© 2013 Cisco and/or its affiliates. All rights reserved. Cisco Confidential 1© 2012 Cisco and/or its affiliates. All rights reserved. Cisco Confidential 1

Standing out in a crowd 

Differentiation for success on a level

playing field

Matt Kolon - CTO APJC

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Investments in NBN/FTTx Infrastructure

• Governments have realized broadband infrastructure is essential to economic prosperity

AU$??

NZ$4B

US$58B

S$0.75B

US$3.27B

US$0.65B• +10% increase in broadband use can

increase GDP by 1.8%

• Increasing broadband use by 10% can reduce unemployment by 1.6%

• National output increases faster from sovereign investment than private investment

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Network Investment Is Special

The World Bank suggests, “a 10 percentage point increase in broadband penetration in high-income economies such as Australia resulted in an

increase in economic growth of 1.2 percentage points." (Gyarmati, 2010).

Country GDP Improvement(10 year)

Australia ~AU$80B

USA ~US$6T

Germany ~€100B

Japan ~US$160B

China ~US$1.5T

No other sovereign investment

yields such results

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A New Differentiation Paradigm

StructuralSeparation

WholesaleNetwork

WholesaleAccess

Integrated

Retail Service Provider

Active Network

PassiveNetwork

InfrastructureProvider

InfrastructureProvider

WholesaleProvider

End To EndProvider

AccessProvider

Comms. &Service

Providers

Service Provider

Service Provider

Example

Regardless of the model the access network is commoditized

What was a differentiator is no more !

Competition and Innovation now must occur in services

Service Providers in an NBN World must transformand differentiate based on a new competitive paradigm

Retail Service Provider

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The Service Provider Impact

Access Backhaul Agg Core DCI

Consumer Access Aggregation Core Data Center

FTTx Access &

Aggregation

NetCo

Traditional Spend 70% 20% 10%

Avg % Of Network Capital Costs

Ser

vice

s

New Competitive Spend 10% 30% 60%

Data CenterService

Origination

• Data center and service origination is now the new value • Many Service Providers will re-profile their businesses to

focus on service creation and innovation

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A new frontier of service differentiation?

“SDN Needs a bigger definition.”—Lippis report, 2012

“We share a more pragmatic view, noting Cisco is likely to view SDN as a TAM expansion opportunity.”

—Deutsche Bank Research note, Wired, April 2012

“Hype around SDN/OpenFlow getting way out of control. Where have I seen this before...”

—Ethereal Mind, Blogger

“Will OpenFlow commoditize networks? Impact Cisco margins?”

—Several media publications, Bloggers

“Google revamps networks with OpenFlow.”—ZDnet

“The Next IT Killer is…NOT SDN.”—DevCentral

Cisco Confidential 6IS THE NETWORK READY?

Cloud Video Mobility Data Deluge

How to Harness Network Value?

How to Drive Business Agility?

How to Drive Operational Simplicity?

Cloud AccessFederated DC (Melb/Syd/Perth)

Centralized E-Government

TelePresense in Education (BER)E-Health

OnDemand Video

Moble TelePresenceLocation aware mobility

Differentiated billing

Big DataAnalyticsCensus

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The levers of differentiation

MonetizationOptimization

Expose Network IntelligenceAnalytics

Inform Network of Desired State

PoP Cloud

Ad Insertion

1800DataMobile TP

Premium Mobile Video

Self Organizing Networks

Elastic Service Creation

Network Service Slicing

Dynamic Pricing and

Policy

M2M and Virtualization

Flex Your Transport

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Example 1: Elastic Service Creation

Virtualized Service Abstraction

Operator Application

3rd Party Applications

OperatorOSS/BSS

Application Monitors Network Resources

1

Build Customer Service Profile(e.g VoIP, Firewall, Video)

2

Push Service into Network and Receive Confirmation

3

Enable Service Group and Monetize Delivery

4

$

I pay for general broadband, my employer pays for home working, Disney pays when my daughter watches TV

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Example 2: Premium Video Everywhere

LowerBW

Bit rate: 0.75Mbps$ add : $0

Bit rate: 7.5MbpsData $: 30/mo. – 2GB

Bit rate: 7.5Mbps$10 eCPM

Bit rate: 7.5Mbps$ add: 20% of top line

Upgrade/Pay per dip or

Timeshift

Toll FreeData

AdSupport

User Event + Real-time Analytics

Correlate Historical analysis + Real-time events + subscriber profile

Policy & Enforcement

• Routing• Throttling• Insertion

• Real-time Event Management

CORRELATEDDATA

TIME BOUND

Analytics

• Quota• QoS

• Charging Policy• RAN type

• Device Type• Subscriber Profile

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A software-centric, new market model

Network ClientData Center

Physical Infrastructure

Virtualized Infrastructure

Orchestration

Applications

APIs

APIs

NPIs

Web APIs and Client Plug-ins

Business and Consumer Applications

Service Functions and Resource Automation

Programming and Managing of Virtual Resources

Programming and Managing of Physical Resources

MASKING NETWORK

COMPLEXITY

OPEN AND PROGRAMMABLE

CONSISTENT OPERATIONAL EXPERIENCE

Ser

vice

s an

d S

uppo

rt

Infrastructure Services Orchestration Management

Business & Service Orchestration Workflow Engine for Compute, Network & Storage

Operating Systems

Controller Layer

Unified Platform API

OpenFlowonePKI2RS PCEPBGP CLI CLI, other,..

Path Computation(PCE)

vRR / BGP

TopologyNPS

AnalyticsPolicy Identity

CustomRouting

OpenStackQuantum

Cloud SecurityDevice Mgmt

WirelessMgmt/WLC

Service MgmtInfrastr.

PrimeNetwork

EMSCloudSXC

El. Services

Fulfillment Automation

API

• New Business Models

• Different skill set to most

SPs today

• Re-tooling – platforms,

systems and processes

• Redefinition of metrics

• New marketing approaches

A new paradigm for an

evolving market

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Summary

• Significant government interest in infrastructure across the region is a great thing

• Investments are changing the requirements of networks and leveling the playing field

• Service differentiation is the emerging key value proposition required to drive profitability

• Software based services are forming the fundamental basis upon which this differentiation can be built

• Service Providers must adapt to and monetize this new world

• This is not the first time our industry has made a transition – there is support in the industry to help shape and guide the future

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Thank you.