols Used by Different Countries, June
2000
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Pricing Information
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Hard Copy Price
$ 999
Electronic Copy Price
(PDF
License Descriptions)
$ 1174 Single-User Printable PDF
$ 1749 6-Seat Printable PDF
$ 2500 Unlimited Corporate-Wide Distribution
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