© 2013 Cisco and/or its affiliates. All rights reserved. Cisco Confidential 1© 2012 Cisco and/or its affiliates. All rights reserved. Cisco Confidential 1
Standing out in a crowd
Differentiation for success on a level
playing field
Matt Kolon - CTO APJC
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Investments in NBN/FTTx Infrastructure
• Governments have realized broadband infrastructure is essential to economic prosperity
AU$??
NZ$4B
US$58B
S$0.75B
US$3.27B
US$0.65B• +10% increase in broadband use can
increase GDP by 1.8%
• Increasing broadband use by 10% can reduce unemployment by 1.6%
• National output increases faster from sovereign investment than private investment
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Network Investment Is Special
The World Bank suggests, “a 10 percentage point increase in broadband penetration in high-income economies such as Australia resulted in an
increase in economic growth of 1.2 percentage points." (Gyarmati, 2010).
Country GDP Improvement(10 year)
Australia ~AU$80B
USA ~US$6T
Germany ~€100B
Japan ~US$160B
China ~US$1.5T
No other sovereign investment
yields such results
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A New Differentiation Paradigm
StructuralSeparation
WholesaleNetwork
WholesaleAccess
Integrated
Retail Service Provider
Active Network
PassiveNetwork
InfrastructureProvider
InfrastructureProvider
WholesaleProvider
End To EndProvider
AccessProvider
Comms. &Service
Providers
Service Provider
Service Provider
Example
Regardless of the model the access network is commoditized
What was a differentiator is no more !
Competition and Innovation now must occur in services
Service Providers in an NBN World must transformand differentiate based on a new competitive paradigm
Retail Service Provider
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The Service Provider Impact
Access Backhaul Agg Core DCI
Consumer Access Aggregation Core Data Center
FTTx Access &
Aggregation
NetCo
Traditional Spend 70% 20% 10%
Avg % Of Network Capital Costs
Ser
vice
s
New Competitive Spend 10% 30% 60%
Data CenterService
Origination
• Data center and service origination is now the new value • Many Service Providers will re-profile their businesses to
focus on service creation and innovation
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A new frontier of service differentiation?
“SDN Needs a bigger definition.”—Lippis report, 2012
“We share a more pragmatic view, noting Cisco is likely to view SDN as a TAM expansion opportunity.”
—Deutsche Bank Research note, Wired, April 2012
“Hype around SDN/OpenFlow getting way out of control. Where have I seen this before...”
—Ethereal Mind, Blogger
“Will OpenFlow commoditize networks? Impact Cisco margins?”
—Several media publications, Bloggers
“Google revamps networks with OpenFlow.”—ZDnet
“The Next IT Killer is…NOT SDN.”—DevCentral
Cisco Confidential 6IS THE NETWORK READY?
Cloud Video Mobility Data Deluge
How to Harness Network Value?
How to Drive Business Agility?
How to Drive Operational Simplicity?
Cloud AccessFederated DC (Melb/Syd/Perth)
Centralized E-Government
TelePresense in Education (BER)E-Health
OnDemand Video
Moble TelePresenceLocation aware mobility
Differentiated billing
Big DataAnalyticsCensus
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The levers of differentiation
MonetizationOptimization
Expose Network IntelligenceAnalytics
Inform Network of Desired State
PoP Cloud
Ad Insertion
1800DataMobile TP
Premium Mobile Video
Self Organizing Networks
Elastic Service Creation
Network Service Slicing
Dynamic Pricing and
Policy
M2M and Virtualization
Flex Your Transport
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Example 1: Elastic Service Creation
Virtualized Service Abstraction
Operator Application
3rd Party Applications
OperatorOSS/BSS
Application Monitors Network Resources
1
Build Customer Service Profile(e.g VoIP, Firewall, Video)
2
Push Service into Network and Receive Confirmation
3
Enable Service Group and Monetize Delivery
4
$
I pay for general broadband, my employer pays for home working, Disney pays when my daughter watches TV
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Example 2: Premium Video Everywhere
LowerBW
Bit rate: 0.75Mbps$ add : $0
Bit rate: 7.5MbpsData $: 30/mo. – 2GB
Bit rate: 7.5Mbps$10 eCPM
Bit rate: 7.5Mbps$ add: 20% of top line
Upgrade/Pay per dip or
Timeshift
Toll FreeData
AdSupport
User Event + Real-time Analytics
Correlate Historical analysis + Real-time events + subscriber profile
Policy & Enforcement
• Routing• Throttling• Insertion
• Real-time Event Management
CORRELATEDDATA
TIME BOUND
Analytics
• Quota• QoS
• Charging Policy• RAN type
• Device Type• Subscriber Profile
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A software-centric, new market model
Network ClientData Center
Physical Infrastructure
Virtualized Infrastructure
Orchestration
Applications
APIs
APIs
NPIs
Web APIs and Client Plug-ins
Business and Consumer Applications
Service Functions and Resource Automation
Programming and Managing of Virtual Resources
Programming and Managing of Physical Resources
MASKING NETWORK
COMPLEXITY
OPEN AND PROGRAMMABLE
CONSISTENT OPERATIONAL EXPERIENCE
Ser
vice
s an
d S
uppo
rt
Infrastructure Services Orchestration Management
Business & Service Orchestration Workflow Engine for Compute, Network & Storage
Operating Systems
Controller Layer
Unified Platform API
OpenFlowonePKI2RS PCEPBGP CLI CLI, other,..
Path Computation(PCE)
vRR / BGP
TopologyNPS
AnalyticsPolicy Identity
CustomRouting
OpenStackQuantum
Cloud SecurityDevice Mgmt
WirelessMgmt/WLC
Service MgmtInfrastr.
PrimeNetwork
EMSCloudSXC
El. Services
Fulfillment Automation
API
• New Business Models
• Different skill set to most
SPs today
• Re-tooling – platforms,
systems and processes
• Redefinition of metrics
• New marketing approaches
A new paradigm for an
evolving market
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Summary
• Significant government interest in infrastructure across the region is a great thing
• Investments are changing the requirements of networks and leveling the playing field
• Service differentiation is the emerging key value proposition required to drive profitability
• Software based services are forming the fundamental basis upon which this differentiation can be built
• Service Providers must adapt to and monetize this new world
• This is not the first time our industry has made a transition – there is support in the industry to help shape and guide the future
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Thank you.