cloud asia overview

The role of telecom operators in developing

profitable customer-centric cloud services

Camille Mendler

[email protected]

Informa Telecoms & Media

Cloud Asia

May 2013

mailto:[email protected]

Services from…

Cloud means a new role for many

2

Enterprises

Web

I/MSP / hosterTelcos

Software

Devices

GovernmentsCloud vending machine

Hardware

Everyone is becoming a cloud supplier!May 2013

© Informa UK Ltd. All rights reserved.

www.informatandm.com

Integrators

Telcos aim to win a bigger slice of the ICT pie

3May 2013



The ICT expenditure ‘pie’

Maintenance & support services

80% of ICT budget can migrate to network-powered clouds.

Networking & PBX equipment

Wireless communications

Fixed voice & data

Hosting & appsservicesStaff / admin

(on payroll, training)

Cloud is reinvigorating old telco norms

4

Connected ‘things’ converse via the cloud.May 2013



There is a telco gold rush to offer cloud services

5May 2013



Asia Pacific49

Eastern Europe& CIS39

Western Europe63

Africa10

Middle East13

Latin America & Caribbean20

North America23

ImplicationToday more than 220 telecom operators offer at least one cloud service. Asian operators like KT, NTT and Singtel entered the cloud market early and are a leading force.

CSPs* active

*CSP: Communication service provider including integrated, fixed, cable, mobile operators

Source: Informa Telecoms & Media

Telecom operators are driving a datacenter boom

6

Globally, telecom operators have over 800,000m2 under construction*

x 110 x 3

*Operators datacenter projects announced since 2010. Source: Informa Telecom Cloud Monitor

Old Trafford Bird’s Nest

More than half of this construction is happening across Asia.

May 2013



Example: China - some like it Hohhot

The Inner Mongolian city of Hohhot is receiving US$8 billion in cloud-related investment – chiefly from telecom operators.

$1.8B $1.9B $1.8B

Picture: Flickr/Civitas Veritas

7May 2013



0 50 100 150 200 250 300

2009

2010

2011

2012

Number of service launches

CSP cloud service launches by customer segment

Consumer

SME

Enterprise

Public sector

Multiple segments

8May 2013



Implication

More attention on consumer cloud (often freemium storage to tie in broadband subs), but also focus on mid-market enterprises with SaaS and IaaS.

Source: Informa Telecoms & MediaNote: Includes service upgrades

Telcos are launching more cloud services

IaaS and UC&C are the primary focus areas

9May 2013



IaaS20%

Unified comms & collaboration

19%

Storage, backup14%

Departmental apps8%

Security7%

Professional services

6%

Saas marketplace4%

Vertical apps6%

Mobile device mgmt

3%

IT management

3%

Generic business apps3%

Other7%

2012: Cloud services launched by CSPs

n=298 servicesSource: Informa Telecoms & Media

Surge in

public cloud

launches

Cheap Expensive

Telcos versus AWS? Please KISS* my IaaS*Keep it simple stupid

10May 2013



ImplicationThe devil is in the details – and price is NOT the main issue. Ability to compare contracts for supposedly commoditized services still a challenge. Telcos are no better than non telcos.

0.04 0.050.07

0.09

0.12

0.150.14

0.100.08

0.15 0.14

0.07

0.19

0.00

0.05

0.10

0.15

0.20

North America

Asia Pacific Western Europe

Africa Latin America Eastern Europe & CIS

Middle East

US cents

Public cloud servicesLowest cost per hour (US cents)

Non-Telco Telco

Base: 34 cloud service providers (telcos and non-telcos) across 24 countries.Source: Informa Telecoms & Media, CSP@IaaS Pricing Benchmark.

Who is disclosing revenues? Some examples

Telecom operator ‘Cloud-related’ revenues Notes

NTT Communications US$1.1 billion FY2012, for cloud computing ‘platforms’ – eg: includes hosting

China Telecom US$665 million For all datacenter/cloud services

T-Systems / Deutsche Telekom (Germany)

US$523 million Targeting US$1.3 billion by 2015

Interoute (UK) US$270 million Claims 55% of revenues from cloud-based services

Orange Business Services (France)

US$146 million Target is US$650 million by 2015 (which it believes it will easily hit)

Rostelecom (Russia) US$100 million Expected 2012; boost from G-cloud project

ImplicationAcquisitions have helped telcos stake a position in the cloud market. Buying systems integrators and datacenter / hosting firms is a key tactic.

11May 2013



Source: Informa Telecoms & Media

Many telcos are becoming cloud service brokers

12May 2013



ImplicationMost telcos’ cloud offers are designed for a generic white-collar employee working in a fixed office. This excludes many enterprises whose employees work outside traditional contexts.

*Percentage of telcos with one or more business SaaS offer in this category. Base: 51 telcos, 1018 SaaS offers.Source: Informa Telecoms & Media, CSP@SaaS Pricing Benchmark.

Cloud service brokerage: Telco strategiesThe Catalog Model

Typically:

• Assumes cloud buyers will pick and mix services

• Assumes a level of technical expertise and comfort with the cloud model

• Often assumes self serve, credit card purchase, may not be integrated on the company’s telco bill

• Telco voice / data propositions kept separate – and often managed by separate team

Example: Chungwha (Taiwan)

13May 2013



ImplicationThe most common approach currently in use among telcos. An online marketplace where SMEs are supposed to come to buy.

Cloud service brokerage: Telco strategiesThe Clustering Model

Typically:

• Provides a simple cluster of services that certain types of SMEs may use

• Focus on SaaS – again – broadband / voice is un-integrated (often assumption that this is upsell for existing customers)

• Some services ‘exclusive’ to existing customers

• Limited discounting on buying a cluster (same pricing if bought individually)

Example: Orange (France)

14May 2013



ImplicationSome telcos are now exploring this more verticalized approach – which Informa believes can build greater differentiation and retention.

Cloud service brokerage: Telco strategiesThe Vertical Model

Typically:

• Fully integrated value proposition to a targeted SME mass vertical

• Aims to capture a high percentage of total ICT expenditure

• Mobile (and fixed) voice / data / application bundle addressing main business processes

• Elements can be unbundled

• Cloud + M2M (after all, a cloud service)

• In this case, a challenger strategy

Example: Maxis (Malaysia)

15May 2013



ImplicationStill rare, but an opportunity for telcos to build more focused ICT bundles – if their structural and operational processes allow it.

16Mars 2013



• Telcos may all look alike, but they’re not• Judge them by what they can prove: certifications, processes, customer service commitments and bundles - not just how big they are

• Don’t get caught in the race to the bottom• Pay peanuts, get monkeys

• Demand end-to-end cloud service accountability• But be prepared to recompense those who can provide it

Takeaways

17

For more information:

Camille MendlerPrincipal [email protected]+44 77 66 13 15 28Twitter | Slideshare | Blog

mailto:[email protected]

http://twitter.com/cmendler

http://www.slideshare.net/camillem

http://blogs.informatandm.com/author/mendlerc/

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