The Right Type of
Cloud Messaging
Cocoy J. Claravall
VP-Business Products & Services
fjclaravall@globetel.com.ph
GOAL
The Opportunity
The Right Messaging
The Right Cloud for You
Telco’s Trump Card
2012 Gartner Cloud Computing Hype Cycle
Disillusioned yet? 
Chart from Gartner Report
In the US and European major telcos, Cloud is still at
the infancy stage but seen as a key driver for revenue
growth
 AT&...
In the Philippines, customer adoption of cloud services is
starting to increase as the market becomes more open and
releva...
The Right Messaging
How can Cloud help you?
Operational Efficiency
Increase Speed to Market
Increase Revenue and Profit
ELASTICITY
RIGHT
SIZING
PROVISIONING
In the B2...
But first, we need to address these
common “barriers” to Cloud Adoption …
 Availability - The risk of information outages...
Identify your customers and develop
specific messaging addressing their needs
New User
IT and Operations
Finance
COST
SAVI...
Let’s look at IT and Operations, what are
their concerns that we need to address?
What’s the best use of our annual budget...
How to talk differently
to IT & Ops People
Three Short Episodes in Filipino
with English Translation
VIDEO
Product Positioning
ESTABLISH AND ACHIEVE
PRODUCT
DIFFERENTIATION
FOCUS ON RELEVANT
FEATURES
Let’s listen to Juan
and his peanuts …
An interview with a typical Filipino
entrepreneur.
VIDEO
Diagnostic Marketing Mix Approach
AWARENESS
AVAILABILITY
TRIAL
REPEAT
CHALLENGES SOLUTIONS
Advertorials, Press
Releases an...
The Right Cloud For You
Infrastructure as a Service (IaaS) is the most basic
cloud service model, where raw hardware resources
are delivered on de...
To help our customers select the right
cloud service, we need to ask them the ff:
PUBLIC PRIVATE HYBRID
Do you have consta...
Also, open the discussions to think about
these other considerations:
 Service Level Agreements & Monitoring
 Customer S...
Telco’s Trump Card
Technology Push Driver #1: Improved
broadband connectivity and penetration
• Advanced high-speed telecommunications networ...
Technology Push Driver #2:
Excess Computing Infrastructure
• Cost of power
• Infrastructure labor costs
• Infrastructure b...
Maximize our
strengths ...
1. Our infrastructure
2. Our customers
3. Our scale
4. Our coverage
5. Our ability to offer
end...
For a Telco to succeed in this space, a holistic
view and a coherent strategy is needed.
COMPETENCIES
IT, Applications, Bu...
Examples of Globe Customers Today
 Current DIY Exchange email
system is getting bigger due to
increasing number of ports
...
Leading
market
position
Strong
financial
performance
World-class
corporate
governance
•
- A full-service telecommunication...
The Right Type of Cloud Messaging
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The Right Type of Cloud Messaging

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A presentation I did in November 2012 in the Cloud World Forum Asia in Singapore

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  • Most market forecasts coincide around $45-50bnpa of revenue globally by 2013-2014 (more than double the level in 2011) and weexpect a 20% CAGR to 2020. According to Informa, telcos took 16% of a $20bncloud services market in 2011 (~$3bn). Cisco expects telcos share to rise to c.20%by 2014 implying a three-fold increase to around $9bn of revenue.
  • How can cloud help you improve your operations, be cost-efficient and satisfy your customers?To help you understand more what cloud is, let me show you this video.PLAY PEANUTS JAY PEREZ VIDEOAfter the video:In essence, cloud is a form of outsourcing. You subscribe to a service from a company that has the expertise to do it for you at a competitive cost.Sometimes what happens is that customers over invest. They buy more than they need or sometimes they under invest. What they buy is less than what they need, so the applications and the user experience suffers. The scalability of the cloud service addresses all of these concerns, for a fixed monthly service fee.
  • The French state will invest EUR 135 million in national cloud computing alliance Andromede, Les Echos reports. The joint venture will be formed on 1 November with the backing of France Telecom-Orange, Thales and DassaultSystemes. The state will hold a one-third stake. Orange and Dassault will own 26.7 percent for EUR 60 million each and Thales 13.3 percent for EUR 30 million. Documents submitted to personnel representatives state that Andromede will be a "completely independent" entity and that its management will not be chosen amongst its industrial partners. The board will be composed of nine executives, including two independent directors and two appointed by the government. Shareholders will have to wait five years before selling any stock. All of Andromede's data centres will be located in France or elsewhere in Europe, a unique selling point for clients wary of seeing their data transit through US-based servers. Orange will provide co-location services and all of the necessary connectivity for Andromede clients. Thales will supply security services. The estimated value of four years of work for these two companies is EUR 60 million and EUR 30 million, respectively. Elsewhere, Le Monde reports that data sovereignty is a key point for public sector clients. Microsoft and Atos have formed a partnership to offer Offfice 365 services on servers hosted by Atos in France. "The public sector needs assurances that its data will not leave Europe, or better yet, the national territory", Atos vice president Jerome Brun said at Microsoft France's autumn conference.
  • IT admins are also struggling to keep pace with evolving technology.  There are a lot of challenges we are faced with.  However, a lot of the infrastructure we have was not built with a grand plan in mind but simply evolved over time as we solved immediate challenges.Let's look at a typical environment today.Step 1: We had PCs, and OS's and productivity software.  Life looked pretty good.Step 2: We started buying systems, and just kept going.  Mail systems, security systems, directory systems, SPAM filters, etc.  Pretty soon an entire environment had grown up around us.Step 3: Eventually we realized that these systems were really business-critical and that they could no longer go down. Step 3: And now we spend lots of time maintaining existing systems.  Patch Tuesday rolls around and we are just putting CDs into servers.Most IT time is spent just keeping current systems running.  According to Gartner, 80% of IT resources and money go to maintain current systems.  And this when our users are begging for more functionality.
  • Play video.
  • Demand varies with time. The Pay-As-You-Go quality of cloud services meansthat a company that experiences, for example, peak use for a few days a month(such as an online ticket seller) can pay only for the resources it needs, withouthaving to build capacity for itself that would normally be superfluous. Working Capital Management. The ability to lease IT as required providescompanies with improved flexibility when managing their working capital. Batch analytics. Companies that are required to complete computationallyexpensive activities can benefit from speed/time advantages. For example, using1,000 servers for 1 hour costs the same as using one server for 1,000 hours. Addresses resource / talent management issues. We note two sub-pointshere. (1) Usage of the cloud has first taken off among small businesses, whichhave been historically underserved by traditional IT, largely because serving thisclient base in the traditional manner was less profitable (small businesses havevery limited budgets over which to spread overhead costs). (2) Take-up of cloudis also rising for repeatable and lower-risk functions where technology offers achance to re-allocate scarce resources to more meaningful tasks. This is a factorbecause of the extremely low 2%-5% unemployment rate for IT talent in mostwestern countries.
  • Play video.
  • The Web-grade IaaS was the first cloud computing business model and waspioneered by Amazon, which remains the market leader in this segment, primarilythrough its Elastic Compute Cloud (EC2). EC2 provides a web service throughwhich a user can boot an Amazon Machine Image to create a virtual machine,containing any software desired. EC2 was first offered as a public beta in 2006, andnow Technology Business Research estimates that Amazon Web Services (AWS)revenue for Q1 2012 reached $283 million, up 37% year to year. AWS operates ona cost-plus pricing model, where it maintains 10% margins, continually cuttingprices as costs fall due to improved economies of scale.In contrast, enterprise-grade platforms are used where customers sign contractsand arrange service agreements with cloud providers. They typically incorporatehigh-end storage and are more rigorous about security certification. There is alsogreater accountability for reliability through SLAs.Consequently, these providers are capable of charging a premium. There is alsoscope for further differentiation, by offering services targeting particular industryverticals or further specific functional requirements such as hybrid clouds andprovision for customised enterprise software requirements.It is important to note that the distinction between enterprise-grade and web-gradeclouds is not the same as between private and public clouds. Enterprise-gradecloud providers typically provide a range of public, hybrid and private clouds.On the other hand, web-grade clouds are almost exclusively public clouds.
  • Cloud AdministrationIt’s particularly important for IT departments to enable administration systems that let them monitor every dimension of the service they’re getting.Service level agreements and monitoringEvery company that buys any service from a cloud service provider must either accept a standard service level agreement (SLA) from the provider or negotiate such an agreement.No organization should commit mission-critical systems to the cloud without negotiating an SLA that includes significant penalties for not delivering the promised service level.SupportSupport problems don’t disappear when applications or infrastructures move to the cloud. You have to make sure that support targets are agreed on in advance with a cloud services provider. Therefore, your company must align its internal support team to deal with both internal customers and the cloud provider.Billing and accountingOne cloud benefit is that, as a customer you can acquire just as much capability as needed. Billing and account management must be automated so that customers can monitor what they’re using and how much it costs.Customers can run up unexpected bills if they can’t accurately track usage.Cloud Technical InterfaceTo take advantage of the benefits of cloud computing the proper technical interface must be in place. Companies that have already moved to a service-oriented architecture (SOA) will be find this transition easier.APIs and data transformationsA cloud’s Application Programming Interface (API) is the software interface that lets your company’s infrastructure or applications plug in to the cloud. This is perhaps the most important place for standardization. For an organization to easily build connections between its internal data center and the cloud, it must use standardized APIs and data transformation capabilities.Data and application architectureNew internally created services that support the business’s changing demands must operate with cloud ecosystems. These services may need to migrate to and from the cloud. This means that it will have to build an architecture that’s modular enough to allow services to move between various cloud platforms.To be effective, data also has to be packaged and managed. The IT organization needs to manage data independently of the underlying packaged application, transactional system, or data environment such as a warehouse. Your organization needs to start with consistent definitions of data elements to manage cloud-based information services.Security in the cloudCompanies planning to use cloud services must be assured of tight, well-defined security services. Many levels of security are required within a cloud environment:Identity management: For example, so that any application service or even hardware component can be authorized on a personal or group role basis.Access control: There also needs to be the right level of access control within the cloud environment to protect the security of resources.Authorization and authentication: There must be an authentication mechanism so the right people can change applications and data.A comprehensive security infrastructure must be provided at all levels and types of cloud services. Developers also need tools that allow them to secure the services they design to be delivered in the cloud. Organizations need consistent security across their own data center environments that intersect with a cloud service.
  • Reversing the decline seen in the fourth quarter of 2011, global average connection speed increased by 14% quarterover-quarter in the first three months of 2012 to 2.6 MBps, according to Akamai.Telefónica Digital estimates suggest that by 2015,70% of its customer base will have more than 5 connected devices.
  • In our view, market-side drivers have been far more relevant in driving forward thecloud computing agenda and will continue to provide its momentum into the future.We consider both the advantageous supply- and demand-side economies of scale,before looking at other associated advantages for cloud customers.Supply-side economies of scaleCloud computing is not a return to the mainframe era, but in fact offers economiesof scale and efficiency that exceed those of a mainframe. The key feature on thesupply-side is multi-tenancy, which allows for data to be concentrated at a singlephysical location. In other words, one data centre can host resources for multiplecustomers. This results in the following economies of scale: Cost of power. The operators of small data centres must pay the prevailing localrate for electricity, but it is possible for larger operators to pay a fraction of theaverage rate by locating their data centres in locations with inexpensive electricsupply and through bulk purchase agreements. This rapidly decreases the costper MIP (million instructions per second) as the scale of the operation increases. Infrastructure labour costs. The workforce required to service, maintain andupdate a given number of servers decreases markedly when those servers areconcentrated in a single physical location. Whereas one IT professional couldpreviously service around 140 servers at different locations, he or she can nowlook after a data centre of 10,000. This in turn permits IT employees toconcentrate on higher value-add activities such as building new capabilities andimproving user control. Infrastructure buying power. Bulk buying data centre hardware and softwarereduces unit costs, favouring the larger cloud data centre controllers.Demand-side economies of scaleThe efficiency with which the capacity is used also plays a role in achievingeconomies of scale, and this is improved with demand aggregation. Time-of-day patterns. Behavioural patterns dictate the degree of serverutilisation at different times of the day. In business use, peaks tend to beobserved during nine-to-five working hours. Capacity has to be built-in toanticipate these peaks, but under conventional server systems it would remainunused at other times. Cloud data centres are able to run the same workload formultiple time zones on the same server. Equally, multi-location scheduledprocessing can ‘follow-the-moon’ to consistently make use of cheaper night-timeelectricity costs. Randomness. Random usage can account for spikes in required servercapacity. However, the pooling of servers will necessarily smooth this as the totalnumber of users increases. Multiplexing. On the cloud, capacity is shared and when not being employed byone user, it can be allocated to another. This is antithetical to the case withindividual desktops, where processing power is locked up on individual machineswhich is plainly extremely wasteful. The same is true on the software side, and soa smaller number of copies of pieces of software are required, again reducingcosts.
  • The Right Type of Cloud Messaging

    1. 1. The Right Type of Cloud Messaging Cocoy J. Claravall VP-Business Products & Services fjclaravall@globetel.com.ph
    2. 2. GOAL The Opportunity The Right Messaging The Right Cloud for You Telco’s Trump Card
    3. 3. 2012 Gartner Cloud Computing Hype Cycle Disillusioned yet?  Chart from Gartner Report
    4. 4. In the US and European major telcos, Cloud is still at the infancy stage but seen as a key driver for revenue growth  AT&T cloud represents a very small but growing portion of total revenue which makes up around 5%.  Telefónica generated (if we assume Cloud & Security was 10% of TDigital) €240m, 0.5% of 2011 group revenues.  Verizon’s Strategic Services represent 7% of 2012E consolidated revenue or 10% of 2012E proportionate revenue.  Portugal Telecom expects cloud to form an interesting additional revenue stream. In 2011 and 1H12, PT's total cloud revenues were >€5.5mn from c.100 new customer deals. Source: Citi Research Cloud Computing (090512)  In the US, cloud computing is still in the nascent stages of adoption and has emerged as a valuable tool for companies to drive cost efficiencies and revenue growth.  In Europe, some telecom operators are lagging behind their US counterparts. In many cases their approach to cloud remains too fragmented and sometimes defensive rather than driven by a strategic vision. 0% 1% 2% 3% 4% 5% 6% 7% 8% 9% 10% AT&T Telefonica Verizon 5% 0.5% 10% Cloud Revenue Share VS Total Revenue
    5. 5. In the Philippines, customer adoption of cloud services is starting to increase as the market becomes more open and relevant products become available Philippine Market (Billions PhP) 2011 2012 2013 2014 2015 2016 IAAS 0.5 0.8 1.2 1.9 3.0 5.8 PAAS 0.2 0.3 0.5 0.8 1.2 3.2 SAAS 1 1.6 2.5 3.9 6.1 6.4 Total 1.7 2.7 4.2 6.6 10.3 15.4 Growth 57% 57% 57% 57% 49% Globe Market Share (%) 0% 2% 7% 10% 15% 25%  Cloud industry revenue growth @ 57% p.a. – McKinsey  Market share of Globe starting to increase as sales pipeline grows due to availability of products offers, customer adoption and sustained marketing campaigns  IaaS and SaaS will be key contributors to this growth 0 2 4 6 8 10 12 14 16 18 2011 2012 2013 2014 2015 2016 Cloud Revenue Forecast (Billions - Php) Philippines
    6. 6. The Right Messaging
    7. 7. How can Cloud help you?
    8. 8. Operational Efficiency Increase Speed to Market Increase Revenue and Profit ELASTICITY RIGHT SIZING PROVISIONING In the B2B environment, it’s all about AGILITY.
    9. 9. But first, we need to address these common “barriers” to Cloud Adoption …  Availability - The risk of information outages turns many business away from the cloud  Confidentiality - There are currently limited guarantees for data confidentiality and security  Local Regulations - The requirements of cloud-associated regulations can outweigh the benefits of its implementation, leading to initiatives like Andromède in France  Industry Fragmentation - Many different services, and limited market consolidation  Specialization - There is a perceived lack of specialized services available  Existing Sunk Costs - The cost of moving to the cloud may outweigh its benefits  Inertia - If it works, don’t fix it From Citi Research
    10. 10. Identify your customers and develop specific messaging addressing their needs New User IT and Operations Finance COST SAVINGS Efficiency and Speed to Market EDUCATIO N
    11. 11. Let’s look at IT and Operations, what are their concerns that we need to address? What’s the best use of our annual budget? How to migrate from legacy systems? How to effectively manage information explosion real-time? How to manage the risk of consumerization? How to continue to keep pace with evolving technologies? What do I move into the cloud? And, what type?
    12. 12. How to talk differently to IT & Ops People Three Short Episodes in Filipino with English Translation VIDEO
    13. 13. Product Positioning ESTABLISH AND ACHIEVE PRODUCT DIFFERENTIATION FOCUS ON RELEVANT FEATURES
    14. 14. Let’s listen to Juan and his peanuts … An interview with a typical Filipino entrepreneur. VIDEO
    15. 15. Diagnostic Marketing Mix Approach AWARENESS AVAILABILITY TRIAL REPEAT CHALLENGES SOLUTIONS Advertorials, Press Releases and Campaigns Sales and Support Standardize Processes Learn from Deployments
    16. 16. The Right Cloud For You
    17. 17. Infrastructure as a Service (IaaS) is the most basic cloud service model, where raw hardware resources are delivered on demand and priced consumptively. Private PublicHybrid Enterprise-Grade Clouds (Terremark, Savvis, Virtustream, Globe) Web-Grade Clouds (Amazon, Rackspace, Google, Rightscale) From Citi Research
    18. 18. To help our customers select the right cloud service, we need to ask them the ff: PUBLIC PRIVATE HYBRID Do you have constant demand for IT resources? NO YES Mostly constant but some spikes Do you have a clear view of your growth? NO YES Likely, but need to plan for spikes If you need to scale your resources, can you plan it over a period of time? NO YES Most of it YES Do you serve end users locally or are they geographically dispersed? More dispersed More local Mixed Do you require standard or customized SLAs? Standard Customized Customized
    19. 19. Also, open the discussions to think about these other considerations:  Service Level Agreements & Monitoring  Customer Support  Infrastructure Diversity Billing and Accounting Security in the Cloud APIs, Data & Application Architecture Track Record, Experience, & Sustainability
    20. 20. Telco’s Trump Card
    21. 21. Technology Push Driver #1: Improved broadband connectivity and penetration • Advanced high-speed telecommunications networks are the key enabler of cloud architecture and their existence relies on recent technological developments in speed, sophistication and penetration. • Developments include both an increase in the raw capacity of networks as well as their improved intelligence in being able to prioritize certain data packets over others. • There has been a massive increase in the number of connected devices particularly the proliferation of smartphones and tablets, shown in the data from the August 2012 Ofcom communication market report. Charts from Cisco Global Cloud Index
    22. 22. Technology Push Driver #2: Excess Computing Infrastructure • Cost of power • Infrastructure labor costs • Infrastructure buying power Supply side economies of scale • Time of day patterns • Randomness • Multiplexing Demand side economies of scale
    23. 23. Maximize our strengths ... 1. Our infrastructure 2. Our customers 3. Our scale 4. Our coverage 5. Our ability to offer end-to-end SLAs 6. Our billing capabilities TO OVERCOME WEAKNESSES Perceived lack of Customer-centricity IT and Network Silos Perceived lack of Innovation Speed of Execution “Telco-minded” thinking Telcos are naturally well positioned to play in the cloud …
    24. 24. For a Telco to succeed in this space, a holistic view and a coherent strategy is needed. COMPETENCIES IT, Applications, Business Analysis, Revenue & Commercial Model, Partnership PRIORITIZATION Resources, Funding, Marketing, EBITDA GO-TO-MARKET Messaging, Branding, Segmentation, Pricing SELLING APPROACH Scoping, Proposal Creation, Partner Engagement, Audience to talk to PRODUCT CREATION Specifications, Partnership Model, SLA ORGANIZATION AL STRUCTURE BUSINESS PROCESSE S METRICS, KPIs & COMPENSATIO N
    25. 25. Examples of Globe Customers Today  Current DIY Exchange email system is getting bigger due to increasing number of ports  Need to upgrade to 2010 version  They wanted it managed so that they can focus on their core competency  Managed Email with Computing Resources  Customer Relationship Management is very important to their industry  Current system is fragmented and requires multiple IT Resources  Managed CRM with Computing Resources GLOBAL PORT & TERMINAL OPERATOR INTERNATIONAL AIRLINE
    26. 26. Leading market position Strong financial performance World-class corporate governance • - A full-service telecommunications company with 5.8K+ employees, 32M+ mobile subscribers, 1.6M+ broadband subscribers, 700K+ landline subscribers, 800K+ retailers and distributors and business partners. - Has its own international data & voice gateways, cable landing stations (Nasugbu and Ballesteros), domestic fiber backhaul and access network (data, fiber, 3G/HSDPA, LTE, WiMax).  Margins among the highest in Asia-Pacific region  Credit metrics reflect prudent balance sheet management  Generates high dividend yields – Pay-out at 75% of prior year’s core net income  Consistently rated one of the best managed companies in the Philippines  Strong and committed shareholders from Ayala Corporation and Singapore Telecom Who is Globe Telecom?  Market leader in wireless postpaid market  Over 38% share of wireless industry revenues  Major player in corporate voice, data, and broadband

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