CPE Cloud Innovation: Unlock value from the video set-top box

March 8, 2019

RESEARCH REPORT

In brief

Moving Customer Premise Equipment to the cloud can boost efficiency and drive innovation. Yet service providers lag OTT players in cloud adoption.
This point of view explains why, justifies the move to an agile, cloud-based operation and offers a five-step plan for making the move.
We lay out the critical aspects that must be in place before a successful transition and describe the conditions for cloud-based CPE to flourish.

Customer Premise Equipment (CPE) plays a familiar part in TV Service Providers’ video delivery operations. Moved to the cloud, and managed with agile processes, it can do much more. Cloud CPE creates a springboard for new products, services and revenue streams—creating the opportunity to capitalize on additional advanced entertainment services and strengthening the Service Provider’s (SP’s) role in consumers’ lives and homes.

In the past, operators have been locked into maintaining an expensive population of CPEs, which often included generations of products requiring support well beyond their expected useful lifetimes. This troubling legacy has proven to be an operational drag as unencumbered OTT players race by. The complexity of transition projects, set up costs and market pressures to create short term cash flow have, however, discouraged many SPs from transforming their CPE.

Cloud CPE market dynamics*

$1.9B

Total investment potential in Cloud CPE market

55_%

A majority of TV SPs plan to adopt Cloud CPE in coming years.

6_%

Few subscribers in our researched markets are offered Cloud CPE today.

*Accenture research conducted Q1 2018, USA, Brazil, Argentina, Mexico, Germany, Netherlands, Austria, Switzerland, Italy, France, Japan, South Korea, Malaysia.

While each TV Service Provider will need to arrive at a Cloud CPE solution architecture that is unique to their existing network, investment approach and target offerings, every successful Cloud CPE transition starts with the same three fundamentals.

Customer experience

Commitment to deliver on increasing expectations: personalized, immersive, flexible and seamless TV viewing experience.

Agile DevOps

Ability to apply collaborative, state-of-the-art ways of working. Teams work faster, products evolve iteratively and innovation thrives.

Cloud platform

A well-chosen single platform can serve multiple ecosystems, providing the same back end for all front ends. The open platform creates new revenue opportunities, too.

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And, regardless of each SP’s unique journey, the strategy and implementation roadmap is the same. This Accenture Point of View explores details and provides operations recommendations for each stage of the approach:

Define TV Offering and CPE Strategy – How to identify your ambitions, and an exploration of the three strategic options from which to choose: Hybrid CPE, Thin Client and Cloud Client.
Analyze Network Impacts and Infrastructure Requirements – How to prepare for new capacity requirements for acquiring, storing and delivering DVR/PVR service traffic, and a look at new functional requirements underpinning Cloud CPE capabilities.
Create the Platform Infrastructure – Recommendations for leveraging available market solutions to conserve valuable capacity and resources, while maintaining focus on supporting the business case.
Execute the Roadmap – The best ways to follow your roadmap blueprint. That includes iterative testing to validate design, running scenarios and refining key factors to ensure success.
Operate with Agility – How to realize full Cloud CPE benefits through an agile, data-driven operating model that continuously drives the customer experience.