UBS Telecoms Enterprise Day 2014 Trends in enterprise ICT 28 March 2014 Robert Schumann
2 Contents About Analysys Mason Sizing African SME ICT markets Case studies from Developed Markets Challenges and opportunities for providers
About Analysys Mason 3 About Analysys Mason Knowing what s going on is one thing. Understanding how to take advantage of events is quite another. Our ability to understand the complex workings of telecoms, media and technology (TMT) industries and draw practical conclusions, based on the specialist knowledge of our people, is what sets Analysys Mason apart. We deliver our key services via two channels: consulting and research. Consulting Our focus is exclusively on TMT. We support multi-billion dollar investments, advise clients on regulatory matters, provide spectrum valuation and auction support, and advise on operational performance, business planning and strategy. We have developed rigorous methodologies that deliver tangible results for clients around the world. For more information, please visit www.analysysmason.com/consulting. Research We analyse, track and forecast the different services accessed by consumers and enterprises, as well as the software, infrastructure and technology delivering those services. Research clients benefit from regular and timely intelligence in addition to direct access to our team of expert analysts. Our dedicated Custom Research team undertakes specialised and bespoke projects for clients. For more information, please visit www.analysysmason.com/research.
About Analysys Mason Analysys Mason is part of Datatec, a global ICT solutions and services group 4 Via s services bridge the gap between telephony and computing to deliver best-in-class, multivendor, integrated unified communications solutions. Networking services and support consultancy business focused on three core business pillars; creation of new revenue streams, delivery of projects associated with those revenue streams and support of these projects once delivered. International IT solutions and managed services provider with a breadth of knowledge and expertise in communications and collaboration; data centre and cloud services; and managed services Value added distributor of category-leading unified communications, network infrastructure, data center and security solutions with a global network of specialty resellers
About Analysys Mason 5 Research from Analysys Mason We provide dedicated coverage of developments in the telecoms, media and technology (TMT) sectors, through a range of research programmes that focus on different services and regions of the world. Alongside our standardised suite of research programmes, our Custom Research team undertakes specialised, bespoke research projects for clients. The dedicated team offers tailored investigations and answers complex questions on markets, competitors and services with customised industry intelligence and insights. To find out more, please visit www.analysysmason.com/research.
About Analysys Mason 6 Consulting from Analysys Mason For more than 25 years, our consultants have been bringing the benefits of applied intelligence to enable clients around the world to make the most of their opportunities. Our clients in the telecoms, media and technology (TMT) sectors operate in dynamic markets where change is constant. We help shape their understanding of the future so they can thrive in these demanding conditions. To do that, we have developed rigorous methodologies that deliver real results for clients around the world. Our focus is exclusively on TMT. We advise clients on regulatory matters, help shape spectrum policy and develop spectrum strategy, support multi-billion dollar investments, advise on operational performance and develop new business strategies. Such projects result in a depth of knowledge and a range of expertise that sets us apart. We help clients solve their most pressing problems, enabling them to go farther, faster and achieve their commercial objectives. To find out more, please visit www.analysysmason.com/consulting.
2013 2014 2015 2016 2017 2018 2013 2014 2015 2016 2017 2018 USD million USD billion Sizing African SME ICT markets Micro and small enterprises buy far less ICT in Africa than they do globally Sub-Saharan Africa SME revenue 1,800 1,600 1,400 1,200 1,000 800 600 400 200 0 240 220 200 180 160 140 120 100 80 60 40 20 0 Global SME revenue 7 Medium Small Micro Source: Analysys Mason, ICT services for SMEs worldwide: forecasts and analysis 2013 2018
2013 2014 2015 2016 2017 2018 2013 2014 2015 2016 2017 2018 USD million USD billion Sizing African SME ICT markets Compared with global counterparts, mobile operators control far more of SME spend Sub-Saharan Africa SME revenue 1,800 1,600 1,400 1,200 1,000 800 600 400 200 0 240 220 200 180 160 140 120 100 80 60 40 20 0 Global SME revenue 8 Mobile voice and data Fixed voice Fixed broadband Video services Source: Analysys Mason, ICT services for SMEs worldwide: forecasts and analysis 2013 2018 Cloud services
Case studies from Developed Markets 9 Case study Telefónica Azul An OTT voice, messaging and teleconferencing tool, targeted towards large enterprises. Responding to the threat of OTT and BYOD* to enterprise revenue in developed markets. Entry level UC application conferencing, collaboration, document sharing and unified messaging. We expect BYOD to be an important trend in enterprises in Southern Africa, mainly due to mobile operators aiming to increase spend from corporates Features VoIP calls * BYOD = Bring Your Own Device Interoperability with Lync Integrate contacts and presence Document sharing Call management features Call recording
Case studies from Developed Markets 10 Case study Telefónica Azul Telefónica Azul screenshot
Case studies from Developed Markets 11 Case study Unify Project Ansible Project Ansible is a unified communications (UC) service that aims to deliver on the promise of UC that has so far not been realised. Adoption of UC services is increasing in developed regions, as virtual teams and multiple devices become a reality, and pressure is on IT departments to deliver more value for less budget. Ansible employs WebRTC for a browser based interface, which makes it a potentially viable service for deployment into enterprises in emerging markets that may have lower IT budgets. Enterprise customers in Southern Africa will see improvements in connectivity, and become more data reliant over time, as the economy moves towards being more service orientated. Services such as Ansible be rapidly adopted once this is the case.
Case studies from Developed Markets 12 Case study Unify Project Ansible Project Ansible
2013 2014 2015 2016 2017 2018 Revenue (USD million) Case studies from Developed Markets 13 Cloud-based Mobile Device Management Cloud-based MDM is a small market in terms of revenue in SSA, but it will be one that increases rapidly. Large enterprises will be the early adopters of these services. SMEs will follow as the value becomes clear, and they become more data sensitive. Adoption is increasing rapidly in Latin America and emerging Asia Pacific. Mobile operators are a key channel to market for MDM vendors. Cloud-based MDM revenue, worldwide 2013-2018 12.0 10.0 8.0 6.0 4.0 2.0 0.0 Micro Small Medium
Case studies from Developed Markets 14 Case study AirWatch Airwatch is an MDM vendor, offering both cloud based and onpremises deployments. For SMEs Airwatch Professional is an entry level service that can be deployed for USD1 per user per month, providing basic MDM functionality. It can define and update company-wide settings and access, remotely wipe devices and view all active devices across the network. Airwatch Professional features by stakeholder Stakeholder Feature Employees Use personal devices at work (BYOD) Employers Quick to implement Low cost Upgradable IT administrators Secure mobility Easy to install Monitor devices 24/7 support
Case studies from Developed Markets 15 Other interesting BYOD/MDM applications Dual persona AT&T Toggle (Voice and Data) Split billing Swisscom Duo Bill Virtual SIM Movirtu, Movius OTT Telefónica Azul, Comcast VoiceEdge
Challenges and opportunities for providers Trends suggest more collaborative services through lower cost / more convenient channels Our research in developed markets suggests the following trends: Trend Enhancement of operators online channels Video-based communications Drivers Improved SME customer experience with cloud Lower cost of sales compared to other channels Simple way to educate a mass market on technology Flexible procurement and management of cloud services for the customer Cross-office collaboration with reduced travel Can be integrated into wider UC packages Used for sales, customer service, and support Increasing use in healthcare, government, education and manufacturing BYOD solutions Operator pressure to monetise BYOD SME conflicting requirements for mobility and security 16 Source: Analysys Mason, Top technology trends for SMEs in developed markets in 2014
Challenges and opportunities for providers Connectivity providers must update their operations to support SMEs effectively SMEs are complex customers, requiring good technical support and high reliability Connectivity providers (CPs) must fine-tune their operations to provide these things and to attract and support SMEs for both traditional, ICT, and other emerging digital economy services CPs must offer SME customers simple, automated self-service. They cannot afford to offer customised services for every SME, while SMEs always prefer a quick sign-on process with little outside help. CPs should build partnerships with vendors and resellers that have a good understanding of the SME market. They cannot reach out to SMEs individually, given the huge and fragmented market. CPs should ensure data consistency across systems. A typical CSP will have systems from several different vendors, some of which may not be compatible with each other a common information model must be used. CPs should implement robust security protocols and should offer high-quality services, backed by SLAs for service uptimes. Data security and service reliability are key issues for attracting SMEs. CPs should offer different billing and bundling options for their services. Adoption of a one-sizefits-all approach risks alienating some customers, and lack of differentiation will prevent upselling of quality services. CPs should offer out-of-the-box solutions for digital economy services such as web and server hosting, retail product catalogue and department-level billing on a zero capex, pay-as-you-go SaaS model in order to reduce the upfront costs to customers and ongoing operational costs to the CSP. Source: Analysys Mason, Digital economy software strategies: CPs require advanced operations to provide SMEs with ICT services 17
Challenges and opportunities for providers African enterprises can increase productivity, but price and lack of choice are inhibitors Market drivers Need to increase productivity by: connecting company locations and partners (that may host software) supporting better customer service via contact centres increasing automation of basic business processes. Desire to support real-time applications such as teleconferencing when travel budgets are under pressure. Need to reduce costs leads to more outsourcing, including IaaS and SaaS. Need to improve reliability because more mission-critical applications are being run over the network. Demand for services that are consistent around the world. Replacing PSTN with VoIP as a way of reducing costs. Growth in the population of servers and storage devices leading to increased outsourcing. Market inhibitors Price is the most significant barrier to greater bandwidth usage. Lack of choice of suppliers (also keeps prices high). Users do not want to be dependent on a single supplier. If only satellite (which has high latency) is available, enterprises cannot use real-time applications. Lack of network coverage. Operators inability to support higher network speeds may limit what applications can be run (for example, cloud). Poor quality of the local loop and/or the access network. Restrictions on VoIP (because of regulations regarding what can be carried over data links). Lack of awareness. Companies not yet convinced of the benefits or practicalities of services such as cloud, or how these services can improve productivity. Source: Analysys Mason, Enterprise connectivity demand in Africa: trends and forecasts 2012 2017 18
Challenges and opportunities for providers Time to deploy is the most frequently cited reason for selecting a supplier in Africa Time to deploy. Our discussions with enterprise IT managers in Africa revealed that the ability to get services up and running with minimal lead times is extremely important. Reliability and SLAs. IT managers want to be assured not only of the quality of the services, but also that the supplier can provide the necessary security and maintenance of the hardware. Choice of good-quality partners. Users need to know that operators have a good relationship with their suppliers, and that the equipment and systems suppliers are reliable and credible. Ability to cater for the African terrain. Users may consider remote region coverage and may consider route diversity to ensure service reliability, damage to the fibre is common. Past experiences and brand reputation. IT managers prefer to work with suppliers with whom they have had a good experience in the past or about whom they have heard good reports from peers. 19 Source: Analysys Mason, Enterprise connectivity demand in Africa: trends and forecasts 2012 2017
20 Contact details Robert Schumann Principal robert.schumann@analysysmason.com Johannesburg