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Monetizing the Cloud
© 2010 Oracle 2
The following is intended to outline our general
product direction. It is intended for information
purposes only, and may not be incorporated into any
contract. It is not a commitment to deliver any
material, code, or functionality, and should not be
relied upon in making purchasing decisions.
The development, release, and timing of any
features or functionality described for Oracle’s
products remain at the sole discretion of Oracle.
© 2010 Oracle 3
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Agenda
• Cloud Computing Trends and Analysis
• Learning from Other Business Models
• Succeeding in the Cloud
• Customer Case Studies
• Oracle’s Defining Value
© 2010 Oracle 4
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Cloud Computing Trends
and Analysis
© 2010 Oracle 5
Early markets
We Were
Here
Where are we now?
“the Chasm”
Mainstreammarkets
Latemarket
We Were
Here
We Are
Here
© 2010 Oracle 6
Worldwide IT Revenue* by Consumption Model2009, 2013 ($B)
Source: IDC, March 2010
45
17
2009 2013
Wo
rld
wid
e IT
Re
ve
nu
e (
$ b
illi
on
)
359
416
Public IT Cloud Services
45170
100
200
300
400
500
600
Traditional IT Products
CAGR
26%
4%359
416
5%10%
0
10
20
30
40
50
60
45
17
Public IT Cloud Services Forecast
CAGR
26%
© 2010 Oracle 7
Maturing User Attitudes
(Scale: 1 = Not at all important 5 = Very Important)
Q: Rate the benefits commonly ascribed to the 'cloud'/on-demand model
Source: IDC Enterprise Panel, 3Q09, n = 263
54.0%
63.9%
64.6%
67.0%
68.5%
75.3%
77.7%
77.9%
0% 10% 20% 30% 40% 50% 60% 70% 80% 90%
Seems like the way of the future
Sharing systems with partners simpler
Always offers latest functionality
Requires less in-house IT staff, costs
Encourages standard systems
Monthly payments
Easy/fast to deploy to end-users
Pay only for what you use
% rating 3, 4 or 5
© 2010 Oracle 8
Source: IDC Enterprise Panel, 3Q09, n = 263
72.9%
78.3%
79.2%
81.0%
82.1%
84.5%
86.0%
87.8%
88.6%
91.6%
0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%
Have local presence, can come to my offices
Are a technology and business model innovator
Offer both on-premise and public cloud services
Support many of my IT needs
Allow managing on-premise & cloud together
Understand my business and industry
Provide a complete solution
Option to move 'cloud' offerings back on premise
Offer Service Level Agreements (SLAs)
Offer competitive pricing
% rating 3, 4 or 5
(Scale: 1 = Not at all important 5 = Very Important)
Q: How important is it that cloud service providers…
Maturing User Attitudes
© 2010 Oracle 9
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Learnings from other
Business Models
© 2010 Oracle 10
All you can eat is easy but risky…
© 2010 Oracle 11
For all industries, the right business model is critical
© 2010 Oracle 12
Shifting Back to Usage Based Pricing Resulting in churn, lawsuits and stock price hit
• Service Providers implement tiered price
• 2009 Time Warner Cable implemented tiered pricing – Abandoned program due to customer backlash
• June 2010, ATT implemented tiered pricing for iPhone/iPad – Class action lawsuit pending
• January 2010: ATT, Verizon and other drop unlimited calling plans to $59.99
• Stock prices for both companies immediately dropped 3-5%
© 2010 Oracle 13
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Succeeding in the Cloud
© 2010 Oracle 14
Drive Efficiency
How do you
Private Cloud?
With a
© 2010 Oracle 15
Enabling Cost Allocation in the Private CloudTypical Technology Characteristics
User facingSelf-service
Back office
Provisioning, metering,
chargeback
Infrastructure
IP Network, Hardware, servers,
storage, DB
IaaS
PaaS
SaaSINTERNET
Private Cloud
Users
INTERNET
© 2010 Oracle 16
Metering, Billing, and Chargeback Leveraging Internal Cost Allocation to Drive Efficiency
• Track/meter resource consumption (available today)
- CPU
- Memory
- Storage
- Network Bandwidth
- Service
- Application
- And more
• Chargeback and Billing- Multi-level chargeback rollup using LDAP
Enterprise hierarchy
- Integration with Oracle Billing and Revenue Management for full chargeback capabilities
IT
Users
© 2010 Oracle 17
Self Service Engine
Billing & Revenue Management
Customer
Management
Service
Management
Resource
ManagementEnterprise Manager
Secure Internet
Billing Updates for “IT” & “Network” based Services
Oracle Applications for Cost EfficiencyPrivate Cloud Management and Usage Chargeback
CGBU Software Assets
Non-CGBU Software Assets
Oracle Hardware
Cloud Infrastructure Resources
Oracle VM
Oracle Solaris & Linux
Oracle Database
Oracle Fusion Middleware
© 2010 Oracle 18
Make money
How do you
Public Cloud?
With a
© 2010 Oracle 19
Enabling Order to Cash in the Public CloudTypical Technology Characteristics
Public Cloud
INTERNET
SaaS
IaaS
PaaS
Customer facing
Back Office
Infrastructure
Self-service, customer care,
CRM
Service ordering/provisioning
metering/billing, invoicing
Computing HW, applications, storage, DB,
security, QoS, SLA management,
analytics
© 2010 Oracle 20
Client Layer
•Mobile devices
•Laptops
•PCs
•Games, music
•Web-conferencing
•Online or downloadable apps
•APIs for CRM, Retail
•Tools to develop new apps
•Collaboration infrastructure
•Infrastructure for apps
•Storage, Collocation
•General purpose computing
The Three Monetizable Cloud Layers
Application Layer (SaaS)
Platform Layer (PaaS)
Infrastructure Layer (IaaS)
© 2010 Oracle 21
• Per Application User
• Per Transaction
• Per Program/Activity
• Per Hour
• Per Input/Output
• Per Message
• Per GB used
• Per Named Host
• Per GB
• Per Server/Blade/VM
• Per CPU per hour
Example Billing Metrics
Public Cloud OfferingsPricing Design Based on Usage Models
Public Cloud
I
N
T
E
R
N
E
T
SaaS
IaaS
PaaS
Software offerings
Platform offerings
Infrastructure
offerings
© 2010 Oracle 22
Siebel CRMCustomer
Management
Service
Management
Resource
Management
Comms Network
Order and Service
Management
Enterprise Manager
Unified Inventory
Management
Service Activation
Network Resource Management
Virtualized and Physical IT
InfrastructureComms Network (L1-4+) and Service Infrastructure
Billing Updates for “IT” & “Network” based Services
Oracle Applications for Revenue EnablementPublic Cloud Service Design, Delivery and Monetization
CGBU Assets
Non- CGBU Assets
Non-Oracle assets
Billing & Revenue Management
© 2010 Oracle 23
Physical & VirtualSystems Management
Cloud Management
Oracle Enterprise Manager
Configuration Mgmt
Lifecycle Management
Application PerformanceManagement
Application QualityManagement
Ops Center
Cloud Monetization
Pricing/Charging Flexibility
Customer Management
Complete Billing Operations
Value Chain Management
Business Intelligence
Oracle Billing and Revenue Management
Metered Usage
Usage data
collection
Provisioning
Bill/Invoice generation
and delivery
Integrated Metering and Billing at the Core Complete Resource Management and Monetization Capabilities
CloudServices
Middleware
Database
OS
Virtualization
Applications
Balance Control
Deactivation
© 2010 Oracle 24
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Customer Case Studies
© 2010 Oracle 25
BT Enterprise VDC DeploymentPrivate Cloud XaaS Offerings
Project Overview
9 major VDC centers in UK and Europe, plus others
around the world
VDC is key to BT’s overall cloud strategy – includes servers,
storage, security, connectivity
Other BT Cloud initiatives include UC, Communications as a Service, SaaS for SMEs
BT now rolling up all initiatives under one program – Oracle OSS is being positioned to take
on a broader role
Key Requirements
• Fast TTM through configuration vs coding and leveraging re-usable components
• Reduce costs through systems consolidation and automation
• Support any number of XaaS product types - flexible and future proof
• Dramatically improve customer experience
- Right First Time (RFT)
- Reduce Cycle Time (RCT)
• Flexible support for multivendor environment to avoid vendor lock-in
• TMF standards alignment
© 2010 Oracle 26
Colt Public Cloud IaaS Offerings
• Profile
- Offers voice, data, managed services, wholesale services to 35,000 customers (business, government)
- Operates large pan-European network, 19 Colt data centers
• Project Details
- Oracle (Siebel, Product Hub, OSM, UIM and ASAP) to support IaaS and strategic BSS/OSS architecture
- Phase 1 to be delivered Fall 2010; Phase 2 January 2011
• Key Requirements
• Enable Colt’s IaaS business model (lean provisioning model, real-time self-service)
• Aggressive deployment schedule – configurable platform with market leading OOB functionality key to enabling
fast low, risk deployment
- Strong support for component re-usability – i.e. support different markets (small, medium and large
businesses) from common base of components
- TMF standards alignment to simplify integrations and reduce risk
• Results to Date
• New Wave Transformations: Focused Projects, Fast Execution and High Impact
• Successfully delivering Cloud Services: Innovative Business Strategies
© 2010 Oracle 27
COMPANY OVERVIEW
• Intuit is a leading provider of business and financial management solutions for small and mid-sized businesses; financial institutions, including banks and credit unions; consumers and accounting professionals
• Industry: Software • Segment: Accounting• Employees: over 8000• Revenue: over USD 3.1B
CHALLENGES/OPPORTUNITIES
• Consolidation of multiple IT and billing systems• Cross-product and cross-business line offers• Product/Offer Standardization• Real-time balance management• Regulatory compliance• Time to market for new offers
SOLUTIONS
• Project delivery by Oracle Consulting• Oracle BRM integrated with Siebel CRM and
Oracle E-Business Suite,
ANTICIPATED RESULTS
• Single global process supported by a
single global instance
• Subscription and billing tightly
integrated with accounting
(compliance & operational efficiency)
• Reduction/simplification of
application infrastructure
• E2E solution that offers an integrated
Shop, Buy, Use experience
IntuitPackaged Software & SaaS Offerings
© 2010 Oracle 28
COMPANY OVERVIEW
• WebEx is a leading provider of online meeting applications with 7M users per month and 35,000 customers
• Industry: SaaS-based conferencing• Employees: over 3500• Revenue: US $ 0.5B
CHALLENGES/OPPORTUNITIES
• Consolidate of multiple IT and billing systems• Ensure flexible support for B2B pricing & charging
models• Support high-volume transaction processing• Enable intuitive offer configuration• Support settlements with channel partners
SOLUTIONS
• Oracle BRM to manage customers, accounts, pricing, rating, billing, invoicing, A/R, collections, payments, and financials
• Project delivery by Oracle Consulting
ANTICIPATED RESULTS
• Oracle Communications BRM
processes millions of transactions
per day
• Provides real-time balance
management
• Processes partner settlements
• Handles complex corporate account
hierarchies
• Supports custom pricing for
corporate customers
• Supports multiple lines of business
in multiple countries
Cisco WebExSaaS Offerings
© 2010 Oracle 29
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Oracle’s Defining Value
© 2010 Oracle 30
Complete Oracle Stack for Cloud
1. Expand and accelerate -- dramatically – deliver highly
optimized and integrated hardware-software systems
2. Provide complete, standards-based Oracle IT stack that
delivers sufficient openness to avoid vendor lock-in, but
also superior performance compared with heterogeneous
combinations
3. Lower the costs of assembling, setting up, testing, tuning,
managing, integrating, trouble-shooting, fixing,
upgrading, and running 1 and 2
4. Complete that infrastructure with ultra-modern Fusion
applications that can run with existing enterprise apps,
from Oracle or anyone else.
5. Complement broad horizontal apps with deep
industry knowledge and functionality
© 2010 Oracle 31
Oracle’s Design Time Value Enable a Lean, Flexible Factory Assembly Model for
Cloud-based Services
Design Time Capabilities Business Value
Integrated provisioning of
connectivity and IT systems
Able to offer innovative and
market differentiating
XaaS mashups
Open, service-agnostic and
SID-based fulfillment
platform
Low-cost factory service
assembly model for ever-
changing XaaS offers
Single, configurable Order to
Cash platform
Minimize customization,
hours to days to launch
new XaaS offers
Flexible Pricing Engine Rapid development of
XaaS service pricing
models, real-time
discounting, revenue
recognition
© 2010 Oracle 32
Oracle’s Run-Time Value: Enable Fast, Efficient, Customer-Driven Service
Delivery and Monetization of Cloud-based Services
Run-Time Capabilities Business Value
Converged network and
XaaS platform
On-demand and low-
cost service delivery
model
End-to-end service views
and order statistics
Able to offer market
differentiating self-care
(BoD) and order
fulfillment SLAs
Integration of Ordering,
Provisioning and Billing
Faster time to market for
new service launches
Single platform with
dynamic order change
management
Customer-responsive
service delivery
Flexible pricing engine for
monetization
Any service, any price
point,
© 2010 Oracle 33
Q&A
© 2010 Oracle 34