Cisco's Matt Kolon

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CommsDay Summit 2013

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  • Overview of regional sovereign investment (perhaps in a map format) - should highlight the amount of dollars being invested and key political/regulatory outcomes. This slide aims to provide the audience an insight across the region and to make them aware of the growing trend of governmental investment into national network infrastructureGoogle broadband inkansasUK – BT21CNLithuania – RAINSweden – Rurual development
  • So why all the hype about network investments. What is special about the impact of broadband ? why does it so disproportionately  impact GDP ? provide examples.Sovereign investments have a long term beta (risk factor) of 0.83 compared to private investment of 1.00 – ie: sovereign investment are less riskySovereign investments have a higher yield – 6% compared to 4% - ie sovereign investment make higher returnsSovereign investments have an average sales growth of 20% compared to 12% for private investment – ie: uptake of government funded infrastructure likely to be higher
  • All well and good - but what does this mean for the telecoms industry, specifically service providers ? - touch on legislative issues such as regulated pricing, open access regimes, and the elimination of access technology, coverage and quality as a competitive differentiator. This slide aims to provide an insight into the impact that these investments have on service providers and hints at a significantly transformed market.
  • Whats left ? - model a transitional SP diagrammatically and transition through the changes that the SP will experience. highlighting areas of previous differentiation, levels of investment and costs and where SP build up their intellectual property. This slide aims to show that service provider models will need to change to address the changing environments. the audience should understand that the playing field is levelled and to transition to the "new world" will cost money - but without differentiation where does the revenue (growth) come from to cover these costs.
  • What levers do Service Providers have in the new world ? Introduce SDN as a key technology for enablement, of innovation leading to new service creation. Provide some examples (routing for $, 1800Data, seamless mobility, DR auto config, audience identification (analytics) etc)The problem statements:Declining Profit MarginsLengthy Service Roll-Out CyclesComplex Operational Models Key Messages -- IT and Operators need to capture additional value and increase their relevance whil adapting to the megatrends of the digital internet economy What are the real problems that are being faced..    Harnessing value of strategic assets (network infra), business agility to increase operator value in digital economy, consistent operational experience to expedite service delivery while reducing overall costs. Three key objectives : -- harness and moneitze infrastructure / network value -- drive business agility to accelerate service delivery and transform towards software based / transactional models-- mask complexity across all aspects of operational environment with consistent Our customers continue to look for points of differentiation in their markets, the network continues to play a vital role in enabling businesses to adopt new technologies and applications to help them grow. The creation of an infrastructure that is scalable, intelligent, and ready to support the demands and applications of today and tomorrow, while protecting customer investments, is essential.  Organizations and Service providers are experiencing a data deluge brought on by a number of growing trends including faster residential connectivity, cloud computing, virtualization, and workload mobility. We also see an exponential increase of video traffic and rich media applications and users bringing their own devices such as tablets and smart phones into the work environment which in return increases security challenges of IT. All of these are driving significant change in information technology and Enterprises and Service Providers are now asking, “Is my network really ready to meet these new challenges?”  They understand that the impact of some of these mega trends is not going to be silo’d but have a ripple effect across their entire organization. They have to deal with this proactively, as it can adversely impact their business. So they are looking at CAPACITY PLANNING (on their ability to maximize capacity, performance, scale, bandwidth considerations), REDUCING COMPLEXITY (i.e. not just throwing bandwidth at the problem, but being focused on driving infrastructure efficiency, making deployments more simpler , and thirdly COST REDUCTION, i.e. not just look at CAPEX, which has some benefits, but looking at lowering their TCO strongly considering cost reduction with operational efficiency. So each IT will have to understand if their network is ready for these mega trends.
  • Use case 1: a review of the use case including identifying revenue streams, points of differentiation
  • Use case 1: a review of the use case including identifying revenue streams, points of differentiation
  • Use case 2: a review of the use case including identifying revenue streams, points of differentiation
  • What does Cisco have to assist in achieving a good outcome in the new world ? cover OnePK, SDN, UCS, OpenFlowetcetc
  • Summary slide
  • Cisco's Matt Kolon

    1. 1. Standing out Differentiation for su playing Matt Kolon - CTO APJC© 2013 Cisco and/or its affiliates. All rights reserved.© 2012 Cisco and/or its affiliates. All rights reserved. Cisco Confidential 1
    2. 2. • Governments have realized broadband infrastructure is essential to economic prosperity US$58B • +10% increase in broadband use canUS$0.65B increase GDP by 1.8% US$3.27B • Increasing broadband use by 10% S$0.75B can reduce unemployment by 1.6% • National output increases faster from sovereign investment than AU$?? private investment NZ$4B© 2013 Cisco and/or its affiliates. All rights reserved. Cisco Confidential 2
    3. 3. The World Bank suggests, “a 10 percentage point increase in broadband penetration in high-income economies such as Australia resulted in an increase in economic growth of 1.2 percentage points." (Gyarmati, 2010). Country GDP Improvement (10 year) Australia ~AU$80B USA ~US$6T No other sovereign investment Germany ~€100B yields such results Japan ~US$160B China ~US$1.5T© 2013 Cisco and/or its affiliates. All rights reserved. Cisco Confidential 3
    4. 4. Structural Wholesale Wholesale Integrated Separation Network AccessRetail Service Service Competition Service and Innovation now must occur in services Provider Provider Provider Comms. & ServiceRetail Service Service Providers in an NBN World must transform Active Access and differentiate based on a new Providers paradigmEnd To End competitive Provider Provider Provider Network Regardless of the model the access network is commoditized Wholesale Provider Passive Infrastructure What was a differentiator is no more ! Infrastructure Network Provider Provider Example © 2013 Cisco and/or its affiliates. All rights reserved. Cisco Confidential 4
    5. 5. Consumer Access Aggregation Core Data Center FTTx Access Data Center Services & Service Origination Aggregation Access Backhaul NetCo Agg Core DCI • Data center and service origination isCapital Costs Avg % Of Network now the new value • Many Service Providers will re-profile their businesses toTraditional Spend 70% 20% 10% focus on service creation and innovation New Competitive Spend 10% 30% 60%© 2013 Cisco and/or its affiliates. All rights reserved. Cisco Confidential 5
    6. 6. “SDN Needs a bigger Video Cloud definition.” Mobility Data Deluge —Lippis report, 2012 “ We share a more pragmatic view, noting Cisco is likely to view SDN as a TAM expansion opportunity.” —Deutsche Bank Research note, Wired, April 2012 “ HypeDC (Melb/Syd/Perth) TelePresensegetting way outLocationTelePresence Cloud AccessFederated around SDN/OpenFlowE-Health in Education (BER) Moble aware mobility Big Data Analytics Centralized E-Government have I seen this before...” of control. Where OnDemand Video Differentiated billing Census —Ethereal Mind, Blogger “ Will OpenFlow commoditize How to Drive networks? Impact Cisco margins?” How to Business How to Drive —Several media publications, Bloggers Harness Agility? Operational “GoogleNetwork networks with OpenFlow.” revamps Simplicity? Value? —ZDnet “The Next IT Killer is…NOT SDN.” —DevCentral © 2013 Cisco and/or its affiliates. All rights reserved. IS THE NETWORK READY? Cisco Confidential 6
    7. 7. Expose Network Intelligence Analytics Self Organizing Networks Ad Insertion Dynamic Elastic Pricing and Service Policy Creation Premium M2M andOptimization Mobile Video Virtualization Monetization Network Service Slicing 1800Data Flex Your Mobile TP Transport PoP Cloud Inform Network of Desired State© 2013 Cisco and/or its affiliates. All rights reserved. Cisco Confidential 7
    8. 8. I pay for general broadband, my employer pays for home working, Disney pays when my daughter watches TV 3rd Party Operator Operator Applications Application OSS/BSS Virtualized Service Abstraction1 Application Monitors Network Resources2 Build Customer Service Profile (e.g VoIP, Firewall, Video)3 Push Service into Network and Receive Confirmation4 Enable Service Group and Monetize Delivery $© 2013 Cisco and/or its affiliates. All rights reserved. Cisco Confidential 8
    9. 9. Bit rate: 7.5Mbps Data $: 30/mo. – 2GB Correlate Historical analysis + Real- time events + subscriber profile Ad Analytics Policy & Enforcement Support Lower • Quota BW • Routing Upgrade/ • QoS • Throttling Toll Free CORRELATED Pay per • Charging Policy • Data DATA dip or Insertion • RAN type • Real-time Event TIME BOUND Timeshift • Device Type Management • Subscriber Profile Bit rate: 7.5Mbps Bit rate: 0.75Mbps $10 eCPM $ add : $0 Bit rate: 7.5Mbps $ add: 20% of top line© 2013 Cisco and/or its affiliates. All rights reserved. Cisco Confidential 9
    10. 10. Data Center Network ClientBusiness & Service Orchestration Fulfillment AutomationWorkflow Engine for Compute, Network & Storage Web APIs and Client Plug-ins MASKING • New Business Models NETWORK Unified Platform API Services and Support Applications Business and Consumer Applications COMPLEXITY • Different skill set to most Infrastructure Services Orchestration NPIs Management SPs today Path Computation Topology Custom Orchestration Routing (PCE) Service Functions and ResourceA new paradigmMgmt an Device NPS OpenStack Quantum Cloud Security Infrastr. for Service Mgmt • Re-tooling – Automation OPEN AND Policy Identity Analytics evolving market Wireless PROGRAMMABLE vRR / APIs El. Services SXC Cloud Prime EMS BGPplatforms, systems and Network Mgmt/WLC Virtualized Programming and Managing of Virtual processes Infrastructure Resources API • Redefinition of metrics APIs Controller Layer CONSISTENT Physical Programming and Managing of Physical OPERATIONAL • Infrastructure BGP I2RS New marketing approaches onePK PCEP CLI OpenFlow EXPERIENCE CLI, other,.. Resources Operating Systems© 2013 Cisco and/or its affiliates. All rights reserved. Cisco Confidential 10
    11. 11. • Significant government interest in infrastructure across the region is a great thing• Investments are changing the requirements of networks and leveling the playing field• Service differentiation is the emerging key value proposition required to drive profitability• Software based services are forming the fundamental basis upon which this differentiation can be built• Service Providers must adapt to and monetize this new world• This is not the first time our industry has made a transition – there is support in the industry to help shape and guide the future© 2013 Cisco and/or its affiliates. All rights reserved. Cisco Confidential 11
    12. 12. Thank you.© 2013 Cisco and/or its affiliates. All rights reserved. Cisco Confidential 12

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