Video and Cloud: Disruptive Market Opportunities

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1 Video and Cloud: Disruptive Market Opportunities Rangu Salgame CEO Growth Ventures Group Tata Communications October 9, Tata Communications Ltd. All rights reserved. TATA COMMUNICATIONS and 1

2 Tata group $ billion Annual Revenue ~60% Non-India Over 140 Years in Operation Only Indian entity on Forbes List of World s 20 Most Reputed Companies #45 Worldwide Brand (Source: Brand Finance, 2012) 450,000 Employees Worldwide #11 Most Reputed Company (Source: Reputation Institute, 2009) UK Group s Largest Market outside India Over 100 Operating Companies in 7 Sectors Across 6 Continents 2012 Tata Communications Ltd. All rights reserved. TATA COMMUNICATIONS and 2

3 Tata Communications - at a glance #1 #1 #5 submarine cable owner international voice carrier global IP transit provider and fastest growing and most global Tier-1 IP backbone (2011) Industry leader #1 international voice carrier #1 submarine cable owner #5 IP transit provider Fastest growing Tier-1 operator #1 in enterprise data in India #2 in enterprise and wholesale data in South Africa State-of-the-art infrastructure Over 210,000km of owned fibre Fibre ring around the globe 400 PoPs Over 15 terabits of International bandwidth lit capacity More than 1 million sq. ft. of data centre space 2012 Tata Communications Ltd. All rights reserved. TATA COMMUNICATIONS and 3

4 Video and Cloud: Disruptive Market Opportunities 2012 Tata Communications Ltd. All rights reserved. TATA COMMUNICATIONS and 4

5 Over 90% of the data stored worldwide was created less than 2 years ago Source: Economist & IBM 2012 Tata Communications Ltd. All rights reserved. TATA COMMUNICATIONS and 5

6 Technology trends Ubiquitous video conferencing: multidevice connectivity Video streaming of content becomes key in many sectors (e.g. Media and Healthcare). Universal adoption of 4G mobile High speed connections office on the move Growing component of video traffic. Corporates generate petabytes of data New tools available to analyse complex data patterns Corporates adopt peer-to-peer cloud tools Collaboration and knowledge sharing is critical to business success New data stored by enterprises in quintillion bytes New data stored by consumers in quintillion bytes 2.5 quintillion bytes of data being added every day in 2012 Source: Economist, IBM, McKinsey Global Institute 2012 Tata Communications Ltd. All rights reserved. TATA COMMUNICATIONS and 6

7 Enterprise trends Captive to third party transition for data centre facilities will accelerate Multi-sourcing will encourage selective out-tasking leading to uptake of managed hosting Enterprise wide cyber security will become a strategic issue Most enterprises will adopt some form of cloud services in the next 3 years Businesses go direct to SaaS providers SaaS experience will rival enterprise IT services BYOD will grow significantly Driving subscription based models Social media in the enterprise will become mainstream The separation between enterprise IT and its business customers is growing rapidly creating two distinct cloud value chains #GACS Tata Communications Ltd. All rights reserved. TATA COMMUNICATIONS and 7

8 Cloud a disruptive market opportunity Service providers are uniquely positioned to take advantage of cloud growth 250 Global Cloud Market Global Cloud Total Cloud Markets (US billions) Forrester predicts that the global cloud computing market will grow from $53 billion in 2012 to more than $200 billion in 2018 The market for Cloud Infrastructure Services is expected to grow from $10 billion to $31 billion between , with an average CAGR of 41.7% Cloud traffic as a percent of total data center traffic will grow from 39% in 2011 to 64% in 2016 (Cisco) All other cloud services (BPaaS, PaaS, SaaS, Dynamic Apps/BPO) Dynamic Infrastructure (Enterprise Cloud) Iaas (Commodity Cloud) Source: Forrester Sizing the Cloud 2012 #GACS Tata Communications Ltd. All rights reserved. TATA COMMUNICATIONS and 8

9 IT disruption creating cloud market Massive disruption is occurring in IT (again) as the rapid evolution of technology enables the development of innovative applications and architectures, which in turn drive IT infrastructure changes New types of applications, devices, and software architectures are driving a shift in how IT infrastructure is designed, built, consumed and operated The traditional enterprise infrastructure model is being disrupted by the price/performance, scalability, agility, and operational efficiencies of cloud infrastructure models Enterprise IT Manual Thousands of users Provides % SLA Enterprise (Proprietary) Fewer Bigger Boxes Redundancy and HA Inelastic scale up Provisioning Scale Reliability Hardware Footprint Uptime Applications Cloud IT Automated Millions of Users Built for failure Commodity Many Smaller Boxes Software defined Elastic scale out This is driving enterprises, webscale companies and service providers to seek standardized, repeatable, agile, cost effective platforms to consume and deliver IT services #GACS Tata Communications Ltd. All rights reserved. TATA COMMUNICATIONS and

10 Video Tectonic shift in $500 Billion TV market* The new battlefield for internet companies MSO s Content Aggregators CE Providers * Forbes #GACS Tata Communications Ltd. All rights reserved. TATA COMMUNICATIONS and 10

11 Video service providers (VSPs) Overview Disruption in the video business model Past: Content Developers & rights owners Programmers & aggregators Linear TV Traditional delivery Cable Satellite providers Telcos Broadcasters Advertisers Linear model One screen focus Emerging: Online video Over the top Programmers direct to consumers User generated Multiple screens Non-Linear TV Traditional providers Evolving to meet consumers needs Transform to more efficient delivery Better UI and navigation Focus on quality (visual and content) Time and place shifting Advertisers Interactive model on all screens Dynamic targeting Multiple devices #GACS Tata Communications Ltd. All rights reserved. TATA COMMUNICATIONS and 11

12 VSPs Transformation The Dynamics of video delivery is evolving rapidly Past: Architecture Highly distributed Proprietary Technology MPEG-2 (Cable) Closed CA (conditional access) Video CBR (constant bit rates) Structure & Organizations Silo ed groups Lack of scalability of skills needed Emerging: Architecture Cloud based Centralized acquisition and distribution Open platforms Technology Multiple formats (H264, H265, etc.) Multiple protocols Client based DRM solutions Efficient VBR (variable bit rates) Structure & Organizations Converged groups #GACS Tata Communications Ltd. All rights reserved. TATA COMMUNICATIONS and 12

13 Trends* - multi-screen, live and long-form Tablet and mobile video break new viewing records Total share of tablet and mobile video grew 19% in Q Mobile and tablet video now account for over 10% of all online video plays Live video dominates vod on all devices Globally, desktop viewers watched live news, sports and special events for an average of 40 minutes per play in Q On average, people streamed live video on smart TVs and gaming consoles for 45 minutes per play last quarter 9X longer than VOD Desktop viewers watched live video 13X longer than VOD last quarter, tablet video viewers watched live video 4X longer, and mobile audiences tuned in to live video 3X longer Long-form video Both mobile and tablet video viewers spent more than half of their total online viewing time watching long-form videos* last quarter 25% of total tablet viewing time was spent with content more than 60 minutes long in Q1 #GACS Tata Communications Ltd. All rights reserved. TATA COMMUNICATIONS and * Ooyala s Q Global Video Index

14 Data and Cloud - Legal & regulatory issues Data protection and compliance regulatory requirements on how well data is protected Compliance to industry standards such as Health Insurance and Portability Act (HIPPA) and Payment Card Industry Data Security Standard (PCI_DSS) Data collection, storage and processing regulatory requirements of where data is stored or transferred legal issues tied to countries data privacy laws and related legislation Cyber security Need for international coordination #GACS Tata Communications Ltd. All rights reserved. TATA COMMUNICATIONS and

15 Video - Legal & regulatory issues Net neutrality Should all data on the Internet get treated equally and not discriminated or charged differently by user, content, site, etc. Technology and service neutrality Should service providers and network operators be allowed to use the technology that best meets the needs of their network and the demands of their customers? Should operators be allowed to provide whatever services their technology and infrastructure can deliver? Regulation of content by governments balanced with protection of fundamental rights Providers liability for content on their sites uploaded by users Intellectual property rights of video content #GACS Tata Communications Ltd. All rights reserved. TATA COMMUNICATIONS and

16 Thank you Visit tatacommunications.com Follow us on Twitter, our New World Blog and Tata Communications Ltd. All rights reserved. TATA COMMUNICATIONS and 16 16

17 Thank you Visit tatacommunications.com Follow us on Twitter, our New World Blog and Tata Communications Ltd. All rights reserved. TATA COMMUNICATIONS and 17 17

18 Thank you Visit tatacommunications.com Follow us on Twitter, our New World Blog and Tata Communications Ltd. All rights reserved. TATA COMMUNICATIONS and 18 18

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