tbr webinar: moving beyond connectivity - enterprise strategies of the enterprise operators

TBR

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

TBR

2 TBR Webinar Series | 3.20.14 | www.tbri.com ©2014 Technology Business Research Inc.

Moving Beyond Connectivity: Presenter

Scott Dennehy Senior Analyst, Networking & Mobility Practice

Email: [email protected]

Twitter: @scottdTBR

mailto:[email protected]

https://twitter.com/scottdTBR

TBR


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

TBR


Overcoming negative customer and channel partner perception will be critical to operator success in the enterprise market


• 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


• Dedicated enterprise divisions

• Vertically oriented operating models

• Cloud

• Mobility

• Security

• Unified Comms

• Professional Services

• Channel

• Technology

• Network

TBR


Despite increasing investments in the enterprise market, consistent revenue growth remains elusive for multinational operators


• 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

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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


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


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

.


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.”


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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.


Geographic Expansion

• Identify specific regions where enterprise operators are directing their investments.

• Track enterprise operator investment in new facilities, personnel and alliances.


Vertical Markets Understand how enterprise operators are differentiating through the execution of vertical go-to-market strategies.


TBR Syndicated Topics: Enterprise Operators

Operators will invest in cloud, geographic expansion and key verticals to drive long-term enterprise revenue growth

TBR


Moving Beyond Connectivity: Contact Information

Questions?

James McIlroy

Vice President of Sales


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


Twitter: @scottdTBR


https://twitter.com/TBRinc

http://www.slideshare.net/TBR_Market_Insight

http://www.youtube.com/user/TBRIChannel


https://twitter.com/scottdTBR

TBR


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

TBR

T EC H N O LO G Y B U S I N ES S R ES EAR C H , I N C .

About TBR Technology Business Research, Inc. is a leading independent technology market research and consulting firm specializing in the business and financial analyses of hardware, software, professional services, telecom and enterprise network vendors, and operators.

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