Monetizing Networks in the Enterprise and Content Ecosystems. C. Kaplan VP Global Consulting Ciena Corporation
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1 Monetizing Networks in the Enterprise and Content Ecosystems C. Kaplan VP Global Consulting Ciena Corporation
2 Monetizing Networks in the Enterprise and Content Ecosystems
3 the network s job: to enable applications
4 Enterprise transition to hybrid IT IT Cloudsourcing Self Serve Experience ENTERPRISES Consumption-based economics Spontaneous consumption, bundled IT + connectivity
5 DC Fabric: connecting datacenters OVUM Global Data Center Analyzer 2014
6 Role of the exchange
7 the traffic between data centers choose acceptable duration schedule data transf er choose BW costs more, economic waste costs less, poor performance ndwidth peak peak is = to-20 times x Bandwidth the median median The case for on-demand networking: How to reshape the service to match the traffic pattern?
8 Evolving opportunities for monetization Category Cloud Services and Hybrid IT Integrate Cloud services with network services to be sold as Carrier Managed Service bundles Virtualized Network Functions (VNF) Package connectivity with virtualized network functions Managed Service SaaS, PaaS, IaaS Security, Consulting, and Systems Integration Managed Virtual Appliances Firewall, Routing, Encryption, WAN Optimization $72B $11B WAN Connectivity Services Adapt connectivity Services for Cloud Access and Cloud Fabric (data center interconnect) Secure Cloud Connect Fabric on-demand, integrated into cloud orchestration, self-serve Secure Cloud Access $68B Enterprises seeking a full service channel to provide integrated compute, store, connect, solutions to simplify Cloud migration
9 Opportunity: Data Center Interconnect (Cloud Fabric) Ent. Ent. App DCs 25% 8% Ent. Ent. 12% Ent. Inter-city Telco PoPs metro Ent. international Carrier DCs 55% Ovum DCI Report, Apr15 *2014 global equipment spend **CAGR 2014-to-2019
10 GeoAnalytics: Data Center Latency Estimator Tools for marketing campaigns, diverse path routing plans,
11 Monetizing Networks in the Enterprise and Content Ecosystems
12 What s wrong with this picture?
13 Content Delivery Problem (Opportunity) Video traffic approaching 90% by 2018 Traditional Metro/Core transport services sub-optimal (static) Broadband Access Networks (ISP) dominated by OTT video Must invest in capacity, but cannot charge for it (net neutrality) Other ISP traffic is suffering (churn) What to do? Revisit Peering and Internet Transit agreements? Sell Managed Services ( Direct Connect ) for OTT video? Optimize networks for Content Delivery? New ways to make money in content delivery.
14 Megabits per second the problem (opportunity) will grow Uncompressed Video Stream Uncompressed Video Stream; Growth SD SHD 3G-HD Quad HD UHD 8k HD
15 Cumul Costs of the Scenarios Your advantage: CDNaaS at 50% GM 5-Year Cumulative Costs of the Scenarios $250,000,000 $200,000,000 Scenario-1: OTT Self-Build with Leased Transit- w/o CDN Scenario-2: OTT Self-Build with Leased Transit - with CDN Scenario-3: OTT Leases CDNaaS from CDN Vendors Scenario-4: OTT Leases CDNaaS from MSPs (@ 50% MSP Gross Margin) All costs from OTT point of view NO CDN (use internet) $150,000,000 OTT Self-Build CDN $100,000,000 $50,000,000 Traditional CDN MSP CDNaaS at 50% GM $- OTT Penetration Rate Data Transferred (PB) 1% 1% 5% 10% 10% Year-1 Year-2 Year-3 Year-4 Year-5
16 Opportunity in Content Distribution Extend CDN to ISP edge Bypass the public internet Offer direct connect managed service Who pays for the managed service? Does Netflix pay because it needs the broadband subscribers? Does ISP pay to avoid unhappy subscribers? Origin Server Direct Connect/ V-WAN Edge Server / Cache Edge Cache Edge Cache Transit / Peering Direct Connect/ V-WAN ISP Cache Remember Must-Carry vs. Retransmission Consent
17 Summary of Opportunities Bypass the public internet for OTT Content Owners Optimize the economics with Bandwidth on Demand (SDN) for Content Owners Optimize performance with Transparent Caching (NFV) at content source Remove expensive transcoding / compression stages
18 Monetizing Networks in the Enterprise and Content Ecosystems
19 increasingly agile packet-optical capacity required Virtualized Services L1-2-3 switched dedicated Express λ At Layer 0 Long reach transponder
20 Open, Modular Software Architecture required OSS/BSS Vendor X Cisco Prime ALU NSP Multi-Domain Service Orchestration Cisco / Tail-f ALU SAM SDN Management and Control openmano Overture Ensemble HP Director ALU CloudBand NFV Management and Orchestration VMware NSX Juniper Contrail Cisco ACI ALU Nuage Data Center SDN Controller
21 Network monetization consulting helpful! Is it worth launching the new service? Are we on track with the business model? tracking and process improvement opportunity assessment and sizing network assessment Can my network support the new services? Can I generate and close leads? collaborative selling IT back-office and operations assessment Can my back-office support them? Can my sales force sell the new services into the verticals? sales force training positioning and marketing plan SLA definition and pricing How do I position and promote? How do I define and price new services?
22 Q&A?
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