Cisco Service Provider Forum - Lima, Peru; 2013.04

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Cisco Service Provider Forum - Lima, Peru; 2013.04

  1. 1. Revolutionizing the Way We Work, Live, Play, and Learn Jožek Gruškovnjak Director, Cisco Internet Business Solutions Group Lima, Perú – April 9th, 2013 © 2010 Cisco and/or its affiliates. All rights reserved. © 2010 Cisco and/or its affiliates. All rights reserved. Internet Business Solutions Group Cisco Public 1
  2. 2. THE INTERNET A series of tubes. © 2010 Cisco and/or its affiliates. All rights reserved. Internet Business Solutions Group Cisco Public 7
  3. 3. “The new electronic interdependence recreates the world in the image of a global village.” — Marshall McLuhan, 1962 © 2010 Cisco and/or its affiliates. All rights reserved. Internet Business Solutions Group Cisco Public 8
  4. 4. © 2010 Cisco and/or its affiliates. All rights reserved. Internet Business Solutions Group Cisco Public 9
  5. 5. 120 Exabytes per Month 100 CAGR of 29% 3.6 x increase 110 94 80 77 60 59 40 20 0 44 31 2011 2012 2013 2014 2015 2016 Source: Cisco VNI Global Forecast, 2011–2016 © 2010 Cisco and/or its affiliates. All rights reserved. Internet Business Solutions Group Cisco Public 10
  6. 6. 120 CAGR an How much is of 29%“exabyte”? 3.6 x increase 110 Exabytes per Month 100 94 80 110,000,000,000 77 60 59 40 20 0 44 31 2011 2012 2013 2014 2015 2016 Source: Cisco VNI Global Forecast, 2011–2016 © 2010 Cisco and/or its affiliates. All rights reserved. Internet Business Solutions Group Cisco Public 11
  7. 7. 120 40 80 Exabytes per month Exabytes per Month 100 35 Projected in 2007 Actual 32 31 30 23 25 20 20 15 10 5 0 60 IP Traffic in 2011 Internet Traffic in 2011 Source: Cisco VNI Global Forecast, 2011–2016 Cisco Confidential © 2010 Cisco and/or its affiliates. All rights reserved. 6 40 43 20 0 7 2007 11 2008 16 2009 24 2010 32 2011 2012 Source: Cisco VNI Global Forecast, 2011–2016; Cisco VNI Global Forecast, 2007–2012 © 2010 Cisco and/or its affiliates. All rights reserved. Internet Business Solutions Group Cisco Public 12
  8. 8. 120 40 35 Exabytes per month Exabytes per Month 100 80 17x increase 37% CAGR Projected in 2007 Actual 32 31 30 23 25 20 20 94 15 10 5 0 IP Traffic in 2011 77 Internet Traffic in 2011 Source: Cisco VNI Global Forecast, 2011–2016 60 Cisco Confidential © 2010 Cisco and/or its affiliates. All rights reserved. 6 59 40 44 20 0 110 7 11 16 24 31 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 Source: Cisco VNI Global Forecast, 2011–2016; Cisco VNI Global Forecast, 2007–2012 © 2010 Cisco and/or its affiliates. All rights reserved. Internet Business Solutions Group Cisco Public 13
  9. 9. More Devices Nearly 19 Billion Connections More Internet Users Growth Catalysts 3.4 Billion Internet Users Faster Broadband Speeds 4-Fold Speed Increase More Rich-Media Content 2 Years of Video Minutes/Second Source: Cisco VNI Global Forecast, 2011–2016 © 2010 Cisco and/or its affiliates. All rights reserved. Internet Business Solutions Group Cisco Public 14
  10. 10.   Which key technology trends are changing the world?   What could the ICT industry look like in the next 5 to 10 years?   What are the national and policy implications of these changes? “Prediction is very difficult, especially about the future.” — Niels Bohr, Physicist and Nobel Laureate © 2010 Cisco and/or its affiliates. All rights reserved. Internet Business Solutions Group Cisco Public 15
  11. 11. 10 Technology Trends Changing the World © 2010 Cisco and/or its affiliates. All rights reserved. Internet Business Solutions Group Cisco Public 16
  12. 12. Source: foodfamilyfinds.com © 2010 Cisco and/or its affiliates. All rights reserved. Internet Business Solutions Group Cisco Public 17
  13. 13. Source: wired.com © 2010 Cisco and/or its affiliates. All rights reserved. Internet Business Solutions Group Cisco Public 18
  14. 14. Mobile Traffic Forecast Global Mobile Subscribers by Application 7,500 12 125 Subscriptions 100 5,000 75 50 2,500 - '01 '02 '03 '04 '05 '06 '07 '08 '09 '10 '11 '12* '13* 25 - Source: ITU World Telecommunication/ICT Indicators database © 2010 Cisco and/or its affiliates. All rights reserved. 10 Exabytes per Month Per 100 Inhanbitants Per 100 Inhabitants Mobile-Cellular Subscriptions (Millions) (2001-2011) 8 Mobile File Sharing (3.5%) Mobile M2M (5.1%) Mobile Web/Data (24.9%) Mobile Video (66.5%) 6 66% CAGR 2012–2017 4 2 0 2012 2013 2014 2015 2016 2017 Source: Cisco VNI Global Mobile Data Traffic Forecast, 2012–2017 Internet Business Solutions Group Cisco Public 19
  15. 15. Virtualization Clouds Web Client Server Minicomputer 100 B$ Market In 2015 Mainframe 1960 1970 1980 1990 2000 2010+ Source: Cisco IBSG, Forrester © 2010 Cisco and/or its affiliates. All rights reserved. Internet Business Solutions Group Cisco Public 20
  16. 16. Power Generation Dynamos in Enterprise 1870 Steam Engine Outside power to consumers / shops 1900 Information Technology Print Shops 1995 Enterprise team running IT 1920 Thermal turbines – AC distr. Scalable Compute – Internet No technical standards No distribution network 1960 Household Light Centralized Utilities Commonwealth Edison Time Improved Quality & Uptime Business Leader 20xx Utility computing to consumers & SMB Enterprises link into the cloud (public, hybrid, …) Source: The End of Corporate Computing – MITSloan Management Review (Spring 2005, Vol.46 No. 3) © 2010 Cisco and/or its affiliates. All rights reserved. Internet Business Solutions Group Cisco Public 21
  17. 17. Voice Messaging Video Conferencing Music © 2010 Cisco and/or its affiliates. All rights reserved. Internet Business Solutions Group Cisco Public 22
  18. 18. Voice Messaging Video Conferencing Music   Global market for voice traffic only grew by 4% in 20111   The growth figure would have been 13% if report included Skype voice traffic   Operators lost $13.9 billion, or 9%, of messaging revenues to social messaging apps in 2011.1   Netflix subscribers in the United States consumed 30 GB per month in 2012 – 30% of peak-hour internet traffic   25% of streaming video users reduced or eliminated TV   42% of all Skype calls include video, equating to 300 million minutes of Skype video per day   Globally, online music sales accounted for 32% of recordcompanies’ profits in 2011; 3.4 million consumers subscribe to music services Sources: TeleGeography, Ovum, OMA, Sandvin, Consumer Reports 2012, skype.com, Internet Retailer 2012 © 2010 Cisco and/or its affiliates. All rights reserved. Internet Business Solutions Group Cisco Public 23
  19. 19. Market Cap, Revenue, EBITDA of Leading SPs and OTTs (US$ Billion) Market Cap Trends for Top 200 Global firms In Telco / Cable, Traditional Media and OTTs 100% 90% 80% 9.5% 17.7% 20.6% 24.1% AT&T 36 14.3% Market Cap 15.1% 70% 127 16.3% 15.3% Verizon 37 60% 126 110 50% Google 40% 30% 20% 76.2% 67.2% 63.0% 16 60.6% Facebook 10% 0% 2008 216 2009 Telco/Cable 2010 Trad. Media OTTs 2011 4 1 0 38 46 Revenue EBITDA 216 Google’s valuation rivals AT&T’s with only 44% of AT&T’s EBITDA Google’s valuation 70% higher than Verizon’s with 42% of Verizon’s EBITDA 100 200 $ Billion 300 Note: Telcos include ATT, Verizon, Vodafone, NTT DoCoMo. Media include Comcast, Time Warner. OTTs include Amazon, eBay, Google, LinkedIn. For Google and Facebook, unique users calculated in terms of average daily unique users in 2011 Source: Oliver Wyman 2012 SOI analysis, Cisco IBSG Analysis © 2010 Cisco and/or its affiliates. All rights reserved. Internet Business Solutions Group Cisco Public 24
  20. 20. Demand = Supply Smarter Businesses   Customer Experience   Customer Value   Customer Retention   Marketing Effectiveness Technology Delivers   Storage   Computing power   Flexible databases and analysis   Valuable data surplus   Network as source and distributor of data © 2010 Cisco and/or its affiliates. All rights reserved. Internet Business Solutions Group Cisco Public 25
  21. 21. The Network is Important l  Search l  Browsing l  Friends & Family l  Likes & Hobbies Public Internet u  Banking l  Content Consumed u  Oil & Gas Internet of Things Network Data Exchange l  Applications Corporate / Private Internet u  Retail u  Manufacturing u  Healthcare n  City Cameras u  Public Sector u  Business Applications n  Consumer Devices u  Company-Specific Analytics n  Medical Network Data Exchange Data is being collected everywhere, but the network is always in the middle, able to see, correlate patterns and take action n  Meters n  Cars / Fleets Action can be taken through network control points (Policy, Security, QoS, Fog, Routing, etc.) n  Tolls Context can be seen by the network (Location, Identity, Presence, X-Platform, etc.) © 2010 Cisco and/or its affiliates. All rights reserved. Internet Business Solutions Group Cisco Public 26
  22. 22. Korea, Rep Sweden Japan Finland Norway Denmark Israel United States Australia Singapore United Kingdom Switzerland Canada Ireland France Estonia Luxembourg Austria Germany Netherlands Poland Portugal New Zealand Spain Slovenia Belgium Italy Latvia Taiwan, China Croatia Lithuania Hungary Greece Romania Uruguay Slovak Republic Chile Puerto Rico Turkey Argentina Brazil Venezuela Mexico China Ecuador Panama Colombia Dominican Republic Peru South Africa Ukraine Jamaica El Salvador Honduras Guatemala Paraguay Bolivia Nicaragua Subscribers per 100 Inhabitants 120 100 Wireless 80 Fixed 60 40 20 Source: The Global Information Technology Report 2012, WEF & INSEAD © 2010 Cisco and/or its affiliates. All rights reserved. Internet Business Solutions Group Cisco Public 27
  23. 23. 5 C’s of Devices Connected Cleverer Cheaper Converged © 2010 Cisco and/or its affiliates. All rights reserved. Cooler Internet Business Solutions Group Cisco Public 28
  24. 24. 60% Knowledge workers who use a mobile device for work 42% Employees who own the smartphones they use for work 84% IT leaders who are seeing BYOD growth in the enterprise 89% Companies that enable BYOD in some form #1 Employees want an any-device, anywhere work style (37%) Source: Cisco IBSG, 2012 © 2010 Cisco and/or its affiliates. All rights reserved. Internet Business Solutions Group Cisco Public 29
  25. 25. World Population 6.3 Billion 6.8 Billion 7.2 Billion 7.6 Billion Connected Devices 500 Million 12.5 Billion 25 Billion 50 Billion 1.84 3.47 6.58 2010 2015 2020 Connected Devices per Person 0.08 2003 More connected devices than people Source: Cisco IBSG, 2012 © 2010 Cisco and/or its affiliates. All rights reserved. Internet Business Solutions Group Cisco Public 30
  26. 26. “Fixed” computing (you go to the device) Mobility / BYOD (the device goes with you) 200M Internet of Things (age of devices) Internet of Everything (people, process, data, things) Doubles every (?) years Doubled every 1.4 years 50B things 10B Doubled every 1.3 years 1995 2000 2011 2020 Source: Cisco IBSG, 2012 © 2010 Cisco and/or its affiliates. All rights reserved. Internet Business Solutions Group Cisco Public 31
  27. 27. Connecting the unconnected People to People (P2P) People People to Machine (P2M) Home Mobile Process Things Data Business © 2010 Cisco and/or its affiliates. All rights reserved. Internet Business Solutions Group Machine to Machine (M2M) Cisco Public 32
  28. 28. The Internet of Everything builds on the foundation of the Internet of Things by adding network intelligence that allows convergence, orchestration, and visibility across previously disparate systems. The Internet of Things The Internet of Everything Intelligence Convergence Visibility Source: Cisco IBSG, 2012 © 2010 Cisco and/or its affiliates. All rights reserved. Internet Business Solutions Group Cisco Public 33
  29. 29. Citizens Citizens Security Government Government Privacy Societal / political issues Reliability Standards Standards bodies Bodies Businesses Businesses Source: Cisco IBSG, 2012 © 2010 Cisco and/or its affiliates. All rights reserved. Internet Business Solutions Group Cisco Public 34
  30. 30. Converging Forces 1.  2.  3.  4.  3rd Generation Applications— Average Daily Usage by Location – Mexico Your home video, social networks, music, books, etc. Friends' homes Devices— At work at normal location bigger, powerful Rise of Wi-Fi— availability, ease of use Nomadic Use— versus mobile At work, but at remote location Retail locations** Public locations* Travel locations On-the-go 0.0 1.0 2.0 3.0 4.0 Hours per typical day Full population Source: Cisco IBSG Mexico Mobile Study, 2012 © 2010 Cisco and/or its affiliates. All rights reserved. Internet Business Solutions Group Cisco Public 35
  31. 31. Global IP Traffic by Local Access Technology Average Daily Wi-Fi Data Consumption 120 52.6 51.7 55.4 53.4 50 80 40% 60 40 53% 20 2011 2012 2013 2014 2015 2016 Megabytes Exabytes per Month 100 0 60 7% 40 30 20 13.5 10 Sep-12 12.9 Oct-12 13.9 12.8 Nov-12 Dec-12 Mobile Data (70% CAGR) Avg. Daily Mobile Data Consumption/User Fixed/Wired (20% CAGR) Avg. Daily Wi-fi Data Consumption/User Average daily Wi-Fi data consumption is 4X greater than cellular data consumption. Fixed/Wi-Fi (34% CAGR) Source: Cisco VNI Global Mobile Data Traffic Forecast, 2012–2017 © 2010 Cisco and/or its affiliates. All rights reserved. Source: Cisco Data Meter, Sep 2012–Dec 2012 Internet Business Solutions Group Cisco Public 36
  32. 32. Location of Mobile Use Percentage of Total Time Spent in Activity In transit 20% Other indoor location 20% Office 18% Home 42% Mobile Internet 16% 21% 14% 49% The few late-majority/ laggard consumers using mobile Internet and video are more likely to be at home than early adopters, so fixed-location usage could rise as market matures 80% of Internet use and 84% of video viewing occur in fixed locations Mobile Video   More than 80% of mobile video and mobile Internet use (via mobile device) is not mobile   This usage takes place when the user is indoors and stationary, and could be supported by Wi-Fi / femto solutions Source: Cisco IBSG Connected Life Market Watch, 2011 © 2010 Cisco and/or its affiliates. All rights reserved. Internet Business Solutions Group Cisco Public 37
  33. 33. Public Hot Spot Usage per Week Payment for Public Wi-Fi (all locations) (Regular Users – All Locations) Free Mexico Part of broadband subscription Brazil Part of customer loyalty program UK Part of mobile subscription Canada Pay-per-use US N = varies Wi-Fi provider or aggregator 0% 20% 40% 60% 80% 100% Use at Least One Type of Public Hotspot Do Not Use Any Type of Public Hotspot Q37. How frequently do you use public Wi-Fi hot spots during a typical week in each of the following locations? 0% 10% 20% 30% 40% 50% 60% 70% Percentage of Respondents Q38. When using public Wi-Fi hotspots, how do you most often pay? Source: Cisco IBSG – Mexico SP Wi-Fi primary research, July 2012 © 2010 Cisco and/or its affiliates. All rights reserved. Internet Business Solutions Group Cisco Public 38
  34. 34. Importance Of Free Wi-Fi in Broadband Provider Choice Changing Broadband Provider for Free Public Wi-Fi (answering yes to bundled in subscription) 50% 76% N = 448 N = 769 Not at all likely Percentage of Respondents 40% Slightly likely 30% Moderately likely 20% Very likely 10% 64% Completely likely 0% Extremely Very Moderately Slightly important important important important Q29. How important was free access to public Wi-Fi hotspots in your choice of home broadband service provider? Source: Cisco IBSG – Mexico SP Wi-Fi primary research, July 2012 © 2010 Cisco and/or its affiliates. All rights reserved. 0% Not at all important 10% 20% 30% 40% 50% Percentage of Respondents Q30. If another home broadband provider offered you free access to public Wi-Fi hotspots at the same price as your current broadband price, how likely would you be to switch to that provider? Internet Business Solutions Group Cisco Public 39
  35. 35. Interest in Bundled Flat Fee for Mobile/Cellular and Wi-Fi Access 50% Percentage of Respondents 45% 82% Most Important Benefits (Neutral and Above) Flexibility of location / coverage Average = 4.2 / 5 40% Lowers overall cost No additional Wi-Fi access charges Unlimited data (i.e., no overage 35% Improving performance / internet 30% Reliability 25% Trust / familiarity with current service 20% N = 769 15% Automated login 10% N = 727 Ease of doing business 5% 0% Seamlessly transfers between None of the above Very Somewhat Neutral interested interested Not very Not at all interested interested Q48. Imagine a service in which you pay a low flat fee for a combined mobile/ cellular and Wi-Fi solution with unlimited data access throughout the country (does not include voice service). Your Service Provider will seamlessly transfer your service to the lowest cost and best suited network with no degradation of quality. This offer would replace your current mobile data plan and would be at least the same cost, or lower, than your current data plan. 0% 10% 20% 30% 40% 50% Percentage of Respondents Q50. What do you think would be the most important benefits of this service (select up to 3)? Source: Cisco IBSG – Mexico SP Wi-Fi primary research, July 2012 © 2010 Cisco and/or its affiliates. All rights reserved. Internet Business Solutions Group Cisco Public 40
  36. 36. New Internet Platform 2.  3.  4.  5.0 HetNets Access— Cloud Datacenter macro cellular, Wi-Fi, small cell Integrated Core— Zettabytes per Year 1.  Data Center Traffic converged IP networks Content Delivery— federated CDNs Network-Data Centers— virtualization, real-time availability Traditional Datacenter 4.0 3.0 34% 33% CAGR 2010–2015 2.0 66% 11% 1.0 89% 0.0 2010 2011 2012 2013 2014 2015 Source: Cisco Global Cloud Index, 2012 © 2010 Cisco and/or its affiliates. All rights reserved. Internet Business Solutions Group Cisco Public 41
  37. 37. Consumers Technology   Huge demand for all things digital and connected   Hunger for new and innovative apps, devices, and solutions   Network- and technology-agnostic   Everything is wireless with fat pipes   Cloud drives openness and interoperability   Everything is connected across multiple networks Industry Economy   Lower costs for technology and connectivity   Data-, innovation-, and connectivitydriven   Increased competition and blurring of segments   Creates new sources of value   Seek new sources of business value   Raises citizens’ quality of life © 2010 Cisco and/or its affiliates. All rights reserved. Internet Business Solutions Group economic Cisco Public 42
  38. 38. Challenges Across the ICT Industry Value Chain Content Providers Service Providers Equipment Providers Creators and originators of digital content; e.g. music, pictures, videos, and news Companies that build and maintain networks Providers of infrastructure hardware and networks Producers of software and applications Producers of online services that broadly aggregate and disseminate digital content Producers of devices through which content, apps and services are consumed e.g. Sony, Disney, News Corp., … e.g. AT&T, T-Mobile, BT, Orange, AMX, Telefonica, … e.g. Ericsson, EMC, Alcatel-Lucent, Cisco, … e.g. Microsoft, Adobe, Oracle, … e.g. Google, eBay, Amazon, Netflix, … e.g. Samsung, Apple, Nokia, RIM, …   Balancing revenues and costs   HetNet Integration   OTT collaboration   Cost leadership   Innovation   Product leadership with open standards   Innovation   Cloud integration   Mobile enablement   Alternative business models   New distribution models   Multi-rights ownership © 2010 Cisco and/or its affiliates. All rights reserved. Software Internet Business Solutions Group Internet Services   Business model innovation   Cloud   Value-chain collaboration Devices   Innovation   Beyond handsets   Connected home   Cloud extension Cisco Public 43
  39. 39. SP Profitability versus Traffic Growth Category CAGR 40 Exabytes per Month 45 Traffic 48% Revenue 5% EBITDA 4% 600 35 30 43 400 32 25 24 20 15 5 0 Value Opportunity 300 200 16 10 500 11 Growth Index (2007 = 100) 50 100 7 2007 2008 2009 IP Traffic Index 2010 Revenue 2011 2012 - EBITDA Source: Cisco IBSG Analysis of S&P Capital IQ. Data is based on figures from 124 publicly traded integrated SPs (fixed and mobile) from around the world, and on the Cisco Visual Networking Index, 2007-11. © 2010 Cisco and/or its affiliates. All rights reserved. Internet Business Solutions Group Cisco Public 44
  40. 40. 1.  Encourage competition 2.  Nurture innovation 3.  Promote standards—global, open 4.  Ensure consumer protection and trust 5.  Live openness—networks, industry policy 6.  Create frameworks for viable economic models Moving Up the Stack, Beyond Infrastructure © 2010 Cisco and/or its affiliates. All rights reserved. Internet Business Solutions Group Cisco Public 45
  41. 41. 1 Leadership and Vision   Clear goals and objectives   Broad approach—not just about one area   Integration across laws, tax, regulation, etc. © 2010 Cisco and/or its affiliates. All rights reserved. 2 3 Coordination Creating Opportunities   Collaboration and communication across groups and agencies   Formalized coordination structure   Consensus Internet Business Solutions Group   Open up “permissionless” opportunities for new businesses   Create growth platforms and let competition thrive   Promote competition and consumer trust structures Cisco Public 46
  42. 42.   Major technology disruptors are creating the next generation of the Internet   More than ever, the Internet will be the platform for the future of society —the way we work, live, play, and learn   These changes will bring both challenges and opportunities the ICT industry   Governments have an important role to play in “moving up the stack” by creating an environment that encourages business and maximizes the benefits to citizens – and the ICT industry should influence the development of the environment © 2010 Cisco and/or its affiliates. All rights reserved. Internet Business Solutions Group Cisco Public 47
  43. 43.   The document “Then Next Generation of the Internet” is available on Cisco IBSG web site www.cisco.com/IBSG   For more information, please feel free to contact me at jgruskov@cisco.com © 2010 Cisco and/or its affiliates. All rights reserved. Internet Business Solutions Group Cisco Public 48
  44. 44. Thank you. Follow Cisco IBSG for trends and updates: Flickr - http://www.flickr.com/photos/ciscoibsg YouTube - http://www.youtube.com/CiscoIBSG Slideshare - http://www.slideshare.com Facebook - http://www.facebook.com/go.cisco.ibsg Twitter - httpnet/CiscoIBSG LinkedIn - http://www.linkedin.com/in/ciscoibsg © 2010 Cisco and/or its affiliates. All rights reserved. Internet Business Solutions Group Cisco Public 49

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