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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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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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