03q2015-03 small cells iaas

The Potential for Small Cells Infrastructure-‐as-‐a-‐Service in the U.S. Sponsored Study Third Quarter, 2015

Sponsored by:

The Potential for Small Cells Infrastructure-‐as-‐a-‐Service in the U.S.

Sponsored Study

Published Third Quarter, 2015 Version 1 Report Number: 3Q2015-‐03

iGR 12400 W. Hwy 71 Suite 350 PMB 341 Austin TX 78738

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reserves the right to deny approval of external usage for any reason. Internal-‐quoting individual sentences and paragraphs for use in your company’s internal communications activities does not require permission from iGillottResearch. The use of large portions or the reproduction of

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FOR INFORMATION PLEASE CONTACT IAIN GILLOTT (512) 263-‐5682.

Table of Contents Executive Summary ..................................................................................................... 1

Figure A: Enterprise Cloud-‐Based Small Cell Services TAM and Estimated Revenue Forecast, 2014-‐2019 ($M) ...................................................................................................................... 2

Methodology ............................................................................................................... 4

Enterprise IT Manager Survey Results .......................................................................... 5 Cloud Services Used ............................................................................................................. 5

Figure 1: Cloud Service Areas currently used by Company ..................................................... 6 Figure 2: Cloud Service Areas Company planning to use in next 6 – 12 months .................... 6

Benefits of Cloud for IT manager .......................................................................................... 6 Figure 3: Perceived Benefits of Cloud Computing by Employee Size of Firm ......................... 7

Challenges of Cloud Service for IT manager .......................................................................... 7 Figure 4: Perceived Challenges of Cloud Computing by Employee Size of Firm ..................... 8

Managed Services ................................................................................................................ 8 Table 1: Overall Interest in Managed Services ....................................................................... 9 Table 2: Interest in Managed Services by Employees by Employee Size of Firm .................. 10

Cloud versus In-‐House ........................................................................................................ 10 Table 3: Interest in Cloud vs. In-‐house Managed Services ................................................... 11

Mobile Device Management ............................................................................................... 11 Figure 5: IT Role in Mobile Device Management by Employee Size of Firm ......................... 12 Figure 6: Perceived Reasons to keep Mobile Device Management In-‐house ....................... 13 Figure 7: Outsourced Mobile Device Management Functions by Employee Size of Firm .... 14 Figure 8: Perceived Reasons to Outsource Mobile Device Management Functions ............ 15

Critical Success Factors ....................................................................................................... 15 Awareness of Small Cells .................................................................................................... 15

Figure 9: Awareness of Enterprise Small Cell Solutions by Employee Size of Firm ............... 16 Figure 10: Interest in Enterprise Small Cell Solutions by Employee Size of Firm .................. 16

Interest in Enterprise Small Cells as Managed Service ......................................................... 17 Figure 11: Interest in Enterprise Small Cell Solutions as a Managed Service by Employee Size of Firm ................................................................................................................................... 17

Forecast ..................................................................................................................... 18 Total Addressable Market ................................................................................................... 18

Table 4: Survey Respondents by Employee Size of Firm ....................................................... 18 Figure 12: Survey Respondents by Employee Size of Firm ................................................... 18 Table 5: Distribution of Employees by Employee Size of Company ...................................... 19 Table 6: Growth in employees .............................................................................................. 19 Table 7: Increase in Percent of Companies with IT Managing Mobile Devices .................... 20 Table 8: Number of Employees with Mobile Devices Managed by IT, 2014-‐2019 ............... 21 Figure 13: Number of Employees with Mobile Devices Managed by IT, 2014-‐2019 ............ 21 Table 9: Interest in Specific Cloud-‐based Services ................................................................ 22 Table 10: Employee Total Addressable Market for Cloud-‐based Services, 2014-‐2019 ........ 22

Quoting information from an iGillottResearch publication: external — any iGillottResearch information that is to be used in press releases, sales presentations, marketing materials, advertising, or promotional materials requires prior written approval from iGillottResearch. iGillottResearch

reserves the right to deny approval of external usage for any reason. Internal-‐quoting individual sentences and paragraphs for use in your company’s internal communications activities does not require permission from iGillottResearch. The use of large portions or the reproduction of

any iGillottResearch document in its entirety does require prior written approval and may have some financial implications. Copyright © 2015 iGillottResearch, Inc. Reproduction is forbidden unless authorized.

FOR INFORMATION PLEASE CONTACT IAIN GILLOTT (512) 263-‐5682.

Figure 14: Employee Total Addressable Market for Cloud-‐based Services, 2014-‐2019 ....... 23 Table 11: Estimated Price “Willing to Pay” per Employee per Cloud Service, Base Year (2014) .................................................................................................................................... 24 Table 12: Revenue TAM for Cloud Services, 2014-‐2019 ($M) .............................................. 24 Figure 15: Revenue TAM for Cloud Services, 2014-‐2019 ($M) ............................................. 25

Actual Adoption .................................................................................................................. 25 Table 13: Actual Cloud-‐based Services Employee Adoption Forecast, 2014-‐2019 ............... 27 Figure 16: Actual Cloud-‐based Services Employee Adoption Forecast, 2014-‐2019 .............. 28 Table 14: Actual Cloud-‐based Services Revenue Forecast, 2014-‐2019 ($M) ........................ 29 Figure 17: Actual Cloud-‐based Services Revenue Forecast, 2014-‐2019 ($M) ....................... 29 Table 15: Comparison of Actual Revenue to TAM Revenue, 2014-‐2019 ($M) ..................... 30 Figure 18: Comparison of Actual Revenue to TAM Revenue, 2014-‐2019 ($M) .................... 30

Sponsor Profiles ......................................................................................................... 31 SpiderCloud Wireless .......................................................................................................... 31

Figure 19: SpiderCloud E-‐RAN System .................................................................................. 33 Cisco ................................................................................................................................... 35

Figure 20: Cisco Universal Small Cell Solution ...................................................................... 37 Intel .................................................................................................................................... 38

About iGR .................................................................................................................. 39 Disclaimer ........................................................................................................................... 39

Copyright © 2015 iGillottResearch Inc.

1

Executive Summary

In late May 2015, iGR conducted a survey of IT managers in medium-‐ and large-‐sized, U.S.-‐based enterprises to understand the demand and opportunity for managed services based on enterprise small cells. The study was sponsored by Cisco, Intel and SpiderCloud Wireless.

Overall, the study demonstrated that there is:

§ A high level of awareness of enterprise small cells among IT managers in medium and large enterprises.

§ A high degree of interest in deploying small cells in these enterprises.

§ Strong interest in managed services and functions based on an enterprise small cell solution.

As part of the study, iGR forecasted the total addressable market for enterprise cloud-‐based services and the revenue from anticipated adoption of such services. The small cell-‐based cloud-‐based services included in the study were:

§ Unified Communications

§ Mobile device management

§ Mobile and PBX Integration

§ Web Filtering

§ Firewall Services

§ Policy Services

§ Wi-‐Fi as a Service

§ Context/Location Services.

iGR’s forecast suggests that the total addressable market in the U.S. for these mobile cloud services will rise from almost $6 billion in 2014 to $12 billion in 2019 and will total $52.13 billion over the five year period. The forecasted revenue associated with adoption of the various services increases from $91 million in 2015 to more than $4 billion in 2019, a total of $7.2 billion over the forecast period.


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Figure A: Enterprise Cloud-‐Based Small Cell Services TAM and Estimated Revenue Forecast, 2014-‐2019 ($M)

Source: iGR, 2015

The study showed that corporations are interested in moving to the cloud for several reasons:

§ Reduce overall costs.

§ Move costs from capital expenditures to operating expenditures.

§ Become more responsive to changes in the market.

§ Connectivity is not much of an issue given the prevalence of LTE (and Wi-‐Fi in many locations).

Corporations are specifically interested in enterprise small cells for several reasons:

§ Improve in-‐building cellular voice and data coverage.

§ Upgrade Wi-‐Fi to higher capacity standard (e.g., 11ac) while also improving cellular coverage and capacity.

iGR’s adoption model is driven primarily by the availability of small cell-‐based Infrastructure as a Service (IaaS) services and features; the interest and demand is clearly present among enterprises. The issue is availability of the services from the mobile operators. Given the high level of awareness of small cells among the IT managers surveyed, the market opportunity for the mobile operators to offer enterprise small cell services is clearly beginning to rise above the hype of the past several years.

$5,728 $6,812

$7,956

$9,193

$10,462

$11,979

$0.0 $91.0 $333.2 $873.8

$1,870.9

$4,003.4

$0

$2,000

$4,000

$6,000

$8,000

$10,000

$12,000

$14,000

2014 2015 2016 2017 2018 2019

TAM Eskmated Revenue from Adopkon


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And, the need for in-‐building mobile voice and data services is growing. There is a limit to the in-‐building benefit of macrocell/outdoor network improvements. Also, building owners and not just their tenants, are increasingly aware that excellent indoor LTE coverage and capacity can be a major selling point.

Services based on enterprise small cells are driven primarily by:

§ Intense interest from operators in densifying their mobile voice/data networks (LTE) via in-‐building deployments of small cells

§ Interest from operators in expanding their revenue base to include additional services such as those included in the survey

§ Assisting enterprises by reducing costs, particularly of those tasks associated with mobility

§ Assisting enterprises who want to leverage the cloud to reduce capital spending on IT hardware/software and move to a more operational expense driven model. This move can help the organization to be more flexible and efficient and enable IT staff to focus more on the company’s strategic goals rather than day-‐to-‐day operations

§ Leveraging enterprise networks – wired and wireless – to provide better in-‐building coverage and seamless cellular voice.

Any service based on enterprise small cells must include:

§ Security and compliance with regulation/legislation – this was of primary importance among the survey respondents

§ A deployment model that is painless and easy for the enterprise – everything from the cabling to the placement of equipment on walls and ceilings

§ An operating expense-‐based model that minimizes the initial capital expense usually associated with deploying enterprise small cells

§ A “neutral host” small cell product to enable enterprises to support the needs of all of their employees, not just those who use a specific mobile operator. This may also include a future option where the mobile operator only provides access to their spectrum and the enterprise takes responsibility for providing the necessary network equipment and interface to the operator’s core network.


4

Methodology

The data presented in this study are the results of iGR’s survey of IT managers in medium-‐ and large-‐sized U.S.-‐based businesses in late May 2015. In order to participate in the survey respondents were required to be:

§ Responsible for or participate in the IT purchase decision process

§ In a company with more than 500 employees

§ In industries other than education and government.

The survey results presented in this report are shown in tables and figures. All primary research data is weighted by employee size of company, according to U.S. census data from the Census Bureau’s Statistics of U.S. Business. Other information presented in this report originates from iGR’s other primary and secondary research.

Where applicable, some results are also described using an index. An index of potential has the objective of demonstrating which market segments offer the greatest opportunity for efficiently and effectively selling a product or service. In this report, the index is a whole number showing an above average or below average incidence of use, where 100 is average. Indexes are an essential calculation used in the development of niche marketing strategies and tactics. An index provides an easy-‐to-‐read metric for highlighting market segments within which marketing and sales budgets have the highest probability of reaching target prospects.

This report uses the following abbreviations for each employee size of company:

§ 500 to 999 employees: 500 to 1K

§ 1,000 to 4,999 employees: 1K to 5K

§ 5,000+ employees: 5K+.


5

Enterprise IT Manager Survey Results

iGR’s survey of IT managers in medium-‐ and large-‐sized businesses (those with more than 500 employees) in the U.S. obviously generated a large amount of data. This report summarizes the survey’s major findings and shows the key trends within that data. As the results show, there is significant interest in small cell-‐based services in the enterprise and a high awareness of small cells themselves.

Cloud Services Used

The survey started by asking IT managers which types of cloud services they currently used (Figure 1). The respondents were given the following descriptions:

§ Software as a Service (SaaS): Applications that are hosted in the cloud and are accessed by users/organizations.

§ Platform as a Service (PaaS): Provides developers with a platform and environment that lets them build applications and services that are hosted in the cloud and accessed by users via the Internet.

§ Infrastructure as a Service (Iaas): The customer leases access to computing infrastructure – e.g., virtual server space, network connections, bandwidth, IP addresses, load balancers, etc.

As the figure shows, 55 percent of companies said they currently use SaaS, followed by 38 percent that said they use some form of IaaS. Just 15 percent of enterprises said they were not using any form of cloud services, while another eight percent said they “did not know.” Note that there were no significant differences by company size.

Figure 2 shows the cloud services that enterprises plan to use in the next six to 12 months. Again, Software-‐as-‐a-‐Service is the most popular with nearly 48 percent of enterprises planning to use it, followed by both Infrastructure-‐ and Platform-‐as-‐a-‐Service, each with just under 30 percent. Fifteen percent of enterprises had no plans to use the services; these companies are likely “technology laggards” and may well have been among those firms that were slow to adopt other new technologies and solutions.


6

Figure 1: Cloud Service Areas currently used by Company

Source: iGR, 2015

Figure 2: Cloud Service Areas Company planning to use in next 6 – 12 months

Source: iGR, 2015

Benefits of Cloud for IT manager

The benefits of cloud services as perceived by the IT managers are shown in Figure 3; the chart shows the results by the size of company. Several trends are apparent:

§ Small companies are more focused on being flexible and/or efficient. Companies with 500 to 999 employees are 50 percent more likely to cite this benefit than the larger companies.

0% 10% 20% 30% 40% 50% 60%

Soqware as a Service (SaaS)

Plarorm as a Service (PaaS)

Infrastructure as a Service (Iaas)

None of these

Don't know

0% 10% 20% 30% 40% 50%

Soqware as a Service (SaaS)

Plarorm as a Service (PaaS)

Infrastructure as a Service (Iaas)

None of these

Don't know


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§ For larger companies, the ability to reduce costs is the most important benefit of cloud. Note that the largest companies are nearly four times more likely to select this benefit than smaller companies.

§ Companies of all sizes identified with the benefit of allowing IT staff to focus on strategic goals as a result of using cloud services.

Figure 3: Perceived Benefits of Cloud Computing by Employee Size of Firm

Source: iGR, 2015

Challenges of Cloud Service for IT manager

The survey results show that security and compliance with regulation/legislation were the biggest issues, with Compliance a bigger issue for the smallest and largest firms.

The next biggest concern was the potential for hidden costs associated with cloud services. All of the remaining concerns (connectivity, reliability, finding the right vendor, disaster recovery, and measuring the actual benefits) scored with some respondents but appeared to be tertiary concerns.

0% 10% 20% 30% 40% 50% 60% 70%

More flexibility & efficiency

Reduced cost

Moving cost from "capex" to "opex"

IT focused on strategic goals

Future proofing

Greater resiliency

Greater security 5K+ 1K-‐5K 500-‐999


8

Figure 4: Perceived Challenges of Cloud Computing by Employee Size of Firm

Source: iGR, 2015

Managed Services

To assess the interest in managed services that could be offered via a small cell installation, iGR presented a list of services to the survey respondents and asked a range of questions. The description given was:

We would like to better understand the types of managed services you would potentially like to see offered by a mobile operator, AFTER the mobile operator has established trust that they can offer reliable in-‐building mobility coverage and capacity with a scalable small cell system (paid for and managed by the mobile operator).

Please consider the following brief descriptions of managed services. These could be offered to your company by the mobile operator via its "small cells" (and other network assets). These services would be available to your company's employees wherever they have data access to the Internet.

The services tested were:

• Unified Communications

• Mobile Device Management

• Mobile and PBX integration

• Web filtering

0% 10% 20% 30% 40% 50% 60% 70% 80%

Finding the right cloud provider(s)

Compliance with laws/regulakons (HIPAA, Sarbanes-‐Oxley, etc.)

Disaster recovery

Overall reliability

Security

Measuring actual cost savings

Hidden costs

Conneckvity, cellular data

Conneckvity, WiFi

Conneckvity, wired broadband 5K+ 1K-‐5K 500-‐999


9

• Firewall services

• Policy services

• WiFi-‐as-‐a-‐Service

• Context-‐Aware / Location-‐based Services.

Table 1 below shows the level of interest in each of the managed services for all respondents. Overall, there is a high degree of interest in all services, with only Unified Communications failing to have a majority “Interested.”

While the level of “Interest” in each service is high, more telling is that the percentage of respondents who indicated “Not interested” is very low: this indicates that the interest is “definite” among the IT managers.

Two of the services are worth noting:

• Wi-‐Fi: Overall, enterprises with Wi-‐Fi appeared more likely to be interested in Wi-‐Fi as a Service. Given that these enterprises have already installed and are maintaining a Wi-‐Fi network, the high interest in this service indicates that these IT managers see the need to outsource the support of their Wi-‐Fi networks and use their internal resources for other more strategic tasks.

• Context/Location: Little description was given about this service and the level of interest was relatively low. More telling is that the “Neutral” responses were high, suggesting that additional education is likely needed to demonstrate the value of this service.

Table 1: Overall Interest in Managed Services

Unified Comms MDM

Mobile & PBX Integration

Web Filtering

Firewall Services

Policy Services

Wi-‐Fi as a Service

Context/ Location Services

Interested 49.5% 66.0% 58.3% 61.2% 63.1% 62.1% 55.3% 51.5%

Neutral 32% 23.3% 20.4% 18.4% 21.4% 25.2% 19.4% 24.3%

Not Interested 18.4% 9.7% 20.4% 19.4% 15.5% 12.6% 26.2% 23.3%

Source: iGR, 2015

Table 2 below shows the interest in each service split by the size of company. (Note that only the respondents who were “Interested” are shown.) There are several interesting trends:

§ Smaller companies are slightly less interested in most of the services than those companies with more than 1,000 employees. This could be because


10

these smaller companies: already have these solutions installed, see less need for that function or are more resource-‐constrained (time, cash, staff, etc.).

§ Larger companies already indicated they were most interested in reducing costs as compared to smaller-‐sized companies surveyed – the higher level of interest in the managed services reflects this.

§ Interest in Unified Communications was highest in companies with 1,000 to 5,000 employees. The largest companies (5K+ employees) may already have some type of solution installed. For the medium companies, communications are likely an issue that needs addressing across the organization. Note that “Mobile & PBX Integration” also rates highly for the mid-‐sized companies.

§ Mobile device management, policy, web filtering and firewall services all showed significant levels of interest across all company sizes.

Table 2: Interest in Managed Services by Employees by Employee Size of Firm

Interested Only

Unified Comms MDM


Web Filtering

Firewall Services

Policy Services


Context/Location Services

500 -‐ 999 Employees 41.2% 68.6% 54.9% 58.8% 60.8% 62.7% 51% 51%

1K to 5K Employees 58.5% 65.9% 63.4% 65.9% 68.3% 61% 61% 56.1%

5K+ 50% 70% 60% 50% 70% 60% 50% 50%

Source: iGR, 2015

Cloud versus In-‐House

Managed services can be provided via a trusted cloud solution on an in-‐house server (where the service provider locates equipment on the enterprise premises). Table 3 below shows the IT managers’ preferences for provisioning of each managed service:

§ Overall, the preference is for an in-‐house solution, with the exception of Context/Location Services.

§ Given the concerns about security with cloud services (discussed earlier), it is likely that the responses to these questions are influenced by this concern. In other words, IT managers are concerned about losing control of their environment and security. Even though the option was given for a “trusted”


11

cloud provider, the IT managers are more likely to want on-‐premises solutions.

§ That said, the interest in cloud solutions is relatively high, with most of the managed services scoring one third of the respondents or higher.

§ If the cloud service provider can demonstrate how the IT manager can retain control, how the solution is secure and the benefits of the cloud approach, iGR believes that the majority of IT managers would show a preference for cloud provisioning.

Table 3: Interest in Cloud vs. In-‐house Managed Services

Unified Comms MDM


Web Filtering

Firewall Services

Policy Services


Context/Location Services

In-‐house 60% 58.8% 51.7% 52.4% 64.6% 53.1% 71.4% 40.7%

Cloud 36% 33.8% 36.7% 46% 32.3% 40.6% 26.8% 51.9%

Not sure 4% 7.4% 11.7% 3.2% 1.5% 6.3% 1.8% 7.4%

Source: iGR, 2015

Mobile Device Management

A series of questions in the survey specifically asked which mobile device management functions the IT department was currently responsible for and which were outsourced. Organized by size of company, Figure 5 below shows the results for the functions managed by the IT department.

Several interesting trends appeared:

§ Among the larger companies with more than 5,000 employees, exactly half of the IT managers said that they had no role in device management. The other half said they were responsible for all functions except for “support,” which includes diagnostics, remote assistance / repair, troubleshooting, etc. For the larger companies, it would seem that mobile device management is an “all-‐or-‐nothing” approach – the IT department either provides no device management or all of it.

§ In the midsized companies, the majority of IT departments were providing some level of mobile device management: just 2.5 percent said they did not manage any devices.

§ Securing mobile devices (protecting data through encryption and passcode policies, locking down certain device features, auditing devices, etc.) and managing mobile devices (asset and inventory management, updating and provisioning new policies, pushing out new configuration policies, etc.) were


12

the most common, followed by deploying mobile devices (activate devices, enroll them in policies, authenticate users, configure policies, provision apps, etc.).

§ Similar trends were seen in the smaller companies, with deploying mobile devices the most common IT department function, followed by securing mobile devices. Just 10 percent of the smallest surveyed companies (those with 500 to 999 employees) said that their IT department provided no mobile device management.

Figure 5: IT Role in Mobile Device Management by Employee Size of Firm

Source: iGR, 2015

Figure 6 below shows the reasons IT managers have chosen to keep some of the mobile device management functions in-‐house. (The responses are shown for those that provide some device management.)

§ 38 percent said to “maintain direct control.” Of the IT managers that indicated this reason, the functions they kept in-‐house were monitoring, managing, and supporting mobile devices.

§ 29 percent said security policies require that the IT department provide this service in-‐house. The IT managers that indicated this reason said that all the mobile device management functions were kept in-‐house.

§ 22 percent said they wished to keep expertise internal to the IT department. Of the IT managers that indicated this reason, the functions they kept in-‐house were security, monitoring, and supporting mobile devices.

0%

10%

20%

30%

40%

50%

60%

70%

80%

500-‐999 1K-‐5K 5K+ Employee Size of Company

No one manages mobile devices

Deploying

Securing

Monitoring

Managing

Supporkng


13

Figure 6: Perceived Reasons to keep Mobile Device Management In-‐house

Source: iGR, 2015

Of course, many companies are outsourcing some functions of mobile device management (Figure 7). Between 30 and 37 percent of the companies said that none of their mobile device management was outsourced. This suggests that approximately two thirds of companies outsource at least some functions.

§ Among the largest companies (with more than 5,000 employees), 40 percent said they had outsourced deployment of mobile devices (activate devices, enroll them in policies, authenticate users, configure policies, provision apps, etc.).

§ The next most common functions to outsource among the largest companies were monitoring (tracking activity, monitoring access, alerts) and managing (asset and inventory management, updating and provisioning new policies, pushing out new configuration policies, etc.).

§ Managing mobile devices was the most popular function to outsource in the smaller and mid-‐sized companies: just over 30 percent said they were outsourcing this function.

§ Supporting mobile devices was also a popular function to outsource.

0% 5% 10% 15% 20% 25% 30% 35% 40%

Our IT staff is underuklized

Want to hire IT staff dedicated to mobile device management

Our company is pursuing an "all-‐mobile" strategy

Want to maintain direct control over all mobile devices

Want to keep the experkse internal

Company security policies require us to keep it in-‐house

Don't trust a third-‐party

Other


14

Figure 7: Outsourced Mobile Device Management Functions by Employee Size of Firm

Source: iGR, 2015

Figure 8 below shows the reasons IT managers have chosen to outsource some of the mobile device management functions. (The responses are shown for those that outsource some device management.)

§ 39 percent said to “leverage provider expertise.” Of the IT managers that indicated this reason, the functions they outsourced were securing and supporting mobile devices.

§ 32 percent said that they trust the outsourced mobile device management provider. Of the IT managers that indicated this reason, the functions they outsourced were monitoring and managing their employees’ mobile devices.

§ 32 percent said they wished to keep the mobile device management as an operating expense. Of the IT managers that indicated this reason, the functions they outsourced were deployment, management, and supporting mobile devices.

0%

5%

10%

15%

20%

25%

30%

35%

40%

45%


We have not outsourced any mobile device management

Deploying

Securing

Monitoring

Managing

Supporkng


15

Figure 8: Perceived Reasons to Outsource Mobile Device Management Functions

Source: iGR, 2015

Critical Success Factors

iGR’s survey also asked the IT managers which functions they planned to outsource and why. This data results in the following critical success factors for a Cloud provider:

§ Direct control of enterprise mobile devices regardless of where the equipment/software actually sits (data center, enterprise private cloud on-‐premise, etc.).

§ Security and enforcement of policies.

§ Allow the enterprise to develop the expertise without the hassle of dealing with physical hardware.

§ Make it easy to support, monitor and maintain the mobile devices.

§ Demonstrate ability to be a trusted partner of the IT department.

Awareness of Small Cells

Small cells for indoor enterprise solutions have been introduced over the past few years (supported by companies such as SpiderCloud Wireless, Cisco and Intel). The industry has also done a lot of work to raise awareness of the benefits among enterprise IT managers. As Figure 9 shows, this strategy appears to be working: the awareness of enterprise small cell solutions is very strong, with more than 50

0% 5% 10% 15% 20% 25% 30% 35% 40% 45%

Don't have an IT staff

Don't want to hire / create an IT staff

Don't want to increase the size of current IT staff

Don't want to add to the responsibilikes of current IT staff

Want to keep it as operakonal expense

Trust the provider of the service

Leverage the service provider's experkse, economies of scale, etc.


16

percent of IT managers across all company sizes saying they are very aware of the solutions available.

IT managers were also asked about their interest in enterprise small cell solutions (Figure 10), and interest is very strong across all company sizes. However, IT managers in the largest companies are significantly more interested in small cell solutions: nearly two thirds indicated the highest level of interest.

Figure 9: Awareness of Enterprise Small Cell Solutions by Employee Size of Firm

Source: iGR, 2015

Figure 10: Interest in Enterprise Small Cell Solutions by Employee Size of Firm

Source: iGR, 2015

50.0% 60.0%

50.0%

23.1% 15.0% 30.0%

26.9% 25.0% 20.0%

0% 10% 20% 30% 40% 50% 60% 70% 80% 90%

100%


Less aware

Somewhat

Most aware

50.0% 45.5% 62.5%

21.4% 33.3%

25.0%

28.6% 21.2% 12.5%

0% 10% 20% 30% 40% 50% 60% 70% 80% 90%

100%


Not Interested

Neutral

Most interested


17

Interest in Enterprise Small Cells as Managed Service

The final survey questions assessed interest in enterprise small cells offered as a managed service. The questions specifically asked about the interest in having the small cells “operated as a managed service by the mobile operator.” As Figure 11 shows below, there is solid interest in having a small cell managed service, as more than 30 percent of IT managers in all company sizes indicated high levels of interest.

It is important to note that this question was asked without a long description of the benefits of a small cell managed solution. This is effectively a “blind” question.

Figure 11: Interest in Enterprise Small Cell Solutions as a Managed Service by Employee Size of Firm

Source: iGR, 2015

Subsequent questions were about the interest in having the mobile operator “remotely monitor and control the function and performance” of the small cell. The responses indicated that IT managers do not want to lose direct control of the small cell environment. To an IT manager, the phrase “Managed solution” means that they retain some control and have a secure environment while benefiting from a solution that reduces IT overhead and capital expense.

36.0% 37.8% 30.0%

32.0% 29.7% 40.0%

32.0% 32.4% 30.0%

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%


Not Interested

Neutral

Most interested


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Forecast

Total Addressable Market

The following table and chart show the distribution of survey respondents by employee size of company. To create its forecast for the cloud and mobile related services, iGR started with the U.S. employee base within the range of surveyed companies. The source was the Statistics of U.S. Businesses 2012 data, which is part of the U.S. Census Bureau.

Table 4: Survey Respondents by Employee Size of Firm

Percentage

Between 500 to 999 employees 21.6% Between 1,000 to 2,499 employees 25.5%

Between 2,500 to 4,999 employees 11.8%

Between 5,000 to 9,999 employees 15.7%

10,000 or more employees 25.5% Total 100%

Source: iGR, 2015

Figure 12: Survey Respondents by Employee Size of Firm

Source: iGR, 2015

21.6%

25.5%

11.8%

15.7%

25.5%

Between 500 to 999 employees

Between 1,000 to 2,499 employees



10,000 or more employees


19

To create its forecast for the cloud and mobile related services, iGR started with the U.S. employee base within the range of surveyed companies. The following table shows both the number of individual companies per “employee size of company” category (against which the survey data was weighted), the percentage distribution of those companies, and the total number of employees at those companies. As stated above, all of this data comes from the Statistics of U.S. Businesses 2012 data.

Table 5: Distribution of Employees by Employee Size of Company

Employee Size of Company Companies

Percent of Companies

per Employee Size of

Company Employees 500 to 999 employees 9,061 49.7% 6,266,639 1,000 to 4,999 employees 7,249 39.8% 14,730,462 5,000+ employees 1,909 10.5% 38,878,474 Total 18,219 100% 59,875,575

Source: Statistics of U.S. Businesses, 2012 dataset (most recent)

All data in this report (and forecast) were weighted to align with the actual distribution of the number of firms per “employee size of company” category as shown above. In some cases, the cross-‐tabs and other filtered data used by iGR to generate its forecasts resulted in rounding errors.

Recall that this report uses the following abbreviations for each employee size of company:

§ 500 to 999 employees: 500 to 1K

§ 1,000 to 4,999 employees: 1K to 5K

§ 5,000+ employees: 5K+.

The following table shows iGR’s forecast for the total number of employees per “employee size of company” category. iGR assumed a low per-‐year growth rate in the number of employees.

Table 6: Growth in employees

U.S. Employees 2014 2015 2016 2017 2018 2019 500-‐1K 6,266,639 6,329,305 6,392,598 6,456,524 6,521,090 6,586,301 1K-‐5K 14,730,462 14,877,767 15,026,544 15,176,810 15,328,578 15,481,864 5K+ 38,878,474 39,267,259 39,659,931 40,056,531 40,457,096 40,861,667 Total 59,875,575 60,474,331 61,079,074 61,689,865 62,306,763 62,929,831

Source: iGR, 2015


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Next, iGR used survey data to estimate the percent of employees who had mobile devices and what percent of those devices were managed by the companies’ IT departments. Not all employees have devices that were paid for by the company, but virtually everyone in the U.S. (particularly those who work) has a mobile device. In many cases those devices fall under the “bring your own device” policy many U.S. employers now have. Some do not. Some companies do not do anything to manage those BYOD devices while others do. In some cases, that management merely means restricting access to company data for security or other reasons.

iGR believes that the percentage of companies actively managing mobile devices will increase over time, as shown in the following table. This estimate becomes the basis for iGR’s total addressable market (TAM) forecast.

Table 7: Increase in Percent of Companies with IT Managing Mobile Devices

2014 2015 2016 2017 2018 2019

500-‐1K 87% 88.0% 89% 90% 91% 92% 1K-‐5K 85% 86% 87% 88% 89% 90% 5K+ 70% 74% 78% 82% 86% 92%

Source: iGR, 2015

There are several reasons why iGR used the above estimate for the foundation of its TAM:

§ Much of future data access will be on mobile devices – tablets, phablets, smartphones and laptops – just as it is today.

§ Much of data access will be to cloud-‐based data.

§ Much of that data access happens on devices that are inside the enterprise’s offices/buildings. This is why indoor coverage/capacity is so important.

o Today, Wi-‐Fi and wired networks provide that capability. Cellular voice/data is ancillary, but growing quickly.

o In the future, iGR believes that much of indoor data access will be over densely deployed, high-‐capacity wireless networks – unlicensed Wi-‐Fi and/or licensed cellular.

§ Wireless indoor data access will likely be facilitated by equipment that is resident within the enterprise’s local offices – i.e., enterprise Wi-‐Fi and/or small cells. When deployed by a mobile operator / cloud provider, that network equipment will also facilitate access to the mobile operator’s network. That device will also be the local gateway for the enterprise IT managers to access/control their cloud-‐based services.

§ Despite these trends, not all companies will implement centralized mobile device management systems to handle their BYOD and/or non-‐BYOD mobile


21

devices – either because they do not see the need, do not want to invest the resources or simply lag behind.

The following table shows the number of employees with devices that are managed by the companies’ IT departments. This is simply the percentages shown above multiplied by the forecast number of employees.

Table 8: Number of Employees with Mobile Devices Managed by IT, 2014-‐2019

TAM 2014 2015 2016 2017 2018 2019 CAGR 500-‐1K 5,451,976 5,569,789 5,689,413 5,810,872 5,934,192 6,059,397 2.1%

1K-‐5K 12,520,893 12,794,879 13,073,094 13,355,593 13,642,434 13,933,677 2.2% 5K+ 27,214,932 29,057,771 30,934,746 32,846,355 34,793,103 37,592,734 6.7% Total 45,187,800 47,422,440 49,697,253 52,012,820 54,369,728 57,585,807 5%

Source: iGR, 2015

Figure 13: Number of Employees with Mobile Devices Managed by IT, 2014-‐2019

Source: iGR, 2015

iGR’s next step was to calculate, based on the survey data, what percentage of respondents (per “employee size of company” category) were interested in the following services as cloud-‐based services. Overall, the respondents were:

§ Receptive to the following services if offered by their mobile operator(s)

§ Slightly more resistant to the idea of these services as cloud-‐based versus them residing “in-‐house.”

The following table, then, shows the “starting year” (2014) interest for each of the following cloud-‐based services. iGR assumed strong growth in interest in these

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services, which essentially means that overall corporations are more amenable to the idea of moving their “in-‐house” systems to the cloud while still retaining direct control over those systems as if they were still in-‐house (i.e., nothing changes except where the hardware and software is located).

iGR then assumed aggressive growth in interest for these cloud-‐based services, driven both by general interest in cloud and in enterprise small cells.

Table 9: Interest in Specific Cloud-‐based Services

Services – Base year (2014) % interest 500-‐1K 1K-‐5K 5K+ Unified Communications 24% 9% 20% MDM 31% 12% 23% Mobile & PBX Integration 27% 16% 12% Web Filtering 37% 21% 20% Firewall Services 28% 12% 20% Policy Services 30% 21% 10% Wi-‐Fi as a Service 18% 9% 20% Context/Location Services 37% 17% 20%

Source: iGR, 2015

The following table shows iGR’s total addressable market forecast for the number of employees potentially adopting the given services. Note that since a single company could adopt one or more of these services, the employee estimate cannot be summed.

Table 10: Employee Total Addressable Market for Cloud-‐based Services, 2014-‐2019

2014 2015 2016 2017 2018 2019 CAGR

Unified Comms. 7,898,493 9,376,240 10,847,608 12,536,426 14,215,332 16,245,938 15.5% MDM 9,587,635 12,316,429 15,417,206 18,760,626 22,353,051 26,593,235 22.6% Mobile & PBX Integration 6,821,275 8,879,156 11,201,998 13,714,605 16,421,982 19,590,745 23.5% Web Filtering 10,124,207 11,507,750 13,025,272 14,644,737 16,368,761 18,445,176 12.7% Firewall Services 8,516,677 9,854,929 11,336,646 12,919,755 14,606,865 16,645,800 14.3% Policy Services 7,023,216 8,212,087 9,533,538 10,953,341 12,474,057 14,261,745 15.2% Wi-‐Fi as a Service 7,579,315 9,042,053 10,636,974 12,338,668 14,149,870 16,318,534 16.6% Context/ Location Services 9,611,492 10,521,730 11,508,403 12,550,129 13,648,274 15,008,539 9.3%

Source: iGR, 2015


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Figure 14: Employee Total Addressable Market for Cloud-‐based Services, 2014-‐2019

Source: iGR, 2015

The following table shows iGR’s estimate for how much survey respondents would be “willing to pay” per type of service per month. These estimates are weighted averages based on survey data that was then compared to current average pricing for similar services. iGR then tuned the survey averages to better reflect current pricing. Note that the variations in prices per “employee size of company” are consistent with trends iGR observed in the survey data.

To create both the TAM (and estimated revenue forecast, found in a subsequent table), iGR turned these per-‐service, per-‐month, per employee “willingness to pay” averages into a yearly estimate and then forecasted them through 2019. iGR assumed that:

§ All services (except the following two examples) fall by one, two or three percent per year over the forecast period. The rationale here is that increased competition forces prices lower.

§ iGR forecasted a three percent per year increase in Context/Location Services because its potential is largely unknown and unused in-‐building/enterprise function today. In the future, particularly with the increased rollout of in-‐building small cells, iGR believes wireless

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Wi-‐Fi as a Service Context/Locakon Services


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context/location services could develop into a sought-‐after service that might generate significant value.

§ iGR also forecasted a one percent per year increase in “Wi-‐Fi as a Service,” largely because of the expertise needed to install a robust, carrier-‐grade Wi-‐Fi network that could also be used to leverage new functionality, such as Mobile Edge Computing (MEC), Voice over Wi-‐Fi (VoWiFi), LTE-‐Unlicensed (LTE-‐U) and Context/Location Services.

§ iGR believes that IT managers are likely to buy packages/bundles of services. Therefore, the prices shown below are for each individual service/product. They assume no further discounts if an enterprise implements multiple cloud services.

Table 11: Estimated Price “Willing to Pay” per Employee per Cloud Service, Base Year (2014)

Services, Willingness to Pay Per employee, per service, per month 500-‐1K 1K-‐5K 5K+ Unified Communications $23.21 $20.55 $27.44 MDM $4.55 $4.00 $5.63 Mobile & PBX Integration $9.12 $8.72 $8.93 Web Filtering $1.79 $1.51 $1.80 Firewall Services $1.79 $1.73 $1.91 Policy Services $1.61 $1.47 $1.86 Wi-‐Fi as a Service $9.92 $8.64 $11.56 Context/Location Services $3.79 $3.57 $3.83

Source: iGR, 2015

The following table and chart show the TAM revenue for the various cloud-‐based services. This is the result of multiplying the total employees per service by the estimated yearly revenue per service (as described above). iGR’s forecast suggests that the total TAM for these mobile cloud services will rise from almost $6 billion in 2014 to $12 billion in 2019.

Table 12: Revenue TAM for Cloud Services, 2014-‐2019 ($M)

TAM, revenue ($M) 2014 2015 2016 2017 2018 2019 CAGR Unified Communications $2,439 $2,859 $3,274 $3,743 $4,204 $4,764 14.3% MDM $595 $740 $898 $1,060 $1,226 $1,417 18.9% Mobile & PBX Integration $729 $930 $1,149 $1,379 $1,618 $1,891 21.0% Web Filtering $209 $231 $254 $277 $300 $329 9.5% Firewall Services $190 $213 $238 $263 $289 $319 11.0% Policy Services $139 $159 $180 $202 $224 $250 12.4% Wi-‐Fi as a Service $992 $1,191 $1,410 $1,649 $1,907 $2,221 17.5% Context/Location Services $434 $490 $552 $620 $695 $788 12.6% All services, TAM $5,728 $6,812 $7,956 $9,193 $10,462 $11,979 15.9%


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TAM, revenue ($M) 2014 2015 2016 2017 2018 2019 CAGR (revenues)

Source: iGR, 2015

Figure 15: Revenue TAM for Cloud Services, 2014-‐2019 ($M)

Source: iGR, 2015

Actual Adoption

To forecast adoption of the various cloud services, iGR used the following assumptions and demand drivers:

§ Intense interest from operators in densifying their mobile voice/data networks (LTE) via in-‐building deployments of small cells.

§ Solidifying the typically higher revenue stream associated with subscribers who use their mobile devices for work and personal reasons.

§ Interest from operators in expanding their revenue base to include additional services such as those included in the survey.

§ Assisting enterprises by reducing costs particularly of those tasks associated with mobility.

§ Assisting enterprises who want to leverage the cloud to reduce capital spending on IT hardware/software and move to a more operational expense driven model.

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§ Implementation of new functionality within the enterprise that can be realized via the “back-‐end” integration of applications/services – e.g., Context/Location services or VoWiFi.

§ The survey respondents were largely in favor of cloud-‐based services and indicated it was a way for them to become more flexible and efficient, reduce costs and create an IT staff more focused on the company’s strategic goals rather than the “nitty-‐gritty” of IT hardware/software management.

§ Outsourcing is itself relatively common among the surveyed companies. Cloud-‐based services are, conceptually at least, a way to “outsource” some of the function while still retaining direct control over it.

§ Leveraging their networks – wired and wireless – to provide better in-‐building coverage and seamless cellular voice. iGR believes that over time most enterprise networks will be entirely wireless (backed up by a robust, Ethernet-‐based “backhaul” network).

Key hurdles for enterprise small cells include:

§ The survey results suggested that security and compliance with regulation/legislation were the biggest issues. Virtually everything else (connectivity, hidden costs, reliability, etc.) were much less important.

§ A deployment model that needs to be made painless and easy for the enterprise – everything from the cabling to the placement on walls/ceilings.

§ Some enterprises may balk at the expense associated with purchasing and installing carrier-‐specific small cells in their buildings/offices. There is clearly an opportunity for the mobile operator to offer some other forms of cost recovery to address this issue; out-‐of-‐the-‐box thinking can provide a solution to this problem.

§ Some mobile operators may balk at the expense associated with rolling out a small cell solution when the enterprise cannot or will not partner with the carrier for mobile services.

§ A “neutral host” small cell product may help allay the enterprise concern, but do little to encourage the operator to attach to the system. Operators tend to look holistically at the market, and if the given building does not trigger poor network KPIs, then they may have no incentive to provide in-‐building services.

iGR’s adoption model is moderate for these services, but given that awareness around small cells is high iGR believes that the potential is there, especially since the majority of IT respondents, regardless of company size, indicated a high level of interest in enterprise small cells.

Note that iGR’s adoption model is driven primarily by the availability of small cell-‐based SaaS and/or IaaS services and features; the interest and demand is there


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among enterprises. One key issue is availability of the services from the mobile operators.

And, certainly, the need for in-‐building mobile voice/data services is growing. There is a limit to the in-‐building benefit of macrocell / outdoor network improvements. Also, building owners and not just their tenants, are increasingly aware that excellent indoor cellular coverage/capacity can be a major selling point.

The following table and chart show the total number of employees across all company sizes who are likely to use the given cloud-‐based services, assuming services are available from 2015 from a major operator and from 2016 from multiple operators. As with the TAM, these numbers cannot be summed as the same company may adopt multiple services.

Table 13: Actual Cloud-‐based Services Employee Adoption Forecast, 2014-‐2019

Average # employees with cloud-‐

based services 2014 2015 2016 2017 2018 2019 CAGR Unified Communications 0 121,891 390,514 1,027,987 2,132,300 4,548,863 147.2% MDM 0 184,746 925,032 2,438,881 5,588,263 12,498,820 186.8% Mobile & PBX Integration 0 106,550 392,070 1,234,314 2,791,737 6,073,131 174.8% Web Filtering 0 149,601 442,859 1,054,421 2,127,939 4,426,842 133.2% Firewall Services 0 128,114 385,446 930,222 1,898,892 3,994,992 136.3% Policy Services 0 106,757 324,140 788,641 1,621,627 3,422,819 138.0% Wi-‐Fi as a Service 0 135,631 638,218 1,604,027 3,537,467 7,669,711 174.2% Context/Location Services 0 126,261 287,710 753,008 1,501,310 3,001,708 120.8%

Source: iGR, 2015


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Figure 16: Actual Cloud-‐based Services Employee Adoption Forecast, 2014-‐2019

Source: iGR, 2015

The following table and chart show the forecasted revenue associated with the various services. iGR used the same per-‐service, per-‐employee price estimates as described earlier. Also as discussed earlier:

§ With the exception of “Wi-‐Fi as a Service” and “Context/Location Services,” iGR assumed that the price per service would fall over the forecast period

§ This forecast does not factor in any price discounts that might be offered if the given company adopted multiple/bundled services.

As a result, the substantial revenue growth comes from the adoption of services – i.e., new enterprises and/or new employees being “rolled over” to cloud-‐based services.

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Table 14: Actual Cloud-‐based Services Revenue Forecast, 2014-‐2019 ($M)

Revenues ($M) 2014 2015 2016 2017 2018 2019 CAGR Unified Communications $0 $37.2 $117.9 $306.9 $630.6 $1,333.8 144.8%

MDM $0 $11.1 $53.9 $137.8 $306.4 $666.2 178.3% Mobile & PBX Integration $0 $11.2 $40.2 $124.1 $275.0 $586.2 169.2%

Web Filtering $0 $3.0 $8.6 $19.9 $39.1 $78.9 126.5% Firewall Services $0 $2.8 $8.1 $18.9 $37.5 $76.6 129.3% Policy Services $0 $2.1 $6.1 $14.5 $29.1 $59.9 131.9% Wi-‐Fi as a Service $0 $17.9 $84.6 $214.3 $476.7 $1,044.1 176.5% Context/Location Services $0 $5.9 $13.8 $37.2 $76.5 $157.6 127.5%

All services, Actual revenue $0 $91.0 $333.2 $873.8 $1,870.9 $4,003.4 157.5%

Source: iGR, 2015

Figure 17: Actual Cloud-‐based Services Revenue Forecast, 2014-‐2019 ($M)

Source: iGR, 2015

The following table compares the actual revenue forecast to the TAM revenue. Clearly, the total addressable market vastly exceeds the forecasted adoption of cloud-‐based services offered by mobile operators via enterprise small cells, but

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estimated revenue from adoption grows at a substantial pace over the forecast period.

Table 15: Comparison of Actual Revenue to TAM Revenue, 2014-‐2019 ($M)

2014 2015 2016 2017 2018 2019 CAGR

TAM, revenue ($M) $5,728 $6,812 $7,956 $9,193 $10,462 $11,979 15.9% Actual revenue ($M) $0.0 $91.0 $333.2 $873.8 $1,870.9 $4,003.4 157.5% Actual as % of TAM 0.0% 1.3% 4.2% 9.5% 17.9% 33.4%

Source: iGR, 2015

Figure 18: Comparison of Actual Revenue to TAM Revenue, 2014-‐2019 ($M)

Source: iGR, 2015

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Sponsor Profiles

SpiderCloud Wireless

Brief Overview

SpiderCloud Wireless, founded in 2007 and headquartered in San Jose, California, is a provider of a small cell management platform.

The management team includes:

• Mike Gallagher, CEO since 2008 – Previously CEO of FiberTower, president of Flarion Technologies, which was acquired by Qualcomm, and senior VP of sales of Nortel Networks’ IP Services.

• Thomas Scott, CFO since January 2012 – Previously CFO of FiberTower and First Avenue Networks.

• Behrooz Parsay, Senior VP of Engineering and Operations since 2010 – Previously with Aperto Networks and Ericsson.

• Amit Jain, VP of Marketing and Product Management since September 2011 – Formerly with Airvana, Qualcomm, Ericsson, and McKinsey & Company.

Basic Products and Services

SpiderCloud Wireless provides the E-‐RAN system, which is a small cell managed services platform for enterprises. In short, the E-‐RAN is a scalable small cell system with dual-‐band 3G+4G or 4G+4G, scalable to more than 100 radios and serve buildings/offices with anywhere from 50,000 to 1.5 million square feet. E-‐RAN can be used in an enterprise with as few as 200 subscribers, or a venue with over 10,000 subscribers. E-‐RAN supports dual-‐carrier LTE, VoLTE and Carrier Aggregation.

Small Cell Offerings

The SpiderCloud E-‐RAN system consists of two elements:

• SpiderCloud Services Node (SCSN)

o Controller for enterprise premises that provides integration of carrier and enterprise networks for seamless coverage in a building. The Services Node controls the SpiderCloud Radio Nodes.

o Aggregates the many small cells so that they appear as one node to the mobile network. These architecture speeds handovers and improves interference coordination with the enterprise’s building.


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Integrates with the mobile operator’s network through one IPSec tunnel using Iuh interface. The SCSN also supports the Iu and S1 interfaces.

o The Services Node enables a suite of enterprise services including analytics, security and policy enforcement, content caching, and Mobile PBX/Unified Communications solutions. With its policy based user management functions, the Services Node enables differentiated services between user groups such as local switching and prioritization.

o Uses proprietary self-‐organizing network (SON) technology. SpiderCloud Radio Nodes have advanced “network listen” capabilities and so are able to listen to other Radio Nodes, as well as to GSM, UMTS, and LTE macrocells. These scans are done at startup and periodically as a part of normal operation.

o The Services Node includes a Trusted Platform Module (TPM), secure boot and a secure hard drive. Traffic to both Radio Nodes and the mobile operator’s core is encrypted..

• SpiderCloud Radio Node (SCRN)

o The Radio Nodes are small cells designed for in-‐building environments. They can be installed on walls or ceilings. Both network connectivity and power are provided over Ethernet. The Radio Nodes have no fans and are convection cooled. Antennas are built-‐in with an option to use external antennas as required.

o The Radio Nodes support UMTS and LTE air interfaces in multiple frequency band combinations. The various models include:

§ SCRN-‐200 – A 3G Small Cell that supports up to 32 channels.

§ SCRN-‐210 – An LTE Small Cell that supports up to 128 RRC_Connected users. (RRC is Radio Resource Control and refers to the signaling between the user equipment and the RAN).

§ SCRN-‐310 – Integrated dual band 3G+LTE and LTE+LTE small cell supporting up to 32 3G channels and 128 LTE RRC_Connected Users. This Small Cell is software upgradeable and supports downlink speeds of 150Mbps to 300Mbps (the higher rate assumes the use of Carrier Aggregation, which the 310 supports).

o Nodes communicate to the services node (SCSN) through an IPSec tunnel with security keys stored in a Trusted Platform Module (TPM) allowing support for a secure boot process and X.509 certificate-‐based mutual authentication. There is no management


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port or console on the Radio Node, and the Radio Node can be physically locked to prevent theft.

• SpiderNet – Centralized configuration, fault, and performance management system that allows mobile operators to manage multiple E-‐RAN small cell systems.

The complete solution is pictured below. SpiderCloud’s E-‐RAN is designed to be deployed by technicians who deploy Enterprise Wi-‐Fi. Each Radio Node is connected to the nearest switch using a single Ethernet cable, and the system is completely secure. Note that E-‐RAN can work over existing enterprise LANs so redundant cabling is not necessary. E-‐RAN has also been designed to not overwhelm the LAN with unnecessary baseband traffic.

E-‐RAN offers seamless handovers to subscribers as they move from the coverage area of one Radio Node to another, using Soft Handover technology in UMTS, and Fast Handovers in LTE. This is particularly important as subscribers move from outdoor macrocell coverage to the E-‐RAN in-‐building system and/or when subscribers move around inside their building. E-‐RAN is interoperable with all major LTE Evolved Packet Core (EPC) and 3G Iuh Gateway suppliers. It offers standard north bound interfaces for OSS integration.

Figure 19: SpiderCloud E-‐RAN System

Source: SpiderCloud, 2015

SpiderCloud also offers SpiderNet, which is the company’s centralized configuration, fault, and performance management system that allows mobile operators to manage multiple SpiderCloud Enterprise Radio Access Network (E-‐RAN) small cell systems through a graphical interface.

SpiderNet uses TR-‐069, a standard protocol defined by the Broadband Forum, to manage SpiderCloud Services Nodes. Each Services Node manages all the SpiderCloud Radio Nodes connected to it, and connects to the SpiderNet server in the operator’s core network through secure IPSec tunnels. On the


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northbound side, SpiderNet integrates with the operator’s support systems using North Bound Interfaces (NBI).

Recent News

• May 2015 – Nominated for three awards at the Small Cell Forum’s annual Industry Conference, two awards at Light Reading’s Big Telecom Event and an award from Informa Telecoms & Media at that company’s annual LTE World Summit.

• April 2015 – Telcel of Mexico has deployed SpiderCloud small cells in many of its largest government, education and business customers in Mexico.

• March 2015 – Cisco announced the launch of its Universal Small Cell (USC) 8000 Series, which is designed for large enterprises or venues and was developed by Cisco and SpiderCloud. Cisco will resell SpiderCloud’s entire small cell portfolio under the USC 8000 Series brand. Furthermore, SpiderCloud will develop additional small cell technology for Cisco. Vodafone will be the first mobile operator to launch this solution.

• February 2015 – Warid Telecom, a mobile operator in Pakistan, has deployed SpiderCloud small cells systems in major cities.

• February 2015 – SpiderCloud announced many enhancements to its small cell products, including:

o The addition of carrier aggregation to dual-‐band Radio Nodes

o Radio Nodes with Integrated Bluetooth Low Energy Beacons

o Virtualized functions on the Services Node

o The support of two operators on dual-‐band LTE Radio Nodes.

• December 2014 – SpiderCloud announced that they had begun supplying Verizon Wireless with their small cell E-‐RAN system. The solutions will be used for Verizon’s enterprise customers and public access venues.

• June 2014 – SpiderCloud and NEC together are trialing a small cell solution for Turkcell in Turkey. The solution includes NEC femtocell access points and the E-‐RAN solution from SpiderCloud.

• June 2014 – SpiderCloud announced successful trials with its dual-‐band 3G/LTE SCRN-‐310. In the trials the SCRN-‐310s were deployed in buildings of large enterprise customers and tested against several KPIs.

• February 2014 – Vodafone UK launched its Sure Signal Premium service for medium and large businesses. The service, which provides improved 3G and LTE indoor mobile coverage, was developed by NEC and SpiderCloud Wireless.


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Partners

• SpiderCloud’s primary partners are Cisco and NEC.

• Cisco resells SpiderCloud’s entire small cell portfolio.

• NEC has partnered with SpiderCloud Wireless to provide indoor mobile access for enterprises. NEC will resell the SpiderCloud solution as part of its enterprise small cell strategy. In NEC’s deployment of the SpiderCloud SmartCloud system, the SpiderCloud Services Node (SCSN) connects to the NEC Small Cell Gateway over an Iuh interface.

• SpiderCloud Wireless has implemented its physical layer software (PHY) on Mindspeed Technologies’ (now MACOM’s) system-‐on-‐chip (SoC). The PHY manages radio nodes’ (SCRN’s) mobility and interference.

• SMTC Corporation provides SpiderCloud Wireless with a range of manufacturing and integrated service solutions.

• SpiderCloud uses Broadcom’s 3G/LTE baseband SoC in the company’s SCRN-‐310 small cell.

• Other partners include Druid Software, Intel, and Tango Networks.

Customers

SpiderCloud Wireless’s customers include América Móvil/Telcel, Avea, EE, Verizon, Vodafone UK and Netherlands, Warid Telecom, among others.

Cisco

Brief Overview

Cisco, founded in 1984 and headquartered in San Jose, California, provides Internet solutions. A public company (NASDAQ: CSCO) with over 65,000 employees, Cisco reported revenue of $47.1 billion in fiscal year 2014. Cisco is laser focused on partnering with its customers to provide more than technology – to provide improved business outcomes. Its Universal Intelligent Access Solution – comprised of Universal Small Cell and Universal Wi-‐Fi – is designed to remove the complexity and cost from indoor small cell solutions so that customers can focus on delivering new value added wireless services.

The management team includes:

• John Chambers, CEO since 1995 and Chairman of the Board – With Cisco since 1991. Previously with Wang Laboratories and IBM.

• Chuck Robbins, Designated CEO beginning July 2015; he became a member of the Board effective May 1, 2015. Previously he was Senior Vice President of Worldwide Field Operations for Cisco.


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• Kelly Kramer, Executive VP and CFO – With Cisco since 2012 and formerly with GE.

• Rebecca Jacoby, Senior Vice President Operations-‐-‐ With Cisco since 1995.

• Chris Dedicoat, Senior Vice President Worldwide Sales – With Cisco since 1995.

Basic Products and Services

Cisco provides products to enterprise and service providers, including application networking services, blade switches, cloud and systems management, collaboration endpoints, conferencing, connected safety and security, customer collaboration, data center management and automation, data center switches, interfaces and modules, networking software, optical networking, routers, security, servers – unified computing, service exchange, storage networking, switches, unified communications, video, and wireless.

Small Cell Offerings

The following series are part of the Cisco Universal Small Cell Solution:

USC 3000 Series

• Designed for home or small office

• Provides 3G voice coverage.

USC 5000 Series

• Designed for small-‐to-‐medium businesses

• Provide 3G, 4G, or dual mode services

• Includes the Cisco Universal Small Cell 5310, which can be plugged into a Cisco Universal Wi-‐Fi infrastructure.

USC 7000 Series

• Provides coverage in dense indoor environments, such as venues, shopping malls and airports.

• Provide 3G, 4G, or dual mode services

USC 8000 Series

• Designed for large enterprises or public spaces.

• Supports up to 64 simultaneous users.

• Includes self-‐configuring, self-‐optimizing and self-‐healing capabilities.


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• Products include the 8088 Controller, the Universal Small Cell 8718, which provides a licensed radio network extension using the Cisco Universal Wi-‐Fi solution.

ASR 5000 Series Small Cell Gateway

• Integral to both the small cell solution and the SP WiFi solution, it allows users to roam seamlessly between 3G, 4G, licensed and unlicensed small cell networks.

Figure 20: Cisco Universal Small Cell Solution

Source: Cisco, 2015

The Cisco Universal Wi-‐Fi solution is a carrier-‐grade Wi-‐Fi network network solution that includes:

• Cisco Aironet Series Access Points – For indoor and outdoor use

• Cisco Wireless Controller, Mobility Services Engine, and the Cisco Wireless Access Gateways for deployment and management of the network

• Cisco Policy Suite policy control platform

• Cisco ASR 5000 Series Packet Core and Small Cell Gateway

• Cisco ASR 1000 Series Aggregation Services Routers.

Recent News

• June 2015 -‐ Cellular One chooses ClearSky Technologies and Cisco for cost-‐effective small cell services. The Cisco Universal Small Cell Solution provides


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a multi-‐tenant neutral host gateway, the latest example of how Cisco small cell technology is being deployed globally in a multifaceted way to cost-‐effectively provide residential, enterprise and outdoor small cells in a scalable, neutral host environment.

• June 2015 – Cisco and Quortus win the Small Cell Forum Industry Award for Small Cell Element Design and Technology by delivering the industry’s first enterprise small cell VoLTE solution

• May 2015 -‐ Cisco announced that EE, the United Kingdom's largest mobile network operator, is deploying Cisco small cells to support its growing base of enterprise customers. Cisco's end-‐to-‐end small cell solutions can scale to be suitable for small, medium and large enterprise buildings.

• March 2015 – Cisco announced the launch of its Universal Small Cell (USC) 8000 Series, which is designed for large enterprises or venues and was developed by Cisco and SpiderCloud. Cisco will resell SpiderCloud’s entire small cell portfolio under the USC 8000 Series brand. Furthermore, Cisco and SpiderCloud will work together to develop unique small cell technology for the Cisco Universal Wi-‐Fi solution. Vodafone will be the first mobile operator to launch this solution.

• June 2014 – Cisco launched the Cisco Small Cell Enterprise Select program, which allows mobile operators and Cisco channel partners to jointly provide small cell deployments for enterprises.

Partners

Cisco has partners across the small cell ecosystem, from chipset manufacturers like Intel and Qualcomm to backhaul partners like BLiNQ and Dragonwave to tool providers like iBwave to product manufacturers like SpiderCloud.

Customers

Cisco provides solutions to service providers, enterprises, and small businesses in many industries, including Education, Energy, Financial Services, Government, Healthcare, Manufacturing, Public Sector, Real Estate, Retail, Sports and Entertainment, and Transportation.

Intel

Intel is a world leader in computing innovation. The company designs and builds the essential technologies that serve as the foundation for the world's computing devices. As a leader in corporate responsibility and sustainability, Intel also manufactures the world's first commercially available "conflict-‐free" microprocessors. Additional information about Intel is available at newsroom.intel.com and blogs.intel.com, and about Intel's conflict-‐free efforts at conflictfree.intel.com.


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About iGR

iGR is a market strategy consultancy focused on the wireless and mobile communications industry. Founded by Iain Gillott, one of the wireless industry’s leading analysts, we research and analyze the impact new wireless and mobile technologies will have on the industry, on vendors’ competitive positioning, and on our clients’ strategic business plans.

Our clients typically include service providers, equipment vendors, mobile Internet software providers, wireless ASPs, mobile commerce vendors, and billing, provisioning, and back office solution providers. We offer a range of services to help companies improve their position in the marketplace, clearly define their future direction, and, ultimately, improve their bottom line.

A more complete profile of the company can be found at http://www.igr-‐inc.com/.

Disclaimer

The opinions expressed in this report are those of iGR and do not reflect the opinions of the companies or organizations referenced in this paper. All research was conducted exclusively and independently by iGR.

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