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Value Chain Approaches – to ‘Cherry-Pick’ or Not | Viaccess-Orca Blog



For content services providers, deciding how to structure their technical value chain is a crucial consideration.

There are one of two options; an operator can either outsource the End-to-End (E2E) value chain to one vendor, or ‘cherry-pick’ by integrating a technical chain, made of ‘best-of-breed’ components.

In the ‘E2E case’, the vendor of the E2E solution has a responsibility to deliver, and must choose and manage the various components of the value chain. Here, apart from setting requirements and issuing approvals and validations, the operator has little involvement and bears no responsibility.  Responsibilities are handed over to the vendor, and vendors will price accordingly: a commitment on the E2E integration by the vendor has value, and it also has a price. Indeed, short of charging high penalties, there is not much the operator can actually do if the vendor is late or unable to deliver. In such situations, the operator may also at some point feel locked into a relationship with the vendor and feel that there is a lack of flexibility.  So having the option to switch to another vendor is crucial in this respect, and this should be anticipated from the beginning.

However, in the ‘cherry-picking’ case, the operator is in charge – controlling the architecture; the choice of vendors for each component of the value chain; and bears responsibility for the integration, even when it is outsourced. All of which enables easier integration of third parties and the ability to be more innovative. The operator can switch some components to other vendors if needed.  But while taking responsibility for the integration has a number of benefits, it can also be a pain, given the need to keep control of quality, planning and costs.

But in actual fact, it is not a binary question: CSP can also rely on ‘sub-system integrators’ to integrate part of the E2E value chain. A good example of where it’s best to leave some components in the hands of the experts is STBs: the operator is better off not being accountable for the integration of STBs. It is a complex task which requires specific skills, and as it is often at the critical point in the project, it can be worthwhile to ask a sub-system integrator to complete this integration task.

The risks associated with being the E2E integrator can be mitigated when the E2E solution is already proven as an E2E solution. The move to the cloud changes the game, making the replication of existing deployed projects, built on cherry-picked components, almost instantaneous and simpler than in the past. This can also apply to specific subsets of the technical value chain.

So there is no black or white answer to the question of how operators should structure their value chain. They have to assess the pros and cons of each approach before deciding how to proceed.

The stronger the operator’s teams, and the more capable they are of choosing components and driving E2E integration, the greater the attraction of the cherry-picking approach. The more an operator has specific requests, the more he will have to work with various vendors and the less relevant the E2E approach will be. A migration from an existing solution often means specific requirements, and this is a more and more frequent situation. There is no ‘one-size-fits-all’ approach to the management of the E2E value chain, but one thing is certain: content services providers need to rely on reliable and future-proof technical partners.

Photo credit: audreyjm529 / Foter / Creative Commons Attribution 2.0 Generic (CC BY 2.0)

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