digital transformation / digital services...the business strategy of one organization will be...

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Digital Transformation / Digital ServicesNew Business Models and Partnerships Make for Golden Leakage

Opportunities and Fraud Challenges

May 11, 2017

Karl Whitelock, Stratecast Global Director Strategy

Operations, Orchestration, Data Analytics & Monetization (ODAM)



Abstract

Digital transformation is an overused buzzword, but then again so are customer

experience, fraud management, revenue assurance, and network functions virtualization.

Digital services―network connectivity services plus partner-offered extras―continue to

evolve and consume the attention of planning teams and technologists alike.

Partnerships are a key part of digital transformation along with the new business

models they create.

As partnerships grow and complex services are delivered, multi-partner relationships

establish many new areas of concern for not only revenue leakage and fraud but also in

understanding how margins remain acceptable.

Are you ready for the onslaught of new business models and service offerings that

look right, add revenue, but in the end show little profitability?

If you have doubts, you are not alone.



Agenda

Introduction

Market Drivers of Change

Digital Transformation – CSP to DSP Evolution

New Monetization Models Brings New Risk



Introduction

Mass Communications Expands Exponentially

1865 CE – Telegraph

1876 - Telephone

1979 – Cell Phone1450 CE – Gutenberg Printing Press

Today – Interconnected Everything

2000+ BCE

Hieroglyphics

868 CE

Wood Block

Printing

Source: Stratecast



Introduction

But, After 4000 Years has Human Communication Really Changed?

Source: Stratecast



Introduction

Why is Digital Transformation Important?

New Business Opportunities

New Revenue Streams

Avoid Obsolescence

Create New Risk (yes really)

?

Source: Stratecast



The Road to Nowhere – Ignoring Change Creates Obsolescence

Significant decline in the

competitiveness, usefulness,

or value of something originally

of high worth. Occurs often due

to alternatives that perform

better or are cheaper or both.

Something of worth can also

become obsolete due to

changes in user preferences,

requirements or styles.

Obsolescence

Source: Stratecast



Agenda

Introduction






Key Drivers for the Global CSP Market – Data Volumes, Revenue

Percentage of Mobile Data Users Consuming

More Than 2 GB per Month (Global)

Source: Cisco Visual Network Index 2012-2017, Stratecast

Source: A large international network provider claims that 1 in

10 international voice calls travel across its network. It

reported 53 billion minutes of wholesale voice traffic traversing

its global network in 2015, which dropped to 48 billion minutes

of wholesale voice traffic in 2016. This represents a YoY

decline of 9.4%

Source: Stratecast



Key Drivers for the Global CSP Market – Customer Choices

Source: Every 60 seconds insight obtained from multiple sources

including Qmee and Ingram Micro Cloud, Stratecast

Source: Stratecast



Key Drivers for the Global CSP Market – Anything-as-a-Service (XaaS)

XaaS is a monetization model

• A business that traditionally sells its wares to customers, can

now sell them as a service.

Source: Stratecast

Airlines• Power by the Hour

Construction• Tonnage Lifted

Agriculture Management• GPS Acreage by Remote Tractor

Remote Medical• Consult by Smartphone

Backup Power Generation• Emergency Generator by

Subscription Usage

Traditional IT Functions• Disaster Recovery

• Databases

• Desktops

• Security

• Unified Communications

• Productivity Applications

NFC Printable Labels• Delivery

• Inspection

• Authentication



Anything-as-a-Service (XaaS) – Transportation Example

Where are the

points for leakage?

Where are the

places for fraud?

How is profitability

determined:

• Operators?

• Partners?

• Businesses?

Illustration Source: Ericsson

Source: Stratecast



Key Drivers for the Global CSP Market – Partner Ecosystems

Where are the

points of leakage?

Where are the

places of fraud?


determined:

• Operators?

• Partners?

• Businesses?

Source: Stratecast



Agenda

Introduction






How Should CSPs Evolve Into Digital Services Providers?

Stay the Course – Offer the Best Connectivity Services Possible

Consumer Focused DSP

Business Partner DSP

IoT Enabled Business Solution DSP

The business strategy of one organization will be different from that of

another. Not all CSPs will transform the same way.Source: Stratecast



Scores of Installed Systems and Hundreds of Minimally Flexible Processes

Addressing Network Issues Dampen Efforts to Change

Source: Stratecast



What Monetization Focus is Important for Enabling Digital Transformation?

Source: Stratecast Annual CSP Billing Needs Survey, 2017

30%

40%

50%

60%

70%

80%

90%

100%

Enable andCharge for VNFs

Monetizing IoTOfferings

EnterpriseBusiness

Enablement

PartnerEcosystems

Perc

en

tag

e R

esp

on

din

g E

ssen

tial

Overall Leaders Others

Order of importance overall to the survey audience

Digital Transformation, or

the transformation from CSP

to Digital Service Provider,

has different meanings to

different organizations. What

is important in your

customer’s digital

transformation strategy?

Stratecast 2017 Survey Results:



Monetization Solution Approach for Addressing Digital Transformation

20%

30%

40%

50%

60%

70%

80%

90%

100%

Cloud-enabled,Public Cloud

(Saas)

Managed Services On-PremiseSoftware License

Cloud-enabled,Private Cloud

Perc

en

tag

e R

esp

on

din

g E

ssen

tial

Overall Leaders Others

Order of importance overall to the survey audience

Source: Stratecast Annual CSP Billing Needs Survey, 2017

What monetization

solution approach(s) are

your customers engaging

in to support their needs

for digital transformation?

Stratecast 2017 Survey Results:



CSP to DSP Transformation Journey

Where are the points for

leakage?

Where are the places

for fraud?


determined:

• Operators?

• Partners?

• Businesses?

Business Transformation means that a pathway filled

with constant change and business redefinition is now

the standard that all must follow.

Source: Stratecast



Agenda

Introduction






Business Model Evolution

Today’s CSP Business Model is Tied to the Network, but Customers are Evolving

Source: Stratecast



Changing Business Models – Consumer and Small Business Demand

Where are the points of leakage?

Where are the places of fraud?

How is profitability determined:

• Operators?

• Partners?

• Businesses?

Integrated Business and

Operations Support

CSP Network

Infrastructure

IPMobile

PSTN Cable

TMF TAM Model - GB929

Fulfillment Assurance Billing

Virtual Network

Functions (VNFs)

Business

Management

Microservices

Bus Retail B2Cn

Retail B2Cn

User1

User2

User3 User5

Consumers (B2C)

User4 Usern

SM Business (B2C)

DemandB2C Monetization

• Millions of consumers

• Many SMB customers

• Hybrid Network-based services

• Partner content and data

C2C Monetization

• Customer gifting and selling

Source: StratecastThis is Today’s World of Business



Changing Business Models – Large Business / Enterprise Internal Usage




• Operators?

• Partners?

• Businesses?

Enterprise and Large

Business(B2B Internal Consumption)

Wholesale1 B2Bn

DemandB2B Monetization

• Individualized Contracts

• Negotiated Terms

• Contract to Commitment Visibility

• Self-Care Changes

• Network Connectivity Services

• Partner-Provided Capabilities

Source: Stratecast


Operations Support

CSP Network

Infrastructure

IPMobile

PSTN Cable



Virtual Network

Functions (VNFs)

Business

Management

Microservices

This is Today’s World of Business



Changing Business Models – Business Enablement, Anything as a Service (XaaS)

Where are the points of

leakage?

Where are the places of

fraud?


determined:

• Operators?

• Partners?

• Businesses?

Enterprise(B2B and B2C Customer

Solutions, Anything-as-a-

Service, XaaS)Wholesale2 B2Bn

Demand

Source: Stratecast


Operations Support

CSP Network

Infrastructure

IPMobile

PSTN Cable



Virtual Network

Functions (VNFs)

Business

Management

Microservices

B2B Monetization

• Sponsored Data via CSP

• Specialized MVNO and IoT

Solutions

• Telematics (autos)

• Healthcare

• Utilities

• RFID Labels

• Retail Point of Sale (POS)

•Transportation

• Oil and Gas

• Food Products

• Waste Management

• Manufacturing

• Logistics Distribution

• Public Safety

B2C Monetization

• “X” as a Service (XaaS)

• Digital Commerce

• Device-based Services

• Publishing, Entertainment

• Others



Moving from Subscriptions to Usage-Based Consumption

All of these models assume a Configure, Price, Quote (CPQ) approach

from a single supplier, which is the basis for any XaaS offering

… and similar, but increasingly more complex business models.Source: Stratecast



Changing Business Models – Wholesale Capacity, Virtual Network Enablement




• Operators?

• Partners?

• Businesses?

Demand

Virtual Network

Enabler (VNE)(B2B, B2C Customers)

Wholesale4 B2BnB2B and B2C Monetization

• MVNO Comms Services

• Value-Add Services (VAS)

Wholesale

Connectivity(CSP-CSP)Wholesale3 B2Bn

B2B Interconnect Monetization

• CSP to CSP

• CLECs

• Mobile Roaming

B2B and B2C Monetization

• UCaaS, VoIP, Hosted PBX

Source: Stratecast


Operations Support

CSP Network

Infrastructure

IPMobile

PSTN Cable



Virtual Network

Functions (VNFs)

Business

Management

Microservices



Changing Business Models – Virtual Business Ecosystem Enablement




• Operators? Partners? Businesses?

Demand

B2B2X Partner Orchestration, Monetization and Operations

• Partner Definition and Registration

• Retail (B2C) and Wholesale (B2B)

• Partner-with-Partner (PwP) Definition and Registration

• Level 1 – Virtual PwP Enabled Retail Services (B2B2C)

• Level 1 – Virtual PwP Enabled Wholesale Services (B2B2B)

• Level 2 – Virtual PwPwP Enabled Retail Services (B2B2B2C)

• Level 2 – Virtual PwPwP Enabled Wholesale Services (B2B2B2B)

• Level n – Virtual PwP Retail and Wholesale (B2B2X)

Virtual Business

Enabler (VBE)(B2B2X Customers)Wholesale5 B2Bn

Source: Stratecast


Operations Support

CSP Network

Infrastructure

IPMobile

PSTN Cable



Virtual Network

Functions (VNFs)

Business

Management

Microservices



The Demand Challenge – Complexity is Winning


Operations Support

CSP Network

Infrastructure

IPMobile

PSTN Cable



Virtual Network

Functions (VNFs)

Business

Management

Microservices

User1

User2

User3 User5

Consumers (B2C)

User4 UsernSM Business (B2C)

Demand

Bus Retail B2Cn

Retail B2Cn

Enterprise and Large

Business(B2B Internal Consumption)

Wholesale1 B2Bn

Enterprise(B2B and B2C Customer

Solutions, Anything-as-a-

Service, XaaS)Wholesale

Connectivity(CSP-CSP)

Virtual Business

Enabler (VBE)(B2B2X Customers)

Wholesale2 B2Bn

Wholesale3 B2Bn

Wholesale4 B2Bn

Wholesale5 B2Bn

Virtual Network

Enabler (VNE)(B2B, B2C Customers)



Changing Business Models – Supplier Complexity is Growing

Where are the

points of

leakage?

Where are the

places of fraud?

How is

profitability

determined:

• Operators?

• Partners?

• Businesses?

Wholesale B2Bn Digital Services Supplier Ecosystem

1-n

Authorized

CSP

Dealers

1-n

Other

Network

Providers

1-n

Retail

mCommerce

1-n

Physical

Goods

Providers

1-n

Mobile

Money

1-n

Advertisers

1-n

Data Usage

Sponsors1-n

IoT Solution

Suppliers1-n

Digital

Content

Developers1-n

Cloud

Services

Providers

Source: Stratecast



… What Will the Next Suite of Life Changing Improvements Bring?

Where are the

points for leakage?

Where are the

places for fraud?


determined:

• Operators?

• Partners?

• Businesses?

20162020+3D/4D Printing

Virtualized

Networks

(NFV / SDN)Virtual Reality

Speed, Latency

and Data

Throughput

Capacity

Source: Stratecast



The Last Word

Where are the points for leakage? ---------- At Each Interface (Internal or External)

Where are the places for fraud? ----------- Everything Internal and at Each Interface

How is profitability determined: ---------- Ask an Expert, Work with a Trusted Partner

• Operators?

• Partners?

• Businesses?



Contact Details

Karl M. Whitelock

Director Global Strategy – Operations,

Orchestration, Data Analytics & Monetization

(ODAM)

Stratecast | Frost & Sullivan

[email protected]



About the Presenter

One of the original founders of Stratecast, Mr. Whitelock established the Operations, Orchestration, Data Analysis &

Monetization Competitive Strategies practice. He leads this team and personally covers the monetization functions such as

data analysis, policy, rating & charging, partner management and financial assurance (RA, Fraud, Margin).

He has been instrumental in bringing to light the cloud-based, multi-partner services vision and the role of data in

monetizing the Internet of Things. He helped to establish the Enterprise Business Enablement concept for Digital Partner

Ecosystem-Based Virtual Services.

Prior to Stratecast, Mr. Whitelock worked at a major North American service provider, global business consulting and

solution integration firm, a network management developer, and a test and measurement supplier. He has authored 200+

publications on the business concerns of the operations & monetization marketplace. Mr. Whitelock holds a BS

engineering degree from the University of Utah.

Karl Whitelock, Global Director Strategy –

Operations, Orchestration, Data Analytics

& Monetization

Stratecast | Frost & Sullivan

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