tadsummit building a serivce innovation ecosystem - mac taylor - huawei

HUAWEI TECHNOLOGIES CO., LTD.

Building a Service Innovation Ecosystem

Learning from Experience

HUAWEI TECHNOLOGIES CO., LTD. Huawei proprietary. No spread without permission.

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Industry Trends and Disruptions

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Case Studies – Real Commercial Service Innovation

Operator Pain Points – How to get out of the box

Huawei Operation and Aggregation

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DisruptiveTrends Market Changes

Business Changes


Core Telecom TrendsCommoditization of Message and Voice.$100B revenue gap by 2018

ITization / IPization of Telecoms (Cloud, Virtualization, SDN, Free

and Open Source Software, any IP device)

Opex savings of 20% by 2018 being demanded by Telcos

Global scale and a global ecosystem, with adaptation to local market needs. Essential to be competitive against web-based service providers.

Focus on lean and agile.


What this means for Telecom Operators

Commoditization of Message and Voice.$100B revenue gap by 2018

ITization / IPization of Telecoms (Cloud, Virtualization, SDN, Free and Open Source

Software, any IP device)Opex savings

of 20% by 2018 being demanded by Telcos

Global scale and a global ecosystem, with adaptation to local market needs. Essential to be competitive against web-based service providers.

Focus on lean and agile. NOT yet more failed TMF

transformation projects

New Services are now critical across voice, messaging, IoT, M2M, connected

devices, smart city, telematics, connected car, video, etc. to plug the

gap.

The web has won, copy Amazon, Google, Microsoft to deliver the flexible IT/IP-centric multiple control platforms

(IMS/M2M/IoT/WebRTC) the new services require.

Global Cloud, Global Ecosystem. Only the Network Equipment Providers can

deliver the necessary global scale

Its not just the services and supporting infrastructure, model extends to all operations – break free from legacy

telecom processes.


Prediction on Messaging and ARPU

Telco messaging will become niche, anticipate rapid revenue decline as SMS moves to data. Analysys Mason is predicting a >25% ARPU decline by 2018 in Western Europe.

Industry needs to find >$100B in new revenues within 5 years, else face decline.


Services are the key to future profits

Horace Dediu Asymco: April 2014 http://www.asymco.com/

HUAWEI TECHNOLOGIES CO., LTD. Huawei Confidential 8

Digital Services Opportunity

There is an opportunity for Telco and Digital Services to expand horizontally as part of Internet of Things “Service” provider into the other vertical industries

Huawei Confidential

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Case Studies: Service Examples

Real Commercial Innovative Services Available Today

Huawei Confidential

API-Enabled Service Examples: $180M

Estimated Total Annual Revenueif Launched by Operator X

7 Million Subs

$1-5M

$5-10M

$10M+

Low Implementation Difficulty Moderate Implementation Difficulty

• All service examples commercially launched in other markets

• APIs make technical implementation relatively easy

• The 16 API-enabled service examples shown could generate $180+M, and there are hundreds more API-enabled services opportunities.

• Addresses OTT revenue decline to maintain telco revenues.

Huawei Confidential

Different Types of Business Models

11© 2010 Alan Quayle Business and Service Development

Cloud Based Communication Services (e.g. Twilio et al)

For the simple calling, messaging and number provision the business model is clear and commoditized.

Simple per minute / per message / per telephone number per month. With discounts at volume. ( e.g. 0.5 to 0.25c per min)

Service Innovation Business Models

1. Simple professional services deals where operator keeps all the services revenue

2. Revenue share with operator as a go-to-market partner

3. Flat monthly fee for API usage

4. Stimulate API usage with revenue share

5. Bundling to lock-in enterprises to operator network

The key word is flexibility, this requires a willingness to be entrepreneurial, to experiment, to focus on the customer value and find business models that work for

all parties.

Huawei Confidential

Business Model and Go-to-Market example W4Call

• Business Model› Pricing $2 per call!› How is that possible?› CPC of Insurance keyword is $54.91› Its not P2P its A2P, underserved market› Its revenue from your business customers

• Go-to-Market› All operator business customers with a

website should have a widget4call

› 10 calls per day, across 20k business websites gives a revenue of $80M per year!

Page 12

Huawei Confidential

Platform Partners

G2M for Service Innovation Ecosystem

Enterprise SME

Integrated Hosting Centre

Offer Services

Direct

Offer Services

using operator channel

Co

ns

um

er, S

ME

, En

terpris

e, o

ther S

P

Successful Ecosystem

• APIs make implementation easy

• Import a partner ecosystem.

Commercial Proven

services

• There are hundreds of API-enabled services from around

the world that can be launched

Low Investment

•No investment in infrastructure needed

•Simple proven integration with Huawei hosting platform

Global Experience

•All service examples commercially launched in

other markets

•Huawei success stories in China, Latin America and SE

Asia

Smart City

Operator X, Y, Z

Huawei Confidential

03

Case Studies: Get out of the Box

Learning and feedback from real test-cases ,trials and operator pain points and demands

HISILICON SEMICONDUCTORHUAWEI TECHNOLOGIES CO., LTD.

A simple analysis of the problem facing operators, vendors

and the whole telco industry on its journey of digital transformation


Trying to retrofit Digital Services - causes failure


Traditional Telco - an all - in one business. “IN-THE-BOX”


Operators NOW have THREE distinct businesses

Services PlatformBusiness -

The new telco Opportunity: build an ecosystem to drive distribution of new Digital Services

Traditional VASBusiness – Telco BOX

Connectivity Business – Telco BOX

Asymetric Competition: OTTs offer services for free (e.g., Viber), close to free (e.g., Whatsapp). The “bundle” biz model of “service + connectivity” of telcos makes it difficult to compete .

A symbiotic relationship between telcos and OTTs: (e.g. iPhone apps drive data revenue.)


Lets look at some real operators and real pain points to illustrate the problem and the opportunity


1. Internal processes and procedures – slow and bureaucratic

• Before a service can be launched needs consultation with

• IT, OSS/BSS, Core network

• and other inside-the-box stake holders and regulators

2. Any purchase or capital expenditure needs RFP and CFO approval

• Refusal to buy platforms or technology

• But willing to work on Flexible Business models and RS

• Will only invest in infrastructure when Service is successful

3. Go-to-market teams not familiar with Innovative Services • Need support and quick launch • POC test and feedback on multiple long-tail services

Operator X Key Pain Points – launching innovative services


1. Integration “In-the-box” is almost impossible

• Any new services needs agreement with

• IT, OSS/BSS, Core network etc

• Needs “open heart surgery” on existing network just to launch a service

• SDP and other “abstraction” platforms do not help service TTM

2. Digital Services a NOT being launched because of BAU delays

• Lots of ideas but few make it to the market

• Spent millions of USD on consultants - but no result

• Will only invest in infrastructure when Service is successful

3. DS team wants to launch services • NO APPETITE to invest in more failed infrastructure, software of platforms

Operator Y: Key Pain Points – Digital Services


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Huawei Operation and Aggregation

Building a Service Innovation Ecosystem Practical Steps


Core Principle: Enable Our Customers to be Globally Competitive

1. Huawei enables its customers to be globally competitive

• Global scale, Global innovation pipeline, Proven services, Services Ecosystem

• In communications, IoT, connected car, health, life style, home, payments, etc

.

2. Telco can then focus on local go-to-market services

3. Telcos find it VERY difficult to work with innovative companies• Huawei has critical role between 2 divergent cultures


Global Service Aggregation – Local Service Delivery

Global Innovative IoT and Digital Services

Specialist Platform Partners

Operator 1 Operator 2 Operator 3

Huawei Aggregation and Operation

Customers

New business value

MESMEs and

Enterprises

LOCAL Go-to-Market for global Services

GLOBAL service aggregation and brokering


500+ contracted partners

Latin America

AcotelWaumovilCyclelogicYavoxTakenet…

RotanaInfo2cellCadic SodiMobile-Zon…

CIS, M Asia

EuropeArenamobileOperaJambaIndexEMINet-MExit Games…

North AmericaVerisignSONYWarnerNavteqTCS…

Africa

StarfishLeafSGKMobile Planet...

AsiaTencentAccessNavitimeJIGNetqinMobileExtremeSina…

Middle East

i-FreeInform-mobile…

8 Hosting Centers covering global market

Dubai

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3 Centers of Excellence (COE) 30+ Service Branch Offices 50+ Consultancy experts 300+ Senior Business Operation Managers

Hosting - Brings Global Partners and Services to you

http://www.google.com/imgres?imgurl=http://promote.opera.com/logos/Opera_logo5_t.png&imgrefurl=http://www.opera.com/press/images/logo/&h=694&w=1800&sz=54&tbnid=rDVZfEfv1sQJ::&tbnh=58&tbnw=150&prev=/images?q=opera+logo&hl=en&usg=__H3r9xyS0gz6gjDWrq6fq3zL3MrQ=&sa=X&oi=image_result&resnum=2&ct=image&cd=1





http://www.ericsson.com/ericsson/press/releases/20070122-1099183.shtml

http://www.ericsson.com/ericsson/press/releases/20070122-1099183.shtml


Integrated Approach

1. Partn

ering 2. Platform

3. Service Testing

4. Go-To-Market

• Work with Partners who have PROVEN service success stories worldwide

• Developer communities, deployed applications, solved real business needs

• Integrate Partners into Huawei/Operator platform

• Create open environment to develop and test new applications for business and enterprise

• Identify key services and applications• Define kick-starter projects• Create business activity plan for testing the services with key customers• Build business cases – for initial

investment needs

• Build dedicated G2M support team to grow the business

• Engage SME, Enterprise and M-government

• Launch services• Get feedback and improve

Practical Steps – Building the Service Ecosystem with Operators


Five Recommendations and Takeaways

1. The opportunity is in market proven commercial services, available today

2. Platforms, APIs, standards, developers and ecosystems are distractions

3. Focus on building an effective, independent GO-TO-MARKET team

4. Deliver innovative services to customers and drive new revenue

5. Use Hosting: a quick, low cost way to build a Service Innovation Ecosystem


For More Information on Huawei Service Innovation Ecosystem

Please [email protected]

Thank you！www.huawei.com

Copyright©2014 Huawei Technologies Co., Ltd. All Rights Reserved.

The information in this document may contain predictive statements including, without limitation, statements regarding the future financial and operating results, future product portfolio, new technology, etc. There are a number of factors that could cause actual results and developments to differ materially from those expressed or implied in the predictive statements. Therefore, such information is provided for reference purpose only and constitutes neither an offer nor an acceptance. Huawei may change the information at any time without notice.


tadsummit building a serivce innovation ecosystem - mac taylor - huawei

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