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Short overview of telecom cloud activity, service launches, cloud brokerage and bundling approaches.
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The role of telecom operators in developing
profitable customer-centric cloud services
Camille Mendler
Informa Telecoms & Media
Cloud Asia
May 2013
Services from…
Cloud means a new role for many
2
Enterprises
Web
I/MSP / hosterTelcos
Software
Devices
GovernmentsCloud vending machine
Hardware
Everyone is becoming a cloud supplier!May 2013
© Informa UK Ltd. All rights reserved.
www.informatandm.com
Integrators
Telcos aim to win a bigger slice of the ICT pie
3May 2013
© Informa UK Ltd. All rights reserved.
www.informatandm.com
The ICT expenditure ‘pie’
Maintenance & support services
80% of ICT budget can migrate to network-powered clouds.
Networking & PBX equipment
Wireless communications
Fixed voice & data
Hosting & appsservicesStaff / admin
(on payroll, training)
Cloud is reinvigorating old telco norms
4
Connected ‘things’ converse via the cloud.May 2013
© Informa UK Ltd. All rights reserved.
www.informatandm.com
There is a telco gold rush to offer cloud services
5May 2013
© Informa UK Ltd. All rights reserved.
www.informatandm.com
Asia Pacific49
Eastern Europe& CIS39
Western Europe63
Africa10
Middle East13
Latin America & Caribbean20
North America23
ImplicationToday more than 220 telecom operators offer at least one cloud service. Asian operators like KT, NTT and Singtel entered the cloud market early and are a leading force.
CSPs* active
*CSP: Communication service provider including integrated, fixed, cable, mobile operators
Source: Informa Telecoms & Media
Telecom operators are driving a datacenter boom
6
Globally, telecom operators have over 800,000m2 under construction*
x 110 x 3
*Operators datacenter projects announced since 2010. Source: Informa Telecom Cloud Monitor
Old Trafford Bird’s Nest
More than half of this construction is happening across Asia.
May 2013
© Informa UK Ltd. All rights reserved.
www.informatandm.com
Example: China - some like it Hohhot
The Inner Mongolian city of Hohhot is receiving US$8 billion in cloud-related investment – chiefly from telecom operators.
$1.8B $1.9B $1.8B
Picture: Flickr/Civitas Veritas
7May 2013
© Informa UK Ltd. All rights reserved.
www.informatandm.com
0 50 100 150 200 250 300
2009
2010
2011
2012
Number of service launches
CSP cloud service launches by customer segment
Consumer
SME
Enterprise
Public sector
Multiple segments
8May 2013
© Informa UK Ltd. All rights reserved.
www.informatandm.com
Implication
More attention on consumer cloud (often freemium storage to tie in broadband subs), but also focus on mid-market enterprises with SaaS and IaaS.
Source: Informa Telecoms & MediaNote: Includes service upgrades
Telcos are launching more cloud services
IaaS and UC&C are the primary focus areas
9May 2013
© Informa UK Ltd. All rights reserved.
www.informatandm.com
IaaS20%
Unified comms & collaboration
19%
Storage, backup14%
Departmental apps8%
Security7%
Professional services
6%
Saas marketplace4%
Vertical apps6%
Mobile device mgmt
3%
IT management
3%
Generic business apps3%
Other7%
2012: Cloud services launched by CSPs
n=298 servicesSource: Informa Telecoms & Media
Surge in
public cloud
launches
Cheap Expensive
Telcos versus AWS? Please KISS* my IaaS*Keep it simple stupid
10May 2013
© Informa UK Ltd. All rights reserved.
www.informatandm.com
ImplicationThe devil is in the details – and price is NOT the main issue. Ability to compare contracts for supposedly commoditized services still a challenge. Telcos are no better than non telcos.
0.04 0.050.07
0.09
0.12
0.150.14
0.100.08
0.15 0.14
0.07
0.19
0.00
0.05
0.10
0.15
0.20
North America
Asia Pacific Western Europe
Africa Latin America Eastern Europe & CIS
Middle East
US cents
Public cloud servicesLowest cost per hour (US cents)
Non-Telco Telco
Base: 34 cloud service providers (telcos and non-telcos) across 24 countries.Source: Informa Telecoms & Media, CSP@IaaS Pricing Benchmark.
Who is disclosing revenues? Some examples
Telecom operator ‘Cloud-related’ revenues Notes
NTT Communications US$1.1 billion FY2012, for cloud computing ‘platforms’ – eg: includes hosting
China Telecom US$665 million For all datacenter/cloud services
T-Systems / Deutsche Telekom (Germany)
US$523 million Targeting US$1.3 billion by 2015
Interoute (UK) US$270 million Claims 55% of revenues from cloud-based services
Orange Business Services (France)
US$146 million Target is US$650 million by 2015 (which it believes it will easily hit)
Rostelecom (Russia) US$100 million Expected 2012; boost from G-cloud project
ImplicationAcquisitions have helped telcos stake a position in the cloud market. Buying systems integrators and datacenter / hosting firms is a key tactic.
11May 2013
© Informa UK Ltd. All rights reserved.
www.informatandm.com
Source: Informa Telecoms & Media
Many telcos are becoming cloud service brokers
12May 2013
© Informa UK Ltd. All rights reserved.
www.informatandm.com
ImplicationMost telcos’ cloud offers are designed for a generic white-collar employee working in a fixed office. This excludes many enterprises whose employees work outside traditional contexts.
*Percentage of telcos with one or more business SaaS offer in this category. Base: 51 telcos, 1018 SaaS offers.Source: Informa Telecoms & Media, CSP@SaaS Pricing Benchmark.
Cloud service brokerage: Telco strategiesThe Catalog Model
Typically:
• Assumes cloud buyers will pick and mix services
• Assumes a level of technical expertise and comfort with the cloud model
• Often assumes self serve, credit card purchase, may not be integrated on the company’s telco bill
• Telco voice / data propositions kept separate – and often managed by separate team
Example: Chungwha (Taiwan)
13May 2013
© Informa UK Ltd. All rights reserved.
www.informatandm.com
ImplicationThe most common approach currently in use among telcos. An online marketplace where SMEs are supposed to come to buy.
Cloud service brokerage: Telco strategiesThe Clustering Model
Typically:
• Provides a simple cluster of services that certain types of SMEs may use
• Focus on SaaS – again – broadband / voice is un-integrated (often assumption that this is upsell for existing customers)
• Some services ‘exclusive’ to existing customers
• Limited discounting on buying a cluster (same pricing if bought individually)
Example: Orange (France)
14May 2013
© Informa UK Ltd. All rights reserved.
www.informatandm.com
ImplicationSome telcos are now exploring this more verticalized approach – which Informa believes can build greater differentiation and retention.
Cloud service brokerage: Telco strategiesThe Vertical Model
Typically:
• Fully integrated value proposition to a targeted SME mass vertical
• Aims to capture a high percentage of total ICT expenditure
• Mobile (and fixed) voice / data / application bundle addressing main business processes
• Elements can be unbundled
• Cloud + M2M (after all, a cloud service)
• In this case, a challenger strategy
Example: Maxis (Malaysia)
15May 2013
© Informa UK Ltd. All rights reserved.
www.informatandm.com
ImplicationStill rare, but an opportunity for telcos to build more focused ICT bundles – if their structural and operational processes allow it.
16Mars 2013
© Informa UK Ltd. All rights reserved.
www.informatandm.com
• Telcos may all look alike, but they’re not• Judge them by what they can prove: certifications, processes, customer service commitments and bundles - not just how big they are
• Don’t get caught in the race to the bottom• Pay peanuts, get monkeys
• Demand end-to-end cloud service accountability• But be prepared to recompense those who can provide it
Takeaways
17
For more information:
Camille MendlerPrincipal [email protected]+44 77 66 13 15 28Twitter | Slideshare | Blog