Copyright © 2007 Juniper Networks, Inc. Proprietary and Confidentialwww.juniper.net 1 The Collapse of the Walled Garden Paul Gainham Director Service Provider Marketing EMEA $

Copyright © 2007 Juniper Networks, Inc. Proprietary and Confidentialwww.juniper.net 2 Changing Marketplace  Intense pressures placed on carriers to increase revenue  Content providers are aggressively making offers to customers Web 2.0, interactive web Social networking Video Architectures Software as a Service  How can this application focus be leveraged? $ WirelessVoice $ $ Broadband $ Overall Revenue Application Explosion

Copyright © 2007 Juniper Networks, Inc. Proprietary and Confidentialwww.juniper.net 3 Plumbing vs. Value  Carriers are faced with the problem of Best-Effort being too good Only value is in adding more bandwidth…for less revenue Great for Internet hosted content…is it good for the carrier?  Customer see value in the applications, but not necessarily in the network Is there value that the carrier can provide in this evolving space? Is Web 2.0/WebServices a threat or an opportunity for carriers?  What are the new sources of revenue for the carrier? Need to find sources of revenue beyond just from the customer New revenue requires new sources of value—what is that carrier value?

Copyright © 2007 Juniper Networks, Inc. Proprietary and Confidentialwww.juniper.net 4 Increasing Carrier Revenue  Create an environment that allows the customer to access their desired content in a controlled fashion  Solution: Focus on Customer Control Integrate disparate Network Elements (content, core, access) Differentiate Delivery based on Customer/Application Requirement Cable TV Business Model NFL - Content Source ESPN – Content AGG ESPN – Content AGG Value Cable Provider Users  Each step cares about the “Experience” They are getting paid for it  Good user experience

Copyright © 2007 Juniper Networks, Inc. Proprietary and Confidentialwww.juniper.net 5  Increased take-up Content Aggregator Content Source Transforming the Experience: Controlling the delivery of Services Internet Model SP Value Transformed Model Content Source Content Aggregator Value SP User Users Value  Poor user experience  No differentiating value to the carrier  Appropriate user experience  Increased take-up  Increased carrier value & revenue by controlling the “experience”

Copyright © 2007 Juniper Networks, Inc. Proprietary and Confidentialwww.juniper.net 6 Trends: Collaborative Content Distribution Content and application providers : Provide an enhanced user experience Network providers: Deliver the service experience Monetize the Network “We don’t have to own every service. We just have to package a lot of them and help the customer find the things they like.” Ivan Seidenberg | Chairman and CEO | Verizon Communications

Copyright © 2007 Juniper Networks, Inc. Proprietary and Confidentialwww.juniper.net 7 The Role of the Service Provider Network Internet Applications Residential Business Identity Experience Best Effort Enhanced Assured Security L3/L4 Stateful L7 Signature L7 Application L3/L4 Stateless Connectivity/Virtualization L2 VPN L3 VPN L7 VPN Routing/Switching Mobile Web Services Video Gaming Home Telemetry

Copyright © 2007 Juniper Networks, Inc. Proprietary and Confidentialwww.juniper.net 8 Future Service Model  It is all about the Application  It is all about the Experience of the end user Quality, simplicity, continuity, multiple personal devices  It is all about how the network can deliver this AAA + Policy and Resource Control Applications/Content (Video, Voice,…) Core Business Access IP Edge/ GGSN Web Services Applications, End Points, & Services Off-net valued content

Copyright © 2007 Juniper Networks, Inc. Proprietary and Confidentialwww.juniper.net 9 Super Core Metro Core Access IP Edge Carrier Network Content Relationships and Network Value  Carrier Hosted and Delivered – longer time to market, more control Customer Identity Federation & Policy and Control Web Services Video Carrier Hosted Carrier or Partner Content Gaming Home Telemetry On-Net Web Services Video Partner Hosted Partner Content Gaming Home Telemetry Off-Net Video Internet Hosted No relationship Gaming Home Telemetry Internet OTT Content  Partner Hosted, but carrier transacted – fast time to market, same model  No partner relationship – Best Effort delivered applications, no carrier value  Need to build a model where the network has value – experience is a value that only the network can deliver Best Effort Enhanced Assured

Copyright © 2007 Juniper Networks, Inc. Proprietary and Confidentialwww.juniper.net 10 The New Off-Net Business Model  Rapid time to market with new services Deploy a new service every week  Micro-segment the customer market Target 2% of the customers, not 50%  Leverage the intelligence of application companies SOA and WebServices Frameworks  Reduce the risk of new services  Always leverage the value of the network Provide the Glue between the applications and the network

Copyright © 2007 Juniper Networks, Inc. Proprietary and Confidentialwww.juniper.net 11 New Business Model  Delivering an application with an appropriate experience has value at several levels Carrier Network Customer Best Effort Enhanced Assured Applications WebServices Framework Microsoft CSF IBM SDP Identity Federation & Policy and Control Network € €

Copyright © 2007 Juniper Networks, Inc. Proprietary and Confidentialwww.juniper.net 12 Time of Change  We now have the first opportunity for innovation and carrier differentiation in over a decade  This is a new way to do business…not just a new offer or a new network build Leaders will define the future - followers live in it