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Cisco Monetization and Optimization Index (MOI) - Service Provider Cloud, Mobility and Video Economic Value Forecast

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Check out these Monetization and Optimization Index (MOI) infographics about cloud, mobility, and video economic value forecast for Asia Pacific, Middle East & Africa, North America, Latin America, …

Check out these Monetization and Optimization Index (MOI) infographics about cloud, mobility, and video economic value forecast for Asia Pacific, Middle East & Africa, North America, Latin America, Western Europe, Central and Eastern Europe, and overall global regions.

Learn more about the insights behind these statistics, including additional topic areas and region specific information here: http://www.cisco.com/c/dam/assets/sol/sp/moi/index.html?sid=000443169

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  • - We can shed light on the SP cost structure today based on their current architecture and traffic growth
    - What the variance will be with variance technological enhancements – we can pick technologies to highlight and their impact on the SP cost structure ( cost/sub, cost/service….)

    We can collaborate and add Telco 2.0 tranformation index in the mix if it is an operator that has been analyzed or use that as a benchmark to assess the SP

    On the revenue side:
    TAM for new services
    What new services
    Ecosystem value chain analysis
    We can dig deeper in services that could be of interest to regional mobile operators. We have an update of some services catalog we are working on
    - ARPU for specific SP/region

    We can further customize the operational processes and cost challenges to provide a presscriptive transition map with detailed analysis of the business impact

  • Total 2018 Worldwide SP Multi-screen video revenue opportunity
    Total 2018 worldwide SP Mobile opportunity in M2M, targeted ad and sponsored data
    Total 2018 Worldwide Cloud PaaS, SaaS and IaaS opportunity
    SP monthly revenues per subscriber enabled by Cloud DVR, TVE, TSTV, SVOD, Analytics, CDN, and SLA, NA ARPU uplift
    SP monthly revenues per subscriber and per connection enabled by M2M, Targeted advertising and sponsored data
    SP monthly revenues per enabled by IaaS and SaaS/PaaS services)( $7844/month per subscriber)
    TCO Savings driven by moving video functions(CDN, CMS and ABR) to a virtualized cloud infrastructure and intelligent video gateway in the home compared to appliance based video solution
    TCO savings enabled by using video optimization and unified mobile backhaul solution
    TCO savings achieved by using virtualization, common policy and multi-service data center architecture
  • Here you can see the variation in the Cloud Monetization and Optimization Index across regions.
  • The average monthly revenue per enterprise is $7689 while the average cost per enterprise customer per month is $4169 with an operating margin of 59%
    Service provider monthly revenue improves by 52% by running multi-service platform using VMDC Flexpod architecture instead of an IaaS ONLY based implementation
    The cost includes facilities, power, capex and other operational expense
    The optimization savings is achieved by implementing a multi-service data center with virtualization and common policy
    For APJC, we customized it to reflect the average APJC enterprise customer for an SP
    Average of 700 VMS in year 1 growing at 45%
    20 VMs per IaaS tenant
    60% take rate of SaaS by IaaS tenants
    80% of IaaS customers are running small and medium VMs,
    20% take rate in year 1 for SaaS growing at 10%,
    $0.15/KWh, $300/square meter for facilities
  • The average monthly revenue per enterprise is $7689 while the average cost per enterprise customer per month is $4169 with an operating margin of 59%
    Service provider monthly revenue improves by 52% by running multi-service platform using VMDC Flexpod architecture instead of an IaaS ONLY based implementation
    The cost includes facilities, power, capex and other operational expense
    The optimization savings is achieved by implementing a multi-service data center with virtualization and common policy
    For APJC, we customized it to reflect the average APJC enterprise customer for an SP
    Average of 700 VMS in year 1 growing at 45%
    20 VMs per IaaS tenant
    60% take rate of SaaS by IaaS tenants
    80% of IaaS customers are running small and medium VMs,
    20% take rate in year 1 for SaaS growing at 10%,
    $0.15/KWh, $300/square meter for facilities
  • The average monthly revenue per enterprise is $7689 while the average cost per enterprise customer per month is $4169 with an operating margin of 59%
    Service provider monthly revenue improves by 52% by running multi-service platform using VMDC Flexpod architecture instead of an IaaS ONLY based implementation
    The cost includes facilities, power, capex and other operational expense
    The optimization savings is achieved by implementing a multi-service data center with virtualization and common policy
    For APJC, we customized it to reflect the average APJC enterprise customer for an SP
    Average of 700 VMS in year 1 growing at 45%
    20 VMs per IaaS tenant
    60% take rate of SaaS by IaaS tenants
    80% of IaaS customers are running small and medium VMs,
    20% take rate in year 1 for SaaS growing at 10%,
    $0.15/KWh, $300/square meter for facilities
  • The average revenue per subscriber from the 3 Mobile services is around $2.67 in APJC.
    The overall TAM is $141.5 Billion mainly driven by M2M services
    The cost savings benefits (about 31%) come from the ability to roll out services using NFV which has a major impact on OPEX. In addition the ability to uniquely optimize high bandwidth content like mobile video etc creates additional savings as well

    Monthly ARPU Uplift breakdown
    M2M ARPU uplift - $7.03
    Sponsored Data ARPU uplift - $0.67
    Targeted Advertising ARPU uplift - $0.30
    Sponsored Data & Targeted Ads - Monthly ARPU shown in the MOI is based on the entire Mobile subscriber base for APJC which includes Smartphones, Tablets and Feature phones even though the service is only targeted at Smartphones and Mobile connected Tablets.
    M2M – we used a metric called Average Revenue per Connection(ARPC) which is blended into the overall ARPU numbers. Our ARPC is for revenue generating mobile connected M2M devices.

    SP TAM
    SPONSORED DATA SP TAM – this is based on projected revenues generated by SPs in the following ways
    An advertiser or content owner pays a price per GB consumed (based on standard EBITDA margins added on top of cost per GB for HSPA & LTE networks) to the SP
    The SP charges an SLA fee per GB to enhance the QoS of data used or streamed in the case of video content
    The SP also takes a share of CPM paid by the advertiser based on the assumption that the SP will provide enhanced subscriber profile data to the Advertising Network that the SP partners with, to support a highly targeted Ad

    TARGETED ADS SP TAM - uses a bottom up approach by analyzing the following advertising formats;
     
    Video Ads
    Performance Search Ads
    Display Ads
    Messaging Ads

    M2M SP TAM - this is based on projected revenues generated by SPs if they play in the following value chain roles
    Connectivity Provider - Device to Network Connectivity
    M2M Enablement Platform Provider
    M2M Application Development platform provider
    M2M Value Added Services (VAS) & Managed Services
  • The average revenue per subscriber from the 3 Mobile services is around $2.67 in APJC.
    The overall TAM is $141.5 Billion mainly driven by M2M services
    The cost savings benefits (about 31%) come from the ability to roll out services using NFV which has a major impact on OPEX. In addition the ability to uniquely optimize high bandwidth content like mobile video etc creates additional savings as well

    Monthly ARPU Uplift breakdown
    M2M ARPU uplift - $7.03
    Sponsored Data ARPU uplift - $0.67
    Targeted Advertising ARPU uplift - $0.30
    Sponsored Data & Targeted Ads - Monthly ARPU shown in the MOI is based on the entire Mobile subscriber base for APJC which includes Smartphones, Tablets and Feature phones even though the service is only targeted at Smartphones and Mobile connected Tablets.
    M2M – we used a metric called Average Revenue per Connection(ARPC) which is blended into the overall ARPU numbers. Our ARPC is for revenue generating mobile connected M2M devices.

    SP TAM
    SPONSORED DATA SP TAM – this is based on projected revenues generated by SPs in the following ways
    An advertiser or content owner pays a price per GB consumed (based on standard EBITDA margins added on top of cost per GB for HSPA & LTE networks) to the SP
    The SP charges an SLA fee per GB to enhance the QoS of data used or streamed in the case of video content
    The SP also takes a share of CPM paid by the advertiser based on the assumption that the SP will provide enhanced subscriber profile data to the Advertising Network that the SP partners with, to support a highly targeted Ad

    TARGETED ADS SP TAM - uses a bottom up approach by analyzing the following advertising formats;
     
    Video Ads
    Performance Search Ads
    Display Ads
    Messaging Ads

    M2M SP TAM - this is based on projected revenues generated by SPs if they play in the following value chain roles
    Connectivity Provider - Device to Network Connectivity
    M2M Enablement Platform Provider
    M2M Application Development platform provider
    M2M Value Added Services (VAS) & Managed Services
  • The average revenue per subscriber from the 3 Mobile services is around $2.67 in APJC.
    The overall TAM is $141.5 Billion mainly driven by M2M services
    The cost savings benefits (about 31%) come from the ability to roll out services using NFV which has a major impact on OPEX. In addition the ability to uniquely optimize high bandwidth content like mobile video etc creates additional savings as well

    Monthly ARPU Uplift breakdown
    M2M ARPU uplift - $7.03
    Sponsored Data ARPU uplift - $0.67
    Targeted Advertising ARPU uplift - $0.30
    Sponsored Data & Targeted Ads - Monthly ARPU shown in the MOI is based on the entire Mobile subscriber base for APJC which includes Smartphones, Tablets and Feature phones even though the service is only targeted at Smartphones and Mobile connected Tablets.
    M2M – we used a metric called Average Revenue per Connection(ARPC) which is blended into the overall ARPU numbers. Our ARPC is for revenue generating mobile connected M2M devices.

    SP TAM
    SPONSORED DATA SP TAM – this is based on projected revenues generated by SPs in the following ways
    An advertiser or content owner pays a price per GB consumed (based on standard EBITDA margins added on top of cost per GB for HSPA & LTE networks) to the SP
    The SP charges an SLA fee per GB to enhance the QoS of data used or streamed in the case of video content
    The SP also takes a share of CPM paid by the advertiser based on the assumption that the SP will provide enhanced subscriber profile data to the Advertising Network that the SP partners with, to support a highly targeted Ad

    TARGETED ADS SP TAM - uses a bottom up approach by analyzing the following advertising formats;
     
    Video Ads
    Performance Search Ads
    Display Ads
    Messaging Ads

    M2M SP TAM - this is based on projected revenues generated by SPs if they play in the following value chain roles
    Connectivity Provider - Device to Network Connectivity
    M2M Enablement Platform Provider
    M2M Application Development platform provider
    M2M Value Added Services (VAS) & Managed Services
  • Monthly ARPU uplift
    The average revenue uplift per subscriber from the new cloud based video services is around $5.48 in APJC.
    ARPU uplift is mainly from Cloud DVR and Churn reduction
    The overall TAM is $44.5 Billion mainly driven by CDN services. APJC will have the highest amount of online and multi-screen video traffic by 2018. Rental and EST( Content purchase) will provide the largest opportunity with rental growing at a CAGR of 21%
    Optimization savings achieved by video technologies such as NFV and media gateways in the home is around 17% when compared to appliance based solution without a media gateway
    Savings from virtualizing the CDN, CMS and transcoding amount to 39%
    - The cost per GB to deliver multi-screen services is around $1.18 per GB which can easily go up to $2-$3 depending on the amount of content that needs to be managed, the traffic per subscriber per month and the concurrency in multi-screen service usage.
  • Monthly ARPU uplift
    The average revenue uplift per subscriber from the new cloud based video services is around $5.48 in APJC.
    ARPU uplift is mainly from Cloud DVR and Churn reduction
    The overall TAM is $44.5 Billion mainly driven by CDN services. APJC will have the highest amount of online and multi-screen video traffic by 2018. Rental and EST( Content purchase) will provide the largest opportunity with rental growing at a CAGR of 21%
    Optimization savings achieved by video technologies such as NFV and media gateways in the home is around 17% when compared to appliance based solution without a media gateway
    Savings from virtualizing the CDN, CMS and transcoding amount to 39%
    - The cost per GB to deliver multi-screen services is around $1.18 per GB which can easily go up to $2-$3 depending on the amount of content that needs to be managed, the traffic per subscriber per month and the concurrency in multi-screen service usage.
  • Monthly ARPU uplift
    The average revenue uplift per subscriber from the new cloud based video services is around $5.48 in APJC.
    ARPU uplift is mainly from Cloud DVR and Churn reduction
    The overall TAM is $44.5 Billion mainly driven by CDN services. APJC will have the highest amount of online and multi-screen video traffic by 2018. Rental and EST( Content purchase) will provide the largest opportunity with rental growing at a CAGR of 21%
    Optimization savings achieved by video technologies such as NFV and media gateways in the home is around 17% when compared to appliance based solution without a media gateway
    Savings from virtualizing the CDN, CMS and transcoding amount to 39%
    - The cost per GB to deliver multi-screen services is around $1.18 per GB which can easily go up to $2-$3 depending on the amount of content that needs to be managed, the traffic per subscriber per month and the concurrency in multi-screen service usage.

Transcript

  • 1. MOI: Monetization & Optimization Index Contact: ps_bta@cisco.com Service Provider Marketing, Business & Technology Architecture May 16, 2014 Service Provider Cloud, Mobility and Video Economic Value Forecast
  • 2. Cisco Public 2© 2013-2014 Cisco and/or its affiliates. All rights reserved. Monetization and Optimization Index Value to Service Providers Which Services Should You Deploy? • What are the new revenue opportunities? • How much should you expect to make from these new services? Which Technology Architectures Should You Invest In? Market Insight Technology Insight • Which technologies will help you save money? • How much can you expect to save?
  • 3. Cisco Public 3© 2013-2014 Cisco and/or its affiliates. All rights reserved. MOI—Service Provider Economic Value Creation Cloud Mobile Video $142B $353B $115B 39% Higher Revenue per Enterprise Global* Opportunity Monetization** Impact $6/Sub Uplift $11/Sub Uplift Iaas PaaS SaaS New Monetization Opportunities Sponsored Data Targeted AD M2M Cloud DVR TV Everywhere sVOD Virtualization Multiservice Cloud Dynamic Policy Video Optimization Mobile Backhaul nV Virtualization Virtualization: CDN, CMS, Transcoding Media Gateway 19% Lower Cost ESP & EPN Technologies Optimization*** Impact 18% Lower Cost 15% Lower Cost *Global Opportunity by 2018 **ARPU uplift based on estimated service penetration and monthly fee per service or connection ***Optimization based on comparison of Present Mode of Operation(PMO) with new technology architectures
  • 4. Cisco Public 4© 2013-2014 Cisco and/or its affiliates. All rights reserved. Cloud MOI—Worldwide Economic Value by 2018 North America LatAm W. Europe E. Europe Cost Savings1 Total Opportunity2 $82 B Monthly ARPU uplift3 $11k 17% Cost Savings1 Total Opportunity2 $8.1 B Monthly ARPU uplift3 $7k 21% Cost Savings1 Total Opportunity2 $19 B Monthly ARPU uplift3 $8k 18% Cost Savings1 Total Opportunity2 $4.1 B Monthly ARPU uplift3 $5k 22% Cost Savings1 Total Opportunity2 $4.6 B Monthly ARPU uplift3 $4k 20% Source: MOI, Cisco BTA Team 2014, IDC, Gartner, Shireson 1. Savings based on Virtualization Multiservice Cloud Dynamic Policy 2. Total revenue opportunity from SaaS, PaaS and IaaS in each region 3. Revenue uplift per month per subscriber Cost Savings1 Total Opportunity2 $25 B Monthly ARPU uplift3 $10k18% APJCMiddle East & Africa
  • 5. Cisco Public 5© 2013-2014 Cisco and/or its affiliates. All rights reserved. Cloud Footprint—Global
  • 6. Cisco Public 6© 2013-2014 Cisco and/or its affiliates. All rights reserved. Cloud Footprint—North America
  • 7. Cisco Public 7© 2013-2014 Cisco and/or its affiliates. All rights reserved. Cloud Footprint—APJC
  • 8. Cisco Public 8© 2013-2014 Cisco and/or its affiliates. All rights reserved. North America LatAm W. Europe E. Europe Cost Savings1 Total Opportunity2 $83 B Monthly ARPU uplift3 $14 20% Cost Savings1 Total Opportunity2 $23.1 B Monthly ARPU uplift3 $2.57 14% Cost Savings1 Total Opportunity2 $141 B Monthly ARPU uplift3 $2.67 14% Cost Savings1 Total Opportunity2 $14.5 B Monthly ARPU uplift3 $0.91 14% Cost Savings1 Total Opportunity2 $16.6 B Monthly ARPU uplift3 $2.54 17% Source: MOI Cisco BTA Team 2014, Machina research, ABI 1. Savings based on virtualization/NFV of mobile infrastructure such as EPC and Gilan, traffic optimization 2. Opportunity for M2M, Sponsored data and Targeted advertising by 2018 3. ARPU based on regional service deployment model and average over 5 years Cost Savings1 Total Opportunity2 $73 B Monthly ARPU uplift3 $1019% APJCMiddle East & Africa Mobile MOI—Worldwide Economic Value by 2018
  • 9. Cisco Public 9© 2013-2014 Cisco and/or its affiliates. All rights reserved. Mobile Footprint—Global
  • 10. Cisco Public 10© 2013-2014 Cisco and/or its affiliates. All rights reserved. Mobile Footprint—North America
  • 11. Cisco Public 11© 2013-2014 Cisco and/or its affiliates. All rights reserved. Mobile Footprint—Western Europe
  • 12. Cisco Public 12© 2013-2014 Cisco and/or its affiliates. All rights reserved. North America LatAm W. Europe E. Europe Cost Savings1 Total Opportunity2 $25.2 B Monthly ARPU uplift3 $19 27% Cost Savings1 Total Opportunity2 $15.5 B Monthly ARPU uplift3 $8 7% Cost Savings1 Total Opportunity2 $45 B Monthly ARPU uplift3 $5.51 17% Cost Savings1 Total Opportunity2 $15.1 B Monthly ARPU uplift3 $3.36 7% Cost Savings1 Total Opportunity2 $2.9 B Monthly ARPU uplift3 $8 11% Source: MOI, Cisco BTA Team 2014, ABI, Instat, Frost & Sullivan 1. Savings based on virtualization/NFV of video infrastructure such as CDN, CMS and transcoding 2. Opportunity for B2C Cloud Video services such as sVOD & Digital locker and B2B services such as CDN and Analytics 3. ARPU based on regional service deployment model and average over 5 years of B2C services Cost Savings1 Total Opportunity2 $11.8 B Monthly ARPU uplift3 $7.223% APJCMiddle East & Africa Video MOI—Worldwide Economic Value by 2018
  • 13. Cisco Public 13© 2013-2014 Cisco and/or its affiliates. All rights reserved. Video Footprint—Global
  • 14. Cisco Public 14© 2013-2014 Cisco and/or its affiliates. All rights reserved. Video Footprint—North America
  • 15. Cisco Public 15© 2013-2014 Cisco and/or its affiliates. All rights reserved. Video Footprint—Latin America
  • 16. Cisco Public 16© 2013-2014 Cisco and/or its affiliates. All rights reserved. MOI—Forecast Highlights and Tools Worldwide and Regional Forecast Regional Economic Value Forecast Customizable Infographic Footprints & Reports MOI Highlights Go to www.cisco.com/go/moi
  • 17. Thank you.Thank You!