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New Revenue StreamsEvan Schultz

SAP Telco Day October 2015

© 2014 SAP SE or an SAP affiliate company. All rights reserved. 2Internal

Agenda

• Opportunity

• Current Situation

• Transformation Journey

• Program

• Criteria for Success

• How to get Started

• Summary / Call to Action


The industry dilemmaa market reaching saturation

2

4

6

8

2000 2002 2004 2006 2008 2010 2012

World Population

Mobile Subscriptions

billions

0

250

500

750

1.000

2013 2015 2017 2019

$ billions Global mobile telecoms services revenues

Digital services

Non-human data

Human - data

Human - voice & messaging

New Digital Business

Traditional Business


More than 330 telcos are now selling cloud services

0

50

100

150

200

250

300

350

400

2009 2010 2011 2012 2013 2014

Telcos selling cloud services

Africa

Middle East

Latin America

North America

Eastern Europe & CIS

Asia Pacific

Western Europe

68 telcos entered the cloud market in 2013 alone. Many operators are replicating home-tested services

across subsidiaries now, expanding the global footprint.

Source: Ovum


Telcos are investing heavily in data centresTelcos: datacenter space under construction or acquired, 2010-14

1H for 2014.

Source: Ovum

North America

405,279m2

Latin America & Caribbean

11,000m2

Africa

11,472m2

Middle East

15,800m2

Western Europe

139,000m2

Eastern Europe & CIS

17,870m2

553,152m2

Asia Pacific

= 10,000m2

KEY

Since 2010, operators have added more than 1 million square meters of datacenter space to their asset

base. Half of the new construction under way is located in Asia. Chinese operators lead with the planned

rollout of colossal datacenter campuses.


Telco cloud portfolios are filling out as they increase their investments

175

169

132

6261

52

50

30

29

27

227

Telcos: cloud services launched 2010-2014

IaaS

Unified communications (UC)

Storage and backup

Security

ICT services

Multimedia content management

Business apps suite

SaaS marketplace / platform

Mobile device management

ERP

Other

Significant investment and M&A (Verizon/Terramark; CenturyLink/Savvis; NTT/Di-Data; Telefonica and Joyent; AT&T

and IBM partnership). BT and seven other telcos are now rank as the world’s 3rd -9th largest IaaS providers after

Amazon and IBM.

Source: Ovum, Synergy Research Group, Simon Torrance


Telcos already work with a wide range of partners. But they need a long tail to make their portfolio attractive, distinctive and profitable

70%

1%

1%

1%

1%

1%

1%

1%

1%

2%

2%

4%

5%

7%

Others

Oracle

Amazon Web Services

Parallels

Citrix

Google

HP

F-Secure

SAP

IBM

EMC

VMWare

Cisco

Microsoft

Telcos: Top cloud technology partners

Services like Microsoft Office 365 have become a core element of many telcos’ cloud portfolios. Trusted brands like this draw in

customers – mainly as a loss leader - while niche and local technology partners will in future offer operators higher blended

profit margins.Source: Ovum, AD Little, Simon Torrance


…transforming the traditional operator

Satellite

Provider

Undersea Cable

Provider

Tower Operator

Carrier

Content, App, OTT and

Managed Service Providers

Retail Outlet

Consumer

Enterprise

Customer

Direct Sales

Equipment Provider

Device

Provider

Relying on partners for process/industry

expertise

IT is primary buyerUsage and devices are primary

revenue

Vendor reselling

technologies


…into The New Digital Business

Satellite

Provider

Undersea Cable

Provider

Tower Operator

Integrated Service

Provider

Retail Outlet

Customer

Direct Sales

Equipment Providers

Device

Providers

Own IP and

expertise

New high margin revenue

streams

Business is primary buyerTrusted strategic partner Pipe is monetized


What is Telecom as a Channel?

Create differentiated “telecom grade” solution bundles for

targeted customer segments offered as a service

A program enabling Telecoms to distribute SAP platforms &

applications to their enterprise customers AND leverage SAP software

for internal consumption as a customer e.g. Internet of Things

SAP AssetsTelecom AssetsNew Cloud

Solutions

Enterprise/ Brand

Leadership

Comprehensive Cloud

Solution Portfolio

Innovation/ Industry

Capability

Large Consumer and

Enterprise Customer

Base w/ Sales Reach

Cloud Data Center

Network & IT Innovation

+ =1

2

3

LE

General Business


SAP Partnership Engagement Model

Capability Required Description Owner Comments

Demand Generation Targeted account profilingPartner SAP or 3rd

PartyInside / Tele Sales

Sales Sales cycle executionPartner, SAP or 3rd

Party

Virtual joint account

teams based on value

selling methodology

Pre-sales

Demonstrate solutions to

meet customer

requirements, answer

RFPs, etc.

Partner, SAP or 3rd

Party

Support from SAP

Center of Excellence

and Value Engineering

Implementation Deploy solutionPartner, SAP or 3rd

Party

SAP Professional

Services available on

demand

Support / Service Desk1st, 2nd and 3rd level

support

Partner, SAP or 3rd

Party

SAP Enterprise Support

for Partner

Hosting Infrastructure hostingPartner, SAP or 3rd

PartyPartner?

GTM / Sales EngagementSAP local account field

engaged and incented?

Partner, SAP or 3rd

Party

Criteria for business

model selection

Critical Roles and Responsibilities


Robust and Holistic Telecom Partner Enablement

1. Complete enablement offering

2. Flexible model

3. Telecom 1st and 2nd level support

Build Environment / Provisioning CloudSupport / Service Desk

Deployment / ImplementationManage & Operate

Sell

1. Training / education

2. Implementation enablement

3. SAP consulting support

4. Partner selection if necessary

1. Demand generation / business case build

2. Pre-sales / demo

3. Complete sales cycle (shadowing)

1. Telecoms to host

2. Technical enablement

3. Rapid up-skill

4. Multiple solutions

1. Technical enablement

2. Provisioning tools

3. Hands-on if need

4. Scalable

Accelerate telecom partner success: holistic and material enablement

program


Customer Value Proposition: Telecom Partner Example

Approach: Start w/ Cloud; Crawl, Walk then Run…

EXPERIMENTATION / TRY & BUY

Start a PoC straightaway with no

Long -term commitments

SPEED & OUTSTANDING USER EXPERIENCE

Avoid Setup Complexity with Easy and Fast Setup

and Passionate User Support

LOWER RUNNING COSTS AND UPFRONT INVESTMENTS

Flexible Pricing on Pay as you Grow Models (CAPEX to OPEX),

With Lower TCO when compared to On-Premises

SINGLE SUPPLIER FOR CLOUD, APP SUPPORT & NETWORK (E2E SLA)

Telecom Partner

Holds Deep SAP Knowledge And Extensive Certifications


Telcos need to address several challenges by…

Shifting to selling to business stakeholders, rather than only IT

Developing and selling applications, both packaged and custom, to drive higher margins

Emphasizing industry specific solutions that address the core business of their customers, rather

than simply lower value productivity apps

Developing technical competencies, and gaining credibility and trust by embracing mobility internally

(Drink Your Own Champagne)

Gradually investing in the necessary industry and process expertise in all areas from marketing, to

sales to consulting

Learning to work with partners in a completely new way


Program for SuccessDevelop Key Competencies

1. Get Started

2. Implement a complete technology foundation

3. Develop internal competence

4. Cultivate industry expertise and business value

selling

5. Partner strategically for holistic offering

6. Resource, reorganize and retrain for success

Industry &

Process IP

Comprehensive

Platform

Solution Selling

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