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    Washington, DC / London / Paris / Singapore

    Cloud-based BSS: Essential for Long-term Operator Survival in the Digital Economy

    June 2014

    Presented by:

    Ron Westfall Research Director, Service Provider Infrastructure

    Jason MarcheckService Director, Service Provider Infrastructure

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    Agenda

    State of the Market

    Market Drivers

    Solution and Architecture Requirements

    Vendor Positioning and Differentiation

    Cloud BSS Future

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    State of the Market: Cloud BSS

    Can BSS Technology Adapt to Massive Scaling of IP Traffic?

    What is the Potential Impact of Cloud Computing on BSS

    Transformation?

    What are the Cloud Migration Challenges Facing Operators?

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    State of the Market: Burgeoning BSS Challenges

    By 2017, there will be ~3.6 billion Internet users, >48% of

    the worlds projected population (7.6 billion)

    By 2017, >19 billion global network connections Fixed/mobile personal devices, M2M connections, etc.

    Data-Centric Perspective By 2017, Global IP traffic will surpass 1.4 Zettabytes per year

    By 2017, IP Video traffic will account for 73% of Internet traffic

    Proliferation of Non-PC Digital Traffic By 2017, non-PC devices will account for 49% of total IP traffic,

    demonstrating the effect of web-enabled TVs, tablets and smartphones on

    the way consumers access and use the Internet

    Source: Cisco Visual Networking Index

    IP Traffic Explosion Yields Opportunities for Billing Innovation

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    State of the Market: Cloud-ready BSS Emerging

    Annual global cloud IP traffic will reach 5.3 zettabytes by the end of 2017 By 2017, global cloud IP traffic will reach 443 exabytes per month (up from

    98 exabytes per month in 2012)

    By 2017, >19 billion global network connections

    Global cloud IP traffic will increase over fourfold during next 5 years Overall cloud IP traffic will grow at 35% CAGR from 2012 to 2017

    Global cloud IP traffic will account for more than two-thirds of total data

    center traffic by 2017

    Cloud models well-suited for convergence of multiple BSS platforms

    Emergence of real-time cloud model (SDN/NFV)

    Source: Cisco Global Cloud Index

    Massive Scaling of Cloud Computing on the Horizon

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    State of the Market: Operator Barriers

    Silo legacies

    Proprietary interfaces

    Limited visibility

    Untapped analysis of data wealth

    Storage Costs

    Fragmented customer experience

    Cloud security

    Business Mindset Also Needs to Change:

    Must adapt to digital economy

    Accommodate regulatory shifts

    Integrate third-party app innovation

    Internet-centric

    Cloud Migration Challenges

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    State of the Market: Targets

    Small/Medium-sized operators

    Mobile operators

    MVNOs

    Second Wave Adopters of Cloud BSS:

    Top-tier Operators

    Verticals

    Enterprises

    First Wave Adopters of Cloud BSS:

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    Market Drivers: Cloud-based BSS

    What are the Operator Drivers for Cloud-based BSS?

    What are the Operator Pain Points?

    What are the Vendor Drivers for Cloud-based BSS?

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    Cloud-based BSS Drivers: Operators

    Industry Back-Office Transformation

    The BSS market is

    evolving Cloud Migration = Survival

    BSS transformation key to new

    business solutions and models to

    drive new revenue

    Operators need new

    partners Leverage new relationships and

    fill gaps to execute on innovative

    business models to create

    revenue opportunities

    Gaining a toe-hold in the

    digital biz value chain Keep up with OTT competition

    and develop new consumer

    services

    No roadmap, no guarantee

    of success... Time, investment, risk of investing

    in costly transformation projects

    Need to tap new customer

    segments / revenue sources

    Which new opportunity to

    go after first? Uncover which suppliers have the

    right portfolios to match their

    needs

    Identify the right partners

    Traditional built-in Carrier

    mentality Reactive vs. Proactive

    Need to convince the troops with

    solid case studies

    Market Drivers Operator Pain Points

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    Cloud-based BSS Drivers: Vendors

    Vendors Need to Ally with Operators to Drive BSS Innovation

    Operators Need to

    Innovate New revenues

    Counter/monetize OTT

    Vendors Need to Be

    Partners Capture more revenue

    Capture long-term revenue

    Operators Recognizing

    Need to Transform

    Networks Requires new skill sets

    Vendors must evolve to meet the

    requirements

    The Need to Show

    Thought Leadership Education / marketing

    Portfolio innovation

    Acquiring the Right Mix

    of Skills Build or buy

    Innovation

    Where to focus R&D

    Differentiating in a

    Muddled Scene Where to focus marketing?

    Where to tailor R&D?

    Market Drivers Pain Points Opportunities to Help

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    Solution Requirements: Cloud-based BSS

    What are the Architectural Considerations for Operators?

    What are the Operator Priorities?

    What is the Timing for Critical Mass Adoption?

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    Solution Requirements: Essential Cloud-based BSS Capabilities

    NFV-driven virtualization

    Cloud security

    On-demand access

    Multi-tenant modes

    Automation of processes

    Dynamic SLA parameters

    Coordinated data distribution

    Vendor Product/Solution Considerations:

    Real-time charging

    Policy integration

    Open interfaces

    Managed service support

    Pre-integrated, pre-configured, pre-packaged

    Operator Architectural Considerations:

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    Solution Requirements: Operator Prioritization

    Operator Priorities:

    Using SDN/NFV to improve Cloud value

    Cloud-based OSS/BSS launch/expansion

    Opening APIs for Cloud-based customer apps

    Supporting Cloud SLAs and QoS

    Cloud Security

    Cloud Service Priorities

    Cloud Security 4.62

    Supporting Cloud SLAs and QoS 3.08

    Opening APIs for Cloud-based customer apps 3.04

    Cloud-based OSS/BSS launch/expansion 2.62

    Using SDN/NFV to improve Cloud value 1.62

    Scale (1-5): 5 Highest Priority; 1 Lowest Priority

    Source: Current Analysis OSS/BSS Survey (May 2014)

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    Solution Requirements: Operator Prioritization

    Operator Priorities:

    Increased Operational Efficiency (i.e. reduce silos resulting in OpEx savings) 2.59

    Increased Operational Flexibility (i.e. more agile fulfillment, assurance) 2.05

    Preparing to support Cloud-based service offerings 1.91

    Support for Big Data Analytics 1.83

    Preparing OSS to support virtual network operations 1.56

    Preparing to support Service Oriented Architectures (SOA) 1.30

    Scale (1-3): 3 Highest Priority; 1 Lowest Priority

    Preparing to support Service Oriented Architectures (SOA)

    Preparing OSS to support virtual network operations

    Support for Big Data Analytics

    Preparing to support Cloud-based service offerings

    Increased Operational Flexibility (i.e. more agile fulfillment, assurance

    Increased Operational Efficiency (i.e. reduce silos resulting in OpEx

    Overall OSS/BSS Investment Drivers

    Source: Current Analysis OSS/BSS Survey (May 2014)

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    Solution Requirements: Timing of Cloud-based BSS Migration

    Operator Priorities:

    Scale (1-3): 3 Highest Priority; 1 Lowest Priority

    Already use 12%

    Next 12 Months35%

    12-18 Months 31%

    18-24 Months 12%

    2-3 Years 4%

    No Plans 8%

    Timing of Cloud-based OSS/BSS Migration

    2/3 of operators have some plans to adopt Cloud-based OSS/BSS

    by the end of next year

    Source: Current Analysis OSS/BSS Survey (May 2014)

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    Solution Requirements: Essential Cloud BSS Benefits

    Substantial $ savings over SW licensing

    Real-time interactions

    Streamlined, intuitive view

    Reduction of infrastructure spend

    Simplify employee training

    Actionable intelligence

    Additional Cloud BSS Benefits:

    Integration with OSS/Cloud OSS

    SDN/NFV Efficiencies

    Cloud services brokerage

    Leveraging metadata

    Hybrid, Public, Pri