Title of Presentation Client Telecommunications in the Cloud: What It Means for Service Provider Operations Elisabeth Rainge Director, Communications Software Copyright IDC. Reproduction is forbidden unless authorized. All rights reserved.

Title of Presentation Client Agenda Title of Presentation Client Cloud & the Communications Industry How Cloud Changes OSS/BSS OSS/BSS as Cloud Opportunity Cloud as OSS/BSS Opportunity Billing for Cloud Essential Guidance Copyright IDC. Reproduction is forbidden unless authorized. All rights reserved.

IT Cloud Services Taxonomy Title of Presentation Client IT Cloud Services Cloud Applications (Apps-as-a-service) App Dev/Test Cloud (Application) Platforms (Platform-as-a-Service) App Deploy Cloud Infrastructure (Infrastructure-as-a-Service) Copyright IDC. Reproduction is forbidden unless authorized. All rights reserved.

Hybrid Environments Will Dominate Private Designed for, and access restricted to, a single enterprise (or extended enterprise) An internal shared resource, not a commercial offering IT Org is the “vendor” of the shared/std service to its users Hybrid Enterprise’s cloud services portfolio includes both private and public cloud services Some specific services are delivered through a combination of public and private models (e.g., private cloud “bursting to” a public cloud service) Public Designed for a market, not a single enterprise Open to a largely unrestricted universe of potential users appliances hosted/ managed custom-built Integrated Mgmt 2009 IDC Directions

Industries Converging on Cloud Title of Presentation Client Hardware - Networking Software CLOUD Services IT Telecoms Copyright IDC. Reproduction is forbidden unless authorized. All rights reserved.

The Essential Equation Title of Presentation Client The Essential Equation Title of Presentation Client Increase portfolio and service flexibility Infrastructure rationalisation and lower cost of delivery Infrastructure Copyright 2008 IDC. Reproduction is forbidden unless authorized. All rights reserved. 6 Copyright IDC. Reproduction is forbidden unless authorized. All rights reserved.

The Telco Customer Relationship: A Multi-Channel Affair Customers ? Large Corporate Telco Account Management SMB Contact centre SOHO Online CONSUMERS Direct and Indirect Channels

Title of Presentation Client Partnering Title of Presentation Client Partner Large Enterprises Small-Medium Businesses Consumers The Service Account Management Contact centre Online Source:/Notes: Copyright IDC. Reproduction is forbidden unless authorized. All rights reserved.

Title of Presentation Client Many Hidden Dynamics Title of Presentation Client Services Revenue $ New revenue Broadband, Quad play, Applications, Managed services Margin improved Operational & Capital Costs Time Copyright IDC. Reproduction is forbidden unless authorized. All rights reserved.

Public IT Cloud Services Forecast Worldwide IT Revenue* by Consumption Model 2009, 2013 ($B) 10 20 30 40 50 60 100 200 300 400 500 600 Public IT Cloud Services 45 17 2009 2013 Worldwide IT Revenue ($ billion) 359 416 Traditional IT Products 45 17 359 416 CAGR 26% 4% CAGR 26% 5% 10% 45 17 Source: IDC, March 2010 * Includes revenue from delivery of Applications, Application Development & Deployment Softrware, Systems Infrastructure Software, Server capacity and Disk Storage capacity via both traditional product model and the Cloud Services model; AD&D excludes online B2B messaging providers/exchanges 2009 IDC Directions

Datacenter Buildout Considerations Title of Presentation Client Priority of Access to Telecommunications Medium #1 Answer! High C6. If you had to build a new Datacenter to replace your current XXX Datacenter, rate how important each of the following would be in your consideration. Use a scale where 0 = not at all important and 10 = extremely important. n = 197 Copyright 2009 IDC. Reproduction is forbidden unless authorized. All rights reserved.

How Cloud Changes OSS/BSS

Today’s CSP Spend on IT Software Title of Presentation Client Communications Service Provider IT Software Spending Share by Category, 2010 Please share your software spending based on IDC's standard categories for software in the telecom industry. Source: IDC's CSP IT Survey, 2010 Copyright IDC. Reproduction is forbidden unless authorized. All rights reserved.

Moving towards Tomorrow Title of Presentation Client $ $ $ Services Delivered Application & Service Operations Application Enablement Solutions Components IP Location Voice Messaging Video Source: IDC, 2010 Copyright IDC. Reproduction is forbidden unless authorized. All rights reserved.

Moving towards Tomorrow $ $ $ Services Delivered Integrated Operational Strategies Solutions Components IP Location Voice Messaging Video Source: IDC, 2010

Or, what does it take to run the shop Maintain core networks What is the business priority? What teams get it done? Deliver CPE gear Send out bills Run mature networks Manage pricing Run cutting edge IT Phones Data cards Bandwidth Operate energy supply Maintain access area networks Market services to subscribers Run mature IT

OSS/BSS As Cloud Opportunity

Cloud Delivery of OSS/BSS Title of Presentation Client Based on areas of largest and/or complex investments Based on technology compatibility Based on business objectives of the CSP buyers Copyright IDC. Reproduction is forbidden unless authorized. All rights reserved.

Title of Presentation Client Helping Identify the Key Disruptors in the Telecom Value Chain and Adjacent Chains Title of Presentation Client Regulatory change Domestic CIO holistic decision making Devices and services combined Sourcing (roaming, Brokering) KPI metrics (e.g. APPU) Planning timeline Agile development Distribution partners Operating Model (e.g. MVNO) Customer Interaction preferences Enterprise CIOs focus on business ICT strategies Value Chain Disruptors Supply Demand Convergence expectations Non-telco channels Telecoms lost in broader context Media players 19 Copyright IDC. Reproduction is forbidden unless authorized. All rights reserved.

Foundations for Cloud-based OSS/BSS Evolution of SaaS, Managed service delivery methods Business considerations for CSP End to end business transaction considerations (e.g. flow through) Overall system/applications performance considerations

OSS/BSS Likely to Move to Cloud Title of Presentation Client Billing Customer record keeping Transformational IT (various) Revenue assurance Network design/planning Some Criteria Server investment Software maturity Software innovation Variable usage levels Supporting role in projects Copyright IDC. Reproduction is forbidden unless authorized. All rights reserved.

Cloud As OSS/BSS Opportunity

Is “OSS/BSS” a Priority for Cloud? Title of Presentation Client Busine$$ Case Technology Bill Monitor Configure Care Copyright IDC. Reproduction is forbidden unless authorized. All rights reserved.

Business Challenges: BSS-like processes Title of Presentation Client Purchased services Order Entry Location Payment type Loyalty Trouble tickets Revenue leakage Availability Retail integration Web data Order Management Self care Frequency Of Use Marketing Supply chain Call center User profile Device Copyright IDC. Reproduction is forbidden unless authorized. All rights reserved.

Building the Customer Relationship Title of Presentation Client Creating an offer Making the offer highly attractive Structuring the financial transactions Responding to concerns Upholding product or service levels Copyright IDC. Reproduction is forbidden unless authorized. All rights reserved.

Revenues: Points of Risk Title of Presentation Client Copyright IDC. Reproduction is forbidden unless authorized. All rights reserved.

Billing for Cloud

Operations of Cloud: Buyers Title of Presentation Client 3 Types of Buyers: Operators (NSPs) IT Services (Professional Services) Software (SaaS) Copyright IDC. Reproduction is forbidden unless authorized. All rights reserved.

Telecom Billing System Models Title of Presentation Client High Mobile voice Billing Mobile data Billing Wireline voice Billing Pricing flexibility ETM (chargeback) Online Billing ISP Billing Low Payment Gateways Low High Scale (# users, # transactions) Source: Worldwide Telecom Cloud Billing 2009–2013 Forecast, IDC # 217313, May 2009 Copyright IDC. Reproduction is forbidden unless authorized. All rights reserved.

Cloud Billing Market Forecast Title of Presentation Client Spend on telecom billing systems by telecom, IT and online players Includes multiple delivery methods (consistent with telecom billing forecast) Remains small as a % of the telecom billing market Source: Worldwide Cloud Billing, IDC#221358, December 2009 Copyright IDC. Reproduction is forbidden unless authorized. All rights reserved.

Title of Presentation Client Essential Guidance Title of Presentation Client Expect “Service Provider” diversity Hybrid public-private models will dominate Network infrastructure will be increasingly important Communications service providers are inserting themselves into cloud conversations Retail, wholesale and ecosystem aspects affect how communications service providers play in cloud The shift to always-on, including mobile, requires a re-think of investment strategies for business operations Copyright IDC. Reproduction is forbidden unless authorized. All rights reserved.

Title of Presentation Client Contact Title of Presentation Client email erainge@idc.com Follow me @erainge Copyright IDC. Reproduction is forbidden unless authorized. All rights reserved.