New Business Models for
I nnov a t ion G a ins for t h e A sia
P a c ific S erv ic e P rov ider
Sri Sridhar
D ire c t o r A s ia P ac if ic Se rv ic e P ro v ide r B u s in e s s
Se p t e m b e r, 2 0 0 8
P r e s e n ta tio n _ ID
©2 0 0 8 C is c o S y s te m s , In c . A ll r ig h ts r e s e r v e d .
C is c o C o n fid e n tia l
1
Marketplace Changing at Dizzying Rate
Challenging to Keep Straight
Enormous amount of change—trad i ti onal T el co b usi ness mod el s are turned si d ew ay s
M ob il ity stand ard s focused
on al l IP IE TF b ased
stand ard s
Interw ork ing is k ey in
N G N S td s & M ob il ity
Consumer IP Traffic to
S urp ass 1 8 E x ab y tes/ M onth
b y 2 0 1 1
Consol id ation in
w irel ess sp ace tow ard s
L TE and W iM A X
E urop ean Tel co O p erators
L ook to IPTV to O ffset
D ecl ining R ev enues
M ex ico R eg ul ator: Tel mex
M ust Interconnect w ith
Tel efonica
A l l ianz S ig ns 4 -Y ear
M anag ed S erv ices Pact
w ith A T& T
Y ah oo M ak es a N ew Pl ay for
A d s on M ob il e Ph ones
E stab l ish ed as “trusted
p artner” w ith Cab l el ab s
Conv erg ence tow ard s M PL S
and E th ernet as common
transp ort tech nol og ies
P r e s e n ta tio n _ ID
©2 0 0 8 C is c o S y s te m s , In c . A ll r ig h ts r e s e r v e d .
C is c o C o n fid e n tia l
Mobility
L TE , W iM A X future of
mob il ity
G oog l e S ees S urg e in
iPh one Traffic
2
Marketplace Changing at Dizzying Rate
Challenging to K eep S traight
Enormous amount of change—trad i ti onal T el co
b usi ness mod el s are turned si d ew ay s
P r e s e n ta tio n _ ID
©2 0 0 8 C is c o S y s te m s , In c . A ll r ig h ts r e s e r v e d .
C is c o C o n fid e n tia l
3
A
W o rld o f U ncertainty
Worldwide End-U s er S p ending
4 , 000
3 , 5 00
$ Billions
3 , 000
2 , 5 00
How high?
I n f l e c t ion p oin t
2 , 000
How l ow?
1 , 5 00
1 , 000
N e w S e r v ic e s
L e g a c y S P
5 00
0
S ou r c e : C is c o I B S G
P r e s e n ta tio n _ ID
1 9 9 5
2 005
2 01 5
A n a lys is , O v u m , G a r tn e r D a ta q u e s t, P W C , J P Mor g a n , I D C
©2 0 0 8 C is c o S y s te m s , In c . A ll r ig h ts r e s e r v e d .
C is c o C o n fid e n tia l
4
N o n-T rad itio nal Co m petito rs V ying f o r
Market S hare
A ll A re S erv ic e P rov iders !
Value
C h ai n
P r e s e n ta tio n _ ID
C o nt ent
P r o v i d er s
©2 0 0 8 C is c o S y s te m s , In c . A ll r ig h ts r e s e r v e d .
“O v er t h e T o p ”
P lay er s
C is c o C o n fid e n tia l
F ac i li t i es B as ed P lay er s
D ev i c e
S er v i c es
5
Market V iew : S erv ice P ro v id er V alu atio n
9 0
P/E (TTM) Ratio
8 0
R o g e rs
7 0
6 0
3 0
e B a y
Do C o M o
5 0
4 0
G o o g le
DT
F T
S K M
A T& T
Di s n e y
Y a h o o !
2 0
1 0
0
V e r iz o n
S h a w
V ia c o m
S ou r c e : R e u te r s , Y a h oo F in a n c e , J a n u a r y 0 5 , 2 0 0 7
N ote : S iz e of th e c ir c le d e n ote s m a r k e t c a p
P r e s e n ta tio n _ ID
©2 0 0 8 C is c o S y s te m s , In c . A ll r ig h ts r e s e r v e d .
C is c o C o n fid e n tia l
6
P lau s ib le F u tu re S cenario s f o r
S erv ice P ro v id ers
E x p a n d in g
C on s ol id ate d
M a r k e t S iz e
I nd us t r y
R es t ac k
S P
R enai s s anc e
L o w
E v ol u t ion
H ig h
M as s
W i r eles s
C y b er S h o c k
L o w
©2 0 0 8 C is c o S y s te m s , In c . A ll r ig h ts r e s e r v e d .
C om p e t it iv e n e s s
C h ao s
S t a t ic
Source: Cisco IBSG Analysis
P r e s e n ta tio n _ ID
F ut ur am a
F r ag m e n te d
H ig h
C is c o C o n fid e n tia l
7
T ap I nto N ew
G am i ng
$ 3 7 B
I nt er net
$ 8 1 B
E s tim a te d I n d u s tr y S iz e , 2 0 0 6
S ou r c e : G loba l I n s ig h t, C is c o, I D C
P r e s e n ta tio n _ ID
©2 0 0 8 C is c o S y s te m s , In c . A ll r ig h ts r e s e r v e d .
Markets
E nt er t ai nm ent
$ 5 3 6 B
S o f t w ar e
$ 5 0 0 B
T otal:
$ 1 0 T rillion
F i nanc e/
I ns ur anc e
$ 3 7 9 9 B
C is c o C o n fid e n tia l
R et ai l
$ 3 4 8 5 B
A d v er t i s i ng
$ 4 0 5 B
Te l e c o m m u n i c a t i o n s
$ 1 3 0 1 B
8
S trategy U nd er U ncertainty
I nf lu enc e
S h ap e i nd us t r y ag end a: d r i v e I nd us t r y R es t ac k r eg ulat i o n, d i g i t al r i g h t s
m anag em ent and p lug -n-p lay s t and ar d s , and r at i o nal c o m p et i t i o n
C rea t e O p t ions
B e t: In d u s try R e s ta c k
C r eat e s up er i o r c us t o m er
ex p er i enc e: b r o ad s er v i c es s c o p e,
r et ai l ef f ec t i v enes s
Value-ad d ed s er v i c es d eli v er y :
net w o r k h o o k s t o s er v i c es ,
t h i r d -p ar t y v alue
He d ge : F u t u r a m a
P r eem p t lo w -c o s t s er v i c es
F r ag m ent t h e O T T
E nt er t h e O T T
m ar k et
m ar k et
S ear c h f o r alt er nat i v e
g r o w t h m ar k et s
T h e B a s ic s
A c h i ev e o p er at i o nal ag i li t y : s c ale, m o d ular i t y , ef f i c i enc y
P r e s e n ta tio n _ ID
©2 0 0 8 C is c o S y s te m s , In c . A ll r ig h ts r e s e r v e d .
C is c o C o n fid e n tia l
9
Cis co S erv ice P ro v id er V is io n
C on n e c tin g C u s tom e r s w ith S e r v ic e s ,
S e r v ic e s w ith N e tw or k s ,
a n d N e tw or k s w ith E a c h O th e r
S m a ll/M e d iu m
B u s in e s s
C o n s u m e r
S P
W h o le s a le
E n te r p r is e
I P N ex t-G eneratio n N etw o rk
V P N s
P r e s e n ta tio n _ ID
C o n te n t
©2 0 0 8 C is c o S y s te m s , In c . A ll r ig h ts r e s e r v e d .
Tr a n s p o r t
C is c o C o n fid e n tia l
M o b ility
In te rn e t
V o ic e a n d V id e o
10
I P N G N J o u rney
Req u ires Mu ltiple L ayers o f Co nv ergence
Com m on
Sub scrib er
M anag em ent
Cont ent
M o b ile ,
W L A N
D S L , C a b le ,
F T T H
A p p lic a t ion
C onv erg enc e
In
In
S
B
In
S erv ic e
C onv erg enc e
S e r v ic e C on t in u it y
a c r os s A c c e s s f or
C u s t om e r L oy a l t y
a n d S t ic k in e s s
N et work
C onv erg enc e
E
in
In
C
Mobile
F R
/ A T M
P S T N
O p t ic a l
B r oa d ba n d
S er v ic es
P r e s e n ta tio n _ ID
IP
N ex t -Generat ion
N et w ork
H ig h -S p eed
I n t er n et
©2 0 0 8 C is c o S y s te m s , In c . A ll r ig h ts r e s e r v e d .
C is c o C o n fid e n tia l
t e gr a t ion of N e w
n ov a t iv e I P D / V / V
e r v ic e s ov e r
r oa d b a n d f or
c re a s e d R e v e n u e
l im in a
t he N
c re a s
a p E x
te L a y
e t wor
e d O p
E f f ic ie
e rs
k f or
E x /
n c ie s
11
Cis co I P N G N A rchitectu re
T e le P re s e n c e
C olla bor a tion
Broad b and Ag g reg at ion
B-R AS/ ISG
1 0 0 0 0 / 7 x 0 0 / uBR
M ob ile IP
Cisco M ob ile E x ch ang e
P re s e n c e B a s e d
W e b S e r v ic e s
T e le p h on y
Mobile A p p s
IP
C on ta c t
C e n te r
P a r le y/ B E E P / J a in
Session/ Call Cont rol
BT S / P GW / SBC
M GX 8 8 8 0 M ed ia Gat ew ay
Int eg rat ed P olicy Cont rol
Cisco Serv ice Cont rol
Cisco BB P olicy M anag er
Securit y Serv ices
Cisco D D oS P rot ect ion
CN S Access R eg ist rar
V id eo
V id eo & M ult icast CAC
Cont ent D eliv ery Syst em
N et w o rk
L a y er
R e s ou r c e Ma n a g e r
C is c o I S R
L in k s ys
S c ie n tif ic A tla n ta
C is c o A ir on e t
C is c o C a ta lys t
C is c o U B R / MG X
C is c o 10 0 0 0
C is c o 12 0 0 0
C is c o 7 x 0 0
Operational Layer
Service
L a y er
A p p l ica t io n
L a y er
Achieving a Whole Greater Than the Sum of the Parts
C is c o C R S -1
C is c o O N S 15 4 5 4 / 15 3 X X / 15 6 0 0
I nt ellig ent N et work ing
P r e s e n ta tio n _ ID
©2 0 0 8 C is c o S y s te m s , In c . A ll r ig h ts r e s e r v e d .
C is c o C o n fid e n tia l
12
Cis co S erv ice P ro v id er S trategy
T he M o s t C o m p l e t e P art n e r f o r E x p e rie n c e P ro v ide r Su c c e s s
D epl o y
S er v ic es
B u il d
N etw o r k s
A c c el er a te
D ema n d
Optimize
B u s in es s
L ay er ex i s t i ng
and new s er v i c es
f o r r ev enue and
p r o fit g r o w th ,
f as t er t i m e
t o m ar k et
I nt elli g ent ,
ex t ens i b le, and
ef f i c i ent p ac k et
i nf r as t r uc t ur es f o r
lo w er T C O
A c c eler at e
d em and b y
c o nnec t i ng
c o ns um er s ,
S M B s and
ent er p r i s es t o
S P s er v i c es
P r o v i d e d o m ai n
ex p er t i s e t o
s up p o r t b us i nes s
and net w o r k
t r ans i t i o ns
and i m p r o v e
o p er at i o nal
ef f i c i enc i es
P r e s e n ta tio n _ ID
©2 0 0 8 C is c o S y s te m s , In c . A ll r ig h ts r e s e r v e d .
C is c o C o n fid e n tia l
13
Cis co R& D Co m m itm ent
$ 4 B R & D S p end *
$ 1 .4 4 B C is c o S e r v ic e P r o v id e r R & D
S p e n d ( 4 0 % o f To t a l )
M ic r o s o ft
IB M
D ell
C is c o
as %
1 2 %
8 %
4 %
0%
C Q 3 ’ 05
C Q 4 ’ 05
C Q 1 ' 06
S ou r c e : Y a h oo F in a n c e , C om p a n y F in a n c ia l S ta te m e n ts
P r e s e n ta tio n _ ID
Intel
1 6 %
R& D
of Re v e n u e
2 0%
©2 0 0 8 C is c o S y s te m s , In c . A ll r ig h ts r e s e r v e d .
C is c o C o n fid e n tia l
C Q 2 ' 06
* T ot al f our q uart ers end ing 7 / 2 9 / 0 6
14
Cis co ’s A ppro ach to Carrier S tand ard s
Innovation
A l ig nm e nt
w ith C D O
C isco
S D O
L e ad e r s h ip
A c c e l e r ate
N G N
P r e s e n ta tio n _ ID
©2 0 0 8 C is c o S y s te m s , In c . A ll r ig h ts r e s e r v e d .
C is c o C o n fid e n tia l
15
Cis co S tand ard s A cco m plis hm ents
f o r the L as t 1 2 Mo nths
O b j ec t iv es
N G N
L e ad e r s h ip
M ob il ity L e ad e r s h ip
V id e o L e ad e r s h ip
R e g u l ator y &
P ol ic y L e ad e r s h ip
P r e s e n ta tio n _ ID
©2 0 0 8 C is c o S y s te m s , In c . A ll r ig h ts r e s e r v e d .
R es u lt s
• TM P L S R e p l a c e d b y M P L S t r a n s p o r t p r o f i l e
• S t a n d a r d i z e d L TE -H
• De f i n e d P P P -f r e e o p
• A lig n e d 3 G P P 2 a n d
b a s e d o n E A P -A K A
• C is c o fin a liz e d th e P
• C o n tr ib u tio n s to W iM
• K e y c o n tr ib u tio n s to
w o r k in g
R P D i n t e r -w o r k i n g p r o c e d u r e s
e r a tio n p r o c e d u r e s in 3 G P P 2
3 G P P a u th e n tic a tio n p r o c e d u r e s
M I P v 6 p r o t o c o l i n I E TF
a X to p r o m o te p r o file C
d e fin e W iM a X a n d 3 G P P 2 in te r -
DV B / E TS I i n l i n e w i t h C i s c o I P TV p r o d u c t
r e q u ir e m e n ts
C a b l e I P TV r e c o m m e n d a t i o n J . 7 0 0
U n i f i e d I P TV a r c h i t e c t u r e s t a n d a r d s i n I TU -T a n d
A TI S I I F
•C is c o le a d e r s h ip in W o r ld S ta n d a r d s fo r In fo r m a tio n
S o c ie ty ( W S IS )a n d o th e r p o lic y / r e g u la to r y b o d ie s
C is c o C o n fid e n tia l
16
Cis co S tand ard s V is io n
N G N
O b j ec t iv es
L e ad e r s h ip
M P L S
In fra s tru c tu re
M ob il ity L e ad e r s h ip
R es u lt s
I P o DW DM , R E P 2 . A
P B B -TE , M P L S TP
•F
•3
•W
•C
s ta
•F
•V
•O
o c u s
G P P
ir e le
o n v e
n d a r
e m to
e r iz o
p e n
o n 3 G P P a n d W iM a X ( m o n ito r 3 G P P 2 )
2 / W iM a X / 3 G P P in te r w o r k in g
s s s e c u r ity ( 3 G P P a n d W iM a X )
r g e d w ir e lin e a n d w ir e le s s a r c h ite c tu r e a n d
d iz a tio n
c e ll a r c h ite c tu r e
n O DI ( O p e n De v e l o p m e n t I n i t i a t i v e )
S o u r c e In itia tiv e s ( i.e ., A n d r o id )
V id e o L e ad e r s h ip
DO C S I S 3 , C a b l e I P TV , S DV , A d v a n c e d S TB s
R e g u l ator y L e ad e r s h ip
•C o m m itte e L e a d e r s h ip in W S IS a n d o th e r U N p o lic y
b o d ie s
•E x p e r ts p a r tic ip a te in w o r ld w id e r e g u la to r y fo r u m s
C onne c te d H om e
N e tw or k ing
P r e s e n ta tio n _ ID
©2 0 0 8 C is c o S y s te m s , In c . A ll r ig h ts r e s e r v e d .
DL N A P r o m o t e r , Q o S v 2 , M O C A P h y
C is c o C o n fid e n tia l
17
Cisco’s I n t e r a ct ion w it h S t a n d a r d s
O r g a n iz a t ion s
P r e s e n ta tio n _ ID
©2 0 0 8 C is c o S y s te m s , In c . A ll r ig h ts r e s e r v e d .
C is c o C o n fid e n tia l
18
P r e s e n ta tio n _ ID
©2 0 0 8 C is c o S y s te m s , In c . A ll r ig h ts r e s e r v e d .
C is c o C o n fid e n tia l
19