Sidney Kriger Business amp Technology Architecture Marketing 12132016 SP Business Transformation Journey with our Customers New Revenue Opportunities and Cost Savings in Mobile ID: 816107
Download The PPT/PDF document "Ben Bekele | Ola Mabadeje" is the property of its rightful owner. Permission is granted to download and print the materials on this web site for personal, non-commercial use only, and to display it on your personal computer provided you do not modify the materials and that you retain all copyright notices contained in the materials. By downloading content from our website, you accept the terms of this agreement.
Slide1
Ben Bekele | Ola Mabadeje | Sidney Kriger
Business & Technology Architecture Marketing
12/13/2016
SP Business Transformation Journey with our Customers
New
Revenue Opportunities and Cost Savings in Mobile
Slide2Agenda
Market Trends for Service Providers and Mobile
1
New Services Opportunities to Grow Revenues
2
How Automation and Virtualization Impact TCO
3
Slide3Trends: New Opportunities
The world has gone
mobile
T
raffic growth in access,
driven by video
Rise of cloud computing
Digitization leading to IoE
Changing Customer
Expectations
With AI, VR
Ubiquitous Access
to
Apps & Services
8X
Mobile Traffic Growth
From
2015-2020
Changing Enterprise Business Models
Efficiency & Capacity
Soon to
Change
SP Architectures/ Service Delivery
Emergence of the Internet of Everything
Process
Things
People
Data
Slide4Accelerate
Growth
Grow compelling services and markets
Leverage cloud and IOT services expansion
Subscriber retention and relationship
Personalization,
any device, anywhere
Increase Speed
Web-scale breaks current cost and design models
Co-development, DevOps, cloud scale
Improve
Efficiency
Bandwidth is growing;
revenue is not
Improve efficiency: virtualization + SDN + automation
SP
Business Challenges and Needs
Secure Everything
Slide5Global IP Traffic Distribution and Growth Rates across Access Types
Total IP Traffic
2015
Total IP Traffic
2020
5-Year Growth Rates
CAGR
Internet Traffic
Internet Traffic
Wi-Fi 26%
Fixed Wired 11%
Mobile 53%
Mobile and Wi-Fi platforms will drive traffic
growth
—
An opportunity and
a challenge
for Service Providers
Source: Cisco VNI
Cisco.com/go/VNI
Slide62020 Mobile Traffic Forecast
Share by Region and
5-Year
CAGRs
North America
CAGR 42%
Western Europe
CAGR 45%
Central/Eastern Europe
CAGR 52%
Latin
America
CAGR 50%
Middle East & Africa
CAGR 71%
Asia Pacific
CAGR 54%
Source: Cisco VNI Global Mobile Data Traffic Forecast, 2015–2020
Cisco.com/go/VNI
Slide72020 Mobile Connected Devices
Share by Region,
5-Year
CAGRs, and Devices per Capita
North America
CAGR 16%
Devices Per Capita 2.8
Western Europe
CAGR
12%
Devices Per Capita
2.7
Central/Eastern Europe
CAGR 7
%
Devices Per Capita
1.9
Latin
America
CAGR 6
%
Devices Per Capita
1.5
Middle East & Africa
CAGR
7%
Devices Per Capita
1.1
Asia Pacific
CAGR 7
%
Devices Per Capita
1.4
Source: Cisco VNI Global Mobile Data Traffic Forecast, 2015–2020
Cisco.com/go/VNI
Slide8Identifying and Assessing SP Opportunities
Market Competitiveness
Cost Optimization
Revenue Generation
Opportunity Assessment
TCO of New Architecture and
Technology Platform
$
Expected Monthly Average
Revenue per User (ARPU)
Identify New Services and Business Models
Annual Forecast of Market Potential
Service Provider Profitability
Slide9New Mobile Services Revenue Opportunities
Slide10Mobile Monetization & Optimization by 2020
Total
SP
TAM for by 2020
Incremental revenues enabled by new
Mobile
services, ARPU uplift
TCO Savings enabled by optimizing the service delivery architecture using Cisco
SDN and NFV technology
Monetization
M2M/
IoT
Voice
over Wi-Fi
Analytics
Services
Sponsored Data
Optimization
NFV/SDN
Core, Edge & Access Optimization
Service Automation
$3
Monthly ARPU
Uplift
2
35%
Cost Savings
3$627BGlobalIncremental Opportunity1CISCO BTA TEAM AND OTHER INDUSTRY SOURCES
Slide11Premium CPM $Z
Potential Revenue Streams:
Analytics as a Service Value Chain
Wi-Fi Service
Provider
Outlets
&
Stores
Stadium
Mall
Hotel
Ad Exchanges
&
Networks
55%*Z
Real-Time Contextual
Data
Revenue ($)
25%*Z
Targeted
User
and
Network
D
ata
20%*
Z
Customized Insights &
Managed
Services Revenue ($Y)
Wi-Fi
Source: Numbers derived from Cisco® BTA’s MVNO
VoWi
-Fi Revenue Analysis, Cisco BTA’s Sponsored Data Economic Analysis, Cisco VNI® 2015, and ACG research
Slide1227%
18%
31%
2%
17%
5
%
System Integrators
VAS
Apps
Data Analytics
Middleware
Connectivity Providers
Potential Revenue Streams:
IoT
/M2M Value Chain
Network & Device Vendors
67% of Total
Service Providers’ Immediate Opportunity
Next Phase of Opportunity
SP Revenues
Today
Transportation/Auto/Connected Car
Utilities/Manufacturing
Retail
Smart City
A
B
C
D
SP Revenues
Tomorrow
Slide13MVNA or
Service
Provider
$
$
Wholesale Capacity
Revenue
Potential Revenue Streams:
VoWi
-Fi Value Chain
Small SP
Voice Plans across Wi-Fi Hotspots and Cellular Network
MVNO
2
Service Provider
$
Enterprise
In-Building Voice Plans
MVNO 1
Offering
MVNO
Service
Offering
VoWi
-Fi
Service
Value-added Servicese.g. International Roaming$Existing Subscribers
$Low Cost Voice& Data PlansNew Markets Subs
Slide14Consumer
Wholesale to partners
Business
WiFi first
MVNO
LEVERAGE EXISTING RELATIONSHIPS AND ASSETS
Customer Type
: Cable Provider
Use Case:
Using NFV-based MVNO deployment and Wi-Fi assets to launch Wi-Fi first MVNO and Wi-Fi capacity wholesale service
NFV Impact on Expanding Revenue O
pportunities
Cable
SP
Revenue
Slide15Derived from pro forma income statements
Cable Provider Average Profit Per User (APPU)
Slide16Year 5
Business as Usual
Year 5
With Wholesale & MVNO
Increase
Monthly ARPU
$157
$169
8%
EBITDA
$20 Million
$23 Million
15%
Average Profit
per Subscriber
$58.15
$64.50
11%
Cable Provider Business Impact
Slide17Automation: SDN Impact on Creating and Delivering Services
Slide18Poll: What is the most important impact SDN will have on your business?Automation of Existing/Legacy Services
Automation of Network Operations Automation of Virtual ServicesReducing Time to Revenue
Slide19Orchestration and Automation
Legacy Services
Virtual Network Elements
Physical Network Elements
Virtual Services
Operations(Ops)
Efficiency
Time to Market
Time to Revenue
Optimization Focus
New On-Demand Services
Dynamic Scale up and down
Lower
OpEx
and
CapEx
Monetization Focus
Hybrid
Approach to
Automation
and
Orchestration
Start with Operation Efficiency for Legacy and Expand into Virtual Services
Phase 1
Phase 2
Slide20Major Barrier To Transformation: ComplexityTime-consuming, Rigid Operations, High O
perations Costs—Cannot Scale!
Plan It
Design It
Where Can We Put It?
Procure It
Install It
Configure It
Secure It
Is It Ready?
Manual
Inhibits New Services
Inhibits New Markets
Inhibits Business Agility
Slide21From Complexity to Simplicity and Automation
A Platform for Innovation
Automated
Self-Service
On-Demand
Plan It
Design It
Where Can We Put It?
Procure It
Install It
Configure It
Secure It
Is It Ready?
Manual
Service
Oriented
Self-Service
Automated Provisioning
Elasticity
(Capacity on Demand)
From Months to Minutes
Slide22Business
Impact of Automation
Improve
Revenue & Avoid Costs
Network and Service Operations
Time to deployment
Time to activation
IT Investment
Revenue Uplift
Cost Avoidance
BSS/OSS update
Integration
Faster time to revenue
Churn reduction
3
rd
party fees
Truck rolls
Improve
OpEx
&
Reduce IT Investment
Slide23Automation
Change Request from Existing
Customers
Add New Customers
Service Disconnect
Incident Resolution
Introduction of New Service or Capabilities
Time to Revenue Gain
Service Automation
Maintenance Window (MOP)
ACL Management
Device Migration
Config
Audit/Validation
Network Refresh/Regional Rollouts
Device Provisioning
Network Automation
Slide24Source: Cisco BTA
Operating Cost
New Customer Add
Change Request
Incident Resolution
MOP/ Maintenance Window
Based on averages across mobile, cable, telco and DC providers
*North bound API for portal and service order entry provides additional benefits
Operation
% of Service
Op Cost
Ops
Improvement
Customer*
O
rder
7%
80%
Order
Entry*
6%
77%
Order
P
rocessing
10%
80%
Config
Validation
20%
93%
Service Provisioning
14%
90%
Network Configuration
13%
78%
CPE Install - TTU29%0%
Highly Relevant
Some Relevance
Less Relevant
Relevance to Automation via NSO
Operation
% of Service
Op Cost
Ops
Improvement
Change Order*
5
%
67%
Order
Entry*
5
%
67
%
Order
P
rocessing
11%
86%
Config
Validation
21%93%Service Provisioning15%
90%
Network Configuration
14%
78%
CPE
Install - TTU
30%0%Operation
% of Service
Op CostOps ImprovementTrouble Call*
12%80%Ticket Generation*
8
%71%Trouble-shooting
15%53%Config Validation
37%
94%Re-Provisioning
23%90%Resolution Verification5%
50%
Operation
% of Service Op CostOps ImprovementChange Order4.6%67%
Route Order
9.1%45%Analyze Order13%
50%Config Template Update18%93%Network Configuration50%
90%
Document
Changes
5%78%OpEx Reduction and Efficiency
Slide2577% Reduction in Time to Process a Change Request
Example
a
nalysis
2.9 Hours
to Process Change Requests, Down from
12.7 Hours
Slide26Impact of SDN Automation on SP OpEx
Before Automation
After Automation
Change Request
New Add
Disconnect
Incidents
MOP
SP Automation Journey
50-60% Improvement in
OpEx
OpEx
(%)
Slide27SPs Generate $5‒$25 in Savings for Every $1 Invested in Automation
Average Savings
Increases
as More Services and Operations Are Automated
Slide28Summary—The Business Value of Automation and Orchestration*
Source: *Average based on multiple use cases and customer engagements SPs - 30+ service provider use cases, Telco, Mobile, Cable, Cloud and Backhaul providers
Change Request from Existing
Customers
+70%
Increased Revenue
+30%
Time to Revenue
-60%
Incident Reduction
-60%
Reduced Backlogs
-40%
Slide29Virtualization: NFV Impact on Service Delivery
Slide30Poll: What is your top reason for moving to a virtualized architecture?
Reduce CapexBetter agility Tap into new revenueReduce
OpexNot moving to virtualization
Slide31Orchestration and Automation
Legacy Services
Virtual Network Elements
Physical Network Elements
Virtual Services
Operations(Ops)
Efficiency
Time to Market
Time to Revenue
Optimization Focus
New On-Demand Services
Dynamic Scale up and down
Lower
OpEx
and
CapEx
Monetization Focus
Hybrid
Approach to
Automation
and
Orchestration
Start with Operation Efficiency for Legacy and Expand into Virtual Services
Phase 1
Phase 2
Slide32PMO
Grow on existing appliance-based infrastructure, purchasing in advance
FMO
Grow with virtualized infrastructure and migrate all
existing
subscribers/sessions, paying via subscription over time
Where to Invest to Handle Growth in Traffic and Sessions?
PMO – Present Mode of Operation
FMO – Future Mode of Operation
v
s.
Slide33Resource & Financial Drivers for Comparison
SP Market Facing Services/Use Cases
FMO
PMO
NSO
ESC/CTCM
Bearer Plane
M2M GW
Policy
Management Servers
TOR Switch
Mercury
CEPH
Number Service Requests
Order to Activation Process
Order
L
ead
T
ime
Configuration & Activation Timeline
Service ARPU
Subscribers & CAGR
Traffic Profile & CAGR
NSO
Service Order-to-Activation & Fulfilment
Testing & Certification and Training
Resource Deployment
Network Assurance
Traffic Backhaul – Edge to Core
Software MaintenanceDatacenter Facilities, Power, Cooling, FloorspaceOpExCost DriversOpExCost DriversCapExCost DriversTerm-based Recurring Software LicensesHardware
Perpetual Software LicensesCapExCost Driversvs.Call ModelService Penetration Infrastructure
Services
Slide34Summary Financial ResultsChoosing NFV-based over Appliance-based Architecture
5-Year Business Case Results
TCO Savings
TCO Savings %
Year 1
ROI
Year 5
ROI
5-Year Revenues from
New Services
NPV
$
4.3 M
36%
33%
249%
$ 14 M
$
13.2 M
5-year demand drivers of resources & costs:
Throughput (
Gbps
) grows from 10.3 to 44.8
SAUs or sessions grow from 1.3M to 2.3M
Slide35TCO Savings Contribution Attribution
35% to 53%
TCO Savings
Slide36Environmental OpEx SavingsPower, Cooling & Floor Space
40%
SAVINGS
NFV-based
OpEx
Appliance-based
OpEx
Slide37$4.9M
Appliance-based
OpEx
Service Management
OpEx
Savings
Design, Plan, Test, Deploy, Roll Out
67%
Savings
Source: IDC , Cisco BTA
$1.6M
NFV-based
OpEx
Slide38Improve and Grow Your Business
Agility/Cost
Automate
Gain flexibility and reduce
OpEx
Virtualize
R
evenue
Tap into
new revenue at
reduced cost
Modernize
Scale
Upgrade infrastructure to manage
b
andwidth & device
e
xplosion
Learn more:
cisco.com/go/mobile
cisco.com/go/
nso
Slide39