sapbrim monetizing m2m services presentation

SAP Billing and Revenue

Innovation Management

Monetizing M2M

15 November 2012

© 2012 SAP AG. All rights reserved. 2 Public

Why now ?

Source: Economist Intelligence Unit, 1Q 2012

• Falling costs, wider connectivity and maturing technologies

• Regulatory mandates

• A growing range of successful applications and business models

• A maturing provider ecosystem

• Rise of the cloud


Value to the end user

“ Successful technology has two great attributes:

They are invisible to the customer and

they solve a fundamental human need “ Martin Cooper, pioneer of cellular telephone

Connecting the physical world to the online;

your machines works for you


M2M market forecast

Source: Economist Intelligence Unit

M2M will contribute to >5% of global operator revenue by 2015 ~ $65B

Source: Informa & SAP, 02/2012


M2M = low ARPU?

0 5 10 15 20 25 30 35

Less than $3

Between $3 and $5

Between $5 and $7

Between $7 and $9

More than $9


Average monthly ARPU per SIM, US$, % of survey respondents


Secure M2M profitability #1

LOW VALUE CONNECTIONS

LOW ARPU

Affordable and re-applicable low cost model

Low ongoing cost of platform ownership

Reduce operational cost

Automation

Business Challenges and Billing Requirements

!


Connected devices and M2M

7.5

15.0

22.5

30.0

Billio

n d

ev

ice

s

Sources: Machina Research,

GSM Association 2010 2012 2014 2016 2018 2020


M2M connections and growth

0

2

4

6

8

10

12

14

16

YoY adds

Source: Berg Insight, April 2012

Mill

ion C

onn

ectio

ns (

end

201

1)



HUGE REAL-TIME TRANSACTION VOLUMES

MASSIVE SCALE

Billing Platform to scale for high volume

High performance and high availability architecture



Future value shift in M2M communications

M2M

revenue

distribution 2012

2015 Service Enablement

Application Services

Connectivity &

Hardware

Vertical Industry specific solutions and managed services

Decision support, Reports and alerts, Data collection storage and analytics, Device monitoring and control, Development toolkit and system integration

Communications services, associated communications hardware (modules, terminals, devices)

Source: Informa/SAP (2012), Berg Insight (2012)



Top 5 M2M operational focus areas CSP

Telecom

equipment

vendor Integrator

Telecom

software

vendor / ISV

Device,

module,

chipset maker

Cloud

service

provider

End-to-end service mgmt ▲ ▲ ▲ ▲ ▲ ▲ Partner mgmt ▲ ▲ ▲ ▲ ▲ Flexible billing ▲ ▲ ▲ ▲ ▲ ▲

Security & fraud ▲ ▲ ▲ ▲ Network traffic

& signalling loads ▲ ▲ ▲ ▲

Ordering & provisioning ▲ Cross-border roaming ▲

Business analytics ▲ ▲ ▲

Secure M2M success


Multi-sided Partner Revenue Sharing

Consumers

App developers

Corporate

Clients

App/Service

Store

Resellers

¥

$

€

Module and Terminal

vendors

System integrators

Specialized solution

providers

Specialized

communication providers

€

$

£

¥

€

£

$

NW operators

Specialized service

providers

Service

Provider




RAPID COMBINATIONS AND VERTICAL SPECIFICS MANAGING AND MONETIZING COMPLEX PARTNER RELATIONSHIPS

CHANGING VALUE CHAIN/S

Enable and drive smart partnership value generation,

including Multi Industry Billing support

Handle settlements & commission for global,

complex value chains

Analytics for service differentiation, and additional

end-user value

!


12,7%

3,6%

0,9%

2,7%

4,5%

10,9%

11,8%

11,8%

14,5%

15,5%

20,0%

20,0%

27,3%

46,4%

51,8%

Don't know /…

Other

Military / defence

Agriculture / food

Oil and gas / mining

Manufacturing /…

Integrators

Public safety

Consumer…

Operators / MVNOs

Health

Financial services

Automotive

Utilities

Transport and…

% of CSPs

CSPs’ target industries

Opportunities:

Seek horizontal scale of M2M services and apps

Focus is shifting to specific apps versus specific industries

Monetize the value that lays in the data

M2M focus and trends

= =

Felony

tracking & alerts

Patient

tracking & alerts

Parcel

tracking & alerts



Revenue capture in the M2M value chain

RUN IT

IaaS

Infrastructure as a Service

BUILD IT

PaaS

Platform as a Service

USE IT

SaaS

Software as a Service

App based

Revenue share

CHANGE

AHEAD




LONG-TERM EVOLVING MULTI-SERVICE CONTRACTS CAPTURE VERTICALLY SPECIFIC ROI

RAPID TTM

NEW BUSINESS MODELS

Real-time and Convergent Charging & Billing; supporting a

mix of recurring and usage based micro payments

Flexibility and Agility for Pricing Innovation and flexible

multi-sided business models

Support retail and wholesale price models

Fast TTM; configure not program

!


Monetizing M2M - Billing requirements summary

LOW ARPU MASSIVE SCALE

NEW BUSINESS MODELS CHANGING VALUE CHAIN/S

What is

needed ?

is key to support vertical differentiation

and abstract value vertically

ensures flexible partner management

– thus your success

is needed to cope with the high

M2M transaction volumes

Low TCO;

Low cost footprint

Simplified operation

helps you to sustain the M2M

low value transactions

Scalability

Real-time

High performance

Innovative pricing

Fast TTM

Fast recombination of offers

Vertical specific or horizontal

Complex partnerships

Thank You

Contact information:

Name: Christina Giraud

Email: [email protected]

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