Navigating in a <br />Sea of Connectivity<br />Jaison Justin<br />Pranav Khanna<br />Orlando O’Neill<br />Robert Schwartz<...
NOTE:<br />This presentation was created by a team of MBA students for educational purposes and in no way reflects the vie...
Within ten years there will be 50 billion connected devices…<br />
Your life in a connected world<br />In the car<br />At home<br />At the mall<br />
Your life in a connected world<br />At home<br />
Your life in a connected world<br />In the car<br />
Your life in a connected world<br />At the mall<br />
Partner incentives<br />Standards/<br />Integration<br />Technology Limitations<br />Impediments to a connected world<br /...
Virtually integrated value network <br />Suppliers<br /><ul><li> Raw material providers
 Outsourced manufacturers</li></ul>Complementors<br />Collaborators<br /><ul><li> Competitors
 Standards setting bodies
 Industry consortia
 App developers
 Social media
 Device manufacturers
 Content providers</li></ul>Channel Partners<br /><ul><li> Telco operators
 Healthcare professionals
 Utilities
 Cities
 Retailers</li></ul>How does Ericsson capture value?<br />
Ericsson enables each layer of the connected world<br />Apps<br />Integration Platform<br />Global Network<br />Infrastruc...
Application business models will require a paradigm shift<br />High<br />Data Use<br />Per Use -  High Fee<br />Subscripti...
Ericsson enables connectivity through <br />its integration platform expertise<br />Integration Platform<br />Open Interco...
Broadband module sales</li></ul>$<br />
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  • 1 Dr. for every 4 people in the US98% births covered by skilled healthcare professional1 hospital bed for 300 people
  • Team Tokyo

    1. 1. Navigating in a <br />Sea of Connectivity<br />Jaison Justin<br />Pranav Khanna<br />Orlando O’Neill<br />Robert Schwartz<br />
    2. 2. NOTE:<br />This presentation was created by a team of MBA students for educational purposes and in no way reflects the views and beliefs of Ericsson.<br />
    3. 3. Within ten years there will be 50 billion connected devices…<br />
    4. 4. Your life in a connected world<br />In the car<br />At home<br />At the mall<br />
    5. 5. Your life in a connected world<br />At home<br />
    6. 6. Your life in a connected world<br />In the car<br />
    7. 7. Your life in a connected world<br />At the mall<br />
    8. 8. Partner incentives<br />Standards/<br />Integration<br />Technology Limitations<br />Impediments to a connected world<br />Current flat fee pricing model does not incent network investments<br />Ericsson orchestrates a networked ecosystem through partnerships with all key players and is the gateway to information flow<br />Different standards across devices/platforms impede interoperability<br />Return on investment for technology providers is unclear<br />
    9. 9. Virtually integrated value network <br />Suppliers<br /><ul><li> Raw material providers
    10. 10. Outsourced manufacturers</li></ul>Complementors<br />Collaborators<br /><ul><li> Competitors
    11. 11. Standards setting bodies
    12. 12. Industry consortia
    13. 13. App developers
    14. 14. Social media
    15. 15. Device manufacturers
    16. 16. Content providers</li></ul>Channel Partners<br /><ul><li> Telco operators
    17. 17. Healthcare professionals
    18. 18. Utilities
    19. 19. Cities
    20. 20. Retailers</li></ul>How does Ericsson capture value?<br />
    21. 21. Ericsson enables each layer of the connected world<br />Apps<br />Integration Platform<br />Global Network<br />Infrastructure<br />
    22. 22. Application business models will require a paradigm shift<br />High<br />Data Use<br />Per Use - High Fee<br />Subscription – High Fee<br />End User<br />Video Broadcasting<br />Video on Demand<br />$<br />App Developer<br />Per use – Low Fee<br />Subscription – Low Fee<br />$<br />Carrier<br />Telematics<br />eReader<br />Low <br />Data Use<br />Pacemaker<br />Intermittent Use<br />Always On<br />Economic cost of broadband usage must be born by the applications themselves<br />
    23. 23. Ericsson enables connectivity through <br />its integration platform expertise<br />Integration Platform<br />Open Interconnectivity Standard<br />Broadband Modules<br /><ul><li>Connectivity implementation professional services
    24. 24. Broadband module sales</li></ul>$<br />
    25. 25. Ericsson licenses the underlying network infrastructure<br />Operator Owned Network Model<br />Managed Service Model<br />Network Operations<br />Maintenance & Upkeep<br />Tower Build & Optimization<br />$<br />$<br />$<br />$<br />$<br />Equipment Expenditures<br />Software Licenses<br />Support Fees<br />Equipment Expenditures<br />Software Licenses<br />Support Fees<br />Network Operations<br />Maintenance & Upkeep<br />Tower Build & Optimization<br />
    26. 26. The proposed value network removes major obstacles to the connected world<br />Partner incentives<br />Standards/<br />Integration<br />Technology Limitations<br />Value Network Solution<br />Current flat fee pricing model does not incent network investments<br /><ul><li>Customized pricing by nature of usage</li></ul>Different standards across devices/platforms impede interoperability<br /><ul><li>Ericsson drives industry to common standards </li></ul>Return on investment for technology providers is unclear<br /><ul><li>New technologies find bigger markets</li></li></ul><li>New challenges to be addressed in a connected world<br />Ericsson uniquely placed due to its position as leading global network provider<br />Who gets to be the “Orchestrator”? <br />How should value be shared with partners?<br />Ericsson should focus on growing the pie vs. maximizing its share<br />Who is accountable to the customer?<br />Explicit commitment for accountability within value network<br />
    27. 27. Tremendous financial impact for Ericsson in getting this right<br />Ericsson Revenues by Sector<br />Sector Choice<br />$B<br />Smart Grid<br />Healthcare<br /><ul><li>Mobile Communication
    28. 28. Healthcare
    29. 29. Energy </li></ul>Communications<br />Potential to reach $100B in revenues by 2020<br />
    30. 30. Implementation timeline<br />2011-2020<br />2010<br />2019<br />2018<br />2017<br />2016<br />2015<br />2014<br />2013<br />2012<br />2011<br />Sectors<br />Mobile Communication<br /><ul><li>Test market in Japan
    31. 31. Rollout in NA & Europe
    32. 32. Broad Rollout in APAC/Lat. Am.</li></ul>Healthcare<br /><ul><li>Test mobile healthcare in India
    33. 33. Rollout in China
    34. 34. Rollout in Africa/other parts of APAC</li></ul>Energy<br /><ul><li>Test market in France
    35. 35. Rollout in rest of NA/Europe
    36. 36. Rollout in APAC/LatAm</li></li></ul><li>Healthcare in India: a grim story<br />42% of births attended by a skilled healthcare professional2<br />1 doctor for every 1700 people1<br />700 million people have no access to specialist healthcare2<br />1 NationMaster<br />2 World Health Organization<br />Source<br />
    37. 37. Solution for dealing with healthcare inequities<br />Remote Doctor<br />Reports<br />Treatment<br />Cloud Processing<br />Patient<br />Mobile Diagnostics<br />Diagnostics<br />Data Processing<br />
    38. 38. Mobile healthcare delivery value network<br />Suppliers<br /><ul><li>Direct material suppliers</li></ul>Complementors<br />Collaborators<br /><ul><li>Govt. – Ministry of Health
    39. 39. Non-profit organizations
    40. 40. Diagnostic equipment providers
    41. 41. Telesurgery solutions providers
    42. 42. Standards setting bodies
    43. 43. Industry Consortia</li></ul>Channel Partners<br /><ul><li>Operator e.g. Airtel
    44. 44. Healthcare professionals</li></li></ul><li>Business models in mobile healthcare delivery <br />Monetization mechanisms<br />Apps<br />App. Developers charge end users i.e. Govt., Insurance or Indivual<br />Airtel charges usage/subscription fees to diagnostics providers<br />Integration Platform<br />Ericsson captures value through:<br /><ul><li>Broadband modules for networked devices
    45. 45. Licensing fee from Airtel</li></ul>Global Network<br />Infrastructure<br />
    46. 46. This application has a revenue potential of $2B for Ericsson by 2015<br />Indian healthcare market size<br />Value-share among ecosystem players<br />$B<br />Ericsson<br />Airtel<br />Device Manufacturers<br />Solution Providers<br />Healthcare Providers<br /><ul><li> $2B opportunity each for Ericsson & Airtel
    47. 47. CapEx outlay offset by government subsidies & licensing revenues
    48. 48. Significant social impact, catalyst for worldwide rollout</li></li></ul><li>Within ten years there will be 50 billion connected devices… enabled by Ericsson<br />App Ecosystem<br />Carriers<br />Ericsson<br />
    49. 49. Appendix: Financial model for revenue projections<br />Existing Business<br />Networked communications<br />Healthcare<br />Energy<br />Sectors<br />Existing Business<br />Networked communications<br />Healthcare<br />Market size & trajectory <br />(based on research reports)<br />Share of new networked model <br />(benchmarked with similar business model shifts)<br />Ericsson’s value-share within new model<br />(benchmarked with similar value-creation models)<br />Consolidated Revenues<br />

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