creating new ecosystems for entering non traditional markets

LTE World Summit 2011

Creating New Ecosystems for Entering in Non Traditional Markets

R. Minerva, Telecom Italia / Future Centre 1

Creating New Ecosystems For Entering

Non Traditional Markets

www.gapinvoid.com

Roberto Minerva

Telecom Italia Future Centre



R. Minerva, Telecom Italia / Future Centre

Topics

• New Services Opportunities for Operators and the need to anticipate the

Competitors

– Social Media, Extended Reality, Internet Of Things, e-Governement

• Differentiating between business and mass market opportunities and

leveraging traditional services for the business market

• De-perimeterization of services on the mass market side - creation of an

ecosystem where users can be providers themselves

• Examining the impact of new services on the network: how to be a lean and a

smart operator




Factors disrupting the Telecom Industry

t

bw

d

• New Data Services with a very low tariffs for services with a high

bytes/sec ratio

• Competition

– In the Past, Telcos had a strict control on three features of the

communication: Bandwidth (64kb/s), Duration (minutes) and Distance

– Competition is harsh from other Telcos

• A Technological Paradigm Shift

– Costs of equipments and technology are reducing

– IP paradigm adoption and data convergence (e.g., voice is a data service)

– Value of end points and terminals

Cost of Call = f (t, bw, d)Yesterday

Cost of Call = constToday

WHY ?

Harsh Competition on

Tariffs

Technological “spiral”

similar to electronics

industry (sort of Moore

Law)

OTTs are an effect and

not the cause of the

turmoil !

t= time

bw= bandwidth

d = distance

Cost of Byte/sec @ 0




The Revenue Paradox

the more capacity offered by the network

the less it produces revenues!!!

The Revenue Paradox Relativity, M.C. Escher

Source: wikipedia.org

No

t in

sca

le

0 t

$

Now

Voice

ARPU

Mbyte price

Revenue

0 t

Usage

Now

Voice

Wireless Broadband

Broadband

Not in scale

Usage




A Warning

• New Mobile Networks will enter into

the “cost of byte/sec = 0” tunnel?

• Will services on these network

compensate for lower revenues in

transport?




Other Network Paradoxes

M.C. Escher, Waterfall 1961

Source: wikipedia.org

the more the communication is available and

cheap, the more it is pervasive

Pervasive Communication Paradox

New highly Pervasive Services !!!




What Business Models for Telcos ? We are here!

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BrokerageModel

AdvertisingModel

InfomediaryModel

SubscriptionModel

UtilityModel Merchant

Model

ManufacturerModel

AffiliateModel

CommunityModel

•Challenge Market Areas

•Try new Business Models

•Create new Ecosystems




De-Perimeterization of Services

• what is a valuable (and billable)

service for an Operator, is a

service given for free by WebCos

Business Model Paradox

• the services provided by an

Operator are local, Services

provided by WebCos are global

Business Span Paradox

• New Global Services

• New offering made

possible by pervasive

communication

• De-perimeterization of

Services

• New service markets

• Entering into new

markets with a

disruptive value

proposition

• Take advantage of a

Regional presence




Two Operators Problems

t

€

Re

ve

nu

e

Cut CostsOptimizeLEAN OPERATOR

New ServicesNew Revenue StreamsSMART OPERATOR

Bit Pipe

2015




Two approaches

• Decoupling Services from the

Network

• Global reach independent of the

access network;

• mashup of local and global

resources (Net of Nets)

• Provide Global Services• the long tail is much bigger

• because the marginal costs of a

global solution are smaller

(Skype: the costs for building a

global software are marginal)

• Networks will become highly dynamic

Complex Systems made out of many

heterogeneous networks, systems and

intelligent endpoints

• Complexity will result in:

• Costly infrastructure difficult to install, manage

and integrate

• Lack of optimization of usage of resources

• Lack of knowledge of the “network" as a whole

and how it is globally and locally behaving in

supporting customers requests

De-perimeterization of

Services

0-Touch Networks

Lean Operator Smart Operator




New Classes of Services

• Internet of Things

• Extended Reality

• Social Media

• e-Government

• Always Best Connected

(ABC)

• Evolution of VPNs

Lean

Operator

Smart

Operator




These Services Challenge the current Network

• Pervasiveness

• High distribution

• Complete decentralization

• New communication paradigms

• Opportunistic and dynamic usage

of resources and networks

• Integration of processing, storage, communication and “sensing”

• Future networks should be able to master complexity, be cost-effective and

seamless

Communication

Processing

Storage

Things




Lean Core and Smart Edge: towards a Network of

Networks

Core Network

Flat, simple ubiquitous and reliable CORE with many functions to share

Complex, (un)reliable, dynamic, local EDGE Networks and Nodes

Core Network as

A Simple Core

Network that

offers valuable

functionalities to

increasingly

complex Edge

networks:

•Identity

•Brokering of

resources

•Virtual

Organizations

•Connectivity on

demand

•...




A New Ecosystem is possible

• The Operator’s Network is providing valuable functions

– Basic Ones: Processing, Storage, Communication Programmability

– Identity of nodes, resources, people, companies

– Brokering of Resources (even external ones)

– Guarantees the reliability and availability of nodes (autonomic networking)

– Information Centrality (Information Centric Networking)

• Other Networks can dynamically offer resources and join the Ecosystems

• End Users can be part of this by offering their basic resources (Processing, Storage and

Communication)

• The Ecosystems will

– enable to harness the robustness of the network and the end-to-end intelligence of nodes

– Optimize the usage of resources for the specific service and on a global scale




A Network of Networks

Grids




Enabling technologies for Resource-Aware NoNs

• autonomic capabilities and bio-inspired algorithms (e.g., gossiping, self-organization

algorithms), to deal with complexity;

• (self-organized) P2P overlays for clustering components, to guarantee scalability,

reliability, and abstraction from underlying network;

• resources virtualization, based on abstraction for coping with heterogeneity and on the

definition of dynamic slices for multiple allocations;

• programmable “intelligent” mechanisms, e.g., based on auctions, game theory, etc., for

optimized resource allocation and use;

• cognitive cross layering, to allow the network to perceive conditions, decide and act

autonomically to reach local/global/end-to-end goals in an optimal way, in cooperation

with autonomic and self-organizing behaviour of resources;

• Grid Computing to better integrate different resources (computing storage and network

and to integrate new ones (sensors., actuators, micromachinery, ...)




The Inner Circle (Network of Networks)

External ReliableResources

INNER CIRCLE

Inner Reliable Resources

Inner Circle of Virtualized Autonomic Reliable Resources

External unreliableResources

Unreliable aggregationof unreliable Resources

Unreliable VirtualResources

Overlay of Virtual resources

Reliable aggregationof Resources

A Simple Core

Network that

can offer

valuable

functionalities

and

abstraction /

virtualization

to increasingly

complex edge

networks




About applications

www.gapinvoid.com




Instead of running after Competitors

... TelCos need to anticipate them and entering in

new markets with a disrupting or differentiating

offering

• Differentiate between the Business and the Residential markets

• Their needs are different




Some Tips

• Differentiation between markets is essential

– Mass Market is going to stick to “BEST EFFORT and ZERO PRICE” paradigm

– Enterprises could stick to traditional ecosystems when the RATIO between Services

and QoS and PRICE is favorable and if the services (e.g., CRM) provided by the

Operator are good

• Networks need to be flexible and pervasive for supporting new services

– Still investments in new network infrastructure are a problem

– Opportunities do exist but the service infrastructure has to encompass new

controlling paradigms (Client-server, p2p, tuple-space, PubSub, ...)




Augmented Reality

• Adding new information to the User Actual Context

• Operators have plenty of data:

– General data

– Personal data

• They could be offered into a new ecosystem for developing Augmented Reality

Applications




Internet of Things

• Each Resource is

addressable

• Every Resource can be

associated to a User

(Identity)

• Secure Links have to

be guaranteed




A Business Model For the Internet of Things?

• Thesis 1: On the supply side of the IoT market, micro providers will play an important role

• Thesis 2: Sensor information should be made available on an open platform to allow everyone to offer higher level services

• Thesis 3: Intermediaries are needed as coordinating central structures on the IoT market

• Thesis 4: The pricing schemes for consumers and for micro providers should be decoupled

• Thesis 5: Intermediaries can offer schemes tailored to the preferences of certain consumer groups, and a competition of pricing schemes can evolve among intermediaries

• Thesis 6: Intermediaries have to cooperate to maximize the customer's utility (and, eventually, their own profits), while also trying to differentiate their services

• Thesis 7: the total cost of the IoT network is the sum of the costs ci for the WSN islands to be connected:C = ci. The initial costs ci are borne by each micro provider on its own

• Thesis 8: The value of the IoT market grows more than linearly with the number of consumers

• Thesis 9: Intermediaries should consider subsidizing micro providers to create an additional incentive for service provisioning and enable the intermediaries' business in the first place

• Thesis 10: For the IoT market, the copy problem of digital information is moderated

• Thesis 11: Initial prices must be low

• Thesis 12: Low entry costs: The cost of deploying and integrating a sensor network into the system must be low

• Thesis 13: Provisioning of incomplete services should be allowed

• Thesis 14: Incentives will be needed to stimulate participation of a large number of (micro) providers

• Thesis 15: An efficient search mechanism is needed to find useful services

Initial Observations on Economics, Pricing, and

Penetration of the Internet of Things Market

Jens-Matthias Bohli, Christoph Sorge, and Dirk

Westhoff

ACM SIGCOMM Computer Communication Review




All-IP can be an enabler for Social Media

OLD

NEW

More than 70% of UGC is

produced by mobile

terminals




E-government

• Plenty of services !!!

• They do depend from a strict cooperation with trusted parties

• Operators can be (regional) trusted parties

• Example of (pervasive) services

– Smart Cities

– Infomobility

– Energy Control and smart grid

– E-health

– E-democracy

– ...




Always Best Connected: the ol’ good stuff

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• Too many terminals with SIMs

• Too expensive to pay for each of those

• The concept of Personal Network made

out of several terminals could emerge

• Operators should support the seamless

roaming of terminals between different

communications environments




From Closed User Groups to Virtual Networks ...

• B2B connectivity leads to Virtual Networking

– VPN

– MVNO

– Virtualization

– Virtual Organization

• But also De-perimeterization of Services by

– Building services and networks on top of other Network Providers’ Infrastructure

– Can you believe? One Operator Network on top of another Network ??




GRID Computing (not Cloud Computing): Protocols,

Services, and APIs at Each Level

Languages/Frameworks

Fabric Layer

Applications

Local Access APIs and Protocols

Collective Service APIs and SDKs

Collective ServicesCollective Service Protocols

Resource APIs and SDKs

Resource ServicesResource Service Protocols

Connectivity APIs

Connectivity Protocols




What Role for Operators ?

• New Network Architectures

• New Roles or Consolidation ?

• New Standards and common

Effort




Choose Your Role and Your Network (1)

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A Service Provider is involved with L3A Bit Carrier is mainly involved in L1/L2

Bit Pipe Carrier

Service Provider





•Bit Carrier

•Service Enabler

(Platform Provider)

Overlay Networks of autonomic components

•Service Provider

Eco-systems of services

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Resources from different physical networks

PrivateNetworks

MeshNetworks

Platform APIs

Virtualized (Resource) Control & Mgmt Platform (Network OS)

Overlays of autonomic virtualized components

Ab

str

acti

on

• Operator’s Nodes are super nodes in an overlay network

• Service Providers integrate the Operator Nodes according to their needs

• The logical Network of the Operator can exceeds regional boundaries

• Resources can be communications, processing, storage and “Things”

Focus on a Network OS(Service Enabler Role)




Thank you!

Roberto Minerva

TORINO - Italy

Phone: +39 011 228 7027

Email: [email protected]

creating new ecosystems for entering non traditional markets

Technology

traditional services

new data services

impact of new services

new markets

new business models

pervasive services

new mobile networks

decoupling services