Carrier Cloud Opportunity Breaking the rules; how KT did it Randy Bias @randybias May 25th, 2011 @cloudscaling TMForum - Dublin
Carrier Cloud Opportunity - TM Forum Management World Dublin 2011
Jan 16, 2015
Cloudscaling Co-Founder and CTO Randy Bias shows the world's largest telcos that carriers must embrace web-scale cloud to be successful in the apps that will drive mobile, web and emerging markets. Legacy "clouds" are essentially virtualized and automated IT, and they do not offer the cost performance or business agility these hyper-growth segments demand.
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Carrier Cloud OpportunityBreaking the rules; how KT did it
Randy Bias @randybiasMay 25th, 2011 @cloudscalingTMForum - Dublin
Step 1: Vision of Cloud Opportunity - Randy Bias, Cloudscaling
Step 2: How KT Did It - Charles Huh, KT
Why don’t Carrier Clouds look like AWS?
Carriers building for the past ... not the future
Carriers today are building ‘Legacy Clouds’
...aka ‘Enterprise Clouds’
What’s the flaw with Legacy (Enterprise)
Clouds?
There are two flaws, actually ...
Flaw #1
Enterprise computing is not cloud computing
...Past, not the future
Flaw #2
Limited Total Addressable Market
...Missed Revenue
Opportunity?
Flaw #1
“Legacy” IaaS Clouds?
?Private
Public
Internal External
“Legacy” IaaS Clouds?
EnterpriseComputingTechniques
Private
Public
Internal External
Enterprise Computing (Legacy)
Cloud Computing (Web-scale)
Cloud Computing’s Pioneers
IT - Disruption & Evolution
EnterpriseComputing
"Client-Server"
CloudComputing
"Web"
MainframeComputing
"Big Iron"
1960 1980 2000 2020
IT - Disruption & Evolution
Disruption
EnterpriseComputing
"Client-Server"
CloudComputing
"Web"
MainframeComputing
"Big Iron"
1960 1980 2000 2020
IT - Disruption & Evolution
Disruption Disruption
EnterpriseComputing
"Client-Server"
CloudComputing
"Web"
MainframeComputing
"Big Iron"
1960 1980 2000 2020
IT - Disruption & Evolution
Disruption Disruption Disruption
EnterpriseComputing
"Client-Server"
CloudComputing
"Web"
MainframeComputing
"Big Iron"
1960 1980 2000 2020
IT - Evolution of Computing Models
Mainframe Enterprise Cloud
SLA
Scaling
Hardware
HA Type
Software
Consumption
IT - Evolution of Computing Models
99.999
Vertical
Custom
Hardware
Centralized
Centralized Service
Mainframe Enterprise Cloud
SLA
Scaling
Hardware
HA Type
Software
Consumption
IT - Evolution of Computing Models
99.999
Vertical
Custom
Hardware
Centralized
Centralized Service
99.9
Horizontal
Enterprise
Software
Decentralized
Shared Service
Mainframe Enterprise Cloud
SLA
Scaling
Hardware
HA Type
Software
Consumption
IT - Evolution of Computing Models
99.999
Vertical
Custom
Hardware
Centralized
Centralized Service
99.9
Horizontal
Enterprise
Software
Decentralized
Shared Service
Always On
Commodity
Distributed
Self-service
Mainframe Enterprise Cloud
SLA
Scaling
Hardware
HA Type
Software
Consumption
Flaw #2
Total Addressable Market: Legacy
In-country Enterprises
Long Tail of Customers
In-country
App Developers
Enterprise
SMB
Global
Revenue Opportunity
$$$
Total Addressable Market: AWS
In-country Enterprises
Long Tail of Customers
In-country
App Developers
Enterprise
SMB
Global
Revenue Opportunity
$$$$$
Total Addressable Market: Carriers
In-country Enterprises
Long Tail of Customers
In-country
App Developers
Enterprise
SMB
Global
Revenue Opportunity
$$$$
Why can’t carriers maximize TAM and
revenue opportunities?
Legacy “Enterprise” Clouds are too
expensive
Market Pricing Sensitivity
In-country Enterprises
Long Tail of Customers
In-country
App Developers
Enterprise
SMB
Global$$$$$
$
Emerging markets won’t accept Legacy Cloud
prices
Web-scale Clouds
You need a Web-scale Cloud alongside your
Legacy Cloud
Web-scale vs. Legacy Focus
vs.
Greenfield Apps Legacy Apps
Enterprises use Web-scale Clouds for Greenfield Apps
Estimated IaaS Growth RatesWeb-scale vs. Legacy Cloud
0%
23%
45%
68%
90%88%
20%
Web-scaleLegacy
Source: Cloudscaling market analysis
A Bookseller Rank Top 10 IT services in 2016???
1 IBM $37,3472 HP $34,6783 Fujitsu $26,9354 CSC $16,2815 Accenture $15,5556 Capgemini $11,2557 Hitachi $11,0508 Ericsson $11,0319AWS $10,465
10 NTT Data Corporation $10,425
Source: servicestop100.org - 2010 top 100 IT services businesses by service revenue
Comparing Clouds
Capital Expense (Initial)
Web-scale vs. Legacy Cloud
$0
$1,000
$2,000
$3,000
$4,000
$382
$3,216Cost per Sellable ‘VMU’
(m1.small, 1.7GB RAM, 1 vCore)
Web-scaleLegacy
Source: Cloudscaling confidential financial models for IaaS clouds
Operational Expense (Labor)
Web-scale (1500:1) vs. Legacy (300:1)
$0M
$38M
$75M
$113M
$150M
Year 1 Year 2 Year 3 Year 4 Year 5
Servers : IT Headcount
Source: Cloudscaling estimates of VM:admin based on known IaaS deployments
Web-scale Legacy
Legacy 5-yr TCO is 3-5x more than Web-scale ...
... doesn’t provide 3-5x value for greenfield apps
Cloud Futures
Mobile, web, cloud-based apps exploding
Sources: Asymco.com, Chetan Sharma, Morgan Stanley
Web, mobile, cloud-based apps won’t be deployed on Legacy
Clouds
Carriers need to build Legacy *and* Web-scale
+
Focus first on Greenfield
+
Focus first on GreenfieldPricing 20% < AWS
+
Focus first on GreenfieldPricing 20% < AWS
High Margins
+
Focus first on GreenfieldPricing 20% < AWS
High MarginsHigher Performance
+
Focus first on GreenfieldPricing 20% < AWS
High MarginsHigher Performance
< 9 months to market
+
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