bt\'s market view

$: BT\'s market view$
BT’s market view

Benedicte HenneboHead of MarketingBT Global Services, Middle East

and North Africa

HULT Intl, 23rd July 2009

£21,4bn Revenue £2.9bn Profit 111,858 people

Sir Michael RakeBT GroupChairman

BT Global Services

Hanif LalaniCEO

41%

BT Wholesale

Sally DavisCEO

16%

BT Retail

Gavin PattersonCEO

38% 5%

Openreach

Steve Robertson CEO

Al-noor Ramji CEO & Group CIO

BT Design

Matt Bross Group CTO

BT Innovate

BT Group

Ian Livingsto

ne BT Group

CEO

Group Operations & Strategy

Roel LouwhoffCEO

BT Operate

BT Group

BT Global ServicesUK

Professional Services experts: 3,000

UK12,600 employees2,500 major customers 9,000 connections

North America2,600 employees3,500 customers8,000 connections

Asia Pac

Professional Services experts: 2,000

Asia Pac4,750 employees650 customers11,000 connections

EMEA

Professional Servicesexperts: 3,000

US

Professional Servicesexperts: 2,000

MEA250 employees600 customers3,000 connections

Western Europe8,300 employees6,700 major customers46,000 connections

CEE/Russia400 employees350 customers3,000 connections

Latin America1,000 employees500 major customers2,000 connections

BTGS serves 8,500 major multi-site

customers worldwide

If a picture is worth 1000 words…

Recession?

World GDP and World Trade %YoY growth forecast

-10-8-6-4-202468

1012

2004 2005 2006 2007 2008 2009 2010 2011 2012 2013

Trade in goods World GDP

World economy in deep recession

Source: EIU, May 2009

Economy

World economy recovery is not expected until 2010

The recovery will be slow, and growth take longer to return

However, some leading indicators point to the fact that economy is approaching the bottom of the cycle, e.g.:

Global Stock Market mini rally starts in March 2009, oil price moves higher

OECD report (published in May 2009): Index of composite leading indicators for major economies indicates that some of them may have now reached the through of the economic cycle

The above signs are still tentative

2009 will be the first year after WWII that the global economy will decline

World trade is expected to decline by 8.2% in 2009, as a result of the recession

“Don’t waste the crisis”

Source: EIU, 30 May 2009

Forecast GDP growth for selected countries (%)

ItalyBelgium

UKFrance

Hong Kong

India China

Spain Nether-lands

Russia

USA

GermanySouth Korea

Japan

Canada Brazil

-8

-6

-4

-2

0

2

4

6

82009 2010

Economy

EU

BRICs

Developed Asia

North America

Developed countries: In recession in 2009 and they will see little growth in 2010. USA and Canada will be the first to see the recovery.

BRIC countries: mixed picture for 2009, all BRICs are expected to grow in 2010, India and China continue with strong growth throughout the recession

The shifting power equation

-3.7% GDP estimated

growth 2009

4.8% GDP estimated

growth 2009

$1.4bn raised in IPOs last

quarter

21 million page views per month

3.8 billion page views per month

6.7 million eBay listings

added per day

Sovereign wealth funds $3.22 trillion

60 days+ to build a

datacentre

West East

Publiclisting

SovereignWealth Funds

Corporate Community

Infrastructure Customer

8

Crisis: unleash your innovation

1948/91st Post war Recession

Cellphone, Transistor

1958GDP depression

Lazer

70’s Graphic User InterfaceEthernet, TCP/IP, DNA recombination

80’s PC, Walkman,…

.com bubble Google, YouTube…

Innovation

Don’t waste the crisis

Companies

Useable Business Intelligence Virtualisation end user in

charge Mobility, always on Social Computing, everyone

is an information source UCC, your colleague is one

click away

Technology

Outsourcing/hosting/managed services continues to be very relevant

Federated approach to IT. Global players Leverage green IT capabilities as customers look to be ‘Lean

and Green’ Provide them top class service to end customer. Customer

dictates the market

Business Opportunities / Implications

Severe economic downturn Stalled globalisation Increased Gov. intervention and

regulatory burdens Increase in protectionism and

nationalism Continued importance of green

and CSR issues

Regulatory, political & economic

Increasing competitive rivalry some providers are chasing smaller but more profitable deals

Keeping the customer is key, sometimes to the price of margin

M&A activity has expectedly cooled in 2009

Competition

How does this impact the marketplace?

Most companies are trying to survive, contain costs and/or improve operational efficiency

Short term demonstrable ROI is a pre-requisite for CAPEX investment

Focus on core business activities/disposal of non-core

Sector view

Finance

Impact of the crisis on

companies:

survival modecost cuttingoperational efficiency

low impactbenefiting

Oil & Gas

Retail

Government

Utilities

Packaged goods

Manufacturing/Automotive

Pharmaceutical

New Regulatory Burden

CEO Priorities

Source: Gartner CEO Concerns 2009: Dealing With the Downturn, March 2009

CEO Priorities for 2009

Restructuring Write-offs Loss of Business Trust

Globalisation InstabilityGreen issues

80-20 ratio: Spend less on internal IT issues and more on external, customer-facing projects

Capture and communicate the business value of IT efforts and expenses on global projects

Shifting the internal outlooks of worldwide IT organisations to reflect global perspectives rather than domestic ones

CIO Priorities

Sources: Global CIO Survey, Information Week, May 2009, Goldman Sachs Global CIO Survey, March 2009

CIO Priorities for 2009

Reducing overall IT function costs

by

Reducing facilities costs, including through energy efficiency initiatives

Increasing off-shoring where possible

Exploring cost saving benefits of cloud computing, e.g. SaaS

Rationalisation of software purchasing, vendor standardisation

Reducing staff, scaling back projects, delaying purchases

Network is the intelligent enabler Strategies:

Business Process:

Applications:

Infrastructure:

Highly-interfaced applications automate and standardise information-intensive business processes

Complex transactions unique to the enterprise

Growth, profitability and efficiency

•Performance

•Availability

•Scalability

•Security

Must be able to support requirements for:

The network becomes an intelligent enabler of strategies, processes and applicationsBest practice

21 CN global networked services platform

Single BT Global Contract

Converged Service Management

£857m Open Innovation

21 CN global networked services solutions

iVPN, SOI Platform, Virtualisation, SaaS & Re-usable Capabilities

21 CN global networked services benefits

Securely connects global operations

Enables efficient globalisation

Provides foundation for global

collaboration

Strengthens operational risk

profile

Enables technology renewal and

transformation

Provides access to open innovation

• Reduced operational costs

• Improved enterprise performance

• Service delivery transformation (CRM)

• Securely. Resiliently with minimum risk

Transition

Transformation

Innovation

A consistent and proven methodology

Impacting the bottom line

Existing barriers to effective communication

Sources: Sage Research

At least Monthly 35%

…results in lost time, delays and missed deadlines

Daily 52%

…have to use multiple methods of reaching coworkers…

Up to 6 types of devices

Communication devices and apps proliferating…

47% travel at least once per month

employeesincreasingly mobile…

Communication today and tomorrow

Unified communications link communication and

collaboration technologies to improve and accelerate

business processes

What is Unified Communications?

Squeeze the lemon: Travel banGartner’s CIO priorities survey 2009,

1. Business Process Improvement2. Reducing Enterprise Cost

ICT is seen as a major tool for improving business processes and operational efficiencyTelepresence at Southbank Symphonia

Just 36% of organisations have a single view of the customer across their multiple channels/systems4

Multiple systems

Only 40% of contact centres advisors haveprevious experience3

Different levels of agent skills& knowledge

41% of organisations don’t record channel preference1

Multiple Communication Channels Multiple sites

56% of contact centres have more than one operational site

Contact centre

Cherish your customer: “Fragvergence”

Getting things right presents opportunities

ICT Spend is focused on customer-centric activities

Customerexperience

Sources: 1 Datamonitor 2 & 3 Contact Babel 6 4 Dimension data

Smart Customer InteractionsExtracting maximum potential from today’s complex contact centres

Sustainability is a key road to profitable growth

BT is able to deliver sustainable business through its Networked

IT portfolio

While the sector (ICT) plans to significantly step up the energy efficiency of its products and services, ICT’s largest influence will be by enabling energy efficiencies in other sectors, an opportunity that could deliver carbon savings five times larger than the total emissions from the entire ICT sector in 2020

Smart 2020: Enabling the low carbon economy in the information age

Enterprise green IT services spending will grow by 60% annually to reach $4.8 billion in 2013.

From Web 1.0 to Web 2.0 to Web 3.0

Source: Social Media Bootcamp by Akanksha Goel

The importance of new media

Iranian elections

Corporate usage of social media

Source: Technorati

The new marketing rules

Source: Social Media Bootcamp by Akanksha Goel

Key Emerging Technologies for 2009Emerging Technologies

Source: Gartner, Forrester, Morgan Stanley

Technologies rated as the key and emerging by most technology analysts:

Machine to Machine (M2M)

User Interfaces

Crowdsourcing

Semantic Web

Augmented Reality

Given the weak economic scenario most organisations are currently focusing on cost reduction. For many short term ROI is a pre-requisite for IT

investment. In 2009, technologies like Unified Communications, Telepresence, SaaS, Outsourcing that help organisations reduce

costs and capex will experience growth, while spending on SOA, Enterprise Mash-ups, Virtualisation are expected to be delayed

Cloud Computing

SaaS

Virtualization (Desktop, Server)

Green IT

Social Computing

Unified communications

Mash-ups and Enterprise portals

Business Intelligence

Mobility – Mobile apps and Internet

Web Oriented Architecture

Disruptive technologies that radically transform

markets, create wholly new markets or destroy

existing markets for other technologies

Source: Analyst & Industry Reporting

More Info?

[email protected]

Thank You

Appendixes

Total size of the business market for ICT in 2009

North America$809.3bn

YOY Growth in 2010 = 1.2%CAGR 2007-12 = 2.5%

North America is the largest market but it experiencing the second lowest

growth due to economic pressure

Latin America$115.4bn


Mexico is the largest market in terms of size in Latin America

followed by Argentina

Western Europe$597.7bn


The UK is by far the largest market but economic pressure has meant that WE has the lowest YoY growth and CAGR

Asia Pacific$485bn


Japan is by far the largest market in the Asia-Pac Region followed by Korea which

is less than half the size of Japan

Middle East & Africa$81bn


Turkey represents the largest market in this region followed by the UAE

Russia, Central & Eastern Europe$69.3bn

YOY Growth in 2010 2.2%CAGR 2007-12 = 7.4%

The smallest regional market but RC&EE has the largest CAGR

The worldwide ICT market in 2009 in worth US$2.2tr and is expected to grow YoY (2010) by 1.6% with a 2007-12 CAGR of 3.3%

The severity of global economic pressures are impacting on the regions at different levels with North America and Western Europe seeing the brunt of the economic

downturn with many countries in recession.Source: BTGS Market Sizing Team May 2009 (figures rounded to the nearest 0.1 of a billion/percentage point)

NB: Market size is indicative of the total business market

Market Data

Worldwide IT outsourcing contracts analysis

2007 to 2008 YoY Growth

Total Contract

Value

Average Contract

Value

Run Rate

Average Contract Length

Number of Deals

Worldwide (all sectors) -17% -13% -9% -3% -4%

Commercial (only) -9% -2% 2% -7% -7%

Commercial (global scope)

22% 2% 5% -5% 19%

Source: IDC, May 2009

Analysis based on IDC’s IT contracts database on deals >$10m

60

7864

7895

104112

169

138

115

90

-29%

-17%-19%

30%

15%23% 21%

10% 8%

50%

0

50

100

150

200

19981999200020012002200320042005200620072008

(US

$B

)

-40%

-20%

0%

20%

40%

60%

TCV - Worldwide Y/Y Growth Rate

Worldwide TCV and growth rates – 11 year view

Worldwide TCV ($10M+ deals) reached $115B, resulting in a decline of 17% in 2008, though levels are still higher than all years previous to 2005.$10M+ deals declined in TCV and across all metrics due to the economic downturn and deferring of contracts.Large decline in TCV and small decline in number deals indicates customer preference for smaller deals.Rise in the number/value of deals with global scope as global enterprises look to generate savings via a federated IT approach.Average TCV in Government has fallen by 30% from 2007 to 2008. Mega deals numbers fallen from 38 in 2007 to 11 in 2008.

Outsourcing Deal Analysis

Outsourcing Deals in 2008 - EMEA

Help desk and/or support services were in highest demand in 2008

Source: Forrester, March 2009

Source: Forrester, March 2009

Forrester tracked 341 deals (>€10m) in 2008Overall spending significantly down.Preference for smaller, shorter deals increases resulting in decline in number of mega deals (3 in 2008 down from 7 in 2007) Q408 saw a dramatic increase signed deals from 59 in Q308 to 92 in Q408.UK firms continue to lead outsourcing in EMEA followed by Germany and the Netherlands.Finance saw the largest YoY drop in spending (over $6bn)Manufacturing enterprises spent the most money while Government and the public sector closed the most deals.51% of deals in government were for less than €20m (35% and 33% in finance and manufacturing. respectively).

Outsourcing Deal Analysis

Source: IMF, Reuters; industry reporting

Key Trends ImplicationsPositive/ Negativ

ePotential Head

-line Props

Severe Global Economic Recession

Under the scenario, ICT projects with longer pay-back period are likely to be deferred in most industries, impacting growth rate of the overall ICT market negatively. ICT trend in emerging countries is likely to face significant downward pressure. The abrupt change in scenario will negatively impact on ICT opportunities.

Improve Operational Efficiency IP/IT, Make Contact Centres Efficient

Focus on Operational Efficiency and Cost Reduction

Technology leaders are faced with the challenge of trimming the fat out of their budgets. Gartner’s CIO survey on their top10 business priorities for 2009, 'Business Process Improvement' and 'Reducing Enterprise Cost' ranked 1st and 2nd respectively. ICT is seen as a major tool for improving business processes and operational efficiency; the focus is most likely to contribute positively to the ICT market revenues

Improve Operational Efficiency IP/IT

Stalled Global-isation

For the first time in decades, growth in world trade will lag behind growth in world GDP. This implies that the share of trade in world GDP will decline - a poignant illustration of ‘stalled globalisation’. Globalisation is a major driver of ICT needs, especially connectivity and integration, in the enterprise world; stagnation in the activity is likely to inject passivity in the market

Improve Operational Efficiency IP/IT, Optimise Network Centric Security

Downtrend in M&A Activity

So far this year, the merger volumes in Americas, Europe, Asia Pacific and Japan have declined by 30%, 47%, 34% and 11% respectively. M&A is a major driver of ICT needs, especially connectivity and integration needs; the downtrend in the activity comes as a major offsetting factor from the global ICT opportunity standpoint.

Improve Operational Efficiency IP/IT, Unify Comms

Trends driving the ICT demand (1/3)Market Trends

Key Trends Implications Positive/ Negative

Potential Headline Propositions

Increasing Adoption of Social Computing

Through 2010, the adoption of social computing software in IT operations will increase by 100%. Social computing comes as a major driver for connectivity and integration needs in the enterprise world. The growth in its trend should contribute to increase the overall ICT market revenues markedly.

Unify Comms, and Improve Operational Efficiency IP/IT

Increasing Interest in Green IT

More often than not disguised as cost reduction in the current economic climate. Enterprise green IT services spending will grow by 60% annually to reach $4.8 billion in 2013. Green IT is a driver of enterprise ICT needs, acceleration in its demand is going to strengthen it further.

Unify Comms, and Improve Operational Efficiency IP/IT

Increased Focus on Compliance Management

Process and technology strategies in 2009 will focus on risk standardisation, increasing oversight, performance and risk management coordination, evolving expectations of corporate responsibility and big shifts in governance, risk, and compliance (GRC) technologies. Increasing focus on compliance management should impact the overall ICT market positively.

Unify Comms, Improve Operational Efficiency IT and Optimise Network Centric Security

Virtualising the Enterprise

Virtualisation remains a high priority for CIOs as they look to increase the capacity and reduce the cost. Benefits of virtualisation are being increasingly recognised in the enterprise world. The market is expected to experience good growth in the next few years, representing an opportunity enhancing trend for the overall ICT market.

Improve Operational Efficiency IP/IT and Optimise Network Centric Security

Trends driving the ICT demand(2/3)

Source: Gartner; Forrester; industry reporting

Market Trends

Key Trends ImplicationsPositive/ Negativ

ePotential Headline

Propositions

Interest in Offshoring and Outsourcing Continues

Outsourcing will continue to grow in 2009 despite economic slowdown. Although things look gloomy for the larger global economy, the outsourcing market represents a dichotomy: on the downside, organisations' cost-cutting outsourcing strategies may negatively impact market growth, but at the same time, the upside is that outsourcing will be adopted by more organisations to help them work through financial and competitive challenges.

Improve Operational Efficiency IP/IT, Unify Comms, Work Anywhere and Optimise Network Centric Security

Mobility Continues to be a Top Priority

Mobility is a top priority for enterprises and will continue to place a high priority on mobility initiatives primarily for productivity increases, with mobility activities heating up in emerging markets. Increase in demand for mobility solutions would have positive impact on overall ICT market.

Work Anywhere and Improve Operational Efficiency IP/IT

Collaboration Vibrant

The tough economy is forcing companies to restrict travel while keeping distributed teams in touch. Changes in the composition of the workforce mean enterprises must capture the knowledge of retiring Baby Boomers and provide Gen Yers with their favored tools to work efficiently. These trends have created opportunities for collaboration vendors within global and multi-national enterprises.

Unify Comms and Improve Operational Efficiency IP

Anywhere IT/Cloud Computing Advances

During the next few years, cloud computing will advance further to underpin Anywhere IT as four distinct “clouds”—the enterprise cloud, software as a service (SaaS), platform as a service (PaaS) and infrastructure as a service (IaaS). Growth in “Anywhere IT” market comes as a major positive trend from the ICT opportunity standpoint.

Unify Comms and Improve Operational Efficiency IP

Trends driving the ICT demand (3/3)

Source: Gartner; Forrester, Yankee; industry reporting

Market Trends

Sector Trends

CPG Increasing importance of emerging markets Recession leads to lower disposable income for consumers which leads to declining brand loyalty and increasing price pressures

Oil & Gas Lower oil price results to capex reduction New exploration and production is having

low return. Companies will invest in IT that will enable them to explore difficult oil fields more effectively

M&A activity will result to some mid-size players being acquired by larger, stronger competitors

Government Government spending results in large

deficits, which will bring budget cuts in future years

Drive to improve efficiencies

Utilities Energy efficiency becomes a priority Opportunities to invest in innovative

projects such as intelligent grid, carbon management, smart metering

Sector trends

Manufacturing Focus on improving supply chain Manufacturing activity is low

Retail Lower demand results to capex reductions Retailers scale back expansion plans

Finance Need to improve risk management M&A: players that find themselves in a strong position will act as consolidators Customer acquisition and retention Business intelligence seen as key to success

Analyst predictions – business focus (1/2)Predictions

IDC predicts global IT spending growth to slow to

2.6% (half of 2008's 5% growth rate). The slower

growth will effectively strip out $35 billion of potential

growth in 2009 and will take three years for IT to return to 2008 growth rates. As a result of this poor growth

environment, it will be critically important for

suppliers to look below the surface and more quickly and decisively orient their

businesses toward customer segments that are spending

at above-market growth rates, and toward offerings

with benefits that are magnified in a down

market.

Whether the economy is running low or high,

finding qualified people remains a full-time pursuit. When it comes to the types of

expertise they will seek in the future,

CIOs expect to increase expertise in information design, business process

design, and relationships and sourcing, while decreasing their

expertise in technology

infrastructure and services.

Growth opportunities for telecom services in mature economies can come only from a wide

range of advanced digital services. In emerging markets,

carriers need to innovate to face competition and

support advanced users, but they can

only invest marginally in the more advanced

services needed in mature economies. Services will include mobile messaging

m/presence, advertising,

information services, video and

identification.

Global growth will be cut in half and take three years

to come back

Through 2012, business demand

for IT-driven growth and

innovation will outstrip the supply of qualified people

to fulfil it.

Through 2012, truly global companies

offering communications and cloud computing will show more revenue growth than their peers not offering these services.

Source: Gartner Forrester, IDC and Industry Reporting

Analyst predictions – business focus (2/2)Predictions

Outsourcers will look to make strategic

investments, part of which will be acquiring (or merging with) other

services firms with the goal of achieving the

extension of capabilities, ensuring scalability for growth, pursuing more

strategic investments for long-term growth and

competitive advantage. IDC believes that with the economic downturn, the

services industry will enter a new phase of

restructuring over the coming years, with these

host-based models becoming a more focused

option for meeting customer outsourcing

needs.

In the last decade, Indian service providers and traditional service providers have been

competing in the market while focusing on filling their respective delivery

gaps. As Indian providers seek new

revenue growth opportunities, the

potential for acquiring an indigenous European service provider versus organic growth presents a favourable option in terms of speed, access

to an existing client base, local country

presence, and optimizing

complementary strengths.

The capital crisis will further exacerbate consolidation in the

telecom sector, stimulating more

mergers in all regions. Telcos will expand

aggressively into cloud services. The emerging cloud services delivery

model presents a once-in-a-generation opportunity for the telecom industry to

accelerate what they've attempted do

for decades with limited success:

diversify into broader business and

consumer value-added services

Outsourcing services market to consolidate

and restructure

By 2011 a large Indian service

provider will buy a large European

service provider.

The telecom industry will

consolidate, and expand, in 2009


Analyst predictions – technology focus (1/2)Predictions

The purpose of UC is to expand the scope of

traditional coms possibilities. IDC believe UC will change

the way companies do business internally and

externally, and ultimately the coms culture of

companies. This means that UC will shape enterprise coms, infrastructure, and related services for many years to come. The impact

will be seen in the changing nature of enterprise

telephony (with software becoming more dominant),

business applications, enterprise mobility, and in consulting, integration, and

managed services.

As part of outsourcing engagements, customers will

increasingly look toward new

technologies (e.g., virtualization, Web

services, and unified communications) and service models (e.g.,

SaaS, cloud/utility computing, hosting, and homeshoring) to support customers' need to drive down

costs as well as improve quality of

service and operational capabilities.

Most organizations are already using, piloting

or investigating at least some social software

such as social networking tools, wikis.

Although awareness, interest and willingness

to deploy social software will continue to increase, several factors

will prevent large organizations from

investing in broad pre-integrated suites of

social software functionality for use by

all their employees such as uncertainties about

business benefits

Unified communications will change the

way companies do business

Acceleration in offering new

technologies and new delivery

options as part of outsourcing

engagements

By 2012 more than 30% of large organizations will have deployments of social software suites available to

all their employees


Analyst predictions – technology focus (2/2)Predictions

According to IDC's 2008 European WAN Manager

survey, the overall number of companies

that expect to be using legacy data network services at the end of

2009 is, unsurprisingly, down on 2008. The

number of companies expecting to use carrier Ethernet services is 15% higher, making Ethernet the only service to see

any significant increase in customer numbers.

Awareness initiatives by the MEF and individual providers will further

highlight the attractiveness of Ethernet

services in 2009.

With the global economy on hold,

enterprises are seeking to maximize

efficiency, reduce capital spending,

rationalize assets and infrastructure, and control opex. In the

datacenter, this translates into a

continued increase in the use of blade

servers, looking for energy efficiency

gains, higher utilization rates,

datacenter consolidation, and

greater use of third-party datacenters in

the form of collocation.

Virtualization is becoming standard on

x86 servers in the datacenter, and will be accelerated further by the current economic

situation, as companies seek

efficiencies improvements. The emergence of cloud computing will up

datacenter requirements from both enterprise and

service provider customers and will, again, be stimulated by the credit crisis; in

absolute size, however, it will remain

a small part of the market in 2009.

Ethernet will be the rising star in data services in

2009

Datacenter Providers Will

Have a Good 2009

Virtualization and Cloud Computing in the Datacenter

Market


Key Emerging Technologies for 2009

Cloud Computing – Moving IT delivery into the cloud. The efficiency, scalability, and cost savings make cloud computing something that businesses must consider, especially with 2009 set to be another slow year for the economy.

Drivers/ Issues & Challenges – Cost, built-in elasticity and scalability are potential benefits. However, customers are confused about what it actually can do for them.

Implications for BT - Leverage partnerships with VMware software, vCloud Initiative to deliver enterprise-class cloud computing

Virtualisation - Virtualisation impact on the overall IT industry has been dramatic and will continue to be the most change-driving catalyst for infrastructure and operations software through 2013.

Drivers/ Issues & Challenges - Boosts IT productivity and expedites server setting-up, accelerates time to provision end-user PCs and upgrade cycles of desktop OS.

Implications for BT - Use BT as case study to demonstrate virtualisation in action

Emerging Technologies

Software as a Service – SaaS is forecast to have a 19.4% CAGR through 2013 for the enterprise application market, more than triple the total market CAGR.

Drivers/ Issues & Challenges – Lower initial TCO, upgrade and switching costs. Faster implementation. TCO could turn out to be more expensive in the long run.

Implications for BT - Leverage the power of its 21CN SOI platform that delivers SaaS to further reduce costs, meet business demand and to tap the growth in the market

Context Aware Computing - Conditions will develop in 2009 through 2012 that will lead to mainstream adoption of context-aware computing using location, presence, social computing and search-based to enhance context enriched services.

Drivers/ Issues & Challenges - Enhances computing user experience using and Increased set of sensor-based inputs.

Implications for BT - BT with significant collaboration and SI capabilities can take advantage of the growth in the technology


Key Emerging Technologies for 2009

Green IT – Forrester forecasts very healthy growth of 60% CAGR for Green IT market, peaking at $4.8 billion in worldwide user spending in 2013. In 2009 many Green IT initiatives will be disguised as cost reduction.

Drivers/ Issues & Challenges – Cost efficiencies, Government stimulus packages and strengthen the brand/goodwill.

Implications for BT – promote BT green credentials and Market virtualization, UC and collaboration tools to meet Green IT objectives of customers.

Business Intelligence – BI remains the top technology priority in Gartner’s 2009 CIO survey, mirroring CIO’s focus on business process improvement.

Drivers/ Issues & Challenges - The events that led up to the global economic recession call for greater transparency and financial disclosure, thus regulatory reforms will drive the adoption of interactive BI tools

Implications for BT - Successful implementation requires secure, efficient and application aware networks to support the applications, playing to BT’s core strengths


Social Computing – By 2012 more than 30% of large organisations will have deployments of social software suites available to all their employees.

Drivers/ Issues & Challenges – Inexpensive set of tools to support collaboration and customer relationships but difficult to calculate ROI

Implications for BT - Unified communications and collaboration services offered by BT can help organizations meet their social computing needs by building user-center communication applications.

Unified Communications - Enterprise spending on UC is displacing spending on best-of-breed stand-alone communications, in both the premises-based, and hosted services market domains.

Drivers/ Issues & Challenges - Improved business results, decrease process cycle time by significantly reducing human latency

Implications for BT - Provide interoperability and deep integration of the communications, mgt and reporting functions with product partners in order to differentiate.


Disruptive Technologies

Crowdsourcing – Proving to be a disruptive model that can displace antiquated business practices by utilizing the power of communities.

With the advancements in crowdsourcing, innovators need not sit in the same building or campus, and companies can move innovation activities to anywhere in the world. Thus, lot of innovation projects are expected to move to India and China in near future

BTGS could look at use of crowdsourcing as a tool for innovation within its business model, products and services

Semantic Web – Over the next decade, Web 3.0 will spawn multi-billion dollar technology markets that will drive trillion dollar global economic expansions to transform industries as well as our experience of the internet, Ovum, Jan 2009.

Semantic Web should benefit BTGS by enhancing the business driver for efficient and reliable networking environment


User Interfaces – According to Gartner, within the next five years, information would be presented via new user interfaces such as organic light-emitting displays, digital paper and billboards, holographic and 3D imaging and smart fabric

By YE12, 20% of non-video Internet traffic will be data-derived from a rapidly growing number of sensor-based inputs, Gartner, Feb 2009

Using its BT Balance technology it can tap the boom in the new motion sensitive user interface market.

Machine to Machine - The M2M market has been poised for strong growth, which has partly materialized, but not to the expected degree

Berg Insight estimates there were 14.1 million machines connected to mobile networks in Europe at the end of 2008, up by 34.2% from in 2007, and it expects its to rise to 58.6 million by 2013

Increased adoption of M2M technology would act as a business driver for networking and system integration services.


bt\'s market view

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