Carrier Cloud Opportunity - TM Forum Management World Dublin 2011

Carrier Cloud Opportunity Breaking the rules; how KT did itRandy Bias @randybiasMay 25th, 2011 @cloudscalingTMForum - Dublin

Step 1: Vision of CloudOpportunity - Randy Bias, CloudscalingStep 2: How KT Did It - Charles Huh, KT

Why don’t CarrierClouds look like AWS?

Carriers building for the past ... not the future

Carriers today arebuilding ‘Legacy Clouds’ ...aka ‘Enterprise Clouds’

What’s the ﬂaw withLegacy (Enterprise) Clouds?

There are two ﬂaws, actually ...

Flaw #1Enterprise computing is not cloud computing ... Past, not the future

Flaw #2 Limited TotalAddressable Market ... Missed Revenue Opportunity?

Flaw #1

“Legacy” IaaS Clouds? ? PrivateInternal External Public

“Legacy” IaaS Clouds? Enterprise Computing Techniques PrivateInternal External Public

Enterprise Computing (Legacy)

Cloud Computing (Web-scale)

Cloud Computing’s Pioneers

IT - Disruption & Evolution Mainframe Enterprise Cloud Computing Computing Computing "Big Iron" "Client-Server" "Web"1960 1980 2000 2020

IT - Disruption & Evolution Mainframe Enterprise Cloud Computing Computing Computing "Big Iron" "Client-Server" "Web"1960 1980 2000 2020 Disruption

IT - Disruption & Evolution Mainframe Enterprise Cloud Computing Computing Computing "Big Iron" "Client-Server" "Web"1960 1980 2000 2020 Disruption Disruption

IT - Disruption & Evolution Mainframe Enterprise Cloud Computing Computing Computing "Big Iron" "Client-Server" "Web"1960 1980 2000 2020 Disruption Disruption Disruption

IT - Evolution of Computing Models SLA Scaling Hardware HA Type SoftwareConsumption Mainframe Enterprise Cloud

IT - Evolution of Computing Models SLA 99.999 Scaling Vertical Hardware Custom HA Type Hardware Software CentralizedConsumption Centralized Service Mainframe Enterprise Cloud

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

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

Flaw #2

Total Addressable Market: Legacy Revenue App OpportunityDevelopers $$$ Long Tail of Customers SMB In-country EnterprisesEnterprise In-country Global

Total Addressable Market: AWS Revenue App OpportunityDevelopers $$$$$ Long Tail of Customers SMB In-country EnterprisesEnterprise In-country Global

Total Addressable Market: Carriers Revenue App OpportunityDevelopers $$$$ Long Tail of Customers SMB In-country EnterprisesEnterprise In-country Global

Why can’t carriers maximize TAM andrevenue opportunities?

Legacy “Enterprise” Clouds are too expensive

Market Pricing Sensitivity App $ Developers Long Tail of Customers SMB In-country Enterprises Enterprise$$$$$ In-country Global

Emerging markets won’t accept Legacy Cloud prices

Web-scale Clouds

You need a Web-scaleCloud alongside your Legacy Cloud

Web-scale vs. Legacy Focus vs.Greenﬁeld Apps Legacy Apps

Enterprises use Web-scale Clouds for Greenﬁeld Apps

Estimated IaaS Growth Rates Web-scale vs. Legacy Cloud 88%90%68%45%23% 20% 0% Web-scale LegacySource: Cloudscaling market analysis

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

Comparing Clouds

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

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

Legacy 5-yr TCO is 3-5xmore than Web-scale ...

... doesn’t provide 3-5xvalue for greenﬁeld apps

CloudFutures

Mobile, web, cloud-based apps exploding Sources: Asymco.com, Chetan Sharma, Morgan Stanley

Web, mobile, cloud-based apps won’t bedeployed on Legacy Clouds

Carriers need to buildLegacy *and* Web-scale

+Focus ﬁrst on Greenﬁeld

+Focus ﬁrst on Greenﬁeld Pricing 20% < AWS

+Focus ﬁrst on Greenﬁeld Pricing 20% < AWS High Margins

+Focus ﬁrst on Greenﬁeld Pricing 20% < AWS High Margins Higher Performance

+Focus ﬁrst on Greenﬁeld Pricing 20% < AWS High Margins Higher Performance < 9 months to market

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Carrier Cloud Opportunity - TM Forum Management World Dublin 2011

by Randy Bias on May 24, 2011

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Carrier Cloud Opportunity - TM Forum Management World Dublin 2011 — Presentation Transcript