Carrier Cloud Webinar

TBR

T EC H N O LO G Y B U S I N ES S R ES EAR C H , I N C .

Evolution and Outlook for Carrier Cloud

Technology Business Research Webinar Series

Oct. 21, 2014

TBR

2 TBR Webinar Series | 10.21.14| www.tbri.com ©2014 Technology Business Research Inc.

Your presenter:

Michael Sullivan-Trainor

Executive Telecom Analyst

Email: [email protected]

Twitter: @mikesulliv


mailto:[email protected]

TBR


• What is carrier cloud?

• Where’s the revenue and spend?

• What steps are carriers taking?

• Which carriers are leading, and where?

• Which suppliers are leading so far?

Agenda


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Revenue benchmark of the largest carrier cloud service providers

Revenue Segments:

• Total Cloud Services

• Public Cloud, Private Cloud

• IaaS, Other Cloud Services

Geographic Segments:

• Americas

• EMEA

• APAC


NTT DT

BT

AT&T

Telefonica China Telecom

Bharti

KT

Orange

SingTel CenturyLink Vodafone

Verizon

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Carrier cloud is just one play for the evolving customer-centric carrier

Traditional Service ProviderVertically Integrated

Content

NetworkProvider

SubscribersConsumers/Business

Enablement Layer

Access Layer

ServiceProvider

Ownership And Control

Customer Experience

EnablerM2M

Devices

Verticals

Content

OTT Players

Cloud

SubscribersConsumers/Business

Future Service ProviderHorizontally Integrated

across Digital Value Chain

In the traditional model, the service provider’s value comes from controlling subscribers on the network through a vertically integrated model. In the future model value is generated through partnerships in horizontal solutions in a value chain no one entity fully controls. Source: TBR


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Problems with today’s cloud solutions: limited visibility and reliability


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Ideal carrier cloud: controlled, secure and trustworthy


Source: Lunch atop a Skyscraper – Charles Ebbets

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Carrier cloud services revenue is growing at more than 30% annually

$235 $248 $260 $291 $308

$286 $303 $313$336 $355

$310$336 $353

$423$446

$0

$200

$400

$600

$800

$1,000

$1,200

2Q13 3Q13 4Q13 1Q14 2Q14

Clo

ud

Re

vne

ue

(in

$ M

illi

on

s)

TOTAL CARRIER CLOUD BENCHMARK OPERATORS CLOUD REVENUE GEOGRAPHIC BREAKDOWN

APAC EMEA AMERICAS

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Cloud represents a small share of carrier spend


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The Amazon Web Services effect: Where is the carrier?


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What steps are being taken to expand carrier cloud revenue?

Acquisitions of smaller players to increase regional capability

January 2014 August 2014

Increased partnering to accelerate cloud service adoption

Continued expansion of data center capacity to increase cloud footprint and services

Growth through acquisition

Increased partnering

Continued capacity investment


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What’s next in carrier cloud strategy?

Expansion of cloud services within installed base will increase share of revenue.

2014 2018

Expansion of cloud services to SMBs will widen cloud services reach and growth.

Deepening vertical integration with hybrid and dedicated cloud services

Installed base penetration

Expansion of cloud to SMB

Deepening hybrid/vertical


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NTT

DEUTSCHE TELEKOM

VERIZON

AT&T

CHINA TELECOM

KT

BT

ORANGE

VODAFONE

CENTURYLINK

TELEFONICA

BHARTI

SINGTEL

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

$- $25 $50 $75 $100 $125 $150 $175 $200

Ye

ar-t

o-Y

ear

Re

ven

ue

Gro

wth

Total Cloud Revenue (in $ Millions)

2Q14 TOTAL CLOUD REVENUE (IN $ MILLIONS) TBR

NOTE: SPHERE SIZE REFLECTS VOLUME OF REVENUE.SOURCE: TBR AND COMPANY DATA

Total Cloud: Revenue and Revenue Growth

NTT leads in total carrier cloud revenue by expanding its footprint rapidly

NTT is the leader in 2Q14 carrier

cloud revenue and growth due to

data center expansion and cloud

company acquisitions.


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NTT

VERIZON

AT&T

DEUTSCHE TELEKOM

CHINA TELECOM

KT

BTORANGE

VODAFONE

CENTURYLINK

TELEFONICA

BHARTI

SINGTEL

-20%

-10%

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

$- $25 $50 $75 $100 $125 $150 $175

Ye

ar-t

o-Y

ear

Re

ven

ue

Gro

wth

Total IaaS Revenue (in $ Millions)

2Q14 TOTAL IaaS CLOUD REVENUE (IN $ MILLIONS) TBR


IaaS Cloud Revenue: Revenue and Revenue Growth

China Telecom will become one of the top 3 IaaS carrier cloud operators

NTT is the leader in the IaaS cloud

segment due to scale and

platform focus on enterprises.


TBR


VERIZON

AT&T

CENTURYLINK

DEUTSCHE TELEKOM

ORANGE

NTT

BT

TELEFONICAVODAFONE

KT

CHINA TELECOM

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

110%

120%

$- $10 $20 $30 $40 $50 $60 $70 $80 $90 $100 $110

Ye

ar-t

o-Y

ear

Re

ven

ue

Gro

wth

Total Americas Cloud Revenue (in $ Millions)

2Q14 AMERICAS CLOUD REVENUE (IN $ MILLIONS) TBR


Verizon and AT&T compete head-to-head for revenue in the U.S. while CenturyLink is making its move Americas Cloud Revenue: Revenue and Revenue Growth

CenturyLink has become the

third-largest cloud operator in

the Americas due to strategic

acquisitions including those of

Savvis and Qwest.


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DEUTSCHE TELEKOM

ORANGE

BT

AT&T (VERY SIMILAR TO VERIZON)

VERIZON

NTT

VODAFONE

TELEFONICA

CHINA TELECOM

CENTURYLINK

BHARTI

KT

SINGTEL

-10%

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

110%

$- $10 $20 $30 $40 $50 $60 $70 $80 $90 $100 $110 $120 $130

Ye

ar-t

o-Y

ear

Re

ven

ue

Gro

wth

Total EMEA Cloud Revenue (in $ Millions)

2Q14 EMEA CLOUD REVENUE (IN $ MILLIONS) TBR


Deutsche Telekom leads in EMEA revenue due to its scale and private cloud segment EMEA Cloud Revenue: Revenue and Revenue Growth

The larger European operators are bringing in the

highest EMEA cloud revenue, but multiple newer

entrants from APAC, including Bharti and NTT, are

leading in EMEA cloud revenue growth due to new

data center expansions in the region.


TBR


NTT

KTCHINA TELECOM

BHARTI

DEUTSCHE TELEKOM

VERIZON

AT&T

SINGTEL

ORANGE

BT

CENTURYLINK

VODAFONE

TELEFONICA

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

$- $20 $40 $60 $80 $100 $120 $140

Ye

ar-t

o-Y

ear

Re

ven

ue

Gro

wth

Total APAC Cloud Revenue (in $ Millions)

2Q14 APAC CLOUD REVENUE (IN $ MILLIONS) TBR


NTT, KT and China Telecom lead a two-tiered APAC market

APAC Cloud Revenue: Revenue and Revenue Growth

APAC-based carrier

cloud operators

make it difficult for

large European and

American operators

by competing on

price and local

relationships.


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Who are the leading suppliers?

Differentiation / Technical Capability

Business Performance /

Capability

High

Low

High Low

Cisco

EMC/VMware

Microsoft

SAP

Oracle HP

IBM

Nokia

Huawei

Ericsson Alcatel-Lucent

NEC


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Source: TBR

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Conclusion


Q: What is carrier cloud?

A: Differentiated Cloud Services

Q:Where’s the revenue and spend?

A: Tier 1s

Q:What steps are carriers taking?

A: Acquire, partner, build

Q: Which Carriers are leading, and where?

A: NTT, DT, Verizon, AT&T

Q: Which suppliers are leading so far?

A: IBM, Cisco

TBR


For further information, please contact:

Kate Price James McIlroy Platforms Practice Manager Vice President of Sales [email protected] [email protected]

TBR Evolution and Outlook for Carrier Cloud Webinar Contact Information

Questions?

Michael Sullivan-Trainor

Executive Telecom Analyst

Email: [email protected]

Twitter: @mikesulliv

Twitter: @TBRinc

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Telecom Vendors Operators Benchmarks

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• AT&T • Sprint • T-Mobile USA • Verizon Enterprise Coverage: • AT&T Business Solutions* • BT Global Services* • Orange Business Services* • Verizon Enterprise Solutions* • Vodafone Enterprise Services*

• Telecom Vendor Benchmark

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