Alsbridge e sem-2011-0314-nsg-v2

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Alsbridge e sem-2011-0314-nsg-v2

  1. 1. INNOVATION IN OUTSOURCING 2011 eSEMINAR SERIES March 24, 2011 Audio: +1 (323) 417-4600, Access code 280-431-831 Page 1© 2011 Alsbridge. All rights reserved.Contains proprietary and confidential information. Audio: +1 (323) 417-4600 Access code 280-431-831
  2. 2. Strategy Cost ADM Selection Price Negotiation Performance Applications Business Process Governance Terms & Conditions IT Infrastructur Infrastructure e Network Network Hardware / Hardware / Software Software Page 2© 2011 Alsbridge. All rights reserved.Contains proprietary and confidential information. Audio: +1 (323) 417-4600 Access code 280-431-831
  3. 3. Speaker Introduction Dieter Thompson, President of Alsbridge Network Services Group  Dieter Thompson is the founder and President of NSG, a service line of Alsbridge, Inc.  Dieter has been a major force in the telecommunications industry since 1988. During his 22 year career, he has held numerous leadership positions and launched multiple businesses that have helped shape the industry, create jobs and improve processes.  In 2002, Dieter launched Thompson Advisory Group (TAG) which helped corporations achieve greater IT and telecom value i.e. SAVE MONEY.  TAG, now Alsbridge Network Services Group, was acquired by Alsbridge in 2009. Today the company operates as a service line of Alsbridge, a global leader in outsourcing, shared services and optimization. Page 3© 2011 Alsbridge. All rights reserved.Contains proprietary and confidential information. Audio: +1 (323) 417-4600 Access code 280-431-831
  4. 4. eSeminar Agenda  What is the Wire Line Market?  Current Macro Industry Overview - Wire Line  Future Macro Industry Trends  Pricing Examples  Pricing Trends  International Markets  Leverage and Negotiating Strategies Page 4© 2011 Alsbridge. All rights reserved.Contains proprietary and confidential information. Audio: +1 (323) 417-4600 Access code 280-431-831
  5. 5. What is the Wire Line Market?  What is the wire line market? • Tier 1 = AT&T and VZB • Do not accept Tier 2 label…EMERGING PROVIDERS  XO, PAETEC, Global Crossing, Level 3, TWT • Qwest = Tier 1.5? • Sprint = Wireless? Page 5© 2011 Alsbridge. All rights reserved.Contains proprietary and confidential information. Audio: +1 (323) 417-4600 Access code 280-431-831
  6. 6. Current Macro Industry Overview – Wire line  Consolidation of providers is continuing  Financial stability has returned to the industry  Bandwidth consumption is growing exponentially (Ethernet)  2011 Enterprise IT investment expected to grow  Integration issues are plaguing the consolidated companies  Tier 1 providers fighting on many fronts  Tier 1 retention of QFTE’s and delivery issues getting worse  Tier 1 billing, service support, stewardship getting worse Page 6© 2011 Alsbridge. All rights reserved.Contains proprietary and confidential information. Audio: +1 (323) 417-4600 Access code 280-431-831
  7. 7. Current Macro Industry Overview (cont’d)  Huge gap in the “emerging provider” space trying to be filled. • Enterprise market should be embrace change and accept entrants in the space • We like: XO, Global Crossing, Qwest, Granite, Level 3, Paetec, TWT  Look for niche data services providers like Virtella, US Signal, Cogent, New Edge, etc…  IT organizations struggling internally with fully meshed IP global strategies  VoIP, SIP and next generation convergence is aggressively being studied and slowly being adopted  Integrators are becoming more relevant to the Network Tower  Marketplace is still very volatile with no clear winner Page 7© 2011 Alsbridge. All rights reserved.Contains proprietary and confidential information. Audio: +1 (323) 417-4600 Access code 280-431-831
  8. 8. Future Macro Industry Trends  More of the same for 2011  Tier 1 providers will continue to be difficult on T&C’s  Unit price points will continue to fall  Delta between price point and averages will continue to increase  Tier 1 providers will continue to make market based concessions harder to obtain  More layoffs and restructuring in the Tier 1 space  Providers looking towards outsourcing core functions  Look for a leader to appear in the emerging provider space Page 8© 2011 Alsbridge. All rights reserved.Contains proprietary and confidential information. Audio: +1 (323) 417-4600 Access code 280-431-831
  9. 9. Audience Poll #1  On average, what is the annual decrease in cost we achieve the first time we renegotiate a contract? • 0-10 % • 10-20% • 20-30% • 30-40% Page 9© 2011 Alsbridge. All rights reserved.Contains proprietary and confidential information. Audio: +1 (323) 417-4600 Access code 280-431-831
  10. 10. Telecom Pricing Trends  The Providers have seen dramatic Price Point reductions over the past five years: 2005 APP 2007 APP % Decline 2009 APP % Decline Domestic TDM Voice $0.0231 $0.0166 28.4% $0.0115 30.5% Inter TDM Voice $0.0885 $0.0261 49.7% $0.0216 51.6% Domestic Data $554.96 $348.90 37.1% $177.81 48.9%  NSG forecasts these type of “Price Point” declines to continue in 2011  Continued growth between Price Point and Averages  Legacy Local has been the only service offering the ILEC’s stability, however displacement, SIP and wireless are beginning to pressure pricing Page 10© 2011 Alsbridge. All rights reserved.Contains proprietary and confidential information. Audio: +1 (323) 417-4600 Access code 280-431-831
  11. 11. MPLS Port Price Trending Interstate Direct Dial/Toll Free Dedicated Voice $0.0325 $0.0275 $0.0225 $0.0175 $0.0125 $0.0075 Jan-02 Jan-03 Jan-04 Jan-05 Jan-06 Jan-07 Jan-08 Jan-09 Jan-10 Contract Rate --- Average Price Trend --- Price Point Trend Page 11© 2011 Alsbridge. All rights reserved.Contains proprietary and confidential information. Audio: +1 (323) 417-4600 Access code 280-431-831
  12. 12. Voice Pricing Sample by Commitment Level Domestic Dedicated Internet DS3 $16,000 $14,000 $12,000 $10,000 $8,000 $6,000 $4,000 $2,000 $0 Jan-02 Jan-03 Jan-04 Jan-05 Jan-06 Jan-07 Jan-08 Jan-09 Jan-10 Contract Rate --- Average Price Trend --- Price Point Trend Page 12© 2011 Alsbridge. All rights reserved.Contains proprietary and confidential information. Audio: +1 (323) 417-4600 Access code 280-431-831
  13. 13. Historical and Future Pricing Trends Domestic DS1 Access 6-10 Miles $600 $500 $400 $300 $200 $100 $0 Jan-02 Jan-03 Jan-04 Jan-05 Jan-06 Jan-07 Jan-08 Jan-09 Jan-10 Contract Rate --- Average Price Trend --- Price Point Trend Page 13© 2011 Alsbridge. All rights reserved.Contains proprietary and confidential information. Audio: +1 (323) 417-4600 Access code 280-431-831
  14. 14. Audience Poll #2  Is it likely that your current contract has an annual rate review provision? • Yes • No Page 14© 2011 Alsbridge. All rights reserved.Contains proprietary and confidential information. Audio: +1 (323) 417-4600 Access code 280-431-831
  15. 15. International Markets  Rapidly growing area of focus for enterprise clients  Corporate IT groups growing need for fully meshed IP networks and control  Foreign to foreign voice still hard to get  Not typically a good logical break point, Domestic / International for dual vendor strategy  International based carriers, BT, C&W, Colt, etc. not aggressively pushing in US market  Lots of price compression opportunities Page 15© 2011 Alsbridge. All rights reserved.Contains proprietary and confidential information. Audio: +1 (323) 417-4600 Access code 280-431-831
  16. 16. Leverage and Negotiating Strategies  Leverage is everything: term, commitment, relationship  Multiple vendor RFP process  Start early, use an advisor  Pursue an “active” secondary strategy  Think outside the “usual provider” box  Be very cautious of “The Channel”  Contract terms and structure are critical  Disconnect something… Page 16© 2011 Alsbridge. All rights reserved.Contains proprietary and confidential information. Audio: +1 (323) 417-4600 Access code 280-431-831
  17. 17. Americas Europe Dieter Thompson President of Alsbridge Network Services Group Email: dieter.thompson@alsbridge.com Alsbridge Americas 3535 Travis St., Suite 105 Dallas, TX 75204 United States of America Tel: +1 214-696-6410 Fax: +1 214-239-0698 www.Alsbridge.com Page 17© 2011 Alsbridge. All rights reserved.Contains proprietary and confidential information. Audio: +1 (323) 417-4600 Access code 280-431-831

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