<Insert Picture Here> Monetizing the Cloud

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1 <Insert Picture Here> Monetizing the Cloud

2 The following is intended to outline our general product direction. It is intended for information purposes only, and may not be incorporated into any contract. It is not a commitment to deliver any material, code, or functionality, and should not be relied upon in making purchasing decisions. The development, release, and timing of any features or functionality described for Oracle s products remain at the sole discretion of Oracle Oracle 2

3 Agenda Cloud Computing Trends and Analysis Learning from Other Business Models Succeeding in the Cloud Customer Case Studies Oracle s Defining Value <Insert Picture Here> 2010 Oracle 3

4 <Insert Picture Here> Cloud Computing Trends and Analysis 2010 Oracle 4

5 Where are we now? We Were Are Here Mainstream markets Early markets Late market the Chasm 2010 Oracle 5

6 Worldwide IT Revenue ($ billion) Public IT Cloud Services Forecast Worldwide IT Revenue* by Consumption Model 2009, 2013 ($B) Public IT Cloud Services Traditional IT Products Source: IDC, March % 17 CAGR 26% 4% % Oracle 6

7 Maturing User Attitudes Q: Rate the benefits commonly ascribed to the 'cloud'/on-demand model (Scale: 1 = Not at all important 5 = Very Important) Pay only for what you use Easy/fast to deploy to end-users Monthly payments Encourages standard systems Requires less in-house IT staff, costs Always offers latest functionality Sharing systems with partners simpler 77.9% 77.7% 75.3% 68.5% 67.0% 64.6% 63.9% Seems like the way of the future 54.0% 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% Source: IDC Enterprise Panel, 3Q09, n = 263 % rating 3, 4 or Oracle 7

8 Maturing User Attitudes Q: How important is it that cloud service providers (Scale: 1 = Not at all important 5 = Very Important) Offer competitive pricing Offer Service Level Agreements (SLAs) ption to move 'cloud' offerings back on premise Provide a complete solution Understand my business and industry Allow managing on-premise & cloud together Support many of my IT needs Offer both on-premise and public cloud services Are a technology and business model innovator Have local presence, can come to my offices 91.6% 88.6% 87.8% 86.0% 84.5% 82.1% 81.0% 79.2% 78.3% 72.9% Source: IDC Enterprise Panel, 3Q09, n = 263 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% % rating 3, 4 or Oracle 8

9 <Insert Picture Here> Learnings from other Business Models 2010 Oracle 9

10 All you can eat is easy but risky 2010 Oracle 10

11 For all industries, the right business model is critical 2010 Oracle 11

12 Shifting Back to Usage Based Pricing Resulting in churn, lawsuits and stock price hit Service Providers implement tiered price 2009 Time Warner Cable implemented tiered pricing Abandoned program due to customer backlash June 2010, ATT implemented tiered pricing for iphone/ipad Class action lawsuit pending January 2010: ATT, Verizon and other drop unlimited calling plans to $59.99 Stock prices for both companies immediately dropped 3-5% 2010 Oracle 12

13 <Insert Picture Here> Succeeding in the Cloud 2010 Oracle 13

14 How do you Drive Efficiency With a Private Cloud? 2010 Oracle 14

15 Enabling Cost Allocation in the Private Cloud Typical Technology Characteristics Private Cloud User facing Self-service I N T E R N E T SaaS PaaS IaaS I N T E R N E T Back office Provisioning, metering, chargeback Users Infrastructure IP Network, Hardware, servers, storage, DB 2010 Oracle 15

16 Metering, Billing, and Chargeback Leveraging Internal Cost Allocation to Drive Efficiency Track/meter resource consumption (available today) - CPU - Memory - Storage - Network Bandwidth - Service - Application - And more IT Chargeback and Billing - Multi-level chargeback rollup using LDAP Enterprise hierarchy - Integration with Oracle Billing and Revenue Management for full chargeback capabilities Users 2010 Oracle 16

17 Oracle Applications for Cost Efficiency Private Cloud Management and Usage Chargeback Secure Internet Customer Self Service Engine Management Service Management Billing & Revenue Management Billing Updates for IT & Network based Services Resource Management Cloud Infrastructure Resources Enterprise Manager Oracle Fusion Middleware Oracle Database Oracle Solaris & Linux Oracle VM CGBU Software Assets Non-CGBU Software Assets Oracle Hardware 2010 Oracle 17

18 How do you Make money With a Public Cloud? 2010 Oracle 18

19 Enabling Order to Cash in the Public Cloud Typical Technology Characteristics Public Cloud Customer facing Self-service, customer care, CRM I N T E R N E T SaaS PaaS IaaS Back Office Infrastructure Service ordering/provisioning metering/billing, invoicing Computing HW, applications, storage, DB, security, QoS, SLA management, analytics 2010 Oracle 19

20 The Three Monetizable Cloud Layers Client Layer Mobile devices Laptops PCs Application Layer (SaaS) Games, music Web-conferencing Online or downloadable apps Platform Layer (PaaS) APIs for CRM, Retail Tools to develop new apps Collaboration infrastructure Infrastructure Layer (IaaS) Infrastructure for apps Storage, Collocation General purpose computing 2010 Oracle 20

21 Public Cloud Offerings Pricing Design Based on Usage Models Example Billing Metrics I N T E R N E T Public Cloud SaaS PaaS IaaS Software offerings Platform offerings Per Application User Per Transaction Per Program/Activity Per Hour Per Input/Output Per Message Per GB used Infrastructure offerings Per Named Host Per GB Per Server/Blade/VM Per CPU per hour 2010 Oracle 21

22 Oracle Applications for Revenue Enablement Public Cloud Service Design, Delivery and Monetization Customer Management Service Management Order and Service Management Service Activation Siebel CRM Unified Inventory Management Billing & Revenue Management Billing Updates for IT & Network based Services Resource Management Comms Network (L1-4+) and Service Infrastructure Network Resource Management Comms Network Enterprise Manager Virtualized and Physical IT Infrastructure CGBU Assets Non- CGBU Assets Non-Oracle assets 2010 Oracle 22

23 Integrated Metering and Billing at the Core Complete Resource Management and Monetization Capabilities Cloud Services Cloud Management Cloud Monetization Applications Middleware Database OS Virtualization Provisionin Deactivation g Usage data collection Oracle Enterprise Manager Configuration Mgmt Lifecycle Management Application Performance Management Application Quality Management Ops Center Physical & Virtual Systems Management Metered Usage Balance Control Oracle Billing and Revenue Management Pricing/Charging Flexibility Customer Management Complete Billing Operations Value Chain Management Business Intelligence Bill/Invoice generation and delivery 2010 Oracle 23

24 <Insert Picture Here> Customer Case Studies 2010 Oracle 24

25 BT Enterprise VDC Deployment Private Cloud XaaS Offerings Project Overview 9 major VDC centers in UK and Europe, plus others around the world VDC is key to BT s overall cloud strategy includes servers, storage, security, connectivity Other BT Cloud initiatives include UC, Communications as a Service, SaaS for SMEs BT now rolling up all initiatives under one program Oracle OSS is being positioned to take on a broader role Key Requirements Fast TTM through configuration vs coding and leveraging re-usable components Reduce costs through systems consolidation and automation Support any number of XaaS product types - flexible and future proof Dramatically improve customer experience - Right First Time (RFT) - Reduce Cycle Time (RCT) Flexible support for multivendor environment to avoid vendor lock-in TMF standards alignment 2010 Oracle 25

26 Colt Public Cloud IaaS Offerings Profile - Offers voice, data, managed services, wholesale services to 35,000 customers (business, government) - Operates large pan-european network, 19 Colt data centers Project Details - Oracle (Siebel, Product Hub, OSM, UIM and ASAP) to support IaaS and strategic BSS/OSS architecture - Phase 1 to be delivered Fall 2010; Phase 2 January 2011 Key Requirements Enable Colt s IaaS business model (lean provisioning model, real-time self-service) Aggressive deployment schedule configurable platform with market leading OOB functionality key to enabling fast low, risk deployment - Strong support for component re-usability i.e. support different markets (small, medium and large businesses) from common base of components - TMF standards alignment to simplify integrations and reduce risk Results to Date New Wave Transformations: Focused Projects, Fast Execution and High Impact Successfully delivering Cloud Services: Innovative Business Strategies 2010 Oracle 26

27 Intuit Packaged Software & SaaS Offerings COMPANY OVERVIEW Intuit is a leading provider of business and financial management solutions for small and mid-sized businesses; financial institutions, including banks and credit unions; consumers and accounting professionals Industry: Software Segment: Accounting Employees: over 8000 Revenue: over USD 3.1B CHALLENGES/OPPORTUNITIES Consolidation of multiple IT and billing systems Cross-product and cross-business line offers Product/Offer Standardization Real-time balance management Regulatory compliance Time to market for new offers ANTICIPATED RESULTS Single global process supported by a single global instance Subscription and billing tightly integrated with accounting (compliance & operational efficiency) Reduction/simplification of application infrastructure E2E solution that offers an integrated Shop, Buy, Use experience SOLUTIONS Project delivery by Oracle Consulting Oracle BRM integrated with Siebel CRM and Oracle E-Business Suite, 2010 Oracle 27

28 Cisco WebEx SaaS Offerings COMPANY OVERVIEW WebEx is a leading provider of online meeting applications with 7M users per month and 35,000 customers Industry: SaaS-based conferencing Employees: over 3500 Revenue: US $ 0.5B CHALLENGES/OPPORTUNITIES Consolidate of multiple IT and billing systems Ensure flexible support for B2B pricing & charging models Support high-volume transaction processing Enable intuitive offer configuration Support settlements with channel partners ANTICIPATED RESULTS Oracle Communications BRM processes millions of transactions per day Provides real-time balance management Processes partner settlements Handles complex corporate account hierarchies Supports custom pricing for corporate customers Supports multiple lines of business in multiple countries SOLUTIONS Oracle BRM to manage customers, accounts, pricing, rating, billing, invoicing, A/R, collections, payments, and financials Project delivery by Oracle Consulting 2010 Oracle 28

29 <Insert Picture Here> Oracle s Defining Value 2010 Oracle 29

30 Complete Oracle Stack for Cloud 1. Expand and accelerate -- dramatically deliver highly optimized and integrated hardware-software systems 2. Provide complete, standards-based Oracle IT stack that delivers sufficient openness to avoid vendor lock-in, but also superior performance compared with heterogeneous combinations 3. Lower the costs of assembling, setting up, testing, tuning, managing, integrating, trouble-shooting, fixing, upgrading, and running 1 and 2 4. Complete that infrastructure with ultra-modern Fusion applications that can run with existing enterprise apps, from Oracle or anyone else. 5. Complement broad horizontal apps with deep industry knowledge and functionality 2010 Oracle 30

31 Oracle s Design Time Value Enable a Lean, Flexible Factory Assembly Model for Cloud-based Services Design Time Capabilities Integrated provisioning of connectivity and IT systems Business Value Able to offer innovative and market differentiating XaaS mashups Open, service-agnostic and SID-based fulfillment platform Single, configurable Order to Cash platform Low-cost factory service assembly model for everchanging XaaS offers Minimize customization, hours to days to launch new XaaS offers Flexible Pricing Engine Rapid development of XaaS service pricing models, real-time discounting, revenue recognition 2010 Oracle 31

32 Oracle s Run-Time Value: Enable Fast, Efficient, Customer-Driven Service Delivery and Monetization of Cloud-based Services Run-Time Capabilities Converged network and XaaS platform Business Value On-demand and lowcost service delivery model End-to-end service views and order statistics Integration of Ordering, Provisioning and Billing Single platform with dynamic order change management Flexible pricing engine for monetization Able to offer market differentiating self-care (BoD) and order fulfillment SLAs Faster time to market for new service launches Customer-responsive service delivery Any service, any price point, 2010 Oracle 32

33 Q&A 2010 Oracle 33

34 2010 Oracle 34