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1 cloudline.gordano.com Tel UK: +44 (0) Tel USA:

2 Cloudline from GMS: A collaborative opportunity GMS GMS has been developing innovative messaging software since From the original server for Windows, the software was completely re-written to provide a rich client webmail interface, with tightly integrated anti-virus and comprehensive anti-spam, available for both Windows and Linux platforms. Full groupware capabilities were introduced allowing Microsoft Outlook integration providing a credible alternative to Microsoft Exchange, while providing complete functional interoperability between Outlook and the fully featured GMS webmail client. GMS is evolving its market engagement by addressing both the ongoing needs of the on-premise customer, and new requests for cloud solutions, whilst remaining mindful that for a business-critical application such as , changes to the delivery of messaging services need to be carefully considered. GMS is offering a broad spectrum of solutions, providing facilitation as the cloud market grows, accessed via utility (OPEX) license models, or competitive, longer term CAPEX options. The growing cloud opportunity for an agile ISV The messaging market is changing businesses expect to reduce not only their overheads, but the complexity of their software usage. There is a growing trend for companies to outsource their needs and look for SaaS solutions. GMS has created a comprehensive platform for white labelling and integration with systems already in place within organisation types that include telecoms and carrier operators. Middleware enhancement in the GMS products has allowed for greater API exposure of backend functionality, permitting the implementation of more standardised automation toolsets, making the software more customisable which allows for bespoke deployments. This represents a major advancement of the software s capabilities; it is now more adaptable the process of integrating into other environments is now much easier. One such environment is the NEC Cloud Marketplace. The NEC Cloud Marketplace is a scalable aggregation platform consisting of a range of business oriented services to be sold to communication service providers (CSPs) and telecommunication operators globally. In turn, they get additional Over the Top revenues by offering these solutions to their customers easily, quickly and effectively from a single, integrated location. It also allows carriers to customise their marketplaces by populating it with third-party services. Cloudline in the NEC marketplace:

3 The NEC engagement GMS has worked with NEC to integrate Cloudline (a variant of our well-established on-premise messaging solution, accessed via a feature rich webmail client) into the NEC SaaS/cloud solutions aggregation marketplace environment. The proposed customer audience in this context is the SMB space. Revenue generating applications are hosted on the Cloud Service Platform. These are typically provided by third party ISVs wishing to provide services to the carrier s SME subscribers (Ref: global/solutions/cloud/carriers/solutions.html) The more detailed rationale for this project includes: Reduce carrier customer churn by offering valuable additional functionality to an existing customer audience Increase customer retention via data/usage lock in Mitigate carrier expenditure for rollout by leveraging existing capabilities from third-party ISVs Leverage existing vendor/client relationships between NEC/carriers to generate cloud service revenue streams Challenges facing the CSPs * The NEC cloud marketplace project is one attempt to address challenges to the CSP space from Over-the-top (OTT) players. Vendors embracing the OTT space are affecting CSPs by substituting voice and messaging services, placing significant strain on the CSP data networks and grabbing consumer mind share, and thus weakening the CSPs relationship with their user communities. An example of OTT disruption is how an application like WhatsApp can erode traditional SMS revenue streams for CSPs. There can be strong rivalry between CSPs and over-the-top (OTT) voice and messaging players, causing CSPs to pursue mainly aggressive and competitive strategies to counter the OTT threats. As the prominence of OTT players increases globally, CSPs find themselves under increasing pressure, they not only want to protect their core business and their relationship with consumers, but have to seek new revenue opportunities in nontraditional markets. CSPs are beginning to partner with alternative partner types to fill gaps in their service portfolios and accelerate the time to market of new services. Partnering with suitably selected partners allows CSPs to improve their product portfolios, benefit from attractive licensing and/or revenue share deals, and also reduce their time to market for launching new services. In contrast to aggressive, competitive and alienating tactics to address OTT vendor threats, CSPs can benefit substantially from pursuing these more collaborative approaches. The CSP response options in the OTT battleground Collaborative Partnering in mutually beneficial relationships. CSPs can use their core competencies to add value to the partners services Reactive Use of internal measures such as traffic management, traffic optimization, tiered pricing, throttling and Wi-Fi offloading to moderate the impact of OTT services Aggressive Blocking of select OTT services, this can be dependent on local regulatory restrictions Opportunistic Involves charging consumers a premium for OTT services; for example, bundling VoIP services with the most expensive data plans Competitive Developing own-brand OTT services to compete against OTT players, by developing expertise in-house, merging with or acquiring a company with the relevant skills and know-how, or outsourcing services to white-label service providers (the CSPs then rebrand and sell these services as their own)

4 The Collaborative Approach This strategy involves partnering with select OTT players to develop a mutually beneficial relationship. The CSP leverages its core competencies (distribution channel, control over the network, customer insights, customer care) to promote and add value to the partners services. The business model is often a revenue share between both parties. CSPs are also experimenting with fixed or variable fees for offering OTT players services such as guaranteed quality of service, access to anonymized customer data and customer support. There are several levels of CSP-OTT collaboration, which range from simple partnerships to investments or joint ventures. A lighter form of collaboration can involve the CSP simply acting as an aggregator of OTT services. Pros: CSPs can offer consumers a broad service portfolio with minimal upfront investments (no design and development costs) and a faster time to market. They can also differentiate their service offering from their peers. They can acquire new customers (who are attracted by the OTT player s brand) and generate new revenue streams based on revenue share with the OTT player. CSPs can differentiate the partner OTT player s services by providing additional value for example: direct CSP billing, customer care, marketing, guaranteed QoS. Cons: In this model, the OTT player s brand is often the consumer-facing brand, which means that the consumers are more likely to engage and identify with the OTT player rather than the CSP. Some OTT services have the potential to cannibalize the CSPs core services and increase the strain on the network, resulting in revenue decline and increased costs. Such partnerships are often not exclusive. This means that an OTT partner could be free to move to a competitor that offers a better deal, or possibly work with all CSPs in a given market. With Cloudline, GMS is focusing on this collaborative model as a method for leveraging markets that would otherwise be unavailable. Accessing CSP infrastructure and marketing penetration that can facilitate greater exposure of the Cloudline solution is an obvious (and essential) component of the resource capacity of the smaller ISV. The benefit is bi-directional; by partnering with smaller ISVs, CSPs can provide compelling business cloud services that allow the retention of a greater revenue share, whilst continuing to diversify product portfolios. SaaS Enablement GMS s initial work with cloud aggregators is one example of much wider landscape of SaaS/cloud evolution in the broader CSP arena. There are three primary methodologies in play that are fuelling these developments:

5 CSP app marketplace deployments: Typically focused on CSP business user communities, CSPs worldwide are deploying their own marketplaces to provide SaaS applications to reduce customer churn and retain existing user groups. Examples include: Orange Business Services Bell Canada s Business Apps Store KT ucloud SingTel s PowerON Telefonica s Applicateca Telstra s T-Suite Deutsche Telekom s Business Marketplace SaaS marketplace enablers: As NEC has done, many other entities are looking to leverage client relationships and other pre-existing cloud competencies to deliver systems and frameworks to permit the swift and easy deployment of third-party aggregated SaaS accessible solutions. Examples include: App Direct Provides the platform for cloud service brokerages (CSBs) to build bundled SaaS offerings for regional, business process-focused or vertical markets. Jamcracker Aggregates and distributes on-demand services through a global ecosystem of service providers, resellers, system integrators and ISVs. Ospero IaaS vendor looking to use its underlying federated VMware cloud running on a VCE Vblock hardware to build a better SaaS delivery channel into the enterprise across Europe. HP aggregation Platform for SaaS Enables operators to create a SaaS marketplace portal where SMB customers can discover SaaS products and bundles, run trials, subscribe to services, and consume them. Parallels Specialist in virtualization and cloud computing. It has got significant experience as the provider of infrastructure, application and end-user cloud enablement software and it takes all three levels into account as it has developed its SaaS marketplace software.

6 Non-CSP Enterprise App Stores: Cloud application aggregation is not just a CSP focus of course, almost all the major players are mobilising to provide cloud based business and consumer services. Primary SaaS, IaaS and PaaS operators offer a natural nexus for the collation of services of this type. Some notable examples include: Fujitsu Business Store solution provides transformative opportunities for existing software solutions into the SaaS provision arena. SAP Marketplace Offerings focused towards larger Enterprises. Salesforce.com App Exchange marketplace includes more than 1,400 applications. AWS Marketplace Amazon provides showcase opportunities for SaaS providers that deploy their solutions against AWS. Microsoft s PinPoint Marketplace Not yet an integrated marketplace, currently only offers a catalogue for technology services. Many other providers, particularly in the white label space, show signs of activity in this space, but have yet to launch self-service app store environments. Contenders include: ATOS, HP, IBM, Oracle, Software AG, Tibco, and VMware. CSPs and key SaaS enabled partnerships Some notable partnerships in the SaaS aggregation space include: China Telecom In 2011 China Telecom and SAP announced a partnership to offer cloud-based services to SMEs in China. The partnership is likely to enable China Telecom to offer SAP s Business. Softbank Corp Also in 2011, Softbank Corp. and Oracle Corp. announced a cloud computing partnership to offer software and information services over the internet. Verizon Verizon and SAP America announced plans to jointly deliver the SAP Customer Relationship Management rapid-deployment solution to enterprise workers through Verizon s cloud offering, Computing as a Service. Orange Business Services Orange Business Services offers Business Together as a Service. This service allows unified communications solutions to be offered via the cloud, using an as a service model that allows enterprises to quickly and cost-effectively access communication and collaboration tools.

7 An engagement with other CSP service providers CSP service providers are well positioned to offer an evolving range of value-add services to CSPs allowing service and solution delivery quickly and with minimal developmental overhead. The growing engagement within the cloud space by smaller, more agile ISV operators presents an extensive pool of potential solutions to be integrated with the CSP customer facing product portfolios. GMS are currently developing a range of white label product models (built against integrative middleware technology) that will permit organisations to easily deploy the GMS messaging solutions within owned data centre infrastructures, or against globally recognised cloud stacks (e.g.: Amazon AWS). Leveraging third-party cloud solutions for CSP customer groups is in a relatively early growth phase. GMS s engagement with NEC is an example of how an ISV with useful product IP (and thus flexibility of revenue share margins) can engage with much larger organisations, delivering bi-directional value, and improving CSP customer stickiness and reducing churn. Data sovereignty and lock-in are key to the cloud space, and is a critical business tool that is well suited to cloud deployment and delivery (suitably secured and deployed), as well as ensuring long term customer traction. GMS are interested in exploring further opportunities of this nature and we would welcome an opportunity to speak to organisations that are involved in the development of customisable CSP-centric cloud service delivery models that leverage third-party services and capabilities. Partnering with Cloudline GMS has a long standing, global reputation for on-premise solutions, backed by strong service levels. We are now using this expertise in the delivery of cloud messaging. The evolution of the cloud industry is constantly opening up new and innovative technology partnerships throughout distribution channels and networks, complementing our developments with the application aggregation space we are also interested in: White Label Partnerships Cloudline can be supplied as a blueprint model for third-party organisations to deploy their own cloud messaging services, either for the provision of private cloud instances, or public cloud offerings. Using a customised deployment template, Cloudline can be rolled out quickly to pre-existing or new customer audiences. Private Cloud Partnerships Cloudline has been developed for deployment against a wide range of private cloud infrastructures instantiated on different types of IaaS stacks; typically an Amazon AWS instance is used to support the required user population size/demand and can be spun up quickly based on a standardised usage model. Similarly, using a formalised consultative process, Cloudline can be optimised for deployment in an owned/leased cloud infrastructure, e.g. an existing datacentre. Reselling Cloud represents a potential threat to the traditional reseller model & community. Cloud elements such as selfservice and ostensible low per unit pricing means that margins can be under threat from cloud solutions. As a self-service, prosumer/smb directly accessed solution, Cloudline will also offer opportunities for reseller models that offer compelling margins and web based management tools. Please visit: & cloudline.gordano.com for more information. * Market Trends: CSPs Lay the Foundation for Their OTT Strategies. (Gartner, Gyanee Dewnarain, February 2013) * Market Trends: CSPs Adopt Five Main Strategies In the Four Key OTT Battlegrounds. (Gartner, Gyanee Dewnarain, February 2013) CSP Business Strategy. (Gartner, Gyanee Dewnarain, April 2013)

8 CONTACT US Please visit: cloudline.gordano.com for more information International. +44 (0) Toll Free US