web x.0 & beyond · market dynamics source: cisco wwsp, ibsg internet video • us’s hulu,...

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Web x.0 & Beyond

City Telecom Analyst Event

Andy Wong - Cisco Internet Business Solutions Group (IBSG)

[email protected]

28th March 2011


Cisco is the Strategic Partner of HKBN

• Cisco, with 40B+ revenue, 75k+ employees across 165+ countries, is the leading IP technology and business partner helping our customers to catch market transitions.

• We are the company with leadership across multiple segments from routing and storage to video and collaborative Web 2.0 technologies.

• We have a long term strategic relationship with HKBN since earlier 2000 by implementing the Metro Ethernet IP networks and the next generation optical core.

• The Cisco Internet Business Solutions Group (IBSG), is the global strategic consulting arm of Cisco with ~200 consultants worldwide, help grow our customer business by designing innovative business process and integrating advanced technologies.


Market Dynamics

Source: Cisco WWSP, IBSG

Internet Video• US’s Hulu, Netflix Internet video,

Netflix has 21％US’s traffic

• UK iPlayer provides 7 days BBCTV programs, consume 10%-20% traffic

• Facebook has 620M users, 550k+ Apps

• GoogleTV＝ SmartTV (search +

Internet content + TV)

Service Provider• US’s cable TV operators, for

example, Comcast, TWClaunch TV Everywhere

• US’s telecos, for example : Verizon FiOS and AT&T U-verse roll out IPTV, implementing TV Widget

• SP considering B2B2Cmodel

Media & Broadcast• US CP delivers contents

directly to end-users via Internet, or via 3rd content aggregators e.g. Hulu

• TV broadcasters roll out hybrid-TV, for example, UK’s Canvas project (terrestrial TV + Internet TV) and European’s HbbTV

Consumer Electronics• CE embed Internet-enable

features into electronics products, for example: TV, STB, gaming consoles

• AppleTV operating on a walled garden platform


Video Ecosystem

Source: Cisco IBSG

Content Provider

Content Aggregator

Platform Devices

1Public Internet

2Walled-garden

5

Comcast’s Fancast

6FiOS TV Everywhere

YouTube on FiOS

3Public Internet

4Public Internet


Infinity Contents

Middle

Source: Cisco IBSG

Content quantity

Viewing frequency

Long tail

Characters:

• Social, non-exclusive

• Amateur

• No QoS guarantee

• Low content value

Digital Hollywood

Character:

• Exclusive contents

• Professional

• Mass market

• QoS guarantee

• Consumer like different types of contents, i.e. viewing from Hulu‘s VoD

• Netflix, though does not provides direct TV nor

premium contents, able to attract 20M subscribers via multiple access devices (PC vs CE; 27%:73%) and simplified user interface, 2nd largest SP after Comcast

• UK’s iPlayer provides 7 days catch up TV, taking up 10%-20% internet traffic

Internet

More Contents


Multiple Devices / n-Screens

More Screens

PC TV Mobile

iTunes

Direct TV Channel

Catch up TV

Premium Contents

(Episode, Movie, Sports,

Music)

UGC

OTT Strategy: collaborate with

consumer electronics, leverage

Internet open platform to deliver

video contents to multiple devices

(exclude Apple TV wall-garden)

Content Providers: CP handle

content intellectual property right

carefully, for example: Hulu,

according to agreements, only

authorized to deliver contents to

PC, and not allowed to deliver

contents to TV unless it is on

subscription basis(i.e. HuluPlus)

Though watching Internet video

over PC is common, increasingly

more through game consoles and

mobile handsets. For example,

15% of iPlayer is via game

consoles and iPhone.

Source: Cisco IBSG


Interactive, Social Network are Key Growth Drivers

• Consumer like more controls and choices (contents,

time to watch and devices), VoD, Time shift, Catch

up TV become fundamental features

• From Apple experience, consumer like different

variety of applications, simplified user interfaces. In

2009, number of apps downloads reached 2Bn. On

average, each iPhone / iTouch user owns 40 apps.

• Facebook has 620M users, 550k+ apps

• Pay-TV operators collaborate with OTT to provide

search, social networking, photo uploads

Source: Cisco IBSG

More Controls


Video 1.0 to 2.0 to 3.0, Offering New Interactive, Social Network TV Experience to Internet Users

� Non-real time networks

� Limited content

� Static short tail

� Few services

� Few streams

� Non-mission critical

� TV screens

Video 1.0

� Real time ingest of all live TV

� Large content stores

� Dynamic long tail solutions

� Many services

� Stream per screen

� Availability is critical

� Many types of screens

Traditional Sources

Community

Video 2.0

Long-tail Concept

� Digital

marketplace

“more” era

� more video

devices;

� more video

services; and

� more video

traffic

Video 3.0


Next Generation Video = Data Center + Network + CPE

Internet ConvergenceLow High

Low

High

Interactive capability

Internet Video

3rd Wave Video

Direct TV

Source: Cisco WWSP, IBSG

Unified Network

Cloud Computing Platform

Multiple End-

Device

STB, S/W, Home Gateway

Infinity Content

Content Distribution Network


Cisco’s Visual Networking Index (VNI)

Today’s Media Marketplace Has Entered the Age of “More”.. More video-capable devices, more video services and more video traffic than beforeToday’s Media Marketplace Has Entered the Age of “More”.. More video-capable devices, more video services and more video traffic than before

Global Usage TrendsGlobal Forecast Data

The Cisco VNI Global Forecast methodology relies upon various independent analyst forecasts as well as fixed and mobile data usage surveys.


Global IP Traffic Projection 2009 - 2014

Exabytes per month

Cisco VNI Forecast 64 Exabytes per Month of IP Traffic in 2014

Source: Cisco VNI, 2010

Internet

Managed IP

Mobile data

Mobile data

Managed IP

File sharing

Internet video

Internet TV

Web & data

VoIP

Online gaming

Video calling

Internet

Business IP(13%)

Business IP

Consumer IP

34% or 4.3x(CAGR 2009-2014)

64

Consumer IP (87%)

15

3

55 Web-based video

conferencing

Mobile video66

11

22

44

Internet video

surpass P2P as

top traffic type

Multiples of bytes:

Gigabyte (GB) 109

Terabyte (TB) 1012

Petabyte (PB) 1015

Exabyte (EB) 1018

More Traffic

= 12 billion DVDs across the Internet


Broadband Internet Traffic Will Continue to Experience Tremendous Growth Momentum in Hong Kong

Broadband Internet Traffic in Hong Kong

Source: OFTA, Cisco IBSG Analysis

Broadband Subscribers

(in Million)

Average usage

(in GB/month/sub.)

Usage growth at

26%CAGR (2003-2010)

Quantum leap of broadband usage with the introduction of FTTx access

~88% household broadband

penetration rate

3

11

22

Broadband Sub (LHS)

Average Usage (RHS)


Future Proven Routing Technology is Key to Gain Cost Advantage in a High Traffic Growth Environment

US$’000/Gbps

23% Cumulative Average Price Drop Annually

23% Cumulative Average Price Drop Annually

Cost per bit down with each new generation of routing technology

CoreRouting

93%

Note: Based on Cisco listed price

(Note)

GSR Router CRS-1 CRS-3


HKBN’s “One Infrastructure Multiple Service” is Key to Bring Business Agility and Cost Saving…

Source: HKBN, Cisco

Service

Network

Different Optical Fiber Cores/Ducts

PSTNFR/ATM IP IPTV

Vo

ice

Co

rpo

rate

Data

Inte

rnet A

ccess

Pay-T

V

Traditional Silo Vertical ModelOne Infrastructure Multiple ServiceIPNGN Infrastructure (e.g. HKBN)

Bro

ad

ban

d

2000

Vo

IP

2002

Bro

ad

ban

d T

V

2003

Co

rpo

rate

Data

2004

1G

Bro

ad

ban

d

2005

WiF

i H

ot

Sp

ot

2008

Optical Fiber Core

IPNGN Platform (All IP)

web x.0 & beyond · market dynamics source: cisco wwsp, ibsg internet video • us’s hulu,...

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