IPv6: Making your IPv6: Making your Business CaseBusiness Case

North American Global IPv6 SummitNorth American Global IPv6 SummitJune 24-27 2003 June 24-27 2003

Yurie RichYurie RichBusiness Director - North American IPv6 Task ForceBusiness Director - North American IPv6 Task Force

President - Native6, Inc. President - Native6, Inc.

June 2003June 2003

Who am I? Who is Native6Who am I? Who is Native6

• President - Native6, Inc.President - Native6, Inc.– IPv6 Training & ConsultingIPv6 Training & Consulting

• Business Director, NAv6TFBusiness Director, NAv6TF• Active in IPv6 Forum activitiesActive in IPv6 Forum activities• Focus on IPv6 business case!Focus on IPv6 business case!

– Identifying OpportunitiesIdentifying Opportunities– Marrying technical advocacy with Marrying technical advocacy with

business fundamentalsbusiness fundamentals

June 2003June 2003

Presentation AgendaPresentation Agenda

• Technology Evaluation MethodsTechnology Evaluation Methods• Method for evaluating IPv6Method for evaluating IPv6• Balanced ScorecardBalanced Scorecard

– Financial MeasuresFinancial Measures– Customer ImpactCustomer Impact– Internal Business PerspectiveInternal Business Perspective– Improvement & GrowthImprovement & Growth

• ConclusionsConclusions

June 2003June 2003

The IPv6 Business CaseThe IPv6 Business Case

• The business case for IPv6 is The business case for IPv6 is simple! And the answer is....simple! And the answer is....

For Who?For Who?

Consideration of IPv6 will vary greatly depending upon your business model and

your organizational IT goals

Evaluating TechnologyEvaluating Technology

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Technology Adoption Technology Adoption StandardsStandards• As with any business acquisition, As with any business acquisition,

technology adoption must meet basic technology adoption must meet basic fundamentals:fundamentals:– Yield cost savingsYield cost savings– Create or enhance revenue streamsCreate or enhance revenue streams– Generate a competitive or strategic Generate a competitive or strategic

advantageadvantage– Meet a technological imperativeMeet a technological imperativeTechnology Adoption = Positive ROI

June 2003June 2003

Return on Investment (ROI)Return on Investment (ROI)

• In today’s economic climate, many IT In today’s economic climate, many IT decisions are viewed mainly by their decisions are viewed mainly by their ROIROI

• Return on Investment (ROI) can Return on Investment (ROI) can evaluated a number of ways:evaluated a number of ways:ROI: NPV of input/NPV of output

IRR: CF1/(1+r)1 + CF2/(1+r)2

+.... CFn/(1+r)n

NPV: CF1/(1+r)1 + CF2/(1+r)2

+.... CFn/(1+r)n

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Other FactorsOther Factors• ROI is meant to be a precise ROI is meant to be a precise

measurementmeasurement

• ROI provides financial ROI provides financial measurement, but often fails to measurement, but often fails to capture other factors:capture other factors: Risks Complexity

Intangibles Options

Critical to take a broader approach to Critical to take a broader approach to technology evaluation...particularly technology evaluation...particularly

IPv6IPv6

June 2003June 2003

Balanced Scorecard Balanced Scorecard ApproachApproach

Financial Performance

Internal BusinessPerspective

Improvement &Value Creation

CustomerImpact/Influence

TechnologyEvaluationStrategic Objectives

*Source: HBR, Kaplan & Norton

Evaluating IPv6 in the Evaluating IPv6 in the ScorecardScorecard

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Financial MeasuresFinancial Measures

• Cash Flow sources for ROI measurements Cash Flow sources for ROI measurements will come fromwill come from– Cost SavingsCost Savings– Revenue StreamsRevenue Streams

• Cost saving can come from operational Cost saving can come from operational improvements, reduced administration, improvements, reduced administration, improved integration, cost avoidancesimproved integration, cost avoidances

• Revenue streams driven by Revenue streams driven by product/service salesproduct/service sales

June 2003June 2003

Cost Saving OpportunitiesCost Saving Opportunities

• Most compelling is Most compelling is the long term cost of the long term cost of maintaining/expandinmaintaining/expanding IPv4 networksg IPv4 networks– NATNAT– Address spaceAddress space– ComplexityComplexity– Limitation in new Limitation in new

technology technology deploymentdeployment

– SecuritySecurity– QoSQoS

Source: Takashi Arano

June 2003June 2003

Revenue StreamsRevenue Streams

• Generated from multiple sourcesGenerated from multiple sources– Extending the product life cycle of Extending the product life cycle of

existing products (porting)existing products (porting)– Innovating products that leverage Innovating products that leverage

aspects of the protocol (new product)aspects of the protocol (new product)– Innovating new services/features into Innovating new services/features into

existing product lines (product extension)existing product lines (product extension)– Service creation (product supportService creation (product support))

Customer Customer Impact/InfluenceImpact/Influence

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Customer InfluencesCustomer Influences

• Customer perception of your Customer perception of your product/services affected by many factors, product/services affected by many factors, including:including:– PricePrice– QualityQuality– UsabilityUsability– Innovative or “cool” factorInnovative or “cool” factor– Value perception (quality/price)Value perception (quality/price)– Public opinionPublic opinion– Peer influencePeer influence

June 2003June 2003

IP Address SpaceIP Address Space• Internet usage continues to increase, Internet usage continues to increase,

despite market conditions*despite market conditions*– As consumption continues, successful As consumption continues, successful

acquisition of additional global v4 address acquisition of additional global v4 address space decreases space decreases

– IPv4 address space not well structured to IPv4 address space not well structured to scale to the needs of tomorrow’s network scale to the needs of tomorrow’s network infrastructureinfrastructure

• Companies/Consumers must use NATCompanies/Consumers must use NAT– High proliferation of NAT in home networking, High proliferation of NAT in home networking,

despite its significant drawbacksdespite its significant drawbacks

*Source: ISP-Planet.com, 2003

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IPv6 & Product TetheringIPv6 & Product Tethering

• Ability for user and manufacturer Ability for user and manufacturer to access online devices.to access online devices.

• Current model has severe Current model has severe limitationslimitations

• IPv6 address space offers ability to uniquely identify each device

• Remote access with an improved security model

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Product TetheringProduct Tethering• New product tethering paradigm New product tethering paradigm

for any device that can go “online”for any device that can go “online”

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Consumer Benefits of Consumer Benefits of TetheringTethering

Remote Access

Autoconfiguration

Web Interface

Service Participation

Internal Business Internal Business PerspectivePerspective

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Internal Business Internal Business PerspectivePerspective• The category is about an The category is about an

organization’s core competenciesorganization’s core competencies– How do your core competencies support How do your core competencies support

your customer influences?your customer influences?– How does your adoption of technology How does your adoption of technology

affect your market position?affect your market position?– What are the things you need to do What are the things you need to do

best...to excel at...to service your best...to excel at...to service your organizational goals?organizational goals?

June 2003June 2003

Core CompetenciesCore Competencies• NTT DoCoMo Core NTT DoCoMo Core

CompetenciesCompetenciesInnovationInnovationFirst-to-MarketFirst-to-MarketTechnical Technical

LeadershipLeadershipTightly controlled Tightly controlled

business modelbusiness modelAlliance Alliance

partnershipspartnerships

June 2003June 2003

Moving beyond the cell Moving beyond the cell phonephone• Traditional mobile usageTraditional mobile usage

– Voice, SMSVoice, SMS

• New services in last few yearsNew services in last few years– Picture capture & sending, specialized web Picture capture & sending, specialized web

content, e-commercecontent, e-commerce

• Growing and future services via wirelessGrowing and future services via wireless– Online gaming, unified communications, Online gaming, unified communications,

video, streaming media, m-commercevideo, streaming media, m-commerce– Telematics and Location Based Services*Telematics and Location Based Services*

*Source: NTT Docomo

June 2003June 2003

Automotive TelematicsAutomotive Telematics

• Telematics systems can deliver a Telematics systems can deliver a wide variety of serviceswide variety of services

Roadside assistance

Automotive services

Emergency dispatching

Restaurant location

Entertainment

Driving directions

June 2003June 2003

IPv6 in TelematicsIPv6 in Telematics• Pilot programs in Japan have already Pilot programs in Japan have already

developed and tested telematic developed and tested telematic services enhanced by IPv6*services enhanced by IPv6*– Nagoya Taxi pilot programNagoya Taxi pilot program

•Electronic paymentElectronic payment

•Passenger information services, driving logsPassenger information services, driving logs

– Tokyo pilot programTokyo pilot program•Content delivery (location based service Content delivery (location based service

information)information)

•Electronic payment and real-time driving Electronic payment and real-time driving information (weather, traffic, construction)information (weather, traffic, construction)

Source: Internet ITS*

Improvement & Value Improvement & Value CreationCreation

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Creating ImprovementCreating Improvement

• How do you sustain your ability to How do you sustain your ability to change and improve?change and improve?

ContinuousImprovement

KnowledgeableWorkforce

Employ supportivetechnologies

OperatingEfficiencies

Innovation & Growth

Improvement &Value

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Creating Value with IPv6Creating Value with IPv6

• Elimination of NAT with Elimination of NAT with IPv6 allows IPv6 allows enhancedenhanced adoption of tools like:adoption of tools like:VoIPVoIPVideo Conferencing over Video Conferencing over

IPIPIM for businessIM for businessMobile accessMobile access

Employ supportivetechnologies

Innovation &Growth

Improvement &Value

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Producer Benefits of Tethering Producer Benefits of Tethering (P2P)(P2P)

Service Upgrades

Usage Data

Telemetry

Troubleshooting

Warranty

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IPv6 & Workplace IPv6 & Workplace TechnologyTechnology

Employ supportivetechnologies

Conclusions:Conclusions:IPv6 in the Balanced IPv6 in the Balanced

ScorecardScorecard

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IPv6 Adoption IPv6 Adoption considerationsconsiderations• Identifying how IPv6 will Identifying how IPv6 will

impact impact – Your product and servicesYour product and services– Your customersYour customers– Your IT servicesYour IT services– Your employeesYour employees

• Also remember, IPv6 is Also remember, IPv6 is inevitable, so what is inevitable, so what is cost of waiting to, or not cost of waiting to, or not adopting?adopting?

Financial Performance

Internal BusinessPerspective

Improvement &Value Creation

CustomerImpact/Influence

Thank you for your time!Thank you for your time!

yrich@native6.comyrich@native6.com

June 2003June 2003

Internet GrowthInternet Growth