emerging markets: the cloud imperative
DESCRIPTION
What is the cloud opportunity in emerging markets? This presentation provides an overview of key cloud builders, target customer types and hot services in growth markets.TRANSCRIPT
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Emerging Markets: The Cloud Imperative
Camille Mendler
Principal Analyst
Informa Telecoms & Media
Webinar
July 17, 2012
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Agenda
• Why is cloud an imperative in emerging markets?
• Who are the leading cloud builders?
• Which customers should be targeted and how?
• Conclusions and recommendations
• Q&A
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Emerging markets: The cloud imperative
Cloud is about empowerment
• Support business agility• Promote global competitiveness• Accelerate development goals
It’s not simply about saving money
Cloud stakeholders in emerging markets - particularly in Africa - exhibit more nuanced thinking about cloud than many peers in developed markets. Lacking much legacy infrastructure, the cloud’s operational model serves a dual purpose: To work around what’s missing, and to leapfrog peers.
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Agenda
• Why is cloud an imperative in emerging markets?
• Who are the leading cloud builders?
• Which customers should be targeted and how?
• Conclusions and recommendations
• Q&A
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Services from…
Enterprises
Integrators
Colos / hosters
Web
ISPsTelcos
SoftwareHardware
Devices
Governments Cloud vending machine
By business origin. African example.
Many stakeholders are in the cloud game
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Personal connectivity
Brand recognition
Wide areaconnectivity
Datacenters
Distribution
Security certifications
Billing
In emerging markets, telcos hold the best cards
The means of consumption and distribution remain in local operators’ hands.
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That was then…
Investments in 2011 showed clear bias among developed market operators.
Source: Informa Telecoms & Media
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Now, the picture is shifting
Telecom operators are the largest and most active investors in cloud infrastructure across emerging markets.
Telco cloud service launches by country type (preliminary)
1H11 1H12
High-incomecountries
Upper-middle income countries
Lower-middle income countries
Low-income countries
55%
9%
5%
7%
37%
77%
9%
Source: Informa Telecoms & Media
Examples: Germany, Japan, UAE, US
Examples: Brazil, China, Russia, Turkey
Examples: Armenia, India, Ukraine, Vietnam
Examples: Kenya, Pakistan, Tanzania, Uganda2%
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Africa: Motivated to grow
Activity is concentrated in South Africa and Kenya, but service providers arerolling out their portfolio across all subsidiaries.
• Claims Africa’s largest telecom cloud infrastructure• SME focus• Also seeks government partnerships
• Various SaaS; desktop as a service across subsidiaries• Virtual servers• Data center builds
• Diverse SaaS offers• UC, security & storage• Cloud-based M2M • Fiber + datacenter builds
• Cloud telephony• SaaS trials; MS Office365• Teraco & Neotel datacenter tenancy; fiber build
• Madagascar cloud telephony with Movirtu• Google social toolsvia SMS
• Funding for servicereplication in Kenya& beyond
• NTT-owned DiData +Internet Solutions extensive cloud offers• Fiber & datacenter builds• SME, corporate, MNC
Picture: Flickr/kibuyu
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South America: Hot in 2012
Picture: Flickr/dubiella
Several multi-country service rollouts are now underway after strategic investment in building quality datacenter infrastructure.
Rising investment from in-region operators• Alestra• Telefonica • America Movil• Entel• Oi• TIM Brasil
Global service providers• BT Global Services• Level 3• Orange Business Services
Integrators• IBM
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Emerging Asia: Diverse and inventive
Picture: Flickr/Vietcon1
Other12%
Mobile device mgmt
6%
Storage, backup & restore
6%
Business apps suite
9%
Security9%Unified
comms20%
IaaS38%
Cloud services launched by type, 2012• ‘Other’ is the most interesting category:
• Taxi fleet management• Dentist insurance invoicing• Cloud-based CCTV• Video conferencing for education
• More focus on mobile cloud
• Integration of M2M and Cloud
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China: Some like it Hohhot
The ‘green’ Inner Mongolian city of Hohhot is receiving $8 billion in cloud-related investment – chiefly from telecom operators.
$1.8B $1.9B $1.8B
Picture: Flickr/Civitas Veritas
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Agenda
• Why is cloud an imperative in emerging markets?
• Who are the leading cloud builders?
• Which customers should be targeted and how?
• Conclusions and recommendations
• Q&A
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Key cloud customers in emerging markets
Cloud opportunity exists in all customer segments. But we believe that the customer groups highlighted offer the greatest growth potential.
1. The middle-class consumer
2. The small enterprise universe
3. The mini multinational
Picture: Flickr/mrjorgen
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• Urbanization
• Fast-growing middle class
• Capture them now
The middle-class consumer
Picture: Flickr/christinyca
Despite notoriously dissonant definitions of who is ‘middle class,’ the unquestionable growth of consumer consumption cannot be ignored in developing a cloud services portfolio in emerging markets.
5
10
36
50
106
128
157
160
0 50 100 150 200
Tunisia
South Africa
Russia
Indonesia
Brazil
Africa
China
India
Middle class inhabitants (millions)
46%
20%
25%
21%
54%
13%
12%
13%
0% 20% 40% 60%
Tunisia
South Africa
Russia
Indonesia
Brazil
Africa
China
India
Middle class % of population
Selected examples, various sources
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Appeal to convenience; drive consumptionExamples
China Telecom
• Cloud Gaming
• HD gaming without console
(import issues)
• Via connected TVs
• Using the Ubitus Game
Cloud platform
• Smart tv manufacturers
Skyworth, KONKA and LG
are initial partners
Maxis (Malaysia)
• e-Books• Filling gap for e-books in
local languages• Using Alcatel-Lucent’s Digital
Media Store platform• 300,000 novels and scientific
journals• Accessible via any connected
device
Axis (Indonesia)
• Multimedia storage• This STC affiliate offers its
Axis Box service free• Accessible from any device,
supporting ios, Android and Blackberry OS
• Customers get 2GB of storage free, via partnership with Drop Box
For telecom operators in particular, it’s critical to keep consumers tied to cloud services which reinforce the need for quality of connectivity (and security) – to secure their core revenue stream.
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Employment population Employment population
Developed economy Emerging economy
Co
mp
any
size
LARGE
MEDIUM
SMALL
MICRO
The small enterprise universe
Unique challenges in some emerging markets: Micro enterprises are heavily represented. Also opportunity, as governments look for ways to help SMEs escalate their contribution to economic growth.
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Telephony(fixed and mobile)
General business apps(eg: GoogleApps, MS Office)
Broadband (fixed and mobile)
Virtual desktop(eg: Citrix)
Unified Communications(eg: presence, messaging)
Storage / hosting(eg: cloud-based)
Specialist apps(eg: vertical)
Bundleadd ons
Time
Originally communications centric
Now becomingproductivitycentric
A mobile-centric SME ‘office in a box’ is a great beginning. Vodacom’s Office in the Cloud is a solid example. But vertical add ons can deliver differentiation.
Evolving the SME proposition
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Smart: Focus on SME ‘mass’ verticalsExamples
Maxis (Malaysia)
• Built for SME - Retail
• Business voice (fixed and mobile)
• Point of Sale and ERP• Also option for CCTV
surveillance of store via fiber connectivity
Indosat (Indonesia)
• Mobile App Accelerator
• Targeting local application developers
• Using Nokia Siemens Networks’ cloud-based telco asset marketplace development platform
• Wins brownie points withgovernment
MTN (South Africa)
• Mobile Fleet Management
•South Africa’s 3rd largest vertical
• SMEs with <200 workers• Real-time reports on
location, deliveries• Workflow management
Business process improvement rather than cost is the key value emphasized for moving to the cloud. SME app supermarkets can cater to different needs – but SMEs value the convenience of a packaged solution (will they hunt?).
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The mini multinational
Source: IMF Direction of Trade Statistics, 2010
Brazil exports Asia (ex Japan) 24%W. Europe 23%S. America 22%N. America 13%Middle East 6%
Russia exports W. Europe 49%CEE 18%Asia (ex Japan) 14%N. America 9%Other advanced 5%
India exports Asia (ex Japan) 29%W. Europe 20%Middle East 19%N. America 15%Africa 6%
China exports Asia (ex Japan) 31%W. Europe 21%N. America 20%Other advanced 10% S. America 5%
Emerging markets are doing more business with each other. With economic growth, birth of new multinationals from emerging markets – operating on a regional and global level.
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Treat them well: Rethinking A and B endExamples
BT Global Services
• Global, but growing in Latin America, Middle East
• Investments include regional datacenters and on-the-ground teams
• Strong emphasis on local professional services
• Ongoing expansion of cloud contact center/UC
China Telecom & China ComService
• Latin American expansion
• Subsidiaries in Brazil
• Full suite of communications services planned
• But also cloud services targeting Latin American and Asian multinationals
Tata Communications
• Positioned as an emerging markets service provider for emerging markets enterprises
• Filling service gap afforded to global multinationals and regional minis
• Particularly strong in cloud-based UC and telepresence services
• Submarine cable assets aligned to all key trade routes
Regional data center and network POPs are key investments – but so areon-the-ground professional services teams to develop custom solutions. Our view: Cloud-based unified communications and collaboration –incorporating secured enterprise mobility will sell faster than compute.
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Capacity building requires integration
Source: Safaricom
Cloud service providers must build a single cloud infrastructure for multi-stakeholder services. Hybrid, not siloed connectivity will drive success.
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Takeaways
Don’t ignore the consuming classes• Now is the time to capture rising disposable income
Know your demographics• Beware of purely generic solutions – support local languages and local ‘mass’ verticals
Compete on customer excellence• Local presence and support are lasting differentiators in a U.S.-centric cloud market
Promote agility, not cost savings• Value for money is simply a hygiene factor in the cloud
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Let’s continue the discussionJoin us at these upcoming cloud events
For Enterprises
For Cloud Enablers
For further information, contact Dominic Offord: [email protected]
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Meet some of our regional analysts
South America Asia Pacific
Africa & Middle East Eastern Europe & CIS
Stephen WilsonInna Natalchenko
Charles Moon Anubhuti Belgaonkar
Sadiq Malik Thecla Mbongue
Marceli Passoni Ari Lopes
Contact us in your language, in your region.
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Thank you!
Camille MendlerPrincipal Analyst, Informa Telecoms & Media
[email protected]+44 7766 13 15 28
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