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Leading the Innovation at Telefonica

Leading the Innovation at Telefonica



March 2011

March 2011



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  • - In 2010-> 800,000 petabytes: Picture a stack of DVDs reaching from the earth to the moon and back. - Zettabytes a word we haven´t had to use until now - In 2020 -> Our stack of DVDs would now reach halfway to Mars.
  • - How will we find the information we need when we need it? We will need new search and discovery tools. Most of the Digital Universe is unstructured data (for example, images and voice packets). We will need new ways to add structure to unstructured data, to look INSIDE the information containers and recognize content such as a face in a security video. In fact, the fastest-growing category in the Digital Universe is metadata, or data about data. - How will we know what information we need to keep, and how will we keep it ? Yes, we will need new technical solutions tied to storage, but we will surely also need new ways to manage our information. We’ll need to classify it by importance, know when to delete it, and predict which information we will need in a hurry. - How will we follow the growing number of government and industry rules about retaining records, tracking transactions, and ensuring information privacy? Compliance with regulations has become an entire industry – a $46 billion industry last year – but will it be enough? - How will we protect the information we need to protec t? If the amount of information in the Digital Universe is growing at 50% a year or so, the subset of information that needs to be secured is growing almost twice as fast. The amount of UNPROTECTED yet sensitive data is growing even faster.
  • - Internet video is now over one-third of all consumer Internet traffic, and will approach 40 percent of consumer Internet traffic by the end of 2010, not including the amount of video exchanged through P2P file sharing. - The sum of all forms of video (TV, video on demand, Internet, and P2P) will continue to exceed 91 percent of global consumer traffic by 2014. Internet video alone will account for 57 percent of all consumer Internet traffic in 2014. - Advanced Internet video (3D and HD) will increase 23-fold between 2009 and 2014. By 2014, 3D and HD Internet video will comprise 46 percent of consumer Internet video traffic. - Video communications traffic growth is accelerating. Though still a small fraction of overall Internet traffic, video over instant messaging and video calling are experiencing high growth. Video communications traffic will increase sevenfold from 2009 to 2014. - Real-time video is growing in importance. By 2014, Internet TV will be over eight percent of consumer Internet traffic, and ambient video will be an additional five percent of consumer Internet traffic. Live TV has gained substantial ground in the past few years: globally, P2P TV is now over 280 petabytes per month. Video-on-demand (VoD) traffic will double every two and a half years through 2014. Consumer IPTV and CATV traffic will grow at a 33 percent CAGR between 2009 and 2014. Definitions - Web, email, and data : Includes web, email, instant messaging, and other data traffic (excluding file sharing) - File sharing : Includes peer-to-peer traffic from all recognized P2P systems such as BitTorrent, eDonkey, etc., as well as traffic from web-based file sharing systems - Gaming : Includes casual online gaming, networked console gaming, and multiplayer virtual world gaming - Video communications : Includes PC-based video calling, webcam viewing, and web-based video monitoring - VoIP : Includes traffic from retail VoIP services and PC-based VoIP, but excludes wholesale VoIP transport - Internet video to PC : Free or pay TV or VoD viewed on a PC, excludes P2P video file downloads - Internet video to TV : Free or pay TV or VoD delivered via Internet but viewed on a TV screen using an STB or media gateway

Leading the Innovation at Telefonica Leading the Innovation at Telefonica Presentation Transcript

  • Info&Comms, a brave new world Francisco Jariego, Telefónica I+D Technology Strategy Director March 2011Technology StrategyTelefónica I+D
  • INTRODUCTIONTechnology StrategyTelefónica I+D
  • Telefonica I+D: Leading the Innovation at Telefonica “Telefónica is the World Most Admired company in the Telco sector” Fortune Magazine Telefónica invested 4.814 Mill€ in Tech Among the 40 biggest Innovation in 2010 companies in Europe in 797 M€ in R&D R&D investment 94 M€ in Applied Research done by Telefónica I+D Innovating in 25 countries Telefónica I+D is an international network of innovation centres •5 offices in Spain: Madrid, Barcelona, Valladolid, Granada 1st Spanish Private Business Center in and Huesca R&D activity •A center in Brazil funded by TID & TeleSP •A center in UK formed by TID - O2 UK - Jajah Telefónica I+D has a clear mission:Technology Strategy 3Telefónica I+D
  • A company with a highly qualified and international staff RESEARCHERS Telefónica I+D has a staff of researchers, technologists, developers and designers, from 18 nationalities. TELCO & SW ENGINEERS PRODUCT MANAGERS PSYCHOLOGISTS DESIGNERS 97% university graduates from 34 international universities PhDs, 10% of the staff 1% 2% 12% 4% Telecommunications Computer science Physics 10+ years 52% Electronics 29% Industrial engineering average industry Others experienceTechnology Strategy 4Telefónica I+D
  • Creating one of the largest European network of innovationin the ICT sector Telefónica I+D’s Open innovation model supports collaboration with more than 1,000 organizations 150 of them are universities from 42 countries 180 projects promoted by Public Administration Innovation Programmes Technology Platforms Cluster programmes to promote cooperative R&D Participating in European initiatives Innovation Programmes Technology Platforms Technology Platforms Participating in (National) (Regional) Spanish initiatives Participating in international forums and bodiesTechnology Strategy 5Telefónica I+D
  • INFO & COMMS a brave new worldTechnology StrategyTelefónica I+D
  • Let’s start with a set of numbers235478542312475,000,00034578906799055637612782825,000,00024567986789245633231,800,000,00058932189034232421,802,000,00045663783425272,250,000,000800421594134,000,000,000785912454,600,000,0009868 Technology Strategy 7 Telefónica I+D
  • People have always been well informed 475,000,000 Circulation of newspapersTechnology Strategy 8Telefónica I+D
  • Many people in the world have a car … 825,000,000 registered carsTechnology Strategy 9Telefónica I+D
  • … and use plastic money everyday 1,800,000,000 Unique credit card holdersTechnology Strategy 10Telefónica I+D
  • But nowadays, everybody wants to be connected 2,000,000,000 Internet users (PC, mobile, web)Technology Strategy 11Telefónica I+D
  • There are a lot of basic personal items 2,250,000,000 Tooth brushes in useTechnology Strategy 12Telefónica I+D
  • And people like to hear music and the news 4,000,000,000 FM Radios 13Technology Strategy 13Telefónica I+D
  • But mobile phones are more common than personal cleanliness 5,000,000,000 Mobile phone subscriptionsTechnology Strategy 14Telefónica I+D
  • The Mobile Miracle More than 5B Subscribers Global ICT developments, 2000-2010* 100 Mobile cellular telephone subscriptions 90 Internet users 80 Fixed telephone lines 70Per 100 inhabitants Mobile broadband subscriptions 60 Fixed broadband subscriptions 50 40 30 20 10 0 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010* *Estimates Source: ITU World Telecommunication /ICT Indicators database Technology Strategy 15 Telefónica I+D
  • Fixed and mobile broadband availability is creating acontent explosion on the Internet 90 Trillion Emails sent in 2009 234 Million Websites online (Dec 2009) 126 Million blogs on the Internet 27.3 Million Tweets per day at Twitter 260 Billion Page Views per Month 2.5 Billion photos uploaded to FaceBook monthly 1 Billion Videos are viewed per dayTechnology Strategy 16Telefónica I+D
  • The Digital Universe is expanding In 2009, the Digital Universe grew by 62% to nearly 800,000 petabytes* (800 exabytes) X 44 In 2010 grew almost as fast to 1.2 million petabytes, or 1.2 zettabytes By 2020, our Digital Universe will be 2009 0,8 ZB 44 TIMES AS BIG as it was in 2009*A petabyte is a million gigabytes (1015 Bytes) Source: IDC Digital Universe Study, sponsored by EMC, May 2010Technology Strategy 17Telefónica I+D
  • As the amount of information rises, managing costs aredecreasing and new gaps are appearing THE DECREASING COST OF THE EMERGING GAP MANAGING INFORMATION Source: IDC Digital Universe Study, sponsored by EMC, May 2010Technology Strategy 18Telefónica I+D
  • Smartphones, a new miracle?iPhone + iTouch + iPad vs. NTT docomo i-mode vs AOL vs Netscape Users Fisrt 20 Quarters Since Launch 120 ~120MM+ Mobile Internet 100 iPhone + iTouch + iPad Launched 6/07 Desktop Internet 80 S u b s c r ib e r s (M M ) Netscape* Launched 12/94 60 Mobile Internet ~32MM NTT docomo i-mode 40 Launched 6/99 Desktop Internet 20 ~27MM AOL* v 2.0 Launched 9/94 ~9MM Q 1 Q 3 Q 5 Q 7 Q 9 Q 11 Q 13 Q 15 Q 17 Q 19 Quarters Since Launch iPhone + iTouch NTT docomo i-mode AOL Netscape Source: Morgan StanleyTechnology Strategy 19Telefónica I+D
  • Mobile is revolutionising commerce Location-BasedLocation-Based Services Transparent Pricing Deep DiscountsDeep Discounts Immediate Gratification Location-Based Services Transparent Pricing Location-Based Services Transparent Pricing Services Transparent Pricing Deep Discounts Deep DiscountsImmediate Gratification Gratification Immediate Gratification Immediate Priceline.com iPhone App AppShopSavvy Android App App App App iPhoneGilt iPhone AppStore oniTunes on iPhone Priceline.com iPhone Priceline.com iPhone App App Priceline.com iPhone ShopSavvy Android ShopSavvyShopSavvy Android Android Gilt iPhone App App App Gilt Gilt iPhone iTunes iTunes Store Store on iPhone iTunes Store on iPhone iPhone Finds hotel deals Finds hotelhotel deals Comparison shoppingshopping Designer handbags handbags video / apps / /video / apps Finds Finds hotel deals deals Comparison shopping shopping Designer handbags Comparison Designer handbags Comparison Designer Music / Music Music apps Music / video / apps / video in youryour your area among online +among online + local storesto 70% 70%to 70% Offdelivered wirelessly wirelessly in area area your area in in among online + locallocal stores to 70% Off Off Off delivereddelivered wirelessly among local stores online + stores Up Up Up to Up wirelessly delivered What is the name of the game? SOLOMO (SOcial – LOcal - MObile) ACCESS LONGER MORE MORE EASIER TO FUN TO FASTER NEARLY BATTERYCONNECTED AFFORDABLE USE USE EVERYTHIN LIFE Wi-Fi nearly User Interface G Real-time ubiquitous in Near-zero revolution + many developed location Social / casual Music / video / Hours ofconnectivity / latency for boot- markets…for awareness gaming / reward- documents / continuous24x7 / in palm up / search / many / 3G tiered provide driven marketing ‘stuff’ in cloud usage of hand connect / pay pricing lowers something for adoption barrier nearly everyone Technology Strategy 20 Telefónica I+D
  • … and changing the rules of the game Mobile-phone maker’s world handset market share, % … and their share of profits, % of total* *Out of eight companies Source: Asymco Technology Strategy 21 Telefónica I+D
  • … at a ferocious pace Top Global 15 Publicly Traded Internet Companies by Market Value – 2010 vs. 2004 2010 2004 M a rk e t R evenue M a rk e t R evenueR ank C om pany R e g io n V a lu e ($ B ) ($ M M ) R ank Com pany R e g io n V a lu e ($ B ) ($ M M ) 1 A p p le USA $290 $ 4 6 ,7 0 9 1 eB ay USA $71 $ 3 ,2 7 1 2 G o o g le USA 197 2 3 ,6 1 2 2 G o o g le USA 50 3 ,1 8 9 3 A m a z o n .c o m USA 76 2 4 ,5 0 8 3 Yahoo! USA 52 3 ,5 7 5 4 Tencent CHN 41 1 ,8 2 2 4 IA C /In te r a c tiv e * USA 38 4 ,1 8 8 5 eBay USA 40 8 ,7 2 7 5 Yahoo! Japan JPN 33 1 ,1 0 1 6 B a id u CHN 40 641 6 A p p le USA 22 8 ,2 7 9 7 Yahoo! USA 22 6 ,4 6 0 7 A m a z o n .c o m USA 16 6 ,9 2 1 8 Yahoo! Japan JPN 21 2 ,9 4 1 8 R a k u te n JPN 9 445 9 P r ic e lin e .c o m USA 21 2 ,3 3 8 9 M o n s te r USA 3 846 10 S a le s fo r c e .c o m USA 15 1 ,2 4 1 10 W ebM D USA 2 134 11 R a k u te n JPN 10 3 ,2 0 4 11 Shanda CHN 3 157 12 A lib a b a .c o m CHN 10 568 12 N C S o ft KO R 2 280 13 Akam ai USA 9 860 13 In d e x JPN 2 357 14 N e tflix USA 9 1 ,6 7 0 14 NHN KO R 1 253 15 NHN KO R 8 1 ,0 6 2 15 F o r -s id e .c o m JPN 1 85 T o ta l $809B $126B T o ta l $304B $33B Source: Morgan Stanley Technology Strategy 22 Telefónica I+D
  • The gravity centres of innovation are changing From Atlantic to Pacific RUSSIA USA INDUSTRIAL 60MM users, +31% Y/Y 240MM users, +4% Y/Y DESIGN 42% penetration 76% penetration DEVICES & CONSUMER RADIO SERVICES ELECTRONICSTECHNOLOGIES SOFTWARE & CHINA SERVICES 384MM users, +29% Y/Y 29% penetration INDIA 61MM users, +18% Y/Y DEVICES 5% penetration BRAZIL 76MM users, +17% Y/Y 39% penetration 2000 2010 46% of Internet Users in 5 Countries Technology Strategy 23 Telefónica I+D
  • The gravity centres of innovation are changing (II) And from HW to SW GLOBAL UNIT SHIPMENT SHARE OF SMARTPHONES BY OPERATING SYSTEM Q1 2006 Operating system Q3 2010 0% iOS (Apple) 17% 0% Android (Google) 25% 62% Symbian (Nokia) 37% 7% BlackBerry (RIM) 15% 31% Others 6%Technology Strategy 24Telefónica I+D
  • And soon, beyond people and phones, we will beconnecting a lot more devices Computer Growth Drivers Over Time, 1960 – 2020E Machine to machine communications are just the beginning of the future Internet of ThingsTechnology Strategy 25 Source: Morgan StanleyTelefónica I+D
  • New devices generate more data … Mobile data traffic will double every year reaching 3.5 exabytes per month by 2014 X 39 between 2009 and 2014 66% of the world’s mobile data traffic will be VIDEO by 2014*Monthly Basic Mobile Phone Data TrafficSource: Cisco VNI Mobile, 2010Technology Strategy 26Telefónica I+D
  • Video Content (and Real Time) is gaining market share North America Downstream Fixed-Access Peak North America Mobile Peak Hour* Traffic Share Hour* Traffic Share by Application 9/10 by Application 9/10 vs. 1/10 100% N o r m a liz e d A g g r e g a t e P e a k T r a f f ic P r o f ile 10% 10% 6% 8%O t h e r T r a f f ic 26% 4% 80% 3% 6% 18% HTTP 23% 60% N e t f lix 21% 41% 27% YouTube 10% 40% Streaming Video B itT o r r e n t 8% 20% 36% 32% F la s h V id e o 6% Other Web Traffic 0% RTM P 6% Jan 2010 Sep 2010 0% 5% 10% 15% 20% 25% 30% W e b B r o w s in g R e a l- T im e E n t e r t a in m e n t D o w n s tr e a m T r a ffic S h a r e d u r in g P e a k H o u r s , b y A p p lic a tio n (9 /1 0 ) P 2 P F ile s h a r in g S e c u r e T u n n e lin g G a m in g S o c ia l N e t w o r k in g R e a l- T im e C o m m u n ic a t io n s O th e r Streaming Video Up to 37% of Internet Traffic Mobile Video = 41% of Peak Hour Traffic, Up During Traditional “TV Hours” from 27% in January Telefonica I+D 27 Source: Morgan Stanley
  • And IP traffic will increase 4X from 2009 to 2014 Global IP Traffic 34% CAGR 2009-2014 X4 PB per month X3 Source: Cisco Visual Networking Index – Forecast, 2009-2014 In 2014, more than 60 exabytes* per month will cross the global network *A exabyte is a thousand petabytes (1018 Bytes)Telefonica I+D 28
  • Efficiency improvements and technology evolution havemade possible capacity and speed upgrades without araise in end users prices Technology evolution Download speed evolution (Mbps) BAF Fixed Broadband Mobile Broadband Average Download Speed in Europe Bandwidth per Optimal Commercial Nominal Bandwidth available per Fiber access Speed (Europe) technology Mbps Co FO VDSL Mbps1000 ADSL 2+ LTE 100 ADSL 2 HSPA+ >100 22 42 10 Source: Analysis Mason ADSL HSPA 6 14.4 1 UMTS Broadband prices evolution 0.384 Average (€/Month/Mbps) price per monthly broadband 0.257 GPRS Mbps nominal speed in Europe 0.1 0.08 GSM 0.033 0.01 FTTH 0.0096 0.009 6 VDSL0.001 ADSL2+ 0.0003 ADSL0.0001 82 92 96 00 04 08 14 95 01 03 08 10 12 Source: Analysis Mason Telefonica I+D 29
  • Traffic growth explosion and current Internet economicmodel is driving the decoupling between revenues and traffic Traffic Connectivity Decoupling revenue/efficie ncy gains enabling might not follow data Revenues?? traffic Cost??? Voice Data Time Dominant (Video)Dominant What can we do to improve the cost of transmitting videos? CDNs? Better codecs? Cheaper networks? A different interconnect model? Telefonica I+D 30
  • We will have to deal with information in new ways How will we find the information we need when we need it? How will we know what information we need to keep, and how will we keep it? How will we follow the growing number of government and industry rules about retaining records, tracking transactions, and ensuring information privacy? How will we protect the information we need to protect?Technology Strategy 31Telefónica I+D
  • And discover new business models Where to pay attention? % of Time spent in Media vs. % of Advertising Spending, USA 2009 50% T im e S p e n t Ad Spend % o f T o ta l M e d ia C o n s u m p tio n T im e 40% 39% o r A d v e rtis in g S p e n d in g 30% 31% 28% 26% ~$50B 20% Global Opportunity 16% 10% 12% 13% 9% 0% P r in t R a d io TV In te r n e t 1995E 2009E Global Internet Ad Revenue $55MM $54B Ad Revenue per User $9 $46 Global Internet Users 6MM 1.2BTechnology Strategy 32 Source: Morgan StanleyTelefónica I+D
  • Telcos have many valuable but latent data assets Address Gender Bank MY M Y School P E R SON A L R E L A T I ON SH DA TA Name Preferences Profile Workplace P S Friends I SIM Serial Number Browsing History MY M Y DEV I CES I N TE R A C TI Device details SoftSIM .mobi domains SQR Codes ON Number SIP Number Location Presence Pictures Videos MY I DE N TI F I E R M Y C ON T E X T M Y ST U F F S IP Address Roaming Address Book Calendar On/Off Source: Telco 2.0Technology Strategy 33Telefónica I+D
  • Managing users identity will be an opportunity… The role of identity Identity management Network-agnostic identity information will evolve, will enable new revenue management is the key strengthening the operator’s opportunities, and enhance component of tomorrow’s position in the user experience multi-access network the value chain Customer Identity profiles federation Close & trusted Attribute Single sign-on query/push (SSO) relationship with subscribers and communities Mutual Authorization & authentication trust managementTechnology Strategy 34Telefónica I+D
  • …as well as helping people control their privacy Privacy is a key concept for trusting a brandFROM viewing customers as victimswhose privacy needs to be protected The need for Information Securitythrough regulation… Percentage of the Digital Universe …TO viewing customers as active players in control of their privacy and trading their personal information for benefits Source: IDC Digital Universe Study, sponsored by EMC, May 2010Technology Strategy 35Telefónica I+D
  • The Customer: the final frontier… Knowing them better to be closer FROM a partial view of the TO a holistic, one-view of the customer and different perspectives customer from each business Commercial Web Traffic Call Center Services To improve business intelligence and personalised services: IPTV - Net Incidences Imagenio Targeted Advertising Downloads Contextual ServicesTechnology Strategy 36Telefónica I+D
  • Telefónica I+D Leading the innovation at Telefónica Find us on http://twitter.com/telefonicaidTechnology Strategy 37Telefónica I+D
  • Technology StrategyTelefónica I+D
  • And this is only the beginning 2 billion internet users worldwide 5 billion internet users worldwide 5 billion mobile subscription 10 billion mobile subscription 1.4 billion of connected machines 40 billion of connected machines 800 exabytes of digital info in the 53 zettabytes of digital info in the world- videos, photos, music, texts… world- videos, photos, music, texts…Technology Strategy 39Telefónica I+D
  • Video content is driving consumer IP traffic growth Consumer IP Traffic & Mobile Internet 2009-2014 91% Video traffic Source: Cisco Visual Networking Index – Forecast, 2009-2014 The sum of all forms of video (TV, video on demand, Internet, and P2P) will continue to exceed 91% of global consumer traffic by 2014. Internet video alone will account for 57% of all consumer Internet traffic in 2014.Telefonica I+D 40