Creating a Single Messaging Cloud
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1 Creating a Single Messaging Cloud Strengthen and Grow Your Core Business Bin Hu bin.hu@huawei.com Huawei Technologies Co. Ltd. HUAWEI TECHNOLOGIES
2 Creating a Single Messaging Cloud How Operators Can Differentiate from OTT? 1 Global Messaging Business Challenge 2 Single Messaging Cloud The Game Changer 3 What is the Next? HUAWEI TECHNOLOGIES CO., LTD. Page 2
3 OTT Players Are Penetrating into Mobile Messaging Market ios imessage + icloud IM Chat Kik and Whatsapp Device + Mango + Skype Support sending text messaging, Support Voice Chat, Video Support group chat and video calling is coming soon video, image, file Sharing, Location based Chat imessage / FaceTime embedded with terminal 30 million subs after 10 months release Kik : 1 million download in 15 days, 2.5 million in one month Whatsapp: Rank No.3 among all chargeable APP in AppStore 50% of VoIP calls via video HUAWEI TECHNOLOGIES CO., LTD. Page 3
4 Million Million The Growth of Global Messaging Traffic is Declining Global SMS traffic Global multimedia messaging traffic 10,000, ,000 9,000,000 8,000, ,000 7,000, ,000 6,000,000 5,000,000 80,000 4,000,000 60,000 3,000,000 2,000,000 40,000 1,000, of which A2P/P2A 323,041671,983937,1181,191,351,366,351,513,201,639,131,691,02 Basic text messaging traffic 4,271,975,458,366,310,876,901,977,286,237,508,287,616,587,592,59 20, Video messaging traffic 13,127 20,051 24,551 26,256 27,191 27,758 27,819 28,652 Picture messaging traffic 37,660 55,535 69,258 77,028 82,225 85,963 88,886 90,725 HUAWEI TECHNOLOGIES CO., LTD. Page 4
5 Million and It Differs in Regions 4,500,000 4,000,000 3,500,000 3,000,000 2,500,000 Regional messaging traffic 2,000,000 1,500,000 1,000, , North America 1,632,915 2,165,180 2,416,406 2,633,032 2,749,335 2,810,005 2,833,783 2,821,488 South & Central America 251, , , , , , , ,962 Europe 572, , , , , , , ,228 Asia-Pacific 2,376,105 2,809,553 3,269,823 3,637,116 3,914,163 4,082,358 4,155,433 4,143,403 Middle East & Africa 356, , , , , , , ,431 China 829, , ,158 1,058,332 1,156,299 1,217,894 1,238,543 1,242,677 HUAWEI TECHNOLOGIES CO., LTD. Page 5
6 Million China Messaging Traffic China Messaging Traffic 1,600,000 1,400,000 1,200,000 1,000, , , , , Video messaging traffic 2,972 4,133 4,923 5,703 6,270 6,748 6,872 6,926 Picture messaging traffic 54,210 66,484 72,394 77,438 80,150 82,421 82,197 83,299 of which A2P/P2A 46,362 81, , , , , , ,015 Basic text messaging traffic 772, , , ,191 1,069,879 1,128,725 1,149,474 1,152,452 HUAWEI TECHNOLOGIES CO., LTD. Page 6
7 $ million Regional Messaging Revenue Regional messaging revenues $60,000 $50,000 $40,000 $30,000 $20,000 $10,000 $ North America $35,441 $39,475 $44,144 $46,891 $48,948 $51,030 $50,749 $49,950 South & Central America $8,451 $10,552 $12,523 $13,883 $15,123 $16,301 $17,254 $17,639 Europe $41,445 $42,164 $43,378 $44,290 $44,402 $44,278 $43,807 $42,955 Asia-Pacific $21,129 $22,918 $23,255 $24,004 $24,369 $24,767 $25,015 $24,824 Middle East & Africa $7,156 $9,414 $10,893 $11,706 $12,350 $12,843 $13,298 $13,698 China $13,027 $15,508 $16,410 $17,789 $18,746 $19,429 $20,039 $20,692 HUAWEI TECHNOLOGIES CO., LTD. Page 7
8 Telco Operator s Cash Cow is Being Threatened by OTT World mobile voice/sms revenue is declining OTT is taking operator s traditional traffic OTT is building own user ownership Jan 2010 $62.45 Enriched services & app Low price even free Jan 2011 $48.95 Source: KPN Operator s cake become smaller Skype, the largest international traffic carrier 0.3 bil minutes video calling/month Abundant Content Facebook 0.75 bil users Apple 0.2 bil ios based devices Skype 0.66 bil users Google+ 25M users in 3 week Operator is losing the control to value chain under new competition Value Content Cloud / Apps New value chain Network provider Device Traditional value chain Content Network provider Device HUAWEI TECHNOLOGIES CO., LTD. Page 8
9 Creating a Single Messaging Cloud How Operators Can Differentiate from OTT? 1 Global Messaging Business Challenge 2 Single Messaging Cloud The Game Changer 3 What is the Next? HUAWEI TECHNOLOGIES CO., LTD. Page 9
10 Reactions to OTT Challenge Defensive Re-pricing of service packages Some mobile operators in the W. Europe have raised their mobile data pricing. Single Messaging Cloud In China Market to achieve: -Lower CAPEX and OPEX -Faster TTM -MaaS platform to enable the consolidation of all VAS Cooperative Integration with OTT H3G & Skype Verizon & Skype Sprint & Google voice Improve broadband efficiency and usage Pipe strategy, improve pipe efficiency, implement fair usage policy Cloud-based Single Messaging is the Key Evolution in China Messaging Market HUAWEI TECHNOLOGIES CO., LTD. Page 10
11 Analyzing the OTT offerings OTT strengths Ease of use Vertical integration of services (skype with video, contact list, Google with location) Low cost / free OTT weaknesses Features available only when inside applications or websites Multiple applications need to run concurrently Requires broadband connectivity for voice and IM/SMS Fragmented incompatible environments Web based Increased demand on batteries / phone power Voice, IM, VM speech-to-text Integration FaceBook, with etc.) Gmail, Android Targets consumers Free US/Canada calls Client based Video, voice, IM Integration with FaceBook Targets consumers, SMB Free Skype to Skype only Interfaces and services are different for each environment (Google, Skype, Twitter, HUAWEI TECHNOLOGIES CO., LTD. Page 11
12 Value Proposition of Single Messaging Cloud Lower the Cost Cloud-based, shared resource pool to lower the OPEX Single MaaS platform to enable all VAS and lower the CAPEX Unified Billing and Charging to lower the Administrative Cost Faster TTM A single MaaS platform on which any VAS can be quickly deployed Automated provisioning and upgrade to enable a better user experience Open APIs for quick development and deployment of new services Easier Administration Single Administrative Interface Consolidated management of service components and platform Cloud-based distribution and security Improved service reliability and disaster recovery Improved data security Improved Disaster Recovery Enhanced Utilization and Throughput Cloud-based solution to enhance the hardware utilization and throughput Save energy cost Shared resource pool to allow spare resource for new services HUAWEI TECHNOLOGIES CO., LTD. Page 12
13 Single Messaging Cloud Can One Single Access Interface for Every Service Improved Resource Utilization with Elastic Service-Aware Resource Management Big Data and Storage in Cloud with Higher Performance-Cost Effectiveness Low Cost and Seamless Service Evolution from Single Messaging to Messaging-as- A-Service (MaaS) Platform-based All Services Telco Service Cloud Single Administrative Interface and Consolidated Management for All Services and Platform HUAWEI TECHNOLOGIES CO., LTD. Page 13
14 Key Technologies in Single Messaging Cloud Virtualization and Resource Sharing Service Pool Distributed Deployment Centralized Management Elastics Resource Management Storage in Cloud A. virtualized cloud platform for single messaging deployment and PaaS Service. The resources in platform is shared by multiple services, and serves for future services Single Messaging Center in Cloud provides consolidated access interface and multiple messaging service Physical resources of Single Messaging Center in Cloud is deployed in distributed way to support disaster recovery capability Single Messaging Components and Cloud Platform are managed in centralized way through a consolidated access interface of resource management 分布部署 集中管理 According to the busy / idle status of services, the cloud resources are dynamically allocated and de-allocated so that resource utilization is significantly improved Data storage distributed in cloud with low cost, high capacity and high performance, and provide future rich services with a data container of higher performance-cost effectiveness HUAWEI TECHNOLOGIES CO., LTD. Page 14
15 SWOT Analysis of Single Messaging Cloud vs. OTT Single Messaging Cloud (SMC) 1. SMC is the natural evolution of communication 2. SMC can assist operator to keep user ownership more than piper 3. SMC can keep and grow operator s legacy business 4. SMC is a foundation and start point for future business evolution Strong 1. QoS guarantee 2. ID continuity based on telecom ID 3. Regulation + reliable + security 4. More trustful relationship 5. Interoperability with tele-networks Opportunity 1. IOT with OTT network 2. Advertising + Social graphs 3. DPI & PCRF 4. Smart phone penetration 5. Ecosystem (chipset/clients/handsets/users) Weakness 1. Feature 2. User interface 3. Not free due to old business model 4. Already later on market pace 5. Branding is not so cool 6. Complex telco infrastructure Threat 1. OTT over LTE / WIFI and more wireless access 2. Nokia + Windows phone + Skype with more availability to OTT 3. Big operator goes to Skype (Comcast / Verizon) 4. Business model 5. Net neutrality 6. VoIP apps on ios Android and WM7 HUAWEI TECHNOLOGIES CO., LTD. Page 15
16 Single Messaging Cloud A Game Changer Interoperability QoS/QoE Leverage Assets Device/client Universal reach, not limited in community (OTT based walled garden) Ubiquity among service providers Cloud ecosystem initiative Interconnection with all telco-networks Access all service not only OTT, Integration with other SP services Service based policy for E2E QoS HD Voice/Video capability VoIP with QoS Strong multimedia handling Seamless integrate with legacy services Leverage on existing identity Bundled with existing voice or data service package Integration with FMC strategy Natively integrated with mobile phone Reduce power consumption Auto provisioning Opt out for user, reduce cost of SAC and SRC HUAWEI TECHNOLOGIES CO., LTD. Page 16
17 Creating a Single Messaging Cloud How Operators Can Differentiate from OTT? 1 Global Messaging Business Challenge 2 Single Messaging Cloud The Game Changer 3 What is the Next? HUAWEI TECHNOLOGIES CO., LTD. Page 17
18 Challenges in Launching Service The Business Model: Using classic telco revenue or OTT s? Is there a right pricing model? Demand Generation: Who is going to promote Single Messaging Cloud, Terminal Vendors or telco? How are we promoting Single Messaging Cloud, Viral on Twitter and Facebook, or using classic media Market Affinity: Is it needed or nice to have? Sales Support and Packaging Pre-installed on terminals, or as an application Can we provide a differentiating or unique value? Customer satisfaction HUAWEI TECHNOLOGIES CO., LTD. Page 18
19 Uncovering Market Affinity Consumer wants and needs (vs. Products) What each individual consumer wants and needs from SMC Cost to satisfy (vs. Price) Minimum requirements to support SMC (e.g. a smart phone) Can it work on all devices a consumer owns? Convenience to buy (vs. Place) Is it embedded or needs download? Communication (vs. Promotion) How does consumers learn about SMC? Is there a wow factor? HUAWEI TECHNOLOGIES CO., LTD. Page 19
20 Planning for Deployment From market introduction to profitability Market Value Penetration Profitability Creating the brand Defensive Strategy: Promotion Market push Market test Limited free trial & service bundling Hold Market Share: Differentiate Enhanced user experience Grow ecosystem Matched offerings & enhanced experience Growth : New revenue model: (e.g. revenue-sharing) Internet-based revenue source opportunities Innovative services & applications offering Advertising Open Innovation Time HUAWEI TECHNOLOGIES CO., LTD. Page 20
21 Overview of Huawei Single Messaging Cloud Solution SaaS Mobile Apps SP User Portal IP Access Layer Adapter Management Layer PaaS Service Process Layer Single Messaging Cloud MMSC Pool VMSC Pool SMSC Pool MVAS Pool OM Billing Resource Control Infrastructure Access Layer Infrastructure Access Adapter BI & Rpt IaaS Basic Infrastructure Layer Service Scheduler SS7 Access Gateway Computing Resource Virtualization (Host Storage Network) Distributing storage system (Distributing file system, Distributing DB) Hardware Resouce HUAWEI TECHNOLOGIES CO., LTD. Page 21
22 Single Messaging Cloud Deployment Architecture 云管理平台 VM Layer VM1 (MMSC) VM2 (SMSC) VM3 (VMS) VM4 (MVAS) Application Service API HA Consolidated Resource Management(Physical / Virtual Resource) Load Balancing Cloud Service API Intelligent Resource Scheduling Parallel Computing Management Provisioning and Upgrade HIE Distributed Storage Management Event Notification and Reporting Network Management OS XEN Resource Layer ATAE Cloud Storage DFS Network Distributed DB Service Components are deployed in VM. Applications can access OS, Cloud Platform API and Cloud Storage API Cloud Storage includes DFS and Distributed DB, which are independent subsystems for unstructured data and structured data respectively HUAWEI TECHNOLOGIES CO., LTD. Page 22
23 Single Messaging Cloud Evolution Phase 1 Phase 2 Phase 3 SMC and current messaging service network are combined into a hybrid cloud as the upgrade or extension of current messaging service SMC will take over the messaging traffic gradually SMC takes over all messaging traffic, and MaaS starts to enable other services At each Phase, SMC Center shall support Billing & Charging,O&M, and User Profile Management HUAWEI TECHNOLOGIES CO., LTD. Page 23
24 Summary Time-to-market 1 Now! 2 SMC v.s. OTT QoS &Interoperability Single point of contact with OTT 3 Solution Highlights Best Best-in-class service MaaS / Mobile Cloud HUAWEI TECHNOLOGIES CO., LTD. Page 24
25 Thank You! HUAWEI TECHNOLOGIES CO., LTD. Page 25
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