Changing the way businesses buy technology

Transcription

1 New Business Models Changing the way businesses buy technology Organizations have reached a complex and transformative stage in digital business as the pace of innovation accelerates every day. Technology purchased today will be two or three generations out of date by the time the book value is fully depreciated. Yet, that same technology is expected to contend with growing demands. Where everything Connects

2 Consumption models evolve Before the advent of the electric utility grid, early electricity users owned, operated and maintained all the tools and hardware themselves. For those that could afford it, the cost of ownership was very high, distribution distance was low, and a seemingly random set of standards powered new uses from lighting to industrial motors. However, the innovation of early grids rapidly led to new innovations in electricity distribution and widespread adoption, enabling customers to draw from the grid only when they needed electricity. Of course, this evolution did not occur without the active resistance of local power suppliers, who had enjoyed a healthy ROI selling into an increasingly dependent and closed market. Although paying for electricity as a consumption-based service seems obvious to us now, the impact and benefits of metered on-demand electricity were not always universally accepted. 3 Where business Connects

3 The Future of Business Technology 80% of IT infrastructure will be pay-per-use by 2020 IDC Future Scape: Worldwide Enterprise Infrastructure, 2016 Predictions, IDC Web Conference, Nov 2015 Consume or Buy Technology has long been a capital expense investment with a business value that often resembles a bell-curve over the period of functional life. As new technologies are introduced in a CAPEX model, complexity and management costs also increase, in turn affecting the total cost of ownership. In contrast, consumption models are scalable and outcome focused. The burden of managing complexity lies with the vendor. But the strategic consideration of consumption models is not just about price. Price and cost of ownership are not the same. While the acquisition capital cost is tangible, and operational costs can be estimated, opportunity costs are often overlooked in the cost analysis of technology capital investment. Not all consumption models are equal and there is a relevant distinction between cloud, consumption, and outcome based models. Where business Connects 4

4 Technology models are evolving, aligning cost to revenue and business activity cycles. Alcatel-Lucent Enterprise consumption models FREE YOUR CAPITAL To invest in your core business PAY FOR WHAT YOU USE Adapt costs to business activity BUSINESS AGILITY Rapid scalability RISK SHARING True partnership PAY PER OUTCOME (aligned to business) PAY PER USE (consumption) PAY PER MONTH (lease) PAY UPFRONT (capital) Total cost of Ownership (TCO) Again overlooked, or at least under-defined, each is an alternative to the traditional B2B CAPEX model of make, sell, ship, moving the relationship between vendor and customer towards a partnership based on mutual success. Price and cost of ownership are not the same as any economist will explain, and business assessment considers factors beyond direct ownership costs. In essence, while the acquisition cost of capital is tangible, and operational costs can be estimated, opportunity costs are often overlooked in cost analysis of technology capital investment. 5 We make everything Connect

5 Total Cost of Ownership Depreciation expense Deployment Operation Service Technical support Documentation Training Disposal Maintenance Spare parts Upgrades TCO Comparison matrix CAPEX / ON-PREMISE AS A SERVICE / CLOUD Hardware purchase + - Software purchase + - Implementation services = = TOTAL CAPITAL EXPENDITURE HIGHER LOWER Depreciation expense + - Time value of money + - Investment risk + - Hardware/Software updates + - Support and maintenance + - As a Service Pay per use only Higher Capacity overhead Typically >10% Pay per use / Unlimited TOTAL OPERATING EXPENDITURE Fixed Adaptive We make everything Connect 6

6 Portfolio of Services Network on Demand is a new LAN and WiFi network infrastructure service built upon the pay-per-use concept where end customers only pay for network resources consumed per connected port per day. Network on Demand is built upon our existing portfolio of network technology and each Network on Demand deployment is tailored and scaled to the requirements of the end-user organization, based on their unique needs. Network on Demand enables flexibility for both customer and partner. The unique and innovative feature of Network on Demand is the flexibility built in for the customers throughout the model. At the end of the subscription period, customers can choose to refresh the necessary equipment and renew the subscription without a capex outlay, can pay off any remaining balance, or can simply end the relationship without penalty. For many organizations, this will lower barriers to upgrading their networks to support digital transformation. Open Touch Enterprise Cloud delivers a full featured enterprise communication service that is pay as you use, and fully managed for you. It offers a complete and secure solution delivering business telephony, unified communications, contact center, and industry specific services. It can be deployed in any scenario including pure IP or TDM-based infrastructure, in a private cloud (off or on-premises), or in an overlay installation. Open Touch Entreprise Cloud can align to business demands with a predictable cost that matches spending with use. The flexible consumptionbased licensing model makes it easy to scale up or down depending on changing requirements. Rainbow is an overlay cloud service operated by us that enables cross-community interactions and transactions between business users that goes beyond traditional company borders. Rainbow offers contact management, presence, persistent messaging, audio and video calls, screen and file sharing with PSTN termination and with seamless integration into existing ICT assets. Rainbow proposes two service plans: Rainbow Essential and Rainbow Enterprise where each user is associated to a service plan whilst you can mix Essential & Enterprise service plans within the same company. Optional services can be added to Rainbow Essential and Rainbow Enterprise for traffic-based services. How it works New business models verticalization Our new business models strategy addresses each vertical market and delivers a commercial offer that aligns directly to unique business scenarios and outcomes. Unique Integrated Cloud Our Integrated Cloud is made up of the blend of individual Services and the innovative commercial models suited to fit each customer needs. What differentiates us is how we are changing the way businesses buy technology; how they deploy it, use it and leverage it. By tailoring our partnership models to organisations and their people, processes and customers, organizations are able to configure and enable technology services, much like electricity is consumed today. 7 We make everything Connect

7 SERVICE LINE SERVICE LINE COMPONENT PRICE Basic user port Advanced user port Networking Server port Uplink Port Basic wireless access Advanced wireless access Basic user Mobile user Per connected service / business outcome Advanced user Communications Switchboard Call centre agent Call centre supervisor SIP trunks Redundancy A new breed of partnership We have initiatives that align with the desire to purchase technology for business reasons, not technology reasons. We make everything connect by delivering networking and communications technology that works, for you. Together with our business partners we are delivering business outcomes that are focused on tailoring solutions to the people, processes and customers of your business. Our partnership strategy is one of shared technology opportunity and risk, aligned with our vision to ultimately change the way customers buy technology. With Alcatel-Lucent Enterprise you can provision your network, communications infrastructure and applications as a Service and benefit by: Freeing up working capital for core business activities and reducing over-capitalization on technology; Aligning costs directly with business activity providing customers with a more adaptive cost and the ability to quickly scale both up and down; Leveraging existing technology investments and creating a true risk sharing arrangement. We make everything Connect 8

8 Where everything Connects