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1 Athens Tower, Building B, 2-4 Mesogeion Ave., 5th Floor, GR , Athens, Greece Tel.: W H I T E P A P E R C l o u d E n a b l i n g P l a t f o r m s f o r S e r v i c e P r o v i d e r s, U p d a t e ( ) Sponsored by: Interworks Evangelos Karanikas December 2013 E X E C U T I V E S U M M A R Y Cloud has become an important new paradigm of computing and service delivery models, and adoption will continue to be strong in the foreseeable future. This new, "more dynamic" IT model has transformed the services world, and users are embracing it rapidly, applying even greater pressure on traditional communications service providers (CSPs) to step up their game or lose customers altogether. IDC predicts that worldwide public cloud services will increase by 27.0% year on year in 2013 to $47.40 billion and will reach $ billion in 2017, representing a CAGR of 23.5% five times the growth of the IT industry overall. These services will account for around 17% of total IT product spending by 2017, up from approximately 8% in 2012, and generate nearly half of all growth by IDC believes that extreme urgency in developing competitive cloud offerings and operating models optimized around those offerings is required. For CSPs in particular, cloud computing offers the opportunity not only to deliver a wider variety of service offerings, but to do so with only minimal up-front investment and low OPEX. A well-architected cloud environment can also allow a CSP to tap more efficiently into the broad ecosystem of third-party application and content providers, hence enabling the delivery of a richer and more diverse set of highly relevant and valuable offerings to both business and home end users. Also, because of the cost-effective nature of scaling a cloud service operation, the investment grows only as its cloud services grow in popularity. In addition, a properly configured cloud operation with highly automated service management software can be implemented and run cost effectively so CFOs should be happy with the return that this new operation and its unique genre of applications and services provide to the bottom line. Interworks' Cloud Platform manages the complete lifecycle of delivering cloud services to customers and is designed to address the needs of all types of service providers (SPs), including telcos, hosting companies, and independent software vendors (ISVs). This new type of platform manages the complexity of defining, delivering, and billing the provisioned services; streamlines both business support systems (BSSs) and operational support systems (OSSs) functions and processes; and provides real-time interaction between users, customers and partners. With its integrated approach, Interworks' Cloud Platform enables CSPs to bridge the gap between traditional BSSs and OSSs by combining marketing, sales, billing, provisioning, and support in a unified multi-tier platform. Different deployment solutions allow for different investment options. Interworks' Cloud Platform also offers fully-integrated customer relationship management (CRM) and business intelligence (BI) capabilities. Interworks' end-to-end software and services enablement framework addresses CSPs' need to leverage cloud technologies internally, so as to drive productivity gains and reduce costs, but also externally, generating new revenue.

2 Benefits also include the ability to quickly launch new value-added services, thereby responding to customer demands and increasing customer satisfaction and loyalty. S I T U A T I O N O V E R V I E W On-demand, cloud-based delivery models capitalize on improved operational standardization and increased levels of automation, efficiency, and effectiveness. CSPs have a once-in-a-generation opportunity to get in on the ground floor of cloud services that clearly hold tremendous potential, given their fast-growing adoption and the huge size of the public cloud services market. Recent IDC cloud research indicates worldwide revenue from public IT cloud services exceeded $21.42 billion in 2010 and will grow to $47.40 billion in Almost two-thirds will be on software as a service (SaaS), and about one-quarter will be on infrastructure as a service (IaaS), but the fastest-growing segment will be platform as a service (PaaS), which is expected to surge by 37.8% in IDC predicts that by 2017 public cloud services will account for nearly half of net-new growth in overall IT product spending a reminder to CSPs of the importance of establishing a strong position in the public cloud services market now. With these market trends in mind, we highlight some of the key drivers of a cloud ecosystem from a CSP point of view: C l o u d O f f e r s C S P s O p p o r t u n i t i e s t o E x p a n d i n N e w M a r k e t s a n d V e r t i c a l s Cloud enables CSPs to better monetize their network and systems resources to deliver services to the public. Cloud-based services and applications offer new opportunities for CSPs to expand their addressable markets and create new service portfolios and revenue streams, with the potential to extend the value delivered to customers well beyond that which has been provided to date. Also, new, diverse, and highly relevant cloud services and applications can be targeted at whatever customer segments or industry verticals the CSP desires: large businesses, small and mediumsized businesses (SMBs), government agencies, educational institutions, consumers, healthcare providers, financial services institutions, retailers, or any combination of these. In particular, we believe that the small and midmarket business segments can benefit greatly from quality-assured business applications delivered from CSPs via cloud. In turn, these services and applications have the potential to improve the competitiveness of CSPs that enter the market with higher-value cloud offerings (SaaS or enhanced IaaS) targeted at the enterprise segment (large and very large businesses). C l o u d A d d r e s s e s C S P Q u e s t f o r C u s t o m e r L o y a l t y In addition, today's business intelligence and analytics applications, technologies, and appliances, which usually accompany cloud enablement solutions, are critical to achieving a more profitable and "intimate" customer relationship. Therefore, the cloud can address CSPs' growing need to hold on to valuable customers while attracting new, higher-value ones. C l o u d I m p r o v e s C S P T i m e - To- M a r k e t Cloud computing provides CSPs with the ability to quickly launch new value-added services, thereby responding to customer demands in a fast-changing business 2 #CEMA IDC

3 environment. By doing so, these CSPs effectively gain a competitive advantage, but they also more easily wring out greater profitability from each service and customer. IDC believes this is the best approach to moving forward. I N T E R W O R K S C L O U D P L A T F O R M The Interworks Cloud Platform is a Cloud Business Operating System that addresses the needs of CSPs to simplify their day-to-day operations and scale up their business, by providing them with the tools to rapidly adapt in a dynamic marketplace. The system offers cloud business and operation automation, and allows for real-time interaction between users, customers, and partners. In its Cloud Marketplace layer, Interworks offers the Cloud Services Catalogue, which is a set of pre-integrated IaaS, SaaS, and PaaS services. These services are mostly third-party applications from different vendors with which Interworks has contractual agreements. Interworks has already signed high-volume agreements with Microsoft and other ISVs, thereby allowing the delivery of cloud services. Interworks' Cloud Platform streamlines OSS and BSS functions and processes into one system, therefore facilitating CSPs to expose their assets, manage subscriber information, network policy capabilities, and business processes related to order management and fulfillment. Additionally, the platform handles all new billing models and new types of applications with seamless connectivity. Finally, the platform's federation engine allows CSPs to quickly roll out new and bundled cross-domain services, which can be accessed from any public cloud. F I G U R E 1 I n t e r w o r k s C l o u d P l a t f o r m Source: Interworks, IDC #CEMA

4 C o m p e t i t i v e L a n d s c a p e Competition is diverse, including vendors of both OSSs and billing systems. Attractive characteristics within the Interworks Cloud Platform include: Self-Provisioning: The cloud marketplace includes functionalities such as services catalog browsing, "add-to-basket," and the buy option. As soon as the buy or try action is performed, all services are provisioned automatically in the OSS layer and information is gathered in the BSS layer. Business Automation and Rationalization: Master data management and back-office processes are simplified, and up-to-date information is accessed and ready to be utilized by different groups of interest. Multi-Tier Architecture: This enables CSPs to easily launch partner whitelabeled marketplaces. Through its so-called market-maker engine, the platform facilitates CSPs to expand and utilize their partner network more efficiently. T h e I n t e r w o r k s C l o u d P l a t f o r m E c o s y s t e m Interworks Cloud Platform enables all kinds of SPs, such as telcos, hosting companies, application service providers, and ISVs to manage the complete lifecycle of delivering public cloud services to their customers. Telcos and Service Providers: Telecom operators can bundle traditional services with new product offerings (e.g., public cloud services), while the platform can be integrated with their back-end systems using APIs and workflow hooks. In turn, the platform's customer self-service functionality and unified environment allows SPs to enhance the customer experience and effectively manage both IaaS and SaaS services and their resellers. The Role of ISVs: The Interworks Cloud Services Catalogue consists of IaaS, SaaS, and PaaS offerings; most of these services are third-party applications from different ISVs. ISVs can utilize the platform's open integration framework to deliver their services to their channel network. The Role of Resellers: Through its built-in market-maker functionality, Interworks' Cloud Platform supports the creation of a reseller's ecosystem and manages the need for real-time interaction between users and partners. C A S E S T U D Y : O 4 I T Interworks has already established a presence in the Greek telecom space. At the same time, it has also expanded internationally, on-boarding high-end SPs, with the latest example being O4IT. O4IT was founded in Florida, in the U.S., and is a leading provider of cloud-based IT solutions in South Florida and Latin America. O4IT owns and operates two datacenter infrastructure facilities in Miami and two in Colombia. After reaching the milestone of 150 corporate customers, O4IT decided to move from a direct to an indirect go-to-market strategy, by enabling integrators, value-added resellers, carriers, telcos, and wholesalers to offer its cloud portfolio. 4 #CEMA IDC

5 B u s i n e s s a n d T e c h n i c a l S i t u a t i o n O4IT was seeking a solution to help scale up its portfolio to a broader customer base by using an indirect model. The solution was to incorporate not only automated provisioning capabilities, but also an ecommerce layer that would provide self-service capabilities for purchasing different types of services. The solution was also to be able to coexist with O4IT's technology stack. O4IT uses a multi-tenant architecture that is fully redundant. S o l u t i o n O4IT used Citrix CloudPortal Services Manager as the provisioning layer and Interworks' Cloud Platform as the BSS and marketplace. Interworks' self-service Cloud Platform was integrated seamlessly with O4IT's own infrastructure and virtualization/automation platform, thereby enabling O4IT to offer a complete solutions catalogue to its partner base, giving it the flexibility to have both single- and multi-tier channels. B e n e f i t s Fast go-to-market with a complete range of fully transactional solutions Channel engagement and expansion without compromising service quality and delivery times Minimization of administrative, operation and commercial costs Easy customization based on the company's business model C H A L L E N G E S A N D O P P O R T U N I T I E S IDC sees key opportunities and challenges for Interworks as it rolls out its new Cloud Platform. The opportunities include: Accelerate Transition of Traditional SPs into Cloud Providers: According to IDC research, traditional CSPs have clearly realized that the growth potential in cloud will become strategically important in view of the revenue decline in their core connectivity markets. Telcos in particular need to use cloud to improve their own infrastructural positioning, as well as to support services offered to customers. However, integration issues, the complexity of defining, delivering, and billing these services to thousands of end users, and cost remain key challenges to greater adoption, especially in Central and South Eastern Europe. Overall, well-architected, user-friendly, cloud-enabling platforms will be able to fully capitalize on the need of traditional CSPs to accelerate their transformation into cloud service providers at a global level. Tapping into the Market for SMBs: CSPs, which are Interworks' primary target, are currently showing increased interest in the SMB segment; on the telco side, large tier-1 operators need scalable, automated systems to serve this market segment, while smaller providers need ways to retain current customers and cross-sell new application services. Furthermore, providers of all types also need rapid cloud/hosted services market entry strategies for SMBs. IDC's research 2013 IDC #CEMA

6 indicates that more than half of SMBs will leverage the cloud over the next 2 3 years for IaaS and SaaS in order to enable use cases such as new application development, website creation/management, marketing analytics, , and collaboration. Building an SMB-focused service provider approach (similar to that offered by Parallels) could help Interworks take advantage of more customer opportunities. The challenges include: Further Integration with Existing Provisioning Platforms: IDC believes that expansion of technology partnerships so as to integrate with existing provisioning platforms or operating support systems would increase Interworks' Cloud Platform's overall value proposition. In our view, providers of cloud-enabling platforms need to play their cards well, both in terms of partnerships and brand awareness among end users, in order to avoid being marginalized by broader industry dynamics. Breadth of Cloud Services Catalog: The concept of pre-integrated services offered through the platform can help CSPs to utilize cloud services more effectively. However, Interworks should increase the breadth of offered services and capitalize on SMBs' need for office automation, security, and collaboration. C O N C L U S I O N Given the emergence of cloud as a flexible, cost-efficient delivery platform for a range of IT offerings, CSPs need rapid, scalable ways to leverage this new model and profitably capitalize on growing end-user demand. Interworks' new cloud business operating system is designed to offer a turnkey solution for the delivery of IaaS, PaaS, and SaaS, thus helping traditional SPs transform into cloud providers. Through a unified multi-tier platform with advanced business support and fully-integrated BI functionalities, Interworks helps CSPs to manage the complete lifecycle of delivering cloud services to their customers directly or through resellers, while simplifying their IT infrastructure and streamlining operating costs. C o p y r i g h t N o t i c e External Publication of IDC Information and Data Any IDC information that is to be used in advertising, press releases, or promotional materials requires prior written approval from the appropriate IDC Vice President or Country Manager. A draft of the proposed document should accompany any such request. IDC reserves the right to deny approval of external usage for any reason. Copyright 2013 IDC. Reproduction without written permission is completely forbidden. 6 #CEMA IDC

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