Wider Economy Services 20 Oct 2009
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Transcript of Wider Economy Services 20 Oct 2009
© Copyright 2009. Yankee Group Research, Inc. All rights reserved.
www.yankeegroup.com
Capitalizing on Wider Economy Services
October 20, 2009
© Copyright 2009. Yankee Group Research, Inc. All rights reserved. October 20092
Agenda
Introduction
Setting the context
Rethinking the value chain: Telco as a platform
Wider Economy: Solution examples
Conclusion
© Copyright 2009. Yankee Group Research, Inc. All rights reserved. October 20093
Speakers
ModeratorAngeline Alexakos-Snow, Director of Programs & Content, Trendsmedia
Panelists
Yankee Group IBM Corp.
Benoit Felten, Principal Analyst David Mangini, Global Solution Owner,Service Delivery Platform
Brian Partridge, Vice President Seeta Hariharan, Director, Global Communications Sector
© Copyright 2009. Yankee Group Research, Inc. All rights reserved. October 20094
Agenda
Introduction
Setting the context
Rethinking the value chain: Telco as a platform
Wider Economy: Solution examples
Conclusion
© Copyright 2009. Yankee Group Research, Inc. All rights reserved. October 20095
The reality of living in a globally integrated world is upon us
Economic instability and uncertainty. Shift in resources and growth opportunities from mature to emerging economies.Consumers increasingly empowered by online collaboration and communities.A proliferating “internet of things” communicating and generating vast quantities of data.Escalating personal and business reliance on telecommunications.Global awareness of industry’s impact on the environment.
The world is connected: economically, socially, and electronically.
Source: IBM
© Copyright 2009. Yankee Group Research, Inc. All rights reserved. October 20096
Infrastructure
Applications
Business Models
Business Functions
Processes
1. Improve what service providers do today by focusing on operational efficiency.
2. Apply the wealth of data and intelligence available today to focus on meeting customer needs.
3. Adapt to current and future changes by capitalizing on the opportunities for innovative new business models.
SMARTER TELECOM PROVIDERS• Provide connectivity, speed, and services
via personalized offerings• That are secure, reliable, and affordable • Delivered over intelligent systems and
infrastructure
The goals for smarter telecommunications are clear:
Start planning and implementing Smarter Telecommunications systems
Source: IBM
© Copyright 2009. Yankee Group Research, Inc. All rights reserved. October 20097
Smarter Communications Infrastructure: A horizontal enabler for Wider Economy Services
Wider Economy Services
Smarter Healthcare Smarter Utilities Smarter Transportation …
Wider Economy Services:New opportunities to capitalize on these trends and position Telecoms into adjacent markets
Anywhere Network: A seamless, intelligent, ubiquitous network with broadband capacity
Smarter Telcos / Anywhere Network
Smarter Planet:The planet will be instrumented, interconnected, intelligent
© Copyright 2009. Yankee Group Research, Inc. All rights reserved. October 20098
Exploring Wider Economy Services
Yankee Group and IBM collaborate to explore the wider economy services opportunities in both mature and growth markets:
– What are the services?
– Where are the short- and mid-term opportunities?
– What is the role of a Telecom Service Providers in offering these new services?
– What revenues can be expected to flow back to Telecom Service Providers?
The current webinar is an overview of our research and will be followed by more in-depth sessions exploring specific verticals.
Look for invites to future webinars addressing Telco opportunity in Healthcare, Utilities, Transportation, Home Management, and more.
© Copyright 2009. Yankee Group Research, Inc. All rights reserved. October 20099
Agenda
Introduction
Setting the context
Rethinking the value chain: Telco as a platform
Wider Economy: Solution examples
Conclusion
© Copyright 2009. Yankee Group Research, Inc. All rights reserved. October 200910
ACCESS
TELCO SERVICES
INTERNET SERVICES
ACCESS
TELCO SERVICES
The model that Telcos have strived on for decades is seriously endangered by services migrating “off-deck”
Operators face a serious mid-term threat
Bandwidth increaseInternet innovationDevice normalization
Access revenue growth marginalConstrained bandwidthTelco-controlled end-devicesPC is only area of freedom
Abundant bandwidthServices migrate off-deckService revenue endangeredAccess is only stable revenue
Telco Share of Revenues Telco Share of Revenues
INTERNET SERVICES
© Copyright 2009. Yankee Group Research, Inc. All rights reserved. October 200911
Impacts Question Marks
Slowdown service disintermediation
Access revenue threatened by alternative networks (wireline & wireless)
Maintain customers captive to Telco services
Political and image cost too high to be realistic
More stable but lower margin revenues
Sensible role but how to transition from current model?
Currently envisaged strategies have drawbacks
Slow down/refuse bandwidth upgrade
Maintainwalled garden
Become Broadband Utility
© Copyright 2009. Yankee Group Research, Inc. All rights reserved. October 200912
Solution: wholesale Telco assets
Leverage existing network & organization assets for revenue by:– aggregating & enhancing internet services– powering third party non telecom centric services
Serviceslike...
Enablerssold...
ACCESS
ENABLING NETWORK COMPONENTS
Traditional retail
TELCO SERVICES
Video-communicationTV on-demand
Substitution wholesale
INTERNET SERVICES
BillingCustomer support
Interoperability
Cloud applicationsUnified communications
Incremental wholesale
WIDER ECON SERVICES
Video enablementReal-time alertingVoice integration
Home securityRemote healthcare
© Copyright 2009. Yankee Group Research, Inc. All rights reserved. October 200913
Two-sided business models require new skills, processes, and infrastructure
Net
wor
kA
sset
sO
rgan
izat
ion
Ass
ets
VOICE
VIDEO
BILLING
ACTIVATION
Telco Assets
…
DIRECT SALES
CUSTOMER SUPPORT
…
End Customers
CONS
UMER
SEN
TERP
RISE
S
TELC
O SE
RVIC
ES
RETAIL
$
3rd Party Service Providers
$
UTILITIES
TELCO
HEALTH
GOV’T
TRANSPORT
…
WHOLESALE
and
$
© Copyright 2009. Yankee Group Research, Inc. All rights reserved. October 200914
Evolution of Telco's must support…– Converged connectivity– 1000s of services supplied
mostly by partners– Large ecosystem
– Combination of open networks and closed networks
– Systems integration
Evaluating adjacent segments – solution fit
Telco Today
0
100
200
Connectivity
System Integration Expertise
Vertical expertise
Platform openess
Telco TomorrowSource: Yankee Group, 2009
© Copyright 2009. Yankee Group Research, Inc. All rights reserved. October 200915
Agenda
Introduction
Setting the context
Rethinking the value chain: Telco as a platform
Wider Economy: Solution examples
Conclusion
© Copyright 2009. Yankee Group Research, Inc. All rights reserved. October 200916
Service Provider Capability Fit
Mar
ket A
ttrac
tiven
ess
Solution Segment: Priority Mapping
Monitor
Engage and Partner
Study and develop
HIGH
LOWHIGH
Source: Yankee Group, 2009
Real-time Traffic Mgmt.
In Car Services
Home Monitoring
Distance Learning
Smart Meter Home
Healthcare
© Copyright 2009. Yankee Group Research, Inc. All rights reserved. October 200917
Wider Economy Services: Smarter Health Care
Care CenterVideo conference with visiting nurse, Patient journal over TV, Sensor measurements
Home ServiceInformation on TV about planned visits, Medicine reminder, Alarm monitoring
HospitalVideo conference, Transmission of data at home visit, Supervision of analysis equipment
RelativesVoice controlled video phone using TV, Safety alarm
© Copyright 2009. Yankee Group Research, Inc. All rights reserved. October 200918
Increased LongevityIncreased % of aging populationIncreasing need forhealth monitoring
More and more elderly people go into nursing homesThe cost per patient is fast becoming astronomical (£25k+/y in the UK, $67k/y in US...)The cost is borne by patients, their families, insurance companies and the states’ healthcare systems
Keeping an autonomous elderly person requiring monitoring in their homes can therefore save considerable cost to the parties involved.
The Telco would provide not only connectivity and vital QoS but also monitoring systems, real-time interactive services into the home etc.
A 3rd party healthcare service provider (which may or may not be an existing player in the healthcare sector) offers service & assistance to the elderly person.
The service would be paid by combinations of the current playersfooting the nursing home bills. The economic space for the Telcowould be significant though.
Revenue opportunity: Elderly care service
© Copyright 2009. Yankee Group Research, Inc. All rights reserved. October 200919
« Smart »Meter
Appliances Electricity Grid
Provides real-time consumption feedbackControls energy usage of key appliances
Data Network
Legacy Metering
« Legacy »Meter
ElectricityGrid
Measures consumption
Smart Metering
Meter reading requires physical customer presence
Customer has no real-time consumption information
Aggregated consumption dictates energy company production/purchase strategy
Meter reading can be done remotely
Customer can adjust consumption on the basis of real-time information
Peak demand can be adjusted to avoid incurring peak production costs
Wider economy services: Smart Meters
Implications
Appliances
© Copyright 2009. Yankee Group Research, Inc. All rights reserved. October 200920
Revenue opportunity: Smart MetersRevenues for Telcos:
– Connectivity and network management: a few $/m per meter as per M2M pricing (if absolute real-time is key, might be somewhat higher)
– Service platform: yearly contract basis as per large network management and integration projects
Costs for Telcos:– Broadband usage costs with basic to advanced QoS– Service support for always on metering– Network monitoring and support of the end-points
Developing the service platform capabilities needed will represent an investment akin to a large integration project, but one that will be leveraged for serving multiple wider-economy customers in addition to utilities.
Meter Connectivity
Network Management
Platform and HostingT
elco
Tel
coS
IU
tilit
y
© Copyright 2009. Yankee Group Research, Inc. All rights reserved. October 200921
Agenda
Introduction
Setting the context
Rethinking the value chain: Telco as a platform
Wider Economy: Solution examples
Conclusion
© Copyright 2009. Yankee Group Research, Inc. All rights reserved. October 200922
Evaluating the business plan requires a holistic view
© Copyright 2009. Yankee Group Research, Inc. All rights reserved. October 200923
The building blocks that enable wider economy services
Net
wor
k& IT
Ass
ets
Org
aniz
atio
nA
sset
s
VOICE
VIDEO
BILLING
ACTIVATION
Telco Assets
…
DIRECT SALES
CUSTOMER SUPPORT
…
CONS
UMER
SEN
TERP
RISE
S
TELC
O SE
RVIC
ES
RETAIL
$
$
UTILITIES
UTILITIES
INSURANCE
GOV’T
TRANSPORT
…
WHOLESALEDirect Sales Force
Single-sign on
Retail Shops
Billing
Call routing
Messaging
Marketing support
DSL/Fiber
Telematics
M2M
Collaboration tools
Content management & storage
Policy management
Video deliveryVideo storage
2G/3G/4G
Presence
Device management
Location
M-payments
Customer Trust
Indirect Distribution
Brand image
…
© Copyright 2009. Yankee Group Research, Inc. All rights reserved. October 200924
IBM’s solution strategy is aligned with the needs of telecommunication stakeholders
TELECOMMUNICATIONS PRIORITIES ARE . . . IBM IS INVESTING IN . . .
Enabling new business models.
Differentiating the customer experience.
Best practices helping develop and implement new business modelsGlobal outsourcing capabilities to fund innovative business approachesWorld-class service delivery platform based on SOA to accelerate service creation and deliveryR&D and Telecommunications Centers of Excellence to bring pioneering technologies to clients Global financing to support innovation and change
Analytics to reveal customer insights for better targeted services Churn-management and real-time campaign management solutionsLeadership in security and identity managementCustomer experience, service quality and service level agreement solutions End-to-end customer product catalog and master data management
Improving operational efficiencies.
Modernization and optimization of legacy systems Business, OSS/BSS integrations, process efficiencies & transformationsOpen, standards-based, integrated environments and processesApplication management and outsourcingCustomer Care and Billing efficiencies
Source: IBM
© Copyright 2009. Yankee Group Research, Inc. All rights reserved. October 200925
Final Word
Telcos are under tremendous pressure to transform their business or face disintermediation.
Telcos own or control valuable assets that they can use for wider economy services.
Pursuing these opportunities in the adjacent spaces require a commitment to openness and partner ecosystem development:
– Opportunities need to be viewed in aggregate – not in silos.
– Telcos will need to rely on their strategic partners more than ever.
This transformation requires a fundamental rethink of a Telco’s strategy, organization and network.
© Copyright 2009. Yankee Group Research, Inc. All rights reserved. October 200926
Next Steps
IBM and Yankee Group will be delivering three more webinars in the coming months, each of which focused on a specific vertical such as Healthcare, Smart Meters, and Transportation.
Final webinar will examine the implications for Telcos in terms of strategy, organization and network & IT investment.
Thank you
October 20, 2009