Presentation on theme: "Cisco Service Provider Vision"— Presentation transcript:
1 Cisco Service Provider Vision WelcomeCisco Service Provider VisionMazen JabriTerritory Manager, GulfService Provider Line of Business
2 New World Business Models for Service Providers Roadmaps for Success:New World Business Models for Service ProvidersMuscat - May 29th, 2001
3 Drivers of Telecom Market Disruptive TechnologyDeregulationTelecomMarketCapitalIn Cisco’s environment, there are four key drivers of strategy:Resources: the single most important tool that we marshalTechnology: the end product of the resource allocationCustomers: define the problems that we need to solveCompetitors: attempt to solve the customer problems more effectively than usCombination of these factors and how they are managed generate a strategyIP
4 Intelligence to the Internet Internet Circa199419972000Access MethodDial-upT1DSL/CableApplicationMassMyYahooVideo on demandFiber
5 Intelligence to the Internet Convergence to HTTPComplexity and ScalePersonalization
6 Wireless Internet Internet—anytime, anywhere Internet to the masses 500 million subscribers ww today2 billion expected in 2003Emerging marketsEurope, India, ChinaPC substituteConquering the digital divideLess financially affluentLess technically affluentCell phone brought mobility to our voice communications. This created explosive growth in the mobile phone business. The next frontier for mobile devices is the wireless internet.Wireless devices will be on the frontier of breaking down the digital divide:Digital Divide from two perspectives:less financially affluent – cheap devicesless technically affluent – simple devicesEmerging markets: India/China!
8 Content Delivery Networks Optimize Internet Experience by Connecting Users and Customized ContentDeliverySwitchingCachingNetwork/server knowledgeForwarding of content to cachesRedirecting users to contentForwarding based on http informationHardware assisted switching“Integrated” caching and deliveryLocal content insertionHigh performance serving
9 Enable Networks to Offer Managed Value-Added IP Services at Wire-speed IP Service EnablingEnable Networks to Offer Managed Value-Added IP Services at Wire-speedHardwareSoftwareDecoupling services from switchingCustom siliconServiceSwitchingService creationProvisioningManagement and monitoringBilling and accountingControl
10 Revolutionize the Transmission Infrastructure for Internet Scale Optical NetworkingRevolutionize the Transmission Infrastructure for Internet ScaleBandwidthIP OptimizedMultiservicesWavelength proliferationFrom 2.5G to 10G to 40GDramatic improvementsControlling optics with IPEliminating multiplexing layersStorageMetro/EthernetLong and ultra long haulLegacy traffic
11 Deliver the Internet Anytime, Anywhere 3G and IP WirelessDeliver the Internet Anytime, AnywhereCapacityIP ServicesNew ApplicationsData Rate of WirelessFrom overlay to pure packet based networksConverged data/voiceCustomized internetM-commerceLocation-based servicesRemote accessYears
12 SP Industry Disruption: Waves of Opportunity B2B eMarketplacesClick-to-TalkeCRMPortals/ Online ServicesHosted ApplicationsIndustry DisruptionIP TelephonyWeb ConferencingeCommerceUnified MessagingOnline CommunitiesWireless Web AccessVideo-on-Demand
13 Customer Needs in the Internet Economy CommunicationsContentInformationEntertainmentCommerceCommunityEfficiency/ ProductivityUniversal AccessMobility, FlexibilityPersonalizationSelf-Provisioning
14 Which Businesses, Customers, Industries do you Serve? Consumer Packaged GoodsManu- facturingHealth CareGovernmentRetailEducationInsuranceLarge EnterprisesSmall-Medium BusinessesOil & GasSecuritiesUtilitiesService Provider BusinessesTransport- ationBankingEntertain- mentOther Service ProvidersISPsConsumersLocal InformationNSPsEnterprises as SPsTeenagersHome Automation
15 Falling Prices: U.S. Interstate Long Distance (Voice) U.S. Interstate Long Distance Price per Minute80-02 CAGR-6.4Continued deregulationIncreased competition: CLEC and RBOC penetration of LDLower access costsLower network operating costs95-02 CAGR-12.3Source: FCC; Dataquest; IDC Packetized Voice Services (January 1998)
16 Making Money Up the Stack: End User Activity Drives Revenue End User/ CustomerValue-Add Solutions(conceptual)Use of Content & AppsTraffic, RevenuesContent DistributionHostingSolutions Value AddNetwork ServicesAccessTransportService ProviderCloseness to Customer Delivery
17 New World SP Solutions: Engines for Growth Worldwide Service Revenues $ BillionsCAGR (%)31532.423337.7Content and Applications Solutions78478221.9Data Communications Services31Sources: IDC; Dataquest; Forrester; Morgan Stanley Dean Witter; Internet Research Group; Veronis, Suhler & Associates; Cisco analysis Note: Wireline voice transport grows at 7.6% from 564 B (1999) to 815 B (2004) and wireless voice transport grows at 13.8% from 225 B (1999) to 430 B (2004)
18 Example Roadmap of New World SP Solutions Basic Solutions Data Storage, eFax, , Messaging, IP TelephonyAdvanced Solutions Hosted Apps, Unified Comms, Portal ServicesContent and Application SolutionsBasic Data Transport, Access, Web HostingAdvanced Data IP VPNs, Extranets, Managed Security, Wireless AccessData Communica- tions SvcesSolutions Value-Add(Wireline) Basic Voice Local Long DistanceAdvanced Voice Call Waiting, Caller ID, * 69, ConferencingWireless Voice Local, Long Distance, Call Waiting, etc.Voice Communica- tions SvcesTime
19 Converging and De-layering Service Provider Value Chains 1. Broadcast ContentVideo2. Web Applications3. Web ContentData5. Wireless VoiceVoice4. IP Telephony6. Wireline VoiceNewOld---Wireline PhoneWireless PhonePC/ DesktopTVPager/ PDAAccess Device (Traditional vs. New Usage)
20 Web Content Delivery Value Chain: Who Pays Whom? DisneyTime WarnerUniversal StudiosWarner BrothersParamountNew Line CinemaViacomCNNNBCNewscorpZDnetCBS Market WatchCNetESPNiVillage= revenue flowContent ProviderAkamaiAderoMirror Image InternetDigital Island/ SandpiperReal NetworksYahoo! BroadcastServicesEdgix (satellite)IBeam Broadcasting (satellite)AudioSoftDigital RiverInfinetIntertainerMP3.comProWebCastContent ProviderContent ProviderCDSPNSP/ T1 ISPT2/3 ISP (local access)Wireless ISP(or)ILEC/ CLECEnd UserCDSP: Content Delivery SP (Akamai, Digital Island/Sandpiper)
21 Transactions vs. Transmission Moving to New Revenue Models Usage-based Billing (SMS)Functional ServicesSoftware App ServicesContent Delivery ServicesAdvertisingRevenue-SharingMetered Billing
22 Usage-based Billing On the model of existing On demand services Charge for each usage of short messaging services, message translation services, web- or -to-fax services, find-me services, etc.
23 Functional Services Service Subscription Fees Charge for availability of network-delivered services (monthly charge)Consumer example: home security service that calls police, neighbors, find-me services for each parentBusiness example: company calendaring service, charge by corporate user by month
24 Software Application Services Usage-based Billing to BusinessesProvide hosted business applications (eSFA, eHR, eCRM) to enterprise/SMB; Charge business for each application usage (by the drink)Usage-based Billing to ASPs/ISVsProvide AIP (Application Infrastructure Provider) hosting/ data center services for ASP/ISV; Charge ASP/ISV for each application usage
25 Content Delivery Services Usage-based Billing for Content DeliveryFor delivery of rich media content, charge by item of delivered contentConsumer example: Charge by the item for music- or video-on-demandBusiness example: Charge by the seat for web-based distance learning/ company training sessions
26 AdvertisingAdvertising Revenues from Businesses and Other OrganizationsSubsidize web and voice portal/ search and content delivery servicesSubsidize business and residential user Internet access, IP telephony, eventually IP videoResults in free to the user Internet access, free IP telephony, free IP video
27 Revenue-Sharing: ASP Example Revenue-Sharing With Software Vendors/ ASPsSP provides AIP services for hosting e-business applications for free/ at below market ratesISV/ASP does all customer support and service functions as well as software development and application integrationSP shares in ISV/ASP revenues -- charge per usage, per seat, per project
28 Revenue-Sharing: Content Delivery Example Revenue-Sharing With Content and Media Creation CompaniesProvide free/ low cost content production, hosting, distribution, transport services in exchange for cut of content creation feesExample: free production, hosting, and transport of digital films for playing directly in digital projection theaters in exchange for a cut of theater ticket sales and/or artist royalties
29 Revenue Sharing: e-Commerce Example Share of e-Commerce Transactions for an Enterprise/SMB or a B2B Marketplace OperatorDevelop web site/ integrate packaged application (or done by partner), provide hosting, access, transport for free/ less than market ratesIn exchange for cut of revenues from products/services sold via web site or in the B2B eMarketplace
30 New Services and Solutions: Content and Applications Business SolutionsConsumer SolutionsHosted Application SolutionsE-business applications (internal-facing and external-facing)Personal productivity applicationsOnline gamingContent & Media SolutionsContent delivery: distance learning, advertising, co. websitesContent delivery: music-/video-on-demandCommunica- tions SolutionsManagedShort MessagingWeb conferencingUnified communicationsManagedInstant MessagingWeb conferencingUnified communicationsThis chart suggests some of the primary solutions that businesses and consumers are turning to service providers and their partners to deliver.Hosted Applications Solutions for businesses are primarily hosted e-business applications either internal-facing (eHR, efinance, online directories, back office functions) or external-facing (e-commerce, eCRM); for consumers, hosted personal productivity applications (calendaring, online banking, etc.) and entertainment related apps (online gaming).Content & Media Solutions for businesses are distance learning/training solutions, rich media web sites and web advertising; for consumers, primarily entertainment solutions for music or video-on-demand.Communications Solutions refer to the value-added communications applications: managed services, instant/ short messaging services, unified communications, web conferencing services, chat, collaboration, etc.Portal/ Mediation Solutions include web portals (Yahoo!), voice portals, wireless portals, etc., and the business (B2B marketplaces) and consumer related (AOL’s Motley Fool) communities that grow up around them.Finally, there are some solutions which are exclusively for businesses, like outsourced data storage and management or outsourced contact centers and other business processes.Primarily for consumers are solutions for home automation (e.g., controlling energy, security, or appliance systems via the web).Although this list is not definitive, it helps to provide a useful framework.Portal/ Mediation SolutionsWeb portalVoice portalOnline business communitiesWeb portalVoice portalOnline personal interest communitiesData storage & mgmt.Business process outsourcingHome automation solutions (security, energy, appliances)
31 Challenges in eBusiness Transformation How should we organize for eBusiness?How can we change the “Old World” culture?What should we do with our legacy systems?Which eBusiness solutions should we do first? How can we identify them?What can we do to become a “cool” place to work in? How can we attract and retain talent?How can we increase the value of our company through eBusiness?The Internet is more than just a new way to sell your products and services, it's a way to efficiently run a business, resulting in significant cost savings.I’ll show you some specific examples at Cisco later in my presentation31
32 Prioritizing Solutions Opportunities: Some Examples AIP/ASP SolutionsUnified MessagingData Storage and Mgmt.IP Video on DemandeFax Mgmt. ServicesIP Voice ServicesChat/ Collaboration SolutionsMgmt. ServiceseCommerce/ eMarketplacesOutsourced Contact CentersHome Security Systems SolutionsOnline CommunitiesPortalsHighEconomic Opportunity (revenue growth, margins)LowLowHighAbility to Execute (based on competitive assets)
33 Cisco as Strategic Partner Internet Economy Business ModelsEcosystem PartnershipsWorld-class Technology
34 Cisco’s Role: Helping SP Build Profitable Revenue Streams Cisco as Strategic Partner:Help SP Choose Opportunities and Build the Infrastructure to Create Profitable Revenue StreamsAt the Crossroads: Which Opportunities? How to Build?Challenges and Opportunities in the New Internet Economy
35 SP Business Models: Roles and Responsibilities 1-2 Day Workshops4-12 Week EngagementsEBCsStrategy Consulting & Business PlanningEvangelize and EducateDetailed Financial ModelingDeployment and Go-to-MarketSP SalesSP Field OpsBDMsIBSG-SPSPLOB (MSCs)Various Business Modeling efforts (cable, hosting, STEM)JumpStart, CPNPartner programs (OSS, CHAI, etc.)Ent. Sales/ PAMWW ChannelsCA-SP, PSO
36 Service Providers can benefit from three key opportunities in eBusiness. Running my‘e-SP’eCareWOeComSCM1SP as ane-Enterprise ...… to increase productivity and agility, reduce operating costs, and improve customer loyaltyRunning myNetwork:“Zero Touch”eOSSeBSS2SP as a company whose mode of operating is deeply altered by Internet technology...… to reduce network operating expenses, time-to-market, etc.ProvidingeBusinessServicesto myCustomers3SP as a provider of eBusiness services to its customers ...e-SPService providers (Telecommunication companies, cable, mobile and ISPs) have historically been slow in taking advantage of the Internet to streamline their business processes. However, they are now rushing to develop eBusiness strategies pushed by their clients, their shareholders, and even regulatory agencies and end-clients.Service providers play a key role in the development of the Internet in the countries where they operate, since they provide the broadband network infrastructure required to make eBusiness a reality in the enterprise and consumer market. As such they can be a catalyst or a barrier to Internet diffusion in a market.Service providers have the opportunity to be a major participant in the transformation of enterprises into eBusiness. This can be a way to expand their business into new revenue generating activities that can compensate the erosion in their traditional voice services market. Luckily enough, the enterprise market perceives service providers as a natural suppliers and implementers of eBusiness solutions.Service Providers have three main opportunities in the eBusiness Revolution:First: Service Provider as an enterprise. The goal is to use eBusiness to increase productivity (do more with less) and agility, reduce operating expenses, and improve customer satisfaction and loyalty.Second: Service Provider as a company whose core mode of operating is deeply altered (disrupted) by internet technologies. The goal is to migrate to the new mode-of-operation, reduce the network operating and management expenses, and reduced the time-to-market and time-to-volume.Finally: Service Providers as a provider (reseller) of eBusiness products/services to their customer base. The goal is to generate new flow of high-margin revenue and reposition themselves in the new Internet Economy.In this transformation Service Providers face clear challenges such as past investments in legacy technologies, the prevalence of an “old world” culture, and the lack of experience in partnering to develop the ecosystems required to become an e-SP.… to generate new flow of high-margin revenue
37 Service Provider as an Enterprise: “Transforming into an e-SP” 1eBusiness SolutionsExamplesWorkforce OptimizationWeb-based employee automation: directory, expenses, purchases, training registration, e-learning, executive intelligence systems (EIS)e-CommerceWeb-enabled catalogue, pricing simulation tools, lead times, service configuration, on-line ordering, bill payment, CRM, click-to-talkWeb-based customer care, service order status, service level agreement information, custom bill presentment, equipment and service inventory, trouble ticketing, automated advisory services, etc.e-CareBefore service providers rush into the Holy Grail of eBusiness, they must establish themselves as credible and trusted players, “walk the talk”, by adopting eBusiness solutions themselves.The benefits of doing so are obvious: achieve competitive advantage through increased agility and productivity, reduced operating expenses, and increased customer satisfaction. Service providers must take advantage or webification opportunities in each link along their value chain. For instance:Customer care opportunities: service order status, service level agreement (SLA) information, trouble ticketing status, customised bill presentment and information, equipment and service inventory, automated advisory services, historical analysis, account information, etc.E-commerce opportunities: product/service catalogue, pricing simulation tools, online ordering, secure transaction engine, online payment, lead times, service/network configuration, etc.Supply chain and service provisioning: inventory account, service order status, automated service configuration and provisioning, trouble ticket status, automated custom billing, service provisioning lead times, network/service performance reporting and management, alarms management, ticket entry, SLA management, etc.Employee services: expense report, benefit enrolment, purchases, training registering, communities of interest (new hires, business units, departments, etc.), web directory and organisational chart, holiday/leave capture, e-training, career development, etc.Our experience indicates that increments of up to 25% in productivity are within reach when implementing Internet business solutions. Reductions in the product/service development process and in the time-to-market may alone justify the investments.Supply Chain ManagementCustomer premises equipment supplier integration, field force, maintenance and subcontractors, etc.
38 Service Provider as Network Operator: “Zero Touch Dream” 2eBusiness SolutionsExamplesAutomated Service ProvisioningFlow-through provisioning system:Address validation checkFeature availability checkCustomer service recordService planningService configurationService provisioningBilling...Automated Network ManagementCustom management of the network:Network configurationElement management and testingService fault and performance analysisSecurity managementService provisioning lead timesTrouble ticket...Before service providers rush into the Holy Grail of eBusiness, they must establish themselves as credible and trusted players, “walk the talk”, by adopting eBusiness solutions themselves.The benefits of doing so are obvious: achieve competitive advantage through increased agility and productivity, reduced operating expenses, and increased customer satisfaction. Service providers must take advantage or webification opportunities in each link along their value chain. For instance:Customer care opportunities: service order status, service level agreement (SLA) information, trouble ticketing status, customised bill presentment and information, equipment and service inventory, automated advisory services, historical analysis, account information, etc.E-commerce opportunities: product/service catalogue, pricing simulation tools, online ordering, secure transaction engine, online payment, lead times, service/network configuration, etc.Supply chain and service provisioning: inventory account, service order status, automated service configuration and provisioning, trouble ticket status, automated custom billing, service provisioning lead times, network/service performance reporting and management, alarms management, ticket entry, SLA management, etc.Employee services: expense report, benefit enrolment, purchases, training registering, communities of interest (new hires, business units, departments, etc.), web directory and organisational chart, holiday/leave capture, e-training, career development, etc.Our experience indicates that increments of up to 25% in productivity are within reach when implementing Internet business solutions. Reductions in the product/service development process and in the time-to-market may alone justify the investments.
39 Service Provider as Provider of Services: “e-Business for my Customers” 3E-Business SolutionsExamplesE-Business Value Added Services for Large EnterprisesConsulting and systems integration of e-Business for large enterprises, development of partner ecosystemBasic: Web Sites, IT Services (backup / storage), , simple Desktop Apps (e.g. Calendars). Complex: e-Business Applications (e-Commerce, e-Care, Workforce Optimization, Supply Chain Management)Application Service Provider (Basic and Complex Hosting) for SMEVertical Industry SpecializationVertical market focused portals(COIN) and applicationsMedia PlayE-Learning, e-Training, e-University,e-TV
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