How MSOs can stand out in a crowded Ethernet Services market

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This slide deck is from the Ethernet Business Services panel presentation at Light Reading's “Future of Cable Business Services” conference on November 29th in NYC. Presented by Ciena's Cable MSO expert Barry Zipp, the presentation outlines recommendations on how MSOs can stand out in a crowded Ethernet services market, including ways to differentiate their services and tailor their go-to-market model to accelerate revenue and share growth.

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How MSOs can stand out in a crowded Ethernet Services market

  1. 1. How MSOs can stand out in a crowded Ethernet Services marketBarry ZippCiena Corporation© Ciena Confidential and Proprietary
  2. 2. Agenda The Ethernet services market Creating a superior customer experience Unique service attributes Going to market: Finding the right customers Closing Thoughts2 © Ciena Confidential and Proprietary
  3. 3. Ethernet business services market is now mature $14.3B U.S. market by 2016* (Vertical Systems Group, 2012) 18% 36% Competitive Providers Incumbent Carriers Cable MSOs 46%Mature markets differentiate on experience, not “feeds & speeds” 3 © Ciena Confidential and Proprietary *$45.1B global market size forecast
  4. 4. Unique service attributes are required to create a superior customer experience… …and a tailored GTM model is needed to ATTRACT more customersCombination delivers accelerated revenue growth & profitability 4 © Ciena Confidential and Proprietary
  5. 5. Differentiating the MSO customer experience Service Delivery • Plug-n-play install; activation in minutes • Reduce provisioning costs by up to 75% Service Agility • Scalable, flexible bandwidth • Real-time Class-of-Service Service Assurance • Fix problems before customer calls • SLA transparency; empowered customerDemand for new enterprise services drives need for more agile & automated operations 5 © Ciena Confidential and Proprietary
  6. 6. Going to market: matching supply with demand Addressing the enterprise “sweet spot” “Last mile” connectivity a challenge: Enteprise Data Spend Distribution  Longest delay in service turn-up is40,000 plant construction $35,767  Most enterprises still don’t have fiber  2 ways to accelerate: Pre-construction30,000 and fixed wireless  Pre-construction needs economic 22,598 21,266 justification $19,60520,000 Low ROI 16,054 Heavily  Economic justification requires end- $12,283 Contested customer analytics 12,689 11,639  Mapping supply (plant) to demand10,000 $8,276 $8,264 $8,759 (customers) $2,157 $2,492 2,167 1,250 1,162 0 Under $100 $100-$200 $200-$500 $500-$1K $1K-$3K $3K-$5K $5K-$10K Over $10K #Business $K/Month $200-3000 is the “sweet spot”, but lack of fiber hinders growth 6 © Ciena Confidential and Proprietary
  7. 7. Geo-Analytics can be used to target this sweet spotWhat is it? Supply Competition :=Service := Footprint of Provider competitors Footprint where available Demand Cost :=Enterprise := Network locations, Data expansion cost Centers GeoAnalytics := intelligence Go to market execution plan 7 © Ciena Confidential and Proprietary
  8. 8. Profitably grow Ethernet services revenue viaselective network extensions Analyze the market • Mapping of supply (plant) and demand (enterprises) • Classifying enterprises by value, vertical and credit risk Target your clusters • Predict your profitable sweet spot Extend plant to valuable clusters • Fiber (pre-construction) • Fixed wireless (success-based)8 © Ciena Confidential and Proprietary
  9. 9. Example: Issue: The Key Opportunity for Growth of EBS in NorthernVirginia profitably target & reach businesses? How to9 © Ciena Confidential and Proprietary
  10. 10. MSO Differentiation via Industry Specialization HIGHER EDUCATION FINANCE HEALTHCARE GOVT MEDIA MFG LEGAL RETAIL CARRIERGeneric Cloud Computing, SaaS, LAN-to-LAN, Disaster Recovery / Business Continuity, Video Conferencing, Internet Access, Data Center/IT Infrastructure Consolidation, Virtualization, Business Process Automation (BI, ERP, CRM, etc.) Sales Trading & Connectivity CAD / CAM eDiscovery analytics Tele- between fed, Streaming Distance Market VoIP local video Info medicine Supply Learning institutions archiving SimulationBy Vertical Digital chain Financial Content Electronic Production Docu- simulation Emerg. Distrib. VOD Medical , post and Supply mentation Inventory + complex services Networks Records distrib. chain control modeling (CDN) Video Research hearings & Plant floor Legal Security / Collaboration Imaging & Medical bookings Social automation Databases Wireless & Networks video apps Imaging surveillance backhaul networking (PACS) Remote training 10 © Ciena Confidential and Proprietary
  11. 11. The way forward for MSOs Mature market but still growing fast (15% U.S. CAGR through 2016), especially for high-capacity services MSOs in strong challenger position Ethernet services continue to be a revenue engine for many service providers Strategic position in MSO portfolio Cloud services, mobile backhaul, and specialized applications drive the need for more agile and automated operations for Ethernet Services Access to fiber remains a challenge for MSOs in some markets Direct correlation to revenue Service Level Agreements represent an important area of competitive delineation in a maturing market Winning in this market requires service differentiation and a tailored go-to-market model11 © Ciena Confidential and Proprietary

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