Carrier Cloud Opportunity - TM Forum Management World Dublin 2011

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Cloudscaling Co-Founder and CTO Randy Bias shows the world's largest telcos that carriers must embrace web-scale cloud to be successful in the apps that will drive mobile, web and emerging markets. Legacy "clouds" are essentially virtualized and automated IT, and they do not offer the cost performance or business agility these hyper-growth segments demand.

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Carrier Cloud Opportunity - TM Forum Management World Dublin 2011

  1. 1. Carrier Cloud Opportunity Breaking the rules; how KT did itRandy Bias @randybiasMay 25th, 2011 @cloudscalingTMForum - Dublin
  2. 2. Step 1: Vision of CloudOpportunity - Randy Bias, CloudscalingStep 2: How KT Did It - Charles Huh, KT
  3. 3. Why don’t CarrierClouds look like AWS?
  4. 4. Carriers building for the past ... not the future
  5. 5. Carriers today arebuilding ‘Legacy Clouds’ ...aka ‘Enterprise Clouds’
  6. 6. What’s the flaw withLegacy (Enterprise) Clouds?
  7. 7. There are two flaws, actually ...
  8. 8. Flaw #1Enterprise computing is not cloud computing ... Past, not the future
  9. 9. Flaw #2 Limited TotalAddressable Market ... Missed Revenue Opportunity?
  10. 10. Flaw #1
  11. 11. “Legacy” IaaS Clouds? ? PrivateInternal External Public
  12. 12. “Legacy” IaaS Clouds? Enterprise Computing Techniques PrivateInternal External Public
  13. 13. Enterprise Computing (Legacy)
  14. 14. Cloud Computing (Web-scale)
  15. 15. Cloud Computing’s Pioneers
  16. 16. IT - Disruption & Evolution Mainframe Enterprise Cloud Computing Computing Computing "Big Iron" "Client-Server" "Web"1960 1980 2000 2020
  17. 17. IT - Disruption & Evolution Mainframe Enterprise Cloud Computing Computing Computing "Big Iron" "Client-Server" "Web"1960 1980 2000 2020 Disruption
  18. 18. IT - Disruption & Evolution Mainframe Enterprise Cloud Computing Computing Computing "Big Iron" "Client-Server" "Web"1960 1980 2000 2020 Disruption Disruption
  19. 19. IT - Disruption & Evolution Mainframe Enterprise Cloud Computing Computing Computing "Big Iron" "Client-Server" "Web"1960 1980 2000 2020 Disruption Disruption Disruption
  20. 20. IT - Evolution of Computing Models SLA Scaling Hardware HA Type SoftwareConsumption Mainframe Enterprise Cloud
  21. 21. IT - Evolution of Computing Models SLA 99.999 Scaling Vertical Hardware Custom HA Type Hardware Software CentralizedConsumption Centralized Service Mainframe Enterprise Cloud
  22. 22. IT - Evolution of Computing Models SLA 99.999 99.9 Scaling Vertical Horizontal Hardware Custom Enterprise HA Type Hardware Software Software Centralized DecentralizedConsumption Centralized Shared Service Service Mainframe Enterprise Cloud
  23. 23. IT - Evolution of Computing Models SLA 99.999 99.9 Always On Scaling Vertical Horizontal Hardware Custom Enterprise Commodity HA Type Hardware Software Software Centralized Decentralized DistributedConsumption Centralized Shared Self-service Service Service Mainframe Enterprise Cloud
  24. 24. Flaw #2
  25. 25. Total Addressable Market: Legacy Revenue App OpportunityDevelopers $$$ Long Tail of Customers SMB In-country EnterprisesEnterprise In-country Global
  26. 26. Total Addressable Market: AWS Revenue App OpportunityDevelopers $$$$$ Long Tail of Customers SMB In-country EnterprisesEnterprise In-country Global
  27. 27. Total Addressable Market: Carriers Revenue App OpportunityDevelopers $$$$ Long Tail of Customers SMB In-country EnterprisesEnterprise In-country Global
  28. 28. Why can’t carriers maximize TAM andrevenue opportunities?
  29. 29. Legacy “Enterprise” Clouds are too expensive
  30. 30. Market Pricing Sensitivity App $ Developers Long Tail of Customers SMB In-country Enterprises Enterprise$$$$$ In-country Global
  31. 31. Emerging markets won’t accept Legacy Cloud prices
  32. 32. Web-scale Clouds
  33. 33. You need a Web-scaleCloud alongside your Legacy Cloud
  34. 34. Web-scale vs. Legacy Focus vs.Greenfield Apps Legacy Apps
  35. 35. Enterprises use Web-scale Clouds for Greenfield Apps
  36. 36. Estimated IaaS Growth Rates Web-scale vs. Legacy Cloud 88%90%68%45%23% 20% 0% Web-scale LegacySource: Cloudscaling market analysis
  37. 37. A Bookseller Rank Top 10 IT services in 2016??? 1 IBM $37,347 2 HP $34,678 3 Fujitsu $26,935 4 CSC $16,281 5 Accenture $15,555 6 Capgemini $11,255 7 Hitachi $11,050 8 Ericsson $11,031 9 AWS $10,465 10 NTT Data Corporation $10,425Source: servicestop100.org - 2010 top 100 IT services businesses by service revenue
  38. 38. Comparing Clouds
  39. 39. Capital Expense (Initial) Web-scale vs. Legacy Cloud $4,000Cost per Sellable $3,216‘VMU’ $3,000(m1.small, 1.7GB $2,000RAM, 1 vCore) $1,000 Web-scale $382 Legacy $0 Source: Cloudscaling confidential financial models for IaaS clouds
  40. 40. Operational Expense (Labor) Web-scale (1500:1) vs. Legacy (300:1) Servers : IT Headcount $150M $113M $75M $38M $0MYear 1 Year 2 Year 3 Year 4 Year 5 Web-scale Legacy Source: Cloudscaling estimates of VM:admin based on known IaaS deployments
  41. 41. Legacy 5-yr TCO is 3-5xmore than Web-scale ...
  42. 42. ... doesn’t provide 3-5xvalue for greenfield apps
  43. 43. CloudFutures
  44. 44. Mobile, web, cloud-based apps exploding Sources: Asymco.com, Chetan Sharma, Morgan Stanley
  45. 45. Web, mobile, cloud-based apps won’t bedeployed on Legacy Clouds
  46. 46. Carriers need to buildLegacy *and* Web-scale
  47. 47. +
  48. 48. +Focus first on Greenfield
  49. 49. +Focus first on Greenfield Pricing 20% < AWS
  50. 50. +Focus first on Greenfield Pricing 20% < AWS High Margins
  51. 51. +Focus first on Greenfield Pricing 20% < AWS High Margins Higher Performance
  52. 52. +Focus first on Greenfield Pricing 20% < AWS High Margins Higher Performance < 9 months to market

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