SAPBRIM Monetizing M2M Services Presentation

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SAP Billing Revenue Innovation Management solution presents the business challenges and go to market solutions for new innovative M2M services.

SAP Billing Revenue Innovation Management solution presents the business challenges and go to market solutions for new innovative M2M services.

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  • 1. SAP Billing and RevenueInnovation ManagementMonetizing M2M15 November 2012
  • 2. Why now ? • Falling costs, wider connectivity and maturing technologies • Regulatory mandates • A growing range of successful applications and business models • A maturing provider ecosystem • Rise of the cloud Source: Economist Intelligence Unit, 1Q 2012© 2012 SAP AG. All rights reserved. Public 2
  • 3. Value to the end user “ Successful technology has two great attributes: They are invisible to the customer and they solve a fundamental human need “ Martin Cooper, pioneer of cellular telephone Connecting the physical world to the online; your machines works for you© 2012 SAP AG. All rights reserved. Public 3
  • 4. M2M market forecast Source: Economist Intelligence UnitM2M will contribute to >5% of global operator revenue by 2015 ~ $65B Source: Informa & SAP, 02/2012© 2012 SAP AG. All rights reserved. Public 4
  • 5. M2M = low ARPU? Average monthly ARPU per SIM, US$, % of survey respondents More than $9 Between $7 and $9 Between $5 and $7 Between $3 and $5 Less than $3 0 5 10 15 20 25 30 35 Source: Informa & SAP, 02/2012© 2012 SAP AG. All rights reserved. Public 5
  • 6. Secure M2M profitability #1 Business Challenges and Billing Requirements LOW ARPU ! LOW VALUE CONNECTIONS  Affordable and re-applicable low cost model  Low ongoing cost of platform ownership  Reduce operational cost  Automation© 2012 SAP AG. All rights reserved. Public 6
  • 7. Connected devices and M2M 30.0Billion devices 22.5 15.0 7.5 Sources: Machina Research, 2010 2012 2014 2016 2018 2020 GSM Association © 2012 SAP AG. All rights reserved. Public 7
  • 8. M2M connections and growth 16 14 12 10Million Connections (end 2011) YoY adds 8 6 4 2 0 Source: Berg Insight, April 2012 © 2012 SAP AG. All rights reserved. Public 8
  • 9. Secure M2M profitability #2 Business Challenges and Billing Requirements MASSIVE SCALE HUGE REAL-TIME TRANSACTION VOLUMES  Billing Platform to scale for high volume  High performance and high availability architecture© 2012 SAP AG. All rights reserved. Public 9
  • 10. Future value shift in M2M communications 2015 Decision support, Reports and alerts, Data collection storage and analytics, Service Enablement Device monitoring and control, Development toolkit and system integration Vertical Industry specific Application Services solutions and managed services Communications services, M2M Connectivity & associated communications hardware (modules, terminals, revenue Hardware devices) distribution 2012 Source: Informa/SAP (2012), Berg Insight (2012)© 2012 SAP AG. All rights reserved. Public 10
  • 11. Secure M2M successTop 5 M2M operational Telecom Telecom Device, Cloudfocus areas CSP equipment Integrator software module, service vendor vendor / ISV chipset maker provider End-to-end service mgmt ▲ ▲ ▲ ▲ ▲ ▲ Partner mgmt ▲ ▲ ▲ ▲ ▲ Flexible billing ▲ ▲ ▲ ▲ ▲ ▲ Security & fraud ▲ ▲ ▲ ▲ Network traffic & signalling loads ▲ ▲ ▲ ▲ Ordering & provisioning ▲ Cross-border roaming ▲ Business analytics ▲ ▲ ▲ Source: Informa & SAP, 02/2012© 2012 SAP AG. All rights reserved. Public 11
  • 12. Multi-sided Partner Revenue Sharing Consumers NW operators Module and Terminal vendors App developers € $ £ $ Specializedcommunication providers ¥ App/Service Store £Specialized solution Service € providers ¥ Provider € Specialized service $ providers Corporate System integrators Clients Resellers © 2012 SAP AG. All rights reserved. Public 12
  • 13. Secure M2M profitability #3 Business Challenges and Billing Requirements CHANGING VALUE CHAIN/S RAPID COMBINATIONS AND VERTICAL SPECIFICS MANAGING AND MONETIZING COMPLEX PARTNER RELATIONSHIPS !  Enable and drive smart partnership value generation, including Multi Industry Billing support  Handle settlements & commission for global, complex value chains  Analytics for service differentiation, and additional end-user value© 2012 SAP AG. All rights reserved. Public 13
  • 14. M2M focus and trends CSPs’ target industries Transport and… 51,8% Utilities 46,4% Automotive 27,3% Financial services 20,0% Health 20,0% Operators / MVNOs 15,5% Consumer… 14,5% Public safety 11,8% = = Integrators 11,8% Manufacturing /… 10,9% Oil and gas / mining 4,5% Agriculture / food 2,7% Military / defence 0,9% Parcel Patient Felony Other 3,6% tracking & alerts tracking & alerts tracking & alerts Dont know /… 12,7% % of CSPs Opportunities:  Seek horizontal scale of M2M services and apps  Focus is shifting to specific apps versus specific industries  Monetize the value that lays in the data Source: Informa & SAP, 02/2012© 2012 SAP AG. All rights reserved. Public 14
  • 15. Revenue capture in the M2M value chain CHANGE Revenue share AHEAD App based RUN IT BUILD IT USE IT IaaS PaaS SaaS Infrastructure as a Service Platform as a Service Software as a Service© 2012 SAP AG. All rights reserved. Public 15
  • 16. Secure M2M profitability #4 Business Challenges and Billing Requirements NEW BUSINESS MODELS ! LONG-TERM EVOLVING MULTI-SERVICE CONTRACTS CAPTURE VERTICALLY SPECIFIC ROI RAPID TTM  Real-time and Convergent Charging & Billing; supporting a mix of recurring and usage based micro payments  Flexibility and Agility for Pricing Innovation and flexible multi-sided business models  Support retail and wholesale price models  Fast TTM; configure not program© 2012 SAP AG. All rights reserved. Public 16
  • 17. Monetizing M2M - Billing requirements summary LOW ARPU MASSIVE SCALE  Low TCO;  Scalability  Low cost footprint  Real-time  Simplified operation  High performance helps you to sustain the M2M is needed to cope with the high low value transactions M2M transaction volumes What is needed ? NEW BUSINESS MODELS CHANGING VALUE CHAIN/S  Innovative pricing  Fast recombination of offers  Fast TTM  Vertical specific or horizontal  Complex partnerships is key to support vertical differentiation ensures flexible partner management and abstract value vertically – thus your success© 2012 SAP AG. All rights reserved. Public 17
  • 18. Thank YouContact information:Name: Christina GiraudEmail: christina.giraud@sap.com
  • 19. Legal disclaimerAll information contained in this presentation is provided under NDAThe information in this document is confidential and proprietary to SAP and may not be disclosed without the permission of SAP. Thisdocument is not subject to your license agreement or any other service or subscription agreement with SAP. SAP has no obligation topursue any course of business outlined in this document or any related presentation, or to develop or release any functionality mentionedtherein. This document, or any related presentation and SAPs strategy and possible future developments, products and or platformsdirections and functionality are all subject to change and may be changed by SAP at any time for any reason without notice. Theinformation on this document is not a commitment, promise or legal obligation to deliver any material, code or functionality. This documentis provided without a warranty of any kind, either express or implied, including but not limited to, the implied warranties of merchantability,fitness for a particular purpose, or non-infringement. This document is for informational purposes and may not be incorporated into acontract. SAP assumes no responsibility for errors or omissions in this document, except if such damages were caused by SAPintentionally or grossly negligent.All forward-looking statements are subject to various risks and uncertainties that could cause actual results to differ materially fromexpectations. Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of their dates,and they should not be relied upon in making purchasing decisions.