TADSummit building a serivce innovation ecosystem - mac taylor - Huawei
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The document discusses the urgent need for telecom operators to innovate in response to disruptive trends and market changes that threaten their revenues, notably a projected $100 billion gap by 2018. It emphasizes the importance of building a service innovation ecosystem, leveraging API-enabled services, and establishing flexible business models to remain competitive against web-based service providers. Case studies illustrate the challenges and opportunities in launching innovative digital services while highlighting Huawei's role in enabling operators to compete globally.
TADSummit building a serivce innovation ecosystem - mac taylor - Huawei
- 1. Building a Service Innovation Ecosystem Learning from Experience HUAWEI TECHNOLOGIES CO., LTD.
- 2. 2 Industry Trends and Disruptions 3 4 Case Studies – Real Commercial Service Innovation Operator Pain Points – How to get out of the box Huawei Operation and Aggregation 1 HUAWEI TECHNOLOGIES CO., LTD. Huawei proprietary. No spread without permission. Page 2
- 3. 01 Disruptive Trends Market Changes Business Changes Page 3 HUAWEI TECHNOLOGIES CO., LTD.
- 4. Core Telecom Trends Commoditization of Message and Voice. $100B revenue gap by 2018 ITization / IPization of Telecoms (Cloud, Virtualization, Page 4 HUAWEI TECHNOLOGIES CO., LTD. SDN, Free and Open Source Software, any IP device) Opex savings of 20% by 2018 being demanded by Telcos Global scale and a global ecosystem, with adaptation to local market needs. Essential to be competitive against web-based service providers. Focus on lean and agile.
- 5. What this means for Telecom Operators Commoditization of Message and Voice. $100B revenue gap by 2018 ITization / IPization of Telecoms (Cloud, Virtualization, SDN, Free Page 5 HUAWEI TECHNOLOGIES CO., LTD. and Open Source Software, any IP device) Opex savings of 20% by 2018 being demanded by Telcos Global scale and a global ecosystem, with adaptation to local market needs. Essential to be competitive against web-based service providers. Focus on lean and agile. NOT yet more failed TMF transformation projects New Services are now critical across voice, messaging, IoT, M2M, connected devices, smart city, telematics, connected car, video, etc. to plug the gap. The web has won, copy Amazon, Google, Microsoft to deliver the flexible IT/IP-centric multiple control platforms (IMS/M2M/IoT/WebRTC) the new services require. Global Cloud, Global Ecosystem. Only the Network Equipment Providers can deliver the necessary global scale Its not just the services and supporting infrastructure, model extends to all operations – break free from legacy telecom processes.
- 6. Prediction on Messaging and ARPU Telco messaging will become niche, anticipate rapid revenue decline as SMS moves to data. Analysys Mason is predicting a >25% ARPU decline by 2018 in Western Europe. Industry needs to find >$100B in new revenues within 5 years, else face decline. Page 6 HUAWEI TECHNOLOGIES CO., LTD.
- 7. Services are the key to future profits Horace Dediu Asymco: April 2014 http://www.asymco.com/ Page 7 HUAWEI TECHNOLOGIES CO., LTD.
- 8. Digital Services Opportunity There is an opportunity for Telco and Digital Services to expand horizontally as part of Internet of Things “Service” provider into the other vertical industries HUAWEI TECHNOLOGIES CO., LTD. Huawei Confidential 8
- 9. Huawei Confidential Page 9 02 Case Studies: Service Examples Real Commercial Innovative Services Available Today
- 10. API-Enabled Service Examples: $180M • All service examples commercially launched in other markets • APIs make technical implementation relatively easy • The 16 API-enabled service examples shown could generate $180+M, and there are hundreds more API-enabled services opportunities. • Addresses OTT revenue decline to maintain telco revenues. Huawei Confidential Page 10 $10M+ $5-10M Estimated Total Annual Revenue if Launched by Operator X 7 Million Subs $1-5M Low Implementation Difficulty Moderate Implementation Difficulty
- 11. Different Types of Business Models Cloud Based Communication Services (e.g. Twilio et al) For the simple calling, messaging and number provision the business model is clear and commoditized. Simple per minute / per message / per telephone number per month. With discounts at volume. ( e.g. 0.5 to 0.25c per min) Service Innovation Business Models 1. Simple professional services deals where operator keeps all the services revenue 2. Revenue share with operator as a go-to-market partner 3. Flat monthly fee for API usage 4. Stimulate API usage with revenue share 5. Bundling to lock-in enterprises to operator network The key word is flexibility, this requires a willingness to be entrepreneurial, to experiment, to focus on the customer value and find business models that work for all parties. Huawei Confidential Page 11 11 © 2010 Alan Quayle Business and Service Development
- 12. Huawei Confidential Page 12 Business Model and Go-to-Market example W4Call • Business Model › Pricing $2 per call! › How is that possible? › CPC of Insurance keyword is $54.91 › Its not P2P its A2P, underserved market › Its revenue from your business customers • Go-to-Market › All operator business customers with a website should have a widget4call › 10 calls per day, across 20k business websites gives a revenue of $80M per year! Page 12
- 13. G2M for Service Innovation Ecosystem Huawei Confidential Page 13 Enterprise SME Platform Partners Integrated Hosting Centre Offer Services Direct Offer Services using operator channel Consumer, SME, Enterprise, other SP Successful Ecosystem •APIs make implementation easy • Import a partner ecosystem. Commercial Proven services •There are hundreds of API-enabled services from around the world that can be launched Low Investment •No investment in infrastructure needed •Simple proven integration with Huawei hosting platform Global Experience •All service examples commercially launched in other markets •Huawei success stories in China, Latin America and SE Asia Smart City Operator X, Y, Z
- 14. Huawei Confidential Page 14 03 Case Studies: Get out of the Box Learning and feedback from real test-cases ,trials and operator pain points and demands
- 15. A simple analysis of the problem facing operators, vendors and the whole telco industry on its journey of digital transformation HIUSAILWICEOI TNE SCEHMNIOCOLONGDIUECST COOR., LTD. Page 15
- 16. Trying to retrofit Digital Services - causes failure HIUSAILWICEOI TNE SCEHMNIOCOLONGDIUECST COOR., LTD. Page 16
- 17. Traditional Telco - an all - in one business. “IN-THE-BOX” HIUSAILWICEOI TNE SCEHMNIOCOLONGDIUECST COOR., LTD. Page 17
- 18. Operators NOW have THREE distinct businesses Services Platform Business - The new telco Opportunity: build an ecosystem to drive distribution of new Digital Services Traditional VAS Business – Telco BOX Connectivity Business – Telco BOX Asymetric Competition: OTTs offer services for free (e.g., Viber), close to free (e.g., Whatsapp). The “bundle” biz model of “service + connectivity” of telcos makes it difficult to compete . A symbiotic relationship between telcos and OTTs: (e.g. iPhone apps drive data revenue.) HIUSAILWICEOI TNE SCEHMNIOCOLONGDIUECST COOR., LTD. Page 18
- 19. Lets look at some real operators and real pain points to illustrate the problem and the opportunity HIUSAILWICEOI TNE SCEHMNIOCOLONGDIUECST COOR., LTD. Page 19
- 20. Operator X Key Pain Points – launching innovative services 1. Internal processes and procedures – slow and bureaucratic • Before a service can be launched needs consultation with • IT, OSS/BSS, Core network • and other inside-the-box stake holders and regulators 2. Any purchase or capital expenditure needs RFP and CFO approval • Refusal to buy platforms or technology • But willing to work on Flexible Business models and RS • Will only invest in infrastructure when Service is successful 3. Go-to-market teams not familiar with Innovative Services • Need support and quick launch • POC test and feedback on multiple long-tail services HIUSAILWICEOI TNE SCEHMNIOCOLONGDIUECST COOR., LTD. Page 20
- 21. Operator Y: Key Pain Points – Digital Services 1. Integration “In-the-box” is almost impossible • Any new services needs agreement with • IT, OSS/BSS, Core network etc • Needs “open heart surgery” on existing network just to launch a service • SDP and other “abstraction” platforms do not help service TTM 2. Digital Services a NOT being launched because of BAU delays • Lots of ideas but few make it to the market • Spent millions of USD on consultants - but no result • Will only invest in infrastructure when Service is successful 3. DS team wants to launch services • NO APPETITE to invest in more failed infrastructure, software of platforms HIUSAILWICEOI TNE SCEHMNIOCOLONGDIUECST COOR., LTD. Page 21
- 22. 04 Huawei Operation and Aggregatio n Building a Service Innovation Ecosystem Practical Steps HIUSAILWICEOI TNE SCEHMNIOCOLONGDIUECST COOR., LTD. Page 22
- 23. Core Principle: Enable Our Customers to be Globally Competitive 1. Huawei enables its customers to be globally competitive • Global scale, Global innovation pipeline, Proven services, Services Ecosystem • In communications, IoT, connected car, health, life style, home, payments, etc . 2. Telco can then focus on local go-to-market services 3. Telcos find it VERY difficult to work with innovative companies • Huawei has critical role between 2 divergent cultures HIUSAILWICEOI TNE SCEHMNIOCOLONGDIUECST COOR., LTD. Page 23
- 24. Global Service Aggregation – Local Service Delivery Global Innovative IoT and Digital Services Specialist Platform Partners Huawei Aggregation and Operation Operator 1 Operator 2 Operator 3 HIUSAILWICEOI TNE SCEHMNIOCOLONGDIUECST COOR., LTD. Page 24 Customers New business value ME SMEs and Enterprises LOCAL Go-to-Market for global Services GLOBAL service aggregation and brokering
- 25. Hosting - Brings Global Partners and Services to you 500+ contracted partners North America Verisign SONY Warner Navteq TCS … Acotel Waumovil Cyclelogic Yavox Takenet … Latin America CIS, M Asia i-Free Inform-mobile … Rotana Info2cell Cadic Sodi Mobile-Zon … Europe Arenamobile Opera Jamba Index EMI Net-M Exit Games … Starfish Leaf SGK Mobile Planet ... Africa Asia Tencent Access Navitime JIG Netqin MobileExtrem e Sina … Middle East 8 Hosting Centers covering global market Page 25 HUAWEI TECHNOLOGIES CO., LTD. Dubai 8 3 Centers of Excellence (COE) 30+ Service Branch Offices 50+ Consultancy experts 300+ Senior Business Operation Managers
- 26. Practical Steps – Building the Service Ecosystem with Operators Integrated Approach •Work with Partners who have PROVEN service success stories worldwide •Developer communities, deployed applications, solved real business needs •Integrate Partners into Huawei/Operator platform •Create open environment to develop and test new applications for business and enterprise Page 26 HUAWEI TECHNOLOGIES CO., LTD. •Identify key services and applications •Define kick-starter projects •Create business activity plan for testing the services with key customers •Build business cases – for initial investment needs •Build dedicated G2M support team to grow the business • Engage SME, Enterprise and M-government •Launch services •Get feedback and improve
- 27. Five Recommendations and Takeaways 1. The opportunity is in market proven commercial services, available today 2. Platforms, APIs, standards, developers and ecosystems are distractions 3. Focus on building an effective, independent GO-TO-MARKET team 4. Deliver innovative services to customers and drive new revenue 5. Use Hosting: a quick, low cost way to build a Service Innovation Ecosystem HIUSAILWICEOI TNE SCEHMNIOCOLONGDIUECST COOR., LTD. Page 27
- 28. For More Information on Huawei Service Innovation Ecosystem Please contact [email protected] Page 28 HUAWEI TECHNOLOGIES CO., LTD.
- 29. Thank you！ www.huawei.com Copyright©2014 Huawei Technologies Co., Ltd. All Rights Reserved. The information in this document may contain predictive statements including, without limitation, statements regarding the future financial and operating results, future product portfolio, new technology, etc. There are a number of factors that could cause actual results and developments to differ materially from those expressed or implied in the predictive statements. Therefore, such information is provided for reference purpose only and constitutes neither an offer nor an acceptance. Huawei may change the information at any time without notice. HUAWEI TECHNOLOGIES CO., LTD.
Editor's Notes
- #9: Update format
- #25: I think we can remove all the Table of contents once we have finalised the consolidation and content
- #27: Empower customer Experience - Simplify, personalize and extend customer experience Care - Direct customer interaction for real-time data usages/spending check, alert or notification, self care of packages, easy catalogue search and shopping, on-demand recommendation, etc. Empower operation Operation - Visible, controllable and manageable operation platform Marketing - UBA, granular customer segmentation, Design - Maximize business gains by combining value offers Campaign - Context aware real-time recommendation, promotion or AD push Offer MBB customer value is no longer “nice to have” but crucial for telco to gain edge or even survive and Succeed in this fast growing data market. Key Trend and Implication： Focus on pipe monetization operation. Operation focus is then evolved into user experience and value enhancement over 3-5 years Among the operation mode, pipe monetization bears the minimum risk and highest entry barrier. Network is still the fundamental asset to operators. Make use of the 3 opportunity windows and capitalize the market adaptation be a success. Key Success Factors: 1，Networks - Focus on QoS of speed and data bandwidth 2，Smart Terminal - A focus to Market Operation, High-end vs. Low end 3，Application Innovation and Evolution: “Platform openness + Market Focus + Service innovation” For new business, saying M2M, you have billions of RFIDs. How are you going to track and capture Huge volume of data, manage and offer real-time services and target promotion for your enterprise clients??