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T EC H N O LO G Y B U S I N ES S R ES EAR C H , I N C .
Moving Beyond Connectivity: Enterprise Strategies of Multinational Network Operators
Technology Business Research Webinar Series
March 20, 2014
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Moving Beyond Connectivity: Presenter
Scott Dennehy Senior Analyst, Networking & Mobility Practice
Email: [email protected]
Twitter: @scottdTBR
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Key Takeaways
Operators will leverage their strengths in cloud and mobility to drive enterprise revenue growth
Multinational operators are focused on finding new sources of growth and remaining relevant in the rapidly changing enterprise market landscape. In many cases, operators compete directly with leading IT services firms for enterprise wallet share.
Operators are leveraging a variety of resource management and go-to-market strategies to drive enterprise market growth, with infrastructure expansion, portfolio enhancement, geographic diversification and partnership development being the primary mechanisms.
Mobility and cloud will remain key drivers of operators’ enterprise strategies, as these areas play to their strengths through the complementary network and security assets that enhance and differentiate their portfolios.
Moving Beyond Connectivity
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Overcoming negative customer and channel partner perception will be critical to operator success in the enterprise market
Moving Beyond Connectivity
• Strong customer
demand for next-
generation services
• Long history of
providing voice and
data services to
enterprise customers
• End-to-end solution
portfolios and multiple
delivery models (e.g.,
cloud)
• Weak spending in key
customer segments and
geographies
• Difficulty managing “co-
opetitive” relationships
• Customer perception as old-fashioned, slow-moving providers of network connectivity
• Reputation among channel partners as less than friendly
Conflict and Competition
Growth and Opportunities
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Operator growth strategies encompass a wide range of focus areas
Enterprise
Growth
Strategies
• Network expansion
• Data center buildouts
Moving Beyond Connectivity
• Dedicated enterprise divisions
• Vertically oriented operating models
• Cloud
• Mobility
• Security
• Unified Comms
• Professional Services
• Channel
• Technology
• Network
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Despite increasing investments in the enterprise market, consistent revenue growth remains elusive for multinational operators
Moving Beyond Connectivity
• Rapid declines in legacy voice and data services, coupled with conservative spending in developed markets such as the U.S. and Europe, are offsetting growth in strategic services and emerging markets.
• The culture of most operators is highly bureaucratic (exacerbated by acquisitions), which results in slower sales and delivery cycles and creates opportunities for more nimble competitors to displace the operators in key accounts.
.
-10%
-5%
0%
5%
10%
2011 2012 2013
YTY
Re
ven
ue
Gro
wth
NETWORK OPERATOR BUSINESS SERVICESREVENUE GROWTH
AT&T BT Orange Verizon Vodafone
TBR
TBR
SOURCE: TBR AND COMPANY DATA
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Network and data center infrastructure provides the foundation for operators to drive growth in strategic services
Moving Beyond Connectivity
Segment Operator Strategy
Cloud • Invest in network infrastructure and data centers.
• Leverage network and security assets to differentiate.
Mobility • Leverage investments in 4G LTE infrastructure.
• M2M is a major growth area.
Security Focus on cloud security, threat management, risk and compliance.
Unified Communications
• Leverage history of delivering legacy voice services to transition customers to next-generation services.
• Offer multiple delivery models, including hosted and cloud (e.g., UCaaS).
Professional Services
• Invest in expertise and portfolio expansion.
• Tie professional services to offerings in key segments (e.g., cloud and security).
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Verizon and AT&T are leaders in cloud, but BT, Orange and Vodafone will be more formidable cloud competitors in 2014
Moving Beyond Connectivity
Segment Verizon AT&T BT Orange Vodafone
Cloud
Mobility
Security
Unified
Communications
Professional Services
Weak Strong Rankings are based on TBR’s assessment of each operator’s strategy,
portfolio and estimated revenue performance in each segment.
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Operators are capitalizing on multinational customers’ need to consolidate services across geographies into a seamless, unified portfolio
.
Moving Beyond Connectivity
Emerging markets provide the most growth opportunities due to their rapidly growing economies. Operators look to take advantage of this growth by investing in new facilities and data centers in these locations that allow them to operate closer to the customer.
Emerging-market focus for
multinational operators
Developed-market focus for
foreign-based operators
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Outlook and Opportunities
Multinational operators will remain invested in the enterprise market, providing ample revenue opportunities for product vendors
Despite their lack of revenue growth to date, multinational operators are committed to the enterprise market for the long term. Enterprise customers will increasingly invest in advanced services such as cloud, mobility, security and unified communications, preferring suppliers that can offer a full range of these services at scale and through a variety of delivery models.
To truly capitalize on enterprise market growth opportunities, operators will need to evolve their business models and improve their execution to combat the market perception of being old-fashioned, slow-moving providers of network connectivity.
For equipment and software vendors, multinational operators provide multiple revenue growth opportunities, both as a strong distribution channel into the enterprise for key technologies such as data center, networking, unified communications and enterprise software, and as a customer for those same technologies that operators can deliver to enterprise customers “as a Service.”
Moving Beyond Connectivity
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Quarterly Topics TBR Discussions Related Reports
Strategic Services Growth
• Identify which enterprise operators are having the most success growing revenue from strategic services (e.g., cloud, unified communications, security, professional services).
• Identify the areas where enterprise operators are investing in their portfolios.
AT&T Business Solutions, Orange Business Services, BT Global Services, Verizon Enterprise Solutions, Vodafone Enterprise Services
Cloud Computing
• Identify which enterprise operators are having the most success in the cloud.
• Determine where enterprise operators are placing their biggest cloud bets.
• Understand how enterprise operators are developing their cloud ecosystems.
AT&T Business Solutions, Orange Business Services, BT Global Services, Verizon Enterprise Solutions, Vodafone Enterprise Services
Geographic Expansion
• Identify specific regions where enterprise operators are directing their investments.
• Track enterprise operator investment in new facilities, personnel and alliances.
AT&T Business Solutions, Orange Business Services, BT Global Services, Verizon Enterprise Solutions, Vodafone Enterprise Services
Vertical Markets Understand how enterprise operators are differentiating through the execution of vertical go-to-market strategies.
AT&T Business Solutions, Orange Business Services, BT Global Services, Verizon Enterprise Solutions, Vodafone Enterprise Services
TBR Syndicated Topics: Enterprise Operators
Operators will invest in cloud, geographic expansion and key verticals to drive long-term enterprise revenue growth
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Moving Beyond Connectivity: Contact Information
Questions?
James McIlroy
Vice President of Sales
Email: [email protected]
Telephone: 603.929.1166
Twitter: @TBRinc
SlideShare: www.slideshare.net/TBR_Market_Insight
YouTube: www.youtube.com/user/TBRIChannel
Scott Dennehy Senior Analyst, Networking & Mobility Practice
Email: [email protected]
Twitter: @scottdTBR
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NMP Syndicated Research Coverage
Telecom Vendors Operators Benchmarks
• Accenture Telecom & Mobility • Alcatel-Lucent • Cisco Systems • Ericsson • HP Telecom & Mobility • Huawei • IBM Telecom & Mobility • Juniper Networks • Nokia Solutions and Networks • Samsung Telecommunication
Systems • ZTE
• AT&T • Sprint • T-Mobile USA • Verizon Enterprise Coverage: • AT&T Business Solutions • BT Global Services • Orange Business Services • Verizon Enterprise Solutions • Vodafone Enterprise Services
• Telecom Vendor Benchmark
o Telecom Infrastructure Services (TIS)
Telecom Infrastructure Services Benchmark
Telecom Infrastructure Services Margin Benchmark
Telecom Infrastructure Services Addressable Market Forecast
Telecom Infrastructure Services North America Addressable Market Forecast
• Enterprise Network Vendor Benchmark
o Enterprise Networking Addressable Market Forecast
o Network Infrastructure Services (NIS) Benchmark
• U.S. & Canada Mobile Operator Benchmark
Enterprise Networking Cable Providers
(Reports include content on Ent. Networking)
• Accenture Telecom & Mobility • Cisco Systems • HP Telecom & Mobility • Huawei • IBM Telecom & Mobility • Juniper Networks
• Comcast • Time Warner Cable
Internet Companies
• Google • Microsoft Telecom & Internet
TBR Networking & Mobility Practice Syndicated Coverage
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T EC H N O LO G Y B U S I N ES S R ES EAR C H , I N C .
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