The service provider (SP) industry no longer exists as we once knew it. With the advent of the Internet and the proliferation of digital content, the industry now consists of much more than traditional telcos and network providers. It incorporates all aspects of the new, digital value chain, including content creation and management, devices, advertising, and traditional network transport and service provision.
Despite increasing consumer demand and network growth, the SP industry’s future is far from clear. How much longer will this phase continue? How will it ultimately unfold? And, what will ultimately replace it? These are the questions on CEOs’ minds as they determine the strategies and actions they should take to ensure future success.
Cisco developed a number of plausible scenarios that provide a framework for SP executives to evaluate the future and rationally assess strategic options under different conditions. Cisco developed these scenarios based on an extensive global survey of more than 4,600 Cisco employees, in addition to supplemental research and interviews with industry experts.
Cisco firmly believes that some variant of the SP industry’s future is described by these scenarios. They provide tools and insights to help SPs become better informed and more prepared for the future, and to respond more quickly to conditions as they deviate from the industry norm. The scenarios’ true value comes from encouraging SPs to map out a strategy that helps them shape the future, rather than having it shape them.
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Thursday, November 18, 2010
Monday, November 8, 2010
Small Businesses Ride the Cloud
Cloud services are currently one of the hottest topics in the IT world, and it’s no wonder—Gartner projects this sector’s revenues will exceed $150 billion by 2013.
Small and medium-sized businesses (SMBs) have been the most aggressive segment to adopt cloud services. As they typically have less-complex IT needs, fewer legacy applications, and less IT support than larger enterprises, SMBs are often happy to hand over the delivery and operation of IT to third parties, freeing SMBs to focus on running their businesses. Research by McKinsey confirms this, finding that SMBs with fewer than 250 employees are more than twice as likely as larger companies to adopt subscription or on-demand technology services.
To date, much of the research and analysis on cloud services has focused on market sizing and the technology. Little emphasis has been placed on understanding customer needs and buying behavior. In particular, there is limited understanding of the needs and perspectives of SMBs, and how service providers (SPs) can be successful selling to this rapidly growing and attractive market.
Cisco IBSG undertook its SMB Cloud Watch survey to better understand customer needs and strategies for success in the U.S. and German SMB cloud services markets. SMB Cloud Watch was an online survey of 510 IT buyers in the United States and 502 IT buyers in Germany, representing SMB customers with 5 to 250 employees. The survey sought to understand which cloud services these customers use now, which ones they will employ in the future, and from whom they would buy these services. In addition, Cisco IBSG wanted to understand the specific role and opportunity for service providers, and how they might differentiate their cloud offers to SMBs.
Download the complete document
Small and medium-sized businesses (SMBs) have been the most aggressive segment to adopt cloud services. As they typically have less-complex IT needs, fewer legacy applications, and less IT support than larger enterprises, SMBs are often happy to hand over the delivery and operation of IT to third parties, freeing SMBs to focus on running their businesses. Research by McKinsey confirms this, finding that SMBs with fewer than 250 employees are more than twice as likely as larger companies to adopt subscription or on-demand technology services.
To date, much of the research and analysis on cloud services has focused on market sizing and the technology. Little emphasis has been placed on understanding customer needs and buying behavior. In particular, there is limited understanding of the needs and perspectives of SMBs, and how service providers (SPs) can be successful selling to this rapidly growing and attractive market.
Cisco IBSG undertook its SMB Cloud Watch survey to better understand customer needs and strategies for success in the U.S. and German SMB cloud services markets. SMB Cloud Watch was an online survey of 510 IT buyers in the United States and 502 IT buyers in Germany, representing SMB customers with 5 to 250 employees. The survey sought to understand which cloud services these customers use now, which ones they will employ in the future, and from whom they would buy these services. In addition, Cisco IBSG wanted to understand the specific role and opportunity for service providers, and how they might differentiate their cloud offers to SMBs.
Download the complete document
Winning in Next Generation Television
The Internet is coming to your television and your television is coming to your computer and mobile phone. Industry pundits optimistically talk about the wonderful world of Next Generation Television, but industry players are grappling with trying to understand what these significant transitions mean to their business. This paper uses customer research, case studies and industry experience to provide insights into the big opportunities in Next Generation TV and how cable providers can best position for success. I provide a framework for assessing the different opportunities that exist now and in the future. Extensive consumer research reveals some interesting, and somewhat controversial, insights into what consumers value in their future television experience. Based on these insights, I present a roadmap of how we think future services and features will evolve in the marketplace. Lastly, I discuss new opportunities for providers to make money from Next Generation TV.
The full document can be downloaded here
The full document can be downloaded here
Thursday, October 28, 2010
"Wireless Neutrality" as a Competitive Weapon
Interesting article by Tim Chang of Northwest Venture Partners in VentureBeat in which I am quoted.
New Revenue for SPs Opportunties in Internet Video
Internet-based video consumption is booming all over the world, but most telecommuni-cations operators are not benefiting from it. They must sustain the infrastructure costs needed to support this fast-growing traffic, but they have not been able to create associated incremental revenues. Service providers are trying to find ways to turn this potential threat into an opportunity by generating new, profitable revenue streams from the rise of Internet video.
Cisco IBSG suggests that service providers have the opportunity to turn Internet video costs into profits, initially through a two-sided business model that offers:
1. High-quality content delivery services to content providers
2. A “TV-ready broadband” service for consumers that delivers Internet video with quality equivalent to that of traditional television
Cisco IBSG analysis shows that access-based telecommunications operators can develop a highly profitable business by offering these two services together, with expected earnings before interest, taxes, depreciation, and amortization (EBITDA) margins above 70 percent.
Today, Internet video accounts for less than 2 percent of the total time Americans spend watching video. But with more sophisticated video services coming from the Internet, and with Internet-connected TVs, the time consumers spend watching Internet video could rise significantly—potentially reaching 50 percent of their overall video viewing time in 10 to 15 years. Now is the time for service providers to begin realizing the opportunity of Internet video.
Download the complete document
Cisco IBSG suggests that service providers have the opportunity to turn Internet video costs into profits, initially through a two-sided business model that offers:
1. High-quality content delivery services to content providers
2. A “TV-ready broadband” service for consumers that delivers Internet video with quality equivalent to that of traditional television
Cisco IBSG analysis shows that access-based telecommunications operators can develop a highly profitable business by offering these two services together, with expected earnings before interest, taxes, depreciation, and amortization (EBITDA) margins above 70 percent.
Today, Internet video accounts for less than 2 percent of the total time Americans spend watching video. But with more sophisticated video services coming from the Internet, and with Internet-connected TVs, the time consumers spend watching Internet video could rise significantly—potentially reaching 50 percent of their overall video viewing time in 10 to 15 years. Now is the time for service providers to begin realizing the opportunity of Internet video.
Download the complete document
A New Operating Model for Next Generation Managed Services
The market for fixed and mobile voice services in the economically developed world is nearly saturated. Revenue growth is flat to negative, seriously impacting service provider (SP) profits. Tough economic times only amplify this situation. To maneuver in this challenging business climate, SPs must reinvent their business models by offering new, profitable, next-generation managed services such as web-based video conferencing and collaboration, along with other unified communications solutions. These new services can help SPs realize revenues incremental to those from network-based legacy services such as access and transport, and offer the potential for rapid return on investment.
Next-generation managed services provide attractive opportunities for SPs because they can be integrated into their current product and services portfolios. Not only will these services enhance SPs’ offerings—they will also generate pull-through revenue by combining existing capabilities such as audio with, for example, web-based collaboration.
The market for next-generation managed services is growing fast—the compound annual growth rates (CAGR) of web-based video conferencing and collaboration segments in the United States and Europe are forecast to reach 19 percent and 15 percent, respectively, by 2015. By adding next-generation managed services to their existing portfolios, SPs can provide customers with a rich collaboration environment that includes content sharing, instant messaging, and webcam video—all in a single communications session.
Download the complete document
Next-generation managed services provide attractive opportunities for SPs because they can be integrated into their current product and services portfolios. Not only will these services enhance SPs’ offerings—they will also generate pull-through revenue by combining existing capabilities such as audio with, for example, web-based collaboration.
The market for next-generation managed services is growing fast—the compound annual growth rates (CAGR) of web-based video conferencing and collaboration segments in the United States and Europe are forecast to reach 19 percent and 15 percent, respectively, by 2015. By adding next-generation managed services to their existing portfolios, SPs can provide customers with a rich collaboration environment that includes content sharing, instant messaging, and webcam video—all in a single communications session.
Download the complete document
Wednesday, October 27, 2010
Vodafone Adopts a New Operating Model for Next Generation Managed Services
The market for fixed and mobile voice services in the economically developed world is nearly saturated. Revenue growth is flat to negative, seriously impacting service provider (SP) profits. Tough economic times only amplify this situation. To maneuver in this challenging business climate, SPs must reinvent their business models by offering new, profitable, next-generation managed services such as web-based video conferencing and collaboration, along with other unified communications solutions. These new services can help SPs realize revenues incremental to those from network-based legacy services such as access and transport, and offer the potential for rapid return on investment.
Next-generation managed services provide attractive opportunities for SPs because they can be integrated into their current product and services portfolios. Not only will these services enhance SPs’ offerings—they will also generate pull-through revenue by combining existing capabilities such as audio with, for example, web-based collaboration.
The market for next-generation managed services is growing fast—the compound annual growth rates (CAGR) of web-based video conferencing and collaboration segments in the United States and Europe are forecast to reach 19 percent and 15 percent, respectively, by 2015. By adding next-generation managed services to their existing portfolios, SPs can provide customers with a rich collaboration environment that includes content sharing, instant messaging, and webcam video—all in a single communications session.
Service providers face a number of challenges in designing and bringing next-generation managed services to market and providing after-sales support. This Point of View from the Cisco® Internet Business Solutions Group (IBSG) examines these challenges and illustrates how one company—Vodafone—is successfully deploying next-generation managed services via an innovative partner ecosystem model that helps SPs streamline and improve their operations processes, deploy new services quickly and effectively, and reduce costs.
Download the complete document
Next-generation managed services provide attractive opportunities for SPs because they can be integrated into their current product and services portfolios. Not only will these services enhance SPs’ offerings—they will also generate pull-through revenue by combining existing capabilities such as audio with, for example, web-based collaboration.
The market for next-generation managed services is growing fast—the compound annual growth rates (CAGR) of web-based video conferencing and collaboration segments in the United States and Europe are forecast to reach 19 percent and 15 percent, respectively, by 2015. By adding next-generation managed services to their existing portfolios, SPs can provide customers with a rich collaboration environment that includes content sharing, instant messaging, and webcam video—all in a single communications session.
Service providers face a number of challenges in designing and bringing next-generation managed services to market and providing after-sales support. This Point of View from the Cisco® Internet Business Solutions Group (IBSG) examines these challenges and illustrates how one company—Vodafone—is successfully deploying next-generation managed services via an innovative partner ecosystem model that helps SPs streamline and improve their operations processes, deploy new services quickly and effectively, and reduce costs.
Download the complete document
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