ITU Workshop on “Cloud Computing”
(Tunis, Tunisia, 18-19 June 2012)
Enabling innovative cloud services
An IBM point-of-view for Communications
Service Providers
Selma Turki,
ITS Services Executive
IBM North-West Africa
selma.turki@tn.ibm.com
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Tunis, Tunisia, 18-19 June 2012
Cloud Market overview
The cloud marketplace is real; the cloud marketplace is
now; and CSPs are well positioned to take advantage of
this opportunity
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Future success requires execution on three key imperatives
Based on market research, the CEO Telecom Survey, Telco 2015
Study
IBM CEO Survey Recommendations for Telecom
3 Key Imperatives to
Smarter Communications
Embody creative
leadership
Reinvent customer
relationships
Build operating
dexterity
IBM Telco 2015 Study Common Critical
Success Attributes
Cost-effective ultra-fast
broadband deployment strategy
Enable New Services
& Business Models
Differentiate the
Customer Experience
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Network / customer insights to
enhance experience & optimize cost
Culture of collaboration
Agile, flexible and reconfigurable
processes and infrastructure
Cost containment
Improve Operational
Efficiencies & Reduce
Costs
Public cloud service revenue is growing in importance and CSPs are in the
strongest position to capitalize on this opportunity
1
Public Cloud Initiatives
Verizon buys Terremark
Worldwide, a Public cloud
provider, for $1.4B
Telstra: $1B in 2011
Comprehensive
network
capabilities
2
Large enterprise
customer base
5
Owning the
complete end-toend delivery
chain is a big
advantage
Advantages
for CSPs as a
Cloud Service
Provider
3
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Strong brand
Rackspace: $100M in 2010
Salesforce: $2.3B in 2011
Amazon: $1B in 2011
Publically available information sources
recognition
4
Extensive marketing
experience with many
sales channels
Cloud Computing Market Breakdown
$126B
Business
services
CAGR
BPaaS
27%
SaaS
Infrastructure
services
PaaS
40%
IaaS

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
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Largest segment
Low barriers to entry
Focus of SMB
e.g. email, CRM,
industry processes
 Highest growth
 e.g. Web apps, DB, DR
 Highest margins
(today)
 e.g. Dev / Test,
Compute, Storage
70% of public
cloud market is
in SMB market
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Enterprise
Components
23%
SW
Services
2008
Source: IBM (MI), IDC, CIO magazine,
BCG analysis
2012
 Clients buy
products and / or
implementation
services
clients building
private cloud
Hybrid
Private
cloud +
selective
use of
public
cloud
services
Analysts suggest that the most significant opportunity for cloud services will
be applications
Applications
2012
2013
2014
2014
Share
15,332
17,470
20,580
37.1%
Development
4,325
6,075
8,618
15.5%
Systems
Infrastructure
7,194
8,877
11,345
20.5%
Servers
4,960
6,000
7,548
13.6%
Storage
Total
1. Applications will be the largest segment
representing 37.1 % of the $55B market
by 2014
2. The Applications segment includes
messaging, conferencing, and team
collaboration software and business
applications (e.g., CRM, ERP, financial,
HCM, PLM, and SCM), delivered via the
cloud services model
3. Communications and collaboration
applications lead the way for market
entry – followed by opportunities for
business applications
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4,098
5,414
7,366
13.3%
35,911
43,837
55,457
100%
Source IDC April 2010
Proposed Cloud-Based Opportunities
We have highlighted five categories of cloud-based
services that are suitable for Telco cloud offeringsGuiding Principles

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
New Cloud Service
Enhance existing services
Become an early entrant into cloud ‘intelligence’ space
Take market share in the ‘communications’ space
Build value add capabilities to enable ecosystems
Focus on industry verticals, leveraging key
relationships and acquisitions
Enhanced Cloud Service
Enhanced Cloud Service
Communications-as-a-Service*
Current Offering:
 Differentiator
 Unified Communication
Services
 IP Voice
 Conferencing
 Contact Center
 Videoconferencing
Enhanced Cloud Service
Applications-as-a-Service
Current Offering:
 Value Added Service
 Targeted at SMB
 Hybrid Cloud
 Public Cloud
Enhanced Capabilities:
 Private Cloud
 Mobile-enabled
 New industry verticals
Intelligence-as-a-Service
 Groundbreaking
 Monetize ‘data’ as
consumable services
 Private Cloud
 Hybrid Cloud
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Computing-as-a-Service
Current Offering:
 Table stakes
 Infrastructure (IaaS)
 Platforms (PaaS)
 Public Cloud
Enhanced Capabilities:
 Infrastructure solution for
SMBs
 Enhanced storage &
security capabilities
 Virtual desktop for midmarket customers
 Additional capacity/power
from new data centers
Enhanced Capabilities:
 Add’l conferencing
features
 Contact center and IVR
Network Services
 Unified communications
services targeting
healthcare providers,
government and SMBs
New Cloud Service
Business-Process-as-a-Service
 Remote business process
management
 Streamlines transactions
 Targeted at SMBs,
Industry verticals
 Public Cloud
Our Customer’s Business
What Did We Do?
SK Telecom is a unit of SK Holdings, one of South
Korea’s largest chaebol conglomerates
Korean language portal based on API extensions to
CSP2 Service Portal
SK Telecom has #1 market share in the domestic
wireless market, and #2 market share in the
domestic fixed line market
Development Platform-as-a-Service offering to allow
Business Partners to quickly test, develop, and
publish new end-user focused WAP services
available on SK Telecom network
SK Telecom is perceived as a technology leader in
South Korea
Cloud Business Benefits
Service Management-enabled Cloud Delivery
platform to run new WAP services in a workload
optimized fashion.
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Reduction of new service development time,
achieving faster time to market
Efficient management of resources, delivering
reduction in capex & opex
Our Customer’s Business
•
DutchCloud is a leading ISP based in the Netherlands,
focused on SME customers in a few key industries
(Healthcare, Electronics).
•
DutchCloud offers a range of Cloud based services
from fully managed IaaS through to disaster recovery
solutions.
•
Customers select DutchCloud for the quality of
service delivered and its service assurance.
Cloud Business Benefits
•
The Business Challenges
•
DutchCloud was looking for a light-weight, highly
functional solution for core cloud service delivery.
•
Current challenges are to improve the delivery of
Cloud services in terms of cost, speed, agility,
minimized operations and industrial strength
solutions.
•
Scale delivery costs to business volumes.
•
Support delivery through a Reseller model.
What Did We Do?
• Implementation of IBM SmartCloud Provisioning as the
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core delivery
platform across
multiple compute and
Rapid deployment of new services in seconds rather
than hours. (Deployed 100’s of new VM instances in
under 5 minutes).
•
No/low maintenance, minimized operational
administration, and no outages required for
upgrades.
•
Changing the delivery of DR services from coldstandby (capital intensive) to rapidly deployed
(utilization efficient) and significantly more cost
effective for customers and CSPs.
storage nodes.
• KVM hypervisor delivery for VMs supporting minimized
license cost.
• Customer, management, and VLAN separation for
multi-tenant isolation at the network and presentation
layer.
• Integration with IBM V7000 Storwize storage and
SmartCloud Provisioning to offer customers variable
SLAs for storage.
Cloud Service Provider in action:
Dynamically creates secure virtual, infrastructures for local businesses in hours
The Business Challenges
VNTT wanted to create a
shared central infrastructure
to deliver flexible
infrastructure and software
services to small- and midsized companies, on a payas-you-use pricing model.
What Did We Do?
• Launched the VNTT Cloud Center,
built on IBM Service Delivery Manager
cloud solution and featuring IBM
System x and BladeCenter servers,
enabling the dynamic creation of
secure virtual infrastructures for local
businesses.
• Dynamically creates secure virtual,
infrastructures for local businesses in
hours
The benefits:
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$75 million in savings
“Our vision was to create a platform to foster innovation and growth in the
Vietnamese economy, taking advantage of our economy of scale to deliver
highly cost-effective enterprise-class IT services to small- and mid-sized
businesses,” says Nguyen Minh Tan, CEO, Vietnam Technology and
Telecommunication. ”We chose IBM as our trusted partner for delivering
commercial cloud services, based on its comprehensive portfolio and proven
track record in other client engagements. We knew that IBM had the expertise
and the local support to help us leverage cloud in a way that is safe, reliable
and efficient for our business.”
Nguyen Minh Tan, CEO, Vietnam Technology and Telecommunication
over five years
370% projected ROI in
the first year alone
Cloud-Based Solutions Maturity Model
Making money in the cloud space requires careful planning
“Risk of inaction”
Early Adopters are
Building Market Share
but are also Learning
Valuable Lessons
2007
2008
2009
As IaaS and PaaS
become mature, there
will be a Rush to build
Vertical Solutions
2010
2011
2012
Late
Majority
2013
2014
2015
201
6
201
7
201
8
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WSJ: 9/28/2010: SAP committed
to 10,000 ByDesign customers by
2010, but due to issues the number
is 100...not as successful as
expected
Early
Majority
Picking the right Plays
with limited
investment dollars is
crucial
201
9
Laggards
202
0
To succeed with Cloud Services, CSP’s must be prepared to
challenge themselves and the way they ‘think’
Mental Model Possible Thinking
 Economics


We can rent our way into the business
We can manage it in house
Must include ..…






 Customers
CSP’s value add is brand strength
We need a killer app
Build it and they will come


We ‘white label’ where we can to accelerate entry into the cloud market
We invest in strategic ‘cloud-enabled solutions’ where we can capture
market share and offer clear economic differentiation to our customers
We build an ecosystem of partners (suppliers and wholesalers)
We need to know our end customers’ value chain and their priorities
Our differentiation is superior, integrated with vertical customer
experiences. Our ability to integrate with our existing wholesale
solutions portfolio and customers with new types of business solutions.
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 Technology


Cloud is a technical offering
Platform is Decision #1


 Time to
market


“We want to wet our toes”
We follow existing processes to launch
new cloud services

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IBM Confidential
Cloud is more of a business transformational model than it is a
technology solution
While platform is critical, customer experience, industry specific
solutions and speed-to-market are more important than the platform, as
platform can be outsourced
Capturing market share early for the lucrative applications space is
important. High profit industry solutions cannot be white-labeled.
CSP’s needs an ecosystem where they can rapidly deploy new services
in a matter of few weeks from ideation to deployment.
Agile and nimble processes are critical to success
You can leverage lessons learned from IBM’s experience with CSPs
around the world and from operating our own IBM public cloud
Cloud providers must offer a a full
suite of services to be taken seriously.
Provide entry level and
premium offerings for
each service.
Self-service storefront with
integrated marketing will
drive demand and reduce
churn.
Market &
Marketing
A combination of premise based and
aggregated cloud services are required for
maximize flexibility and control
Solution &
Operations
CSP
Building your own Cloud
ecosystem is time consuming leverage existing storefronts and
ISV relationships to get to market
quickly.
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Develop “A Single Strategy”
for cloud that covers multiple
segments.
Business
Model
Owner economics will win for CSPs.
Think through offer management. An
application can have of multiple offerings
and can participate in multiple bundles.
Cloud-based Transformation Models
Telco’s cloud-based business model will be a combination of a service
innovation model, as well as the creation of a two-sided business model
Service Innovation
Key Questions

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

Two-Sided Business Model
Key Questions








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What services should we offer?
How should we sell these services?
How should we price such services?
How should we deliver such services?
How much are we willing to invest in such services?
Should we build these services ourselves?
What is the value of such services to Telco?
How soon are we looking to launch such services?
How does the two-sided business model work?
How does the money flow?
How do we charge customers?
How do we target our customers across various cloud
industries/customer segments?
What types of investments do we make, if any?
What types of events do we need to think about?
How do we get started?
What is a realistic timeline?
IBM Cloud Service Aggregation Platform - designed to empower CSPs to
CREATE, MANAGE, & MONETIZE a broad portfolio of cloud services fast.
CREATE
MANAGE
MONETIZE
Infuse Creativity Into
the Service Portfolio
Aggregate a Wide
Variety of
Cloud Services
Optimize Sales With
Self-Service Web
Storefront
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Rapidly Launch Partner
Applications
Delegate Administration
to Enterprise customers
Provide Web 2.0
enriched shopping
experience
Market White Labeled
IBM Cloud Services
Leverage Robust and
Secure Cloud Service
Integration
Leverage Intelligence
for Differentiation
Ignite Innovation
and Differentiate
the Service
Portfolio
Deliver a broad
portfolio of cloud
services through
a common
platform
Energize Cloud
Sales & Optimize
the Customer
Experience
IBM's approach is to match our client’s choice of deployment models & entry
strategies
Foundation
Solutions
Services
Business Process as a
Service
Software as a Service
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Business
Analytics and
Optimization
Smarter
Commerce
Easily build and rapidly scale
private cloud environments
with unparalleled time-tomarket, integration and
management
Tunis, Tunisia, 18-19 June 2012
Unprecedented choice,
security and portability of
applications on IBM’s
SmartCloud service delivery
platform
Social
Business
Smarter Cities
Software as a service
coupled with deep industry
insights, business process
skills and analytics
Commitment to open standards and a broad ecosystem
IBM’s SmartCloud service delivery platform is a platform for
business innovation and growth
A robust set of business solutions that leverage
IBM’s deep industry and process skills including
migration of existing hosted business applications
A growing set of infrastructure services and
solutions coupled with our deep architecture,
integration and implementation skills
The choice
and control to
enable clients
to develop,
deploy and
manage
custom
services
IBM
Services
Client Defined
Services
Partner
Services
Application Services
Application
Lifecycle
Application
Resources
Application
Environments
Application
Management
Integration
A broad
ecosystem of
ISVs leveraging
the IBM
SmartCloud as
a platform for
running their
business
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Infrastructur
e platform
Enterprise
data center
Managed private cloud
Managemen
t
and support
Availability and
performance
Enterprise
Security
Enterprise
A
Hosted private cloud
Payment
and billing
B
Shared cloud services
IBM is building a robust ecosystem designed to address a broader set of
enterprise requirements
Cloud Application Providers
Client
defined
service
s
Industry
services
Data and
Analytic
s
Cloud Services Solution
Providers
Workplac
e
Securit
y
Resilienc
e
Enterprise
application
s
Partner
services
Application
Services
Cloud Infrastructure
Providers
Cloud Technology
Providers
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Enterprise
data center
Managed private cloud
Enterprise
A
Hosted private cloud
Cloud Builders
Tunis, Tunisia, 18-19 June 2012
Enterprise
B
Shared cloud services
Protecting and risk management in the cloud building on traditional
approaches, applied to new models. Each model has different aspects to
consider.
IBM Cloud Security
One Size Does Not Fit All
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Different security controls are appropriate for
different cloud needs - the challenge becomes
one of integration, coexistence, and recognizing
what solution is best for a given workload.
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Brokering a range of services is a compelling value proposition for
enterprise customers who are looking at Cloud to reduce IT complexity
“The future of cloud computing will be permeated with the
notion of brokers negotiating relationships between
providers of cloud services and the service customers.”
Market Implication:
“Customers will be able to consume multiple cloud services
in a more user-friendly fashion, with the complexities of
managing
service
the supply
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chain reduced significantly, if not removed altogether.”
In a 2011 survey, Gartner found that 46% of enterprise
customers indicated that the Cloud Service Broker model
was relevant to their selection of cloud service providers.
Source: Gartner
Complexity drives the need for Cloud Service Brokering . . .
and provides an opportunity for differentiation
On Premise
Cloud
Applications
Data Center
Infrastructure
CSP
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White Label
Infrastructure
Companies for illustration only
Cloud
Applications
Cloud
Storefronts
Cast Iron demonstrates IBM’s commitment to a Smarter
Services platform.
Leverage your existing capital expense investments while avoiding
technology lock-in
 Comprehensive range of supported
hypervisors
 Fully extendable via an Open API
 Advanced hybrid Cloud integration
 Hardware vendor agnostic
 Deploy on IBM systems for optimal
service management visibility, cost
and control
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 Accelerate on-boarding of new
partner provided services with preconfigured templates and policies
Cast Iron’s offerings will…advance IBM’s capabilities for a hybrid cloud
model.
22
A quick start for Cloud: Building a private cloud in your enterprise
IBM provides options to Customers on how private clouds can be delivered.
Which option is right for you?
 Flexibility
 Time to Results
 Install Base
 Workload
 Skillset
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Custom Private Cloud
IBM CloudBurst Pre-Integrated Bundles
4 Standard Configurations
Pre-Built at Factory
Integrated Support
10 day installation
Self contained & expandable to
heterogeneous infrastructure and
custom components
Starter Kit Pricing
Unlimited Configurations
Custom Build
Product Level Support
Longer installation
Installed to support multiple
platforms and custom
components
Enterprise Pricing
IBM Centers Deliver & Manage Cloud Services Around the World
IBM Worldwide Support Centers
7
11
57
54
Toronto
Dublin
Boulder, CO
Silicon Valley, CA
Cloud Data Centers
Cloud Labs
Global Delivery Centers
Global Command Centers
Wroclaw, Poland
Ehningen, Germany
Beijing
Raleigh, NC
Seoul
Tokyo
Hong Kong
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Hanoi
Bangalore
Singapore
Sao Paulo
Johannesburg
IBM Cloud Lab
IBM Cloud Data Center
Driving client-focused open standards and
interoperability.
IBM solutions are built on a comprehensive,
open reference model.
 Provides guidance to the multiple
cloud standards-defining bodies.
 Establishes the criteria for openstandards-based cloud computing.
 Delivers content in the form of best
practices, case studies, use cases,
requirements, gap analysis and
recommendations for cloud standards.
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companies are
participating.
operate outside the
IT realm.
Lessons Learned from Global Cloud Initiatives
Focus, Success, Scale
Establish a cloud SP strategy, in alignment with your business and
market and then transform your IT in consequence
Get into the market – it takes time to build critical mass in your
company
Self-service ease-of-use is critical to success
Do what you do best first – infrastructure, communications,
collaboration
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subtitle
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Continually
to maintain
customer
draw customers into an expanding set of services
Support multiple offerings per product – different buying behaviors
SMB most lucrative market for cloud services
Some business applications are complex – channel strategy is
critical – start small, grow fast