Managed Services: A refocused business approach: Gary Nugent, Vice President and General Manager, Managed Services Business

ANNUAL TECHNOLOGY SYMPOSIUM COPYRIGHT © 2013 ALCATEL-LUCENT. ALL RIGHTS RESERVED.

MANAGED SERVICES UPDATE Gary Nugent, VP Managed Services November 2013

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ALCATEL-LUCENT MANAGED SERVICES 2013 ACHIEVEMENTS •  Verticalized the Managed Service business.

•  Restructured or managed separation of 15 contracts not achieving objectives.

•  Simplified offers supporting IP Networks and Ultra-Broadband Platforms sales.

•  Delivered managed services with our Standard Delivery “Blueprint” Model.

• Winning new strategically aligned managed services deals.

•  Focused on improved margins and cash positive engagements.

MANAGED SERVICES TURNAROUND SUCCESSFUL!

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FOCUS

TECHNOLOGY

OPERATIONS METRICS

BUSINESS MODEL

ENGAGEMENT MODEL

NETWORK DRIVEN

MAINTAIN NETWORK

NETWORK KPIs

OPEX DRIVEN

“Like-for-like for less” OUTSOURCE

SERVICE DRIVEN

TRANSFORM NETWORK

SERVICES KQI

TCO DRIVEN

OPERATIONS PARTNERSHIP

END-CUSTOMER DRIVEN

VIRTUALIZE NETWORK

CUSTOMER EXPERIENCE MANAGEMENT

STRATEGIC BUSINESS OBJECTIVES DRIVEN

BUSINESS PARTNERSHIP

A CHANGING MANAGED SERVICES PARADIGM FOCUSED ON CUSTOMER EXPERIENCE, VIRTUALIZATION, AND DELIVERING TRANSFORMATIONAL SOLUTIONS

MANAGED SERVICES MARKET TRENDS

MS 1.0 MS 2.0 MS 3.0

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ALCATEL-LUCENT MANAGED SERVICES STRATEGY 2014-2016

MARKET •  Grow existing customers •  Expand in Strategic Industries and banking •  Invest in META, US, CALA •  Target opportunities aligned with IP Networking,

Ultrafast BB, and fixed/mobile convergence

PORTFOLIO •  Expand and enhance BOMT Offer •  Customer Experience Management/SOC solutions •  VFV/SDN solutions •  Security managed services solutions

DELIVERY •  Transform base to Blueprint Model •  Continue Blueprint innovation •  Consolidate NOC capabilities •  Expand to support evolving portfolio

2014-2016 MANAGED SERVICES STRATEGY… WITH PROFITABLE SALES GROWTH

ALCATEL-LUCENT SHIFT PLAN AND SERVICES STRATEGY

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ADVANCED SERVICE DELIVERY MODEL STANDARDIZED MANAGED SERVICES BLUEPRINT

The Blueprint benefits include…

•  Predictable performance with continuous quality improvement

•  Rapid time-to-delivery

•  Lower TCO

•  Continuous learning with knowledge re-use

•  Accurate real-time dashboard

•  Reduced customer investment

•  Evolution from network to service management

NETWORK MANAGEMENT

DOMAINS Performance Management

Service Desk Management

Fault Management

Inventory Management

Field Force Management

Fully integrated delivery structure providing unmatched performance with 6-Sigma levels of excellence

ALCATEL LUCENT MANAGED SERVICES BLUEPRINT MODEL

Governance

Metrics Systems/ Tools

Process

Organization

Job catalog

Professional development

Delivery centers

• On-shore

• Near-shore

• Off-shore Aligned with eTOM and ITIL frameworks

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BUILD, OPERATE, MANAGE AND TRANSFER (BOMT)

Improve time-to-market and reduce risk when introducing innovative end-user services and new Alcatel-Lucent technologies

TODAY’S MANAGED SERVICES PORTFOLIO SOLUTIONS AND VALUE PROPOSITIONS AVAILABLE

MS OPERATIONS TRANSFORMATION

Improve our customers’ network operations efficiency and quality through transformation to the Alcatel-Lucent Standard Delivery Model

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SERVICE MANAGEMENT MODEL FOR MANAGED SERVICES ALCATEL-LUCENT’S PRAGMATIC APPROACH

1.   “Monitor” - Provide customer experience data

2.   “Assist” - Engage in service operations processes

3.   “Managed Service” - Deliver management of service operations

•  Best-in-class tools and methodologies -  Proactive Care - root cause analysis of

the end-to-end network service quality -  MOTIVE – from KQIs to Customer

Experience Management Network

KQI1 KQI2 KQI3

KQI4 KQI5

Customers

NETWORK AND SERVICE PERFORMANCE MODELS

ANALYSIS TRENDING PATTERNING

CUSTOMER EXPERIENCE DASHBOARD

CUSTOMER EXPERIENCE SCORING

MOTIVE SQM

CUSTOMER EXPERIENCE MODELS

PNM PROACTIVE NETWORK MONITORING

ROOT CAUSE ANALYSIS

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MANAGED SERVICES - VIRTUALIZED TELCOS THROUGH SOFTWARE-DEFINED NETWORKS

•  Telco virtualization and key implications on operations -  Skills spectrum will shift towards IT -  Legacy NOC operations will require entire redesign -  And major investments in new support tools -  IT and network field operations will converge -  Cyber-security challenges will require a new

approach -  Expectations to address customer experience

management

•  Focus for Alcatel-Lucent managed services business: -  Operations impact analysis and development

of operations transformation methodology -  Shift from reactive to proactive operations

due to short reaction time requirement -  Definition of SOC on top of Cloudband and

Nuage platforms -  Development of new Blueprint operations

model for virtualized telco

THE COMPLEXITY OF THE VIRTUALIZED TELCO WILL CHANGE THE PARAGIDM OF HOW OPERATIONS METHODOLOGIES AND PROCESSES ARE DONE – MANAGED SERVICE PROVIDERS NEED TO BE READY.

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ALCATEL-LUCENT CYBER-SECURITY SOLUTIONS

PREVENTION Risk Analysis and Secured Design

PROTECTION Self-defending Architectures

DETECTION Security Log and Monitoring systems

MITIGATION Filtering and Anti-DDOS

COMPLIANCE

Threat and Vulnerability Intelligence

Monitoring and Regulatory Compliance

Events Monitoring and Control

Crisis Management and Remediation

ADVANCED E2E SECURITY INTEGRATION

THREAT MANAGEMENT SERVICES

SECURITY ENABLEMENT SOLUTIONS

CERT services

E.g. IDS, Content Filtering, Mail Filtering

Anti-DDOS Mitigation

IMS LTE IP Etc.

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ALCATEL-LUCENT MANAGED SERVICES

Over 100 wireline and wireless engagements globally

SCALE

•  11,500 managed services experts

•  240 Million+ subscribers

•  Manage 215,000+ technical work orders and 1 Million Repair Transactions annually

•  Over 1000 local repair and logistics partners globally

•  Speaking 19 languages and supporting 900,000 customer requests each year

EXPERIENCE •  24x7 support from 3 GNOCs and

29 local NOCs

•  Staffed with 2000+ highly skilled engineers knowledgeable in 50+ different technologies

•  Managing 470K Network Elements

•  Industry leader in integrated wireline + wireless network operations

•  Managing 10K+ multi-vendor parts of 35+ OEMs

QUALITY •  More than 2000 ITIL, PMP and

6-sigma specialists employing over a dozen tools to ensure personalized and high quality service delivery;

•  20+ years of Technical Support experience

•  Exceeding 95% of all contracts SLAs

20+ years of managed services experience

Customer satisfaction scores consistently above target

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RESULTS AND BENEFITS

•  17% TCO savings driven by energy savings, reduced footprint, IT costs savings, economies of new operations technologies, process and organization optimizations

•  Elimination of business continuity risks

•  New revenue-generating services available

•  Solid partner for Service Quality Center creation

•  Staff redeployment from legacy operations to transformation project

“ ALCATEL-LUCENT TO TRANSFORM KPN’S FIXED NETWORK OPERATIONS IN THE NETHERLANDS OVER NEXT FIVE YEARS”

- Press Release February 27, 2013

CASE STUDY KPN

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VODAFONE Qatar employs Alcatel-Lucent to build and transform its fixed and mobile network

CASE STUDY VODAFONE

“ VODAFONE QATAR IS ACTUALLY TRYING TO SET A NEW STANDARD FOR THE VODAFONE GROUP. ALCATEL-LUCENT WAS THE PERFECT FIT, THE PERFECT PRICE, WITH THE EXPERIENCE WE NEEDED: A COMPANY VODAFONE TRUSTED AND VALUED. THE THING THAT I LIKE MOST ABOUT ALCATEL-LUCENT IS THE WAY THEY DO MANAGED SERVICES…IT IS VERY WELL DONE.

THEY HAVE A COMMON UNDERSTANDING…THERE IS A LOT OF TRANSPARENCY, SO THERE’S NO ISSUES THAT WE HAVE TO OVERCOME. WHAT WE HAVE IS A COST-EFFECTIVE YET SOLID MANAGED SERVICES ENVIRONMENT BASED ON OPERATIONAL EXCELLENCE AND QUALITY OF SERVICE.”

- Bassam Al-Ibrahim, Technology Vendor Manager, Vodafone Qatar

RESULTS AND BENEFITS •  Accelerated time to revenue with an aggressive schedule. •  50% reduction in network outages

•  On-time change requests going from 70% to 100% in 9 months •  Customer satisfaction dramatically improved

•  Alcatel-Lucent was awarded the Vodafone award for best-in-class On-Time Change Management •  Allowed Vodafone to focus on it’s core business and customers

•  Mitigated business risks and lower TCO using Alcatel-Lucent’s operations experts and support infrastructure.

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CASE STUDY AIRTEL (AFRICA)

AIRTEL (AFRICA) - CREATION OF A PAN AFRICAN IP/MPLS NETWORK FOR BOTH CORPORATE AND COMMERCIAL NEEDS

RESULTS AND BENEFITS •  Turnkey Design, Build, Deploy, and Operate for IP/MPLS

Network serving 60 million customers in 17 countries across Africa •  Lower TCO with reduced cost operations and consolidation

at our GNOC in India

•  Faster time-to-market using a common platform for Layer 2 and Layer 3 service provisioning

•  Improved quality of service with proven experience and operations methods

•  Airtel is on the way to becoming a leader in Africa’s enterprise market

“ALCATEL-LUCENT IS HELPING US TO FULLY UTILIZE THE ADVANTAGES OF IP/MPLS TECHNOLOGY TO ECONOMICALLY AND EFFECTIVELY HANDLE HIGH VOLUMES OF A VARIETY OF MOBILE BROADBAND DATA AND VIDEO SERVICES. THE NEW NETWORK IMPLEMENTATION NOT ONLY PROVIDES A SUBSTANTIALLY IMPROVED QUALITY OF SERVICE FOR OUR CURRENT CUSTOMERS, IT ALSO DOES AN EXCELLENT JOB OF PREPARING AIRTEL AFRICA FOR FUTURE INTERNATIONAL EXPANSION OPPORTUNITIES.”

Eben Albertyn Chief Technology Officer, Airtel

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CASE STUDIES

• Accelerated time to revenue with an aggressive schedule.

• 50% reduction in network outages

• On-time change requests going from 70% to 100% in 9 months

• Customer satisfaction dramatically improved

• Alcatel-Lucent was awarded the Vodafone award for best-in-class On-Time Change Management

• Allowed Vodafone to focus on it’s core business and customers

• Mitigated business risks and lower TCO using Alcatel-Lucent’s operations experts and support infrastructure.

• 17% TCO savings driven by energy savings, reduced footprint, IT costs savings, economies of new operations technologies, process and organization optimizations

• Elimination of business continuity risks

• New revenue-generating services available

•  Solid partner for Service Quality Center creation

•  Staff redeployment from legacy operations to transformation project

• Turnkey Design, Build, Deploy, and Operate for IP/MPLS Network serving 60 million customers in 17 countries across Africa

•  Lower TCO with reduced cost operations and consolidation at our GNOC in India

• Faster time-to-market using a common platform for Layer 2 and Layer 3 service provisioning

•  Improved quality of service with proven experience and operations methods

• Airtel is on the way to becoming a leader in Africa’s enterprise market