Services Offering For Enterprise Customers: The Telco's Perspective

Services Offering for Enterprise Customers
The Telcos perspective
Philippe Bovy Business Development Manager Telindus Belgacom ICT
05 October 2006 "Unrestricted"
Contents
Company Overview European ICT Market & Trends Telcos Challenges & Roadmap towards ICT Services Telcos ICT Offering New Telcos Outsourcing approach Conclusions
Septembr 26, 2006 | slide 1
Part of the Belgacom Group

Telindus joined the Belgacom Group in January 2006
About Telindus
International ICT integrator, since 1969 Offering cross domain ICT solutions & services Serving business & public market needs as a solution & sourcing partner International delivery capabilities with 2570 employees Spread over 14 countries (35 cities)
European ICT services Markets
What does include the ICT market ?
The ICT Services value chain What do we mean?

Host and maintain the customers databases and software infrastructure in a remote secured location (a Data Centre). Archive & backup of customer data Run an entire customer business process such as a customers Payroll, a customers warehouse, a customers IT department, a customers training department etc.
CT
Connectivity services Network services Data Centre services
IT
Application services Business services
Traditional Telco business (voice + data network)
Install, maintain and operate the network of laptops, PCs, PBX, telephones and so on. Connect the network to the outside world
Develop and implement software Integrate software so as to inter-work with other software Upgrade software Manage software portfolio
Communication Technology (CT) Services were typically found on the left of the value chain, whereas Information Technology (IT) Services were typically found on the right of the value chain
The ICT Services value chain What do we mean?

Project Management, Solution Design
Consultancy Hard & software sales Business process outsourcing
IT-consultancy Reselling of HW, SW Full takeover of bus processes: e.g. HR, fleet, etc
Storage & Shipping of Printers, Servers, Desktops, etc
Design & Management of customer business processes (Payroll, e-Learning, SAP Financials, etc)
System integration
Application development & implementation
Design & Implementation of customized applications (Internet E-Commerce, Dynamic Web site) Deployment & Management of Office Applications (mail/fax serv.), broadcasting, Deployment & Maintenance of Desktops, Laptops, PDAs on Customer premises
IT outsourcing (WAN bus not included)
Application management
Desktop management
Data centre & storage
Network Integration
(W)LAN, IPTEL, Security
Archive & Back-Up of Customers Data in secured location Deployment of LAN or Wireless LAN Deployment of VoIP platforms (PBXs) Deployment of Firewall and Certificates
Market size in value
Total IT market for Western Europe is estimated by IDC at 254 Bio for 2006 This covers the following services :
IT
Network services Data Centre services Application services Business services
CT
Connectivity services
Split of Western Europe IT Spending
34% 45% Hardware Software IT Services
21%
IT services accounts for 45% of IT spending, Hardware for 34% and Software for 21%
Source : IDC, January 2005
Market size in value

The Total IT Services market is definitely growing Gartner also forecasts a CAGR of 3,4% (2005-2009) for IT Services in Western Europe EITO (European Information Technology Observatory) forecasts a 5.0% growth of IT services in Europe for 2006 and 5,3% for 2007. (This is much higher than traditional Carrier Services : 1.6%)
Market Value: 120B in 2007
IDC expects a CAGR of IT services spending in Western Europe of 5.0% for period 2004-2009
Telcos Revenue Challenge : The Roadmap to ICT Services
1. Decline in (traditional) Revenue Stream

Telcos tough times in domestic markets
Most European Telcos are facing triple pressure :
Saturation : Fixed line traffic volume is declining : Fixed voice substitution to IP & mobile Pricing : Bundled offer and flat fees are common practice Regulatory climate : leading to aggressive LLU offers (triple/quadruple play) from (new) competitors
resulting into declining domestic revenues.
Source : Ovum
1. Decline in (traditional) Revenue Stream (contd)

Situation in Belgium
Professional Voice Market (traditional cash cow) is declining
Value evolution Belgian Fixed Business telecom market 2006-2008

4% 2% 0% -2% -4% -6% -8% -10% -12% 2006 2007 2008
Fixed Data Bus
Fixed Int. Bus Fixed Total Bus
Fixed Voice Bus
Fixed Voice Business Fixed Internet Business

Source: Gartner/Dataquest 2006
Fixed Data Business Fixed Total Business
2. Change in Customer Needs

Corporate Customer Needs more than just Telecom services
Corporate Customers want integrated solutions Corporate Customers are also looking for service providers taking care of all (or part) of their ICT services Outsourcing becomes a more common practice for Corporate customers who need to focus on their core business Market globalisation and mergers & acquisitions lead to international integration and harmonisation of corporate ICT solutions, resulting in the need to have all services provided seamlessly by international service providers and integrators with coherent SLAs
3. Change in Competitive Landscape

Competition on the Corporate segment does not only come from Telcos but from IT Providers enlarging their scope of activities
IT providers are pushing computer-telephone integration as much as they can With voice & data convergence over a single IP-based platform, IT providers (IBM, HP) and network integrators (Dimension Data, Telindus, ) are offering services that were once the exclusive domain of telecom firms. Examples : IxSP (IVSP, )
Dimension Data NextiraOne Damovo Belgacom/ Telcos Getronics IBM HP EDS
Low position in the value chain
Connectivity services
Network services
Storage services
Application services
Consulting services
Overall exercise in the Telcos Industry

This ICT story is not restricted to a few key players.
Most European Telcos are embracing the IP opportunity/challenge to offer new bundled ICT products, leveraging the unified communications momentum, This move is supported by strong users and industry organizations: EVUA (Global Telecommunication Focus Group) created a new ICT services Special Interest Group (SIG) aiming to identify best practices & solutions among ICT services providers ETN0 (European Telecommunications Network Operators), highlighted in 2005 to its Members the importance of the Telcos roles in the future development of European ICT sector (with the aim to ensure the success of i2010 Lisbon initiative.
Fully supported by ICT analysts
Telcos ICT Offerings
What keeps CIOs awake?

Selective Sourcing Security Directory Services Mobile Computing Virtual Network Services Windows Migration and .net Server & Storage Consolidation Digital Surveillance IP Based Contact Centre Content Delivery Networks IPVPN (MPLS) Electronic Messaging and video Applications Business Recovery, Continuity Customer Relation Management Application Response Time Management
Telcos ICT Solutions

Telcos solutions will leverage Telcos infrastructure and skills developped for Internal needs
Empower your applications! Consolidate your IT systems!
reduce cost for servers & storage
Network + Systems power to boost performance
Business Performance
Cost Control
Security
Get your network powered for the future!

You need bandwidth, reliability & security 2006 Septembr 26,
| slide 18
Do more with less!

Todays IT Desired IT
30% new capability
Increases Value Creation
45% new capability
70% sustaining & running existing capabilty
Decreases Maintenance & Delivery
55% existing capabilty
Source: Accenture IT spending survey
1. Security : Managed Security Service

Pro-active management of critical architecture components Firewalling & VPN Intrusion detection Proxy cache Content&URL filtering Antivirus scanning User authentication Strong authentication End point of defense
Internet DMZ
File servers HR Dept Engr Dept Mktg Dept Finance Dept
Headquarters
Intranet
Regional Office
users
Stand-alone IDP Deep Inspection Firewall Stateful Inspection Firewall
SOHO
Security : Managed Security Service

Security is more that just monitoring access and traffic . Security is also a process
Operational security review Penetration tests Vulnerability scans
Security policies & procedures Security infrastructure design Security training
Knowledge Center
Managed Services
Installation & configuration of security Set up of managed services
24*7 Monitoring, management, Support
Security : Security Consultancy Services

Operational Consulting
Systems assessment & configuration (Check Point, Juniper, ) Security training Architecture & design service Incident response & computer forensic Penetration test Ethical hacking IT systems & network vulnerability assessment
Organisational Consulting
Security Policy Support Security Awareness program Disaster recovery & business continuity Enterprise compliances assessment (ISO 17799) Security Risk assessment
Security : Risk Assessment
Security : # 1 in ICT Spending Increase
Security
Source : Europes 2005 Entreprise Telecom Outlook, Forrester, July 1,2005
2. Cost Control : Consolidate Infrastructure

Leverage Telcos State-of-the-art Data Centers Secure places with plently room available State-of-the art fire detection and electrical power/airco supply Existing bullet-proof physical Access infrastructure & procedures Fully redundant connectivity : connected to wide range of competitive Carriers (Interconnect) Optimal place for: Business Recovery Housing Business Recovery Office
Cost Control : Servers Solutions
Ou of el Standard Application Server ev L File Exchange, Document Archiving,

e-mail, fax, ftp, db,
ing rc Application Outsourcing ou ts ASP, AIP, Citrix, TS, Jetro,
Server Hosting
Dedicated Web Server Dedicated Standard Server Dedicated Enterprise Server
Server On-Site
Cost Control : Servers Solutions

Application Outsourcing
End device
Mainframe Applications 16-bit Client/Server 32-bit Client/Server Poorly designed HTML Web Apps
Data Centre
Applications moved Towards the Data Centre
Mouse clicks and keystrokes sent to server Screen updates sent to client devices
HTML Web Applications Web Services Applications Network File Stores Other Data and File Stores
Application Outsourcing is a managed solution where applications & data are installed and executed on centralized servers
Cost Control : Storage Solutions

On-site Storage Customer Remote Storage
Central remote management
VPN
switch
Net Center
IP telephony Call Manager
storage
housing hosting
storage
Cost Control : Backup Solutions

Many Specific Enterprise applications Storage Area Network (SAN)
Decentralized Backup/Restore
LAN based Backup/Restore
Information Cycle Management

Move Storage to more cost effective media Keep Data on specific storage based on legal regulation (Basel II)
3. Business Performance : Managed IP Telephony

IP Tel offers new ways to manage voice svcs : Dedicated / Hosted in complement to Shared IP-Centrex plain Telco offering
Customer
Central remote management
Remote Management
VPN
switch Hosted
Voice/data/video applications
Data Center
IP telephony Call Server
IP telephony Call Server
Business Performance : Voice and Video
Communication services
Service Level Agreements
Online Collaboration
Email
Video Conferencing
Instant Messaging
Contact Center
Infrastructure
Telephone Services
Servers
Connectivity & access LAN/WAN Next Generation Network
Integration Services
Converged DATA/Voice/Video
Calendar
Business Performance : IP Services
IP Services
Source : Europes 2005 Entreprise Telecom Outlook, Forrester, July 1,2005
4. Vertical Solutions : Healthcare

New needs emerging from patients at home (consumer market) New needs emerging from care institutions (infrastructure)
Monitoring
H e
ar
Video communication
ea lt hc
Hospital of the future
Healthcare treatment file
Te le c
Health Link Practitioners
a se r e rv ins ic ti es tu ti on s
Assets Tracking Bedside Terminals
Infotainment at home Hospital storage
HotSpots
Patients
Medical Admin.
ic es R ec or d
IAM for hospitals
&
Ex tr an et
a ot nag Portal he em rs en t
Se rv
eHealth record storage
Message broker Admin Reporting
Vertical Solutions : Healthcare

Ultimate Objective : develop federal framework and neutral service platform to serve the exchange of medical information between relevant Parties.
Org. 2
Org. n
Org. 1
National Register
Authentic sources for attributes Belgacom e-Health FIM

Order of Doctors
Federated Identity Management: Security Access & Single Sign-On is managed by Trusted-Third Party Different credentials can be integrated based on security level required by application owner
Health Care users
Patient
Lay down the foundations for future content-related applications
Vertical Solutions : e-HR (e-Human Resources)

Typical building blocks of e-HR value chain
CT
Connectivity services Network services Data Centre services
IT
Application services Business services
E-Learning Employee Portal
HRSelfService Applications HR Process Applications
Access Service (ADSL Teleworking VoIP)
Drivers
Evolution in composition and nature of workforce (more PC literate) Increased focus on ROI of HR functions Need for increased quality of Human Resource data
Telcos Outsourcing Approach
Outsourcing
Higher Level of conversation with an Entreprise
Vision - Mission - Strategy
Trusted Advisor and Strategic guidance Strategic impact Move up the food chain and be the trigger of change in stead of being the result Executive level conversation
Strategic Business Projects
Application Strategy IT Infrastructure Strategy IT Infrastructure and Support IT Commodities
Conversation barrier level to overcome
Typical client conversation level today
Outsourcing
Change in position of internal ICT departments due to nominator thinking in the business = value creation
Agility
Eff ec t iv are enes s a
dep ICTICT drives nal r Inte business
en Max value r tm a
Efficiency
ICT enables business ICT supportsvices r Se g business Eff rcin u icie o sS are ncy Min costdu lin Te a Internal
Based on Gartner
External
Outsourcing
Why
As CIOs deliver IT services and manage costs, business expectations expand to how IT can support enterprise growth and competitiveness. These expectations include: Supporting enterprise growth and competitiveness Managing an IT budget more like a business budget Leading the IS organization to deliver strategies focused on growth, alignment and business skills Investing in technologies that support enterprise competitiveness.
Outsourcing
How : Via proven methodology & approach
Telindus Object-If Methodology : Understanding business strategy Achieving growth and agility is at the core of customers business objectives. Telindus Object-If sourcing provides a DNA backbone essential to customer success. Every sourcing process should yield a positive business impact. The Object-If DNA backbone aligns with customer specific goals based on four elements,
> > > >
Technological expertise Human involvement Process alignment Cost control
Outsourcing
The Object-If DNA Backbone
PROCESSES
> > > >
COST CONTROL
> > > > >
More effective processes = doing things right More efficient processes = doing the right things Faster, better and cheaper processes Service is flexible and responsive
Reduced time-to-market Better use of staff and resources Better control across the supply chain Less complaints/ less escalations
HUMAN RESOURCES
> > > > > >
TECHNOLOGY
> > >
Reduced workload Lower staff turnover Stable workforce Transparent structure More opportunities for career development Increased specialist skills
Easier upgrades Centralized ICT Up-to-date with latest technologies
>
>
Selective Sourcing or full Outsourcing
full sourcing
selective sourcing
Sourcing Services
A whole range of consulting, planning & advice services rendered by Telindus or its partner(s) outside the scope of full or selective sourcing
sourcing services
Risk Management & Governance Enterprise application integration Collaboration Secure and Well-Managed Infrastructure
Selective Sourcing
Any portion or portions of the entire portfolio of the management of ICT services and delivery of these services by Telindus or its partner(s).
Full Sourcing
The entire portfolio of the management of ICT services and delivery of these services by Telindus or its partner(s).

Services part of a typical Outsourcing approach
User environment Services (PC, Printer, IP Tel terminals) Desktop Life Cycle Management (patch management, assets/license management, OS/SW distribution, malicious SW removal, etc) Service Desk
Global SLAs
Information Security (Disaster Recovery) Internet Security (Intrusion prevention, Penetration testing, Monitoring, Remote Access) Accessibiliity Services (LAN/WAN) Housing Services Hosting Services IP Tel Services Collaborative Applications (mail, Blackberry, videostreaming, ) Business Application (HR-Payroll, )

Outsourcing Trends
There will be a move from discrete project-oriented services towards fullscale services engagements combining different types of services, Multisourcing - with different SP partnering as part of consortia bids to provide a fuller range of services - might become more and more usual, Cost Control is focused on data communications and networking rather than systems infrastructure. Change in clients attitude : more cautious and knowledgeable customers, better able to negotiate contracts. Customers will continue to expect more for less or at no extra cost But longer sales cycles while decision making is more complex.
Source: Gartner Survey TOP 15 for CIOs (2006)
Conclusions
Be Focus on Core expertise

Telcos should not disappoint Enterprises expectations
Focus should remain on leveraging Telcos infrastructure : IP connectivity with voice & data convergence, DataCenter/Housing/Hosting in combination with Security features
be Flexible
No one size fits all : ICT outsourcers should integrate Corporate customer profile in the solution design. No standard cut & paste ICT outsourcing solution
Number of sites Number of employees
Nomadicity
International presence
Mobility
Sector
Anticipate ICT trends

Clean Pipe Security Services
Trend to move away from just strengthening the Corporate Network perimeter to integrate the concept of perimeter-less environment Standalone Corporate security strategies will become obsolete As IP convergence takes hold, services elements such as VoIP, VPN, Ethernet, Remote Hosting will require more and more Clean Pipe infrastructure from Telcos Ultimate Goal : Identify & destroy malicious traffic Managed Intrusion Prevention (IPS) Managed anti-malware Anti-Virus/Anti-Spam/URL Filtering Etc.. Clean-Pipe strategies will be part of carriers NGN plan : NGN-Clean-Pipe Label ?
Questions ?
Philippe Bovy Philippe.bovy@telindus.be Philippe.bovy@belgacom.be Mob: +32.475.25.27.01

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Services Offering for Enterprise Customers

The Telcos perspective

Philippe Bovy Business Development Manager Telindus Belgacom ICT

05 October 2006 "Unrestricted"

Septembr 26, 2006 | slide 1

Part of the Belgacom Group

Septembr 26, 2006 | slide 2

Septembr 26, 2006 | slide 3

European ICT services Markets

Septembr 26, 2006 | slide 4

What does include the ICT market ?

Septembr 26, 2006 | slide 5

The ICT Services value chain What do we mean?

Traditional Telco business (voice + data network)

Septembr 26, 2006 | slide 6

The ICT Services value chain What do we mean?

Consultancy Hard & software sales Business process outsourcing

Storage & Shipping of Printers, Servers, Desktops, etc

Application development & implementation

IT outsourcing (WAN bus not included)

Data centre & storage

Septembr 26, 2006 | slide 7

Market size in value

Split of Western Europe IT Spending

34% 45% Hardware Software IT Services

Septembr 26, 2006 | slide 8

Market size in value

Septembr 26, 2006 | slide 9

Telcos Revenue Challenge : The Roadmap to ICT Services

Septembr 26, 2006 | slide 10

1. Decline in (traditional) Revenue Stream

resulting into declining domestic revenues.

Septembr 26, 2006 | slide 11

1. Decline in (traditional) Revenue Stream (contd)

Value evolution Belgian Fixed Business telecom market 2006-2008

Fixed Data Bus

Fixed Int. Bus Fixed Total Bus

Fixed Voice Bus

Fixed Voice Business Fixed Internet Business

Fixed Data Business Fixed Total Business

Septembr 26, 2006 | slide 12

2. Change in Customer Needs

Septembr 26, 2006 | slide 13

3. Change in Competitive Landscape

Low position in the value chain

Septembr 26, 2006 | slide 14

Overall exercise in the Telcos Industry

Fully supported by ICT analysts

Septembr 26, 2006 | slide 15

Telcos ICT Offerings

Septembr 26, 2006 | slide 16

What keeps CIOs awake?

Septembr 26, 2006 | slide 17

Telcos ICT Solutions

Network + Systems power to boost performance

Get your network powered for the future!

Do more with less!

30% new capability

Increases Value Creation

45% new capability

70% sustaining & running existing capabilty

Decreases Maintenance & Delivery