Companies Look to the Clouds for Collaboration

Jeff Olson

Marketing Manager, Cisco Managed/Cloud Services

December 9, 2010

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Agenda

Transition to the Cloud

Market Opportunity

Market Trends

Collaboration Services Portfolio

Key Takeaways

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IT in Transition: More than half expect to restructure within three years

Source: ―New IT Models Will Focus On Service Improvement And Cost Reduction‖, Forrester July 2010

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Key Drivers for Change

Business continuity

No upfront capital expense

Reduced complexity

Small risk of obsolescence

Buying á la carte capabilities with guaranteed expansion

Tighter vendor relationships

Why cloud services?

IT ―to-do‖ list is too long

Escalating software license and infrastructure costs

Difficult to forecast costs

Less likely to support browser-based interfaces

Features come in waves, rather than at a steady pace

Implication Enterprises are purchasing services and investing in vendor management

& consolidation

Sources: SaaS Implementation Survey: Where, When, and How to Use SaaS, Burton Group, April 03, 2008 ; Moving Out: The Externalization of IT,

Burton Group, April 20, 2009

IT Seeking Creative Solutions

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Security and Cost are the Biggest Barriers to Adoption

Source: SaaS Adoption Study, Schireson Associates April 2010

To date, what are the 3 biggest barriers to your organization's adoption of SaaS solutions in the category?

0 20 40 60

Concerns about security or proprietary data

Cost implications

Concerns about performance

Concerns about uptime/reliability

Concerns about the maturity or longevity of solution providers

Concerns about scalability

% of Respondents

Innovators/Early Adapters

Total

Implication Security and Cost Concerns Are Most Often the Biggest Barriers to Broader

Adoption of SaaS, Especially for the Mainstream Market

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What are Saas Adopters looking for?

0 5 10 15 20

Demonstrating cost savings vs. alternatives

Having robust security functions

Enabling interoperability with other systems

Having outstanding customer service and support

Having superior ease of use

Allowing for flexible configurations and customizations

% Respondents

Innovators/Early Adapters

Total

Source: SaaS Adoption Study, Schireson Associates April 2010

Again assuming you were evaluating one or more SaaS providers, what is the single most important quality that you would look for in a SaaS provider in order for the provider to win your business?

Implication Demonstrable Cost Savings and Stable Service are Key Provider Attributes

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$18–20B Hosted UC Services Global Market Opportunity

Hosted UC services represent ~40% of overall managed UC opportunity

Consistent trend—IP telephony & conferencing leading hosted services

Sizeable contact center and IVR opportunity

Most of the IVR services are network-based, with as a service dominating

Business Insights, IDC, Info Track, Forrester, Gartner, Ovum, Radicati, Wainhouse, 2009; Team analysis

Service

Projected Global

Hosted Market

(2014, $USB)

CAGR (%)

IP Telephony(Includes SIP trunking)

4.2 19

Email 2.0-3.0 4

Messaging (UM, mobility, presence)

1.2–1.8 25

Web/Audio/Video

Conferencing2.0–2.5 15

Collaboration (Includes collaborative

workspaces and social networking

products)

1.0 7

Contact Center 2.0 25

IVR 4.9 9

Integration Services 1.5 10-15

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What About Mobility?Mobility Is a Productivity Enhancing Telecom Priority

―Which of the following initiatives are likely to be your firm’s top

telecom/communications priorities over the next 12 months‖

47%

59%

69%

72%

55%

70%

88%

53%

41%

31%

28%

45%

30%

12%

Implement or Expand Software-as-a-Service

Implement or Expand a UC Solution(s)

Implement or Expand IP Videoconferencing (e.g. Telpresence, Desktop)

Offer More Mobility Support (e.g., More Supported Mobile Apps or Devices)

Migrate More Voice Traffic to VoIP

Implement or Expand Collaboration Solution(s)

Cut Communication/Telecom Costs

Critical/High/Low Priority Not a Priority

Source: Global Managed Services Forecast and Market Opportunities 2010, Forrester

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70% Investing in Video CollaborationNext Wave—Video Across the Enterprise and Intercompany

―What are your firms plans to implement or expand its

use of the following video technologies?‖

43%

40%

59%

70%

57%

60%

41%

30%

High-definition Room-based Video Conferencing

External IP Video Streaming

Internal IP Video Streaming

Desktop Video Conferencing

Not Interested/Don’tknowImplemented/Implementing/Interested

Source: Global Managed Services Forecast and Market Opportunities 2010, Forrester

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A Consistent Set of Benefits Drive Adoption Across Category

Payment Flexibility Faster Implementation

Moving Out of the Data Center Expanding Access

If you’re using Software as a

Service on some major application

that would normally take a server,

the server maintenance, the power,

the cooling. You start adding up

all the hardware and the costs

associated with adding to your

datacenter, this is a serious cost. I

could see a savings there based

on if it doesn’t balloon out of

control. If it’s a fixed cost you can

justify by saving over time.

[Midmarket TDM, Boston]

We have sales personnel all over

the world and when we use our

software anywhere you have

Internet access you could access

our software, which makes it a lot

easier. [Midmarket TDM, SF]

Quick ROI, scalability meaning that

you can increase it on demand,

and then the cost savings

associated with that. [Enterprise

TDM, SF]

There is a lot of ease of

implementation. You don't have

this headache of hundreds of PMs

trying to run your requirements

and you have the process going.

You don’t have any of that.

[Enterprise TDM, Boston]

27

24

28

22

Total

Payment Flexibility

Faster Implementation

Moving Out of the Data Center

Expanding Access

Benefits of SaaS

Across All Solutions on Average

SaaS Adoption Study, Schireson & Associates -- April 2010

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Trend—Collaboration Delivered from the Cloud

Sources: Global Managed Services Forecast and Market Opportunities 2010, Forrester; World Web Conferencing

Services Market 2009, Frost & Sullivan; ―Contact Center Purchase Plans And Trends In 2009, Forrester

56% are seeking hybrid (cloud/on

premise) solution for email

―20% of companies will no longer run Information and Communications Technology (ICT) equipment in-house 3 years from now‖

Gartner

82% of the total web conferencing revenues globally is delivered by

Saas model

30% of Managed IPT Services will be

delivered from cloud

50% IP IVRs have ASR and delivered

as service from cloud

Customer Care

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Comprehensive Collaboration Portfolio

IP Communications

Conferencing

Social Software

Messaging

Mobile Applications

Customer Care

TelePresence

IP Next Generation Network

Any media,

Any application,

Any device,

Anytime, anywhere

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Maximum Service Delivery FlexibilityEnabling a Consistent Experience Across All Delivery Models

Messaging

TelePresence

Social Software

IP Communications

Mobile Applications

Conferencing

Contact Center

SaaSHosted Services

Managed CPE

Unified Service DeliveryWith Cisco, neither you nor your customers have to choose

a single service delivery model

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Broad Collaboration PortfolioAddressing Every Challenge for Your Business Customers

Cisco

Collaboration

Solutions

Economic

AdvantageCompetitive Advantage

Environmental

Advantage

Improve

CapEx,

OpEx

Unify

Global

Workspace

Increase

Productivity

Improve

Customer

Intimacy

Reduce

Travel

Reduce

Energy,

Real Estate

Contact Center

Unified

Communications

TelePresence

Mobility

WebEx,

WebEx Connect

Expert Locator,

Virtual Expert

Collaboration Services Portfolio

Create differentiated end-to-end Services delivered on premise, hybrid, or in the cloud

Unified Communications ServicesConnectivityIP Communications MessagingAudio Conferencing Routing & Prompting

Collaboration ServicesPresence and IM• Enterprise • Business-to-BusinessDesktop videoCustomer Care• Contact Center and Self-serviceWeb Conferencing (data and video)

Video CollaborationTelePresenceDigital SignageVideo SurveillanceEnterprise TV

Rev

en

ue O

pp

ort

un

ity

Customer Requirements

Transform

Extend

Migrate

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Combining the power of the IP NGN with the data

center to speed time-to-market of diverse cloud

offerings, while reducing expenses

Unified Service Delivery Architecture Diverse Services with One Cloud-Enabling Infrastructure

TTMOpEx CapEx

Software-as-a-Service

Hosted Collab

Video as a Service

_____ as a Service

Platform-as-a-Service

Ecosystem Partner

Solutions

Infrastructure-as-

a-Service

Cisco-enabled IaaS

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Key TakeawaysCompanies look to the clouds for Collaboration

Business conditions are driving demand for cloud services

18+ B $US: Hosted Collaboration Service market opportunity

Comprehensive collaboration portfolio is key

Differentiated services provide economic and competitive advantage

Service Providers are uniquely qualified to capture this transition

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Additional Resources

White papers, VoDs, At-a-glace sheets, and more…

Cisco MS Insight Group: www.cisco.com/go/MCSinsightgroup

Cisco Collaboration Portfolio: www.cisco.com/go/collaboration

Cisco Hosted Collaboration Solution: http://www.cisco.com/en/US/netsol/ns1086/index.html

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