Wider Economy Services 20 Oct 2009
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Wider Economy Services: Exploring New Vertical Market Opportunities for Telcos, IBM / Yankee Group Webseminar

Wider Economy Services: Exploring New Vertical Market Opportunities for Telcos, IBM / Yankee Group Webseminar

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Wider Economy Services 20 Oct 2009 Presentation Transcript

  • 1. Capitalizing on Wider Economy Services October 20, 2009 www.yankeegroup.com © Copyright 2009. Yankee Group Research, Inc. All rights reserved.
  • 2. Agenda Introduction Setting the context Rethinking the value chain: Telco as a platform Wider Economy: Solution examples Conclusion 2 © Copyright 2009. Yankee Group Research, Inc. All rights reserved. October 2009
  • 3. Speakers Moderator Angeline Alexakos-Snow, Director of Programs & Content, Trendsmedia Panelists Yankee Group IBM Corp. Benoit Felten, Principal Analyst David Mangini, Global Solution Owner, Service Delivery Platform Brian Partridge, Vice President Seeta Hariharan, Director, Global Communications Sector 3 © Copyright 2009. Yankee Group Research, Inc. All rights reserved. October 2009
  • 4. Agenda Introduction Setting the context Rethinking the value chain: Telco as a platform Wider Economy: Solution examples Conclusion 4 © Copyright 2009. Yankee Group Research, Inc. All rights reserved. October 2009
  • 5. The reality of living in a globally integrated world is upon us Economic instability and uncertainty. Shift in resources and growth opportunities from mature to emerging economies. Consumers increasingly empowered by online collaboration and communities. A proliferating “internet of things” communicating and generating vast quantities of data. Escalating personal and business reliance on telecommunications. Global awareness of industry’s impact on the environment. The world is connected: economically, socially, and electronically. Source: IBM 5 © Copyright 2009. Yankee Group Research, Inc. All rights reserved. October 2009
  • 6. Start planning and implementing Smarter Telecommunications systems The goals for smarter telecommunications are clear: Business Models 1. Improve what service providers Business Functions do today by focusing on operational efficiency. 2. Apply the wealth of data and Processes intelligence available today to focus on meeting customer SMARTER TELECOM PROVIDERS needs. • Provide connectivity, speed, and services via personalized offerings Applications 3. Adapt to current and future • That are secure, reliable, and affordable • Delivered over intelligent systems and changes by capitalizing on the infrastructure opportunities for innovative new Infrastructure business models. Source: IBM 6 © Copyright 2009. Yankee Group Research, Inc. All rights reserved. October 2009
  • 7. Smarter Communications Infrastructure: A horizontal enabler for Wider Economy Services Wider Economy Services Smarter Telcos / Anywhere Network Smarter Healthcare Smarter Utilities Smarter Transportation … Smarter Planet: Anywhere Network: Wider Economy Services: The planet will be instrumented, A seamless, intelligent, ubiquitous New opportunities to capitalize interconnected, intelligent network with broadband capacity on these trends and position Telecoms into adjacent markets 7 © Copyright 2009. Yankee Group Research, Inc. All rights reserved. October 2009
  • 8. Exploring Wider Economy Services Yankee Group and IBM collaborate to explore the wider economy services opportunities in both mature and growth markets: – What are the services? – Where are the short- and mid-term opportunities? – What is the role of a Telecom Service Providers in offering these new services? – What revenues can be expected to flow back to Telecom Service Providers? The current webinar is an overview of our research and will be followed by more in-depth sessions exploring specific verticals. Look for invites to future webinars addressing Telco opportunity in Healthcare, Utilities, Transportation, Home Management, and more. 8 © Copyright 2009. Yankee Group Research, Inc. All rights reserved. October 2009
  • 9. Agenda Introduction Setting the context Rethinking the value chain: Telco as a platform Wider Economy: Solution examples Conclusion 9 © Copyright 2009. Yankee Group Research, Inc. All rights reserved. October 2009
  • 10. Operators face a serious mid-term threat The model that Telcos have strived on for decades is seriously endangered by services migrating “off-deck” INTERNET SERVICES INTERNET SERVICES Bandwidth increase TELCO SERVICES Internet innovation TELCO SERVICES Device normalization ACCESS ACCESS Telco Share of Revenues Telco Share of Revenues Access revenue growth marginal Abundant bandwidth Constrained bandwidth Services migrate off-deck Telco-controlled end-devices Service revenue endangered PC is only area of freedom Access is only stable revenue 10 © Copyright 2009. Yankee Group Research, Inc. All rights reserved. October 2009
  • 11. Currently envisaged strategies have drawbacks Impacts Question Marks Access revenue Slow down/refuse Slowdown service threatened by bandwidth upgrade disintermediation alternative networks (wireline & wireless) Maintain customers Political and image Maintain captive to Telco cost too high to be walled garden services realistic Sensible role but how Become More stable but lower to transition from Broadband Utility margin revenues current model? 11 © Copyright 2009. Yankee Group Research, Inc. All rights reserved. October 2009
  • 12. Solution: wholesale Telco assets Leverage existing network & organization assets for revenue by: – aggregating & enhancing internet services – powering third party non telecom centric services TELCO SERVICES INTERNET SERVICES WIDER ECON SERVICES ENABLING NETWORK COMPONENTS ACCESS Traditional retail Substitution wholesale Incremental wholesale Services Video-communication Cloud applications Home security like... TV on-demand Unified communications Remote healthcare Billing Video enablement Enablers Customer support Real-time alerting sold... Interoperability Voice integration 12 © Copyright 2009. Yankee Group Research, Inc. All rights reserved. October 2009
  • 13. Two-sided business models require new skills, processes, and infrastructure CONSUMERS VOICE TELCO SERVICES Network Assets VIDEO RETAIL BILLING $ ACTIVATION … and Organization UTILITIES GOV’T Assets ENTERPRISES DIRECT SALES WHOLESALE TELCO TRANSPORT CUSTOMER SUPPORT … $ HEALTH … $ Telco Assets 3rd Party End Service Providers Customers 13 © Copyright 2009. Yankee Group Research, Inc. All rights reserved. October 2009
  • 14. Evaluating adjacent segments – solution fit Telco Today Connectivity 200 Evolution of Telco's must support… – Converged connectivity – 1000s of services supplied 100 mostly by partners – Large ecosystem Platform openess 0 System Integration Expertise – Combination of open networks and closed networks – Systems integration Vertical expertise Telco Tomorrow Source: Yankee Group, 2009 14 © Copyright 2009. Yankee Group Research, Inc. All rights reserved. October 2009
  • 15. Agenda Introduction Setting the context Rethinking the value chain: Telco as a platform Wider Economy: Solution examples Conclusion 15 © Copyright 2009. Yankee Group Research, Inc. All rights reserved. October 2009
  • 16. Solution Segment: Priority Mapping Source: Yankee Group, 2009 HIGH Smart Meter Home Healthcare Market Attractiveness Distance Learning Engage and Partner Study and develop Home Real-time Monitoring Traffic Mgmt. In Car Services Monitor LOW HIGH Service Provider Capability Fit 16 © Copyright 2009. Yankee Group Research, Inc. All rights reserved. October 2009
  • 17. Wider Economy Services: Smarter Health Care Care Center Video conference with visiting nurse, Patient journal over TV, Sensor measurements Home Service Information on TV about planned visits, Medicine reminder, Alarm monitoring Hospital Video conference, Transmission of data at home visit, Supervision of analysis equipment Relatives Voice controlled video phone using TV, Safety alarm 17 © Copyright 2009. Yankee Group Research, Inc. All rights reserved. October 2009
  • 18. Revenue opportunity: Elderly care service Increased Longevity More and more elderly people go into nursing homes Increased % of aging The cost per patient is fast becoming astronomical population (£25k+/y in the UK, $67k/y in US...) Increasing need for The cost is borne by patients, their families, insurance health monitoring companies and the states’ healthcare systems Keeping an autonomous elderly person requiring monitoring in their homes can therefore save considerable cost to the parties involved. The Telco would provide not only connectivity and vital QoS but also monitoring systems, real-time interactive services into the home etc. A 3rd party healthcare service provider (which may or may not be an existing player in the healthcare sector) offers service & assistance to the elderly person. The service would be paid by combinations of the current players footing the nursing home bills. The economic space for the Telco would be significant though. 18 © Copyright 2009. Yankee Group Research, Inc. All rights reserved. October 2009
  • 19. Wider economy services: Smart Meters Legacy Metering Implications Meter reading requires physical customer presence Measures consumption Customer has no real-time consumption « Legacy » information Meter Aggregated consumption dictates energy Appliances Electricity company production/purchase strategy Grid Smart Metering Meter reading can be done remotely Provides real-time consumption feedback Customer can adjust consumption on the « Smart » Controls energy usage basis of real-time information Meter of key appliances Peak demand can be adjusted to avoid incurring peak production costs Appliances Electricity Grid Data Network 19 © Copyright 2009. Yankee Group Research, Inc. All rights reserved. October 2009
  • 20. Revenue opportunity: Smart Meters Revenues for Telcos: – Connectivity and network management: a few $/m per meter as per M2M pricing (if absolute real-time is key, might be somewhat higher) – Service platform: yearly contract basis as per large network management and integration projects Costs for Telcos: – Broadband usage costs with basic to advanced QoS – Service support for always on metering – Network monitoring and support of the end-points Developing the service platform capabilities needed will represent an investment akin to a large integration project, but one that will be leveraged for serving multiple wider-economy customers in addition to utilities. Utility Telco SI Platform and Hosting Network Management Telco Meter Connectivity 20 © Copyright 2009. Yankee Group Research, Inc. All rights reserved. October 2009
  • 21. Agenda Introduction Setting the context Rethinking the value chain: Telco as a platform Wider Economy: Solution examples Conclusion 21 © Copyright 2009. Yankee Group Research, Inc. All rights reserved. October 2009
  • 22. Evaluating the business plan requires a holistic view 22 © Copyright 2009. Yankee Group Research, Inc. All rights reserved. October 2009
  • 23. The building blocks that enable wider economy services 2G/3G/4G Collaboration tools Network& IT Assets VOICE TELCO SERVICES CONSUMERS Video storage Video delivery Call routing VIDEO Policy management RETAIL M-payments Messaging … BILLING Content management & storage $ Device management DSL/Fiber ACTIVATION M2M Presence Billing … Telematics Location Single-sign on Organization ENTERPRISES UTILITIES GOV’T Assets Marketing support Brand image DIRECT SALES WHOLESALE Force UTILITIES Direct Sales TRANSPORT Customer Trust CUSTOMER SUPPORT … $ Retail Shops Indirect Distribution INSURANCE … Telco Assets 23 © Copyright 2009. Yankee Group Research, Inc. All rights reserved. October 2009
  • 24. IBM’s solution strategy is aligned with the needs of telecommunication stakeholders TELECOMMUNICATIONS IBM IS INVESTING IN . . . PRIORITIES ARE . . . Enabling new Best practices helping develop and implement new business models Global outsourcing capabilities to fund innovative business approaches business models. World-class service delivery platform based on SOA to accelerate service creation and delivery R&D and Telecommunications Centers of Excellence to bring pioneering technologies to clients Global financing to support innovation and change Differentiating the Analytics to reveal customer insights for better targeted services Churn-management and real-time campaign management solutions customer experience. Leadership in security and identity management Customer experience, service quality and service level agreement solutions End-to-end customer product catalog and master data management Improving operational Modernization and optimization of legacy systems Business, OSS/BSS integrations, process efficiencies & transformations efficiencies. Open, standards-based, integrated environments and processes Application management and outsourcing Customer Care and Billing efficiencies Source: IBM 24 © Copyright 2009. Yankee Group Research, Inc. All rights reserved. October 2009
  • 25. Final Word Telcos are under tremendous pressure to transform their business or face disintermediation. Telcos own or control valuable assets that they can use for wider economy services. Pursuing these opportunities in the adjacent spaces require a commitment to openness and partner ecosystem development: – Opportunities need to be viewed in aggregate – not in silos. – Telcos will need to rely on their strategic partners more than ever. This transformation requires a fundamental rethink of a Telco’s strategy, organization and network. 25 © Copyright 2009. Yankee Group Research, Inc. All rights reserved. October 2009
  • 26. Next Steps IBM and Yankee Group will be delivering three more webinars in the coming months, each of which focused on a specific vertical such as Healthcare, Smart Meters, and Transportation. Final webinar will examine the implications for Telcos in terms of strategy, organization and network & IT investment. 26 © Copyright 2009. Yankee Group Research, Inc. All rights reserved. October 2009
  • 27. Thank you October 20, 2009