S 1 [email protected] Questioning the silly answers since 1997. „We do not lack resources;...

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Questioning the silly answers since 1997.„We do not lack resources; we lack dreams.“

GBE

Siemens GlobalBusiness Ecosystem

(GBE)Jose C. Lacal

Product Manager,OpenSource Applications

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GBETable of Contents

• Jose C. Lacal• Global Business Ecosystem Definition• Plan of Action: the “Sea of Business”• „Competing for the Future“• Market Potential Pyramid• Open Standards = Open Software + Open Hardware +

Open Networks• Create Your Own Future• „Virtualize“ Siemens Assets, Core Competencies• Sample Open BoIP Products and Services• Open Source Value Creation

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GBEJose C. Lacal

• 1986 - 1994: First business at age 21.– Founder, President of industrial bakery in Miami, FL.– In charge of 40 employees, Sales, Customer Care, Marketing.

• 1995 - 1996: First ISP in SE Mexico.– Founder, investor and Chief Vision Officer. 10 employees.– Introduced the Internet culture to this area.

• 1995 - now: founder of 02 Open Source start-up ventures.• 1997 - now:

– Siemens ICN Boca Raton. Customer Service engineer, daily contact with large telco operators in the US and worldwide.

– Munich: Open Source, developed „Business over IP“

• I know business, I know telcos, I know Open Source.

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GBEReality Check

• Value created in the IP market since 1984: US$_____ Billions Percentage of such value to Siemens? _____%

• More of the same actions = more of the same results.• Amazing that young people, who live closest to the

future, are the most disenfranchised in strategy-creating exercises.

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GBEGlobal Business Ecosystem Definition

• No company is large enough to survive and prosper alone• Characteristics of a GBE:

– A group of independent entities (partners, internal companies, external members) and individuals, geographically unbounded;

– that share a common vision of what the future should look like;– and that join forces (temporarily and voluntarily);– to make that future happen in their own terms.

• Cisco, Intel, Microsoft, Nortel nurture their ecosystems• Business ecosystems:

– adapt and adopt– compete– evolve– grow or die together

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GBEPlan of Action: the “Sea of Business”

• Siemens as an aircraft carrier “task force:” provide support logistics to thousands of airplanes (startups, associates). All types: long-range reconnaissance; fighters; bombers.

FutureOpportunity

Island 01

FutureOpportunity

Island 02

PastOpportunity

Island 01

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GBECompeting for the Future

• Envision new markets: strategic purpose• Establish the market: set standards• Lead those markets• As a result:

– we drive perceptions, we make the rules => Trendsetter– create a new global business ecosystem with ICN at the center

• Continued reactive planning ensures:– shrinking market share– diminishing mind-share– shrinking market (stock) value– become an economic dinosaur

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GBEMarket Potential Pyramid

Wires and fiber

Routers, switches

Service providers

?? unknowntoday

Content creationand delivery

Contentaggregation

Communitybuilding

DWDM SONET

IP ATM

Industry elements.

Voice, data, video, fax.

Sensoryaugmentation

Avatars, VR,on-line auctions

Application and developmentsoftware, specialized hardware

Multimedia content for sale,real-time IP voice and video.

?

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GBE

Where is the money?

Wires and fiber

Routers, switches

Service providers

?? unknowntoday

Content creationand delivery

Contentaggregation

Communitybuilding

Mark

et va

lue /

phys

ical a

ssets

ratio

Verylow

Low

Medium

High

Huge

ROI (

Retu

rn on

Inve

stmen

t), EV

ACo

st of

entry

(req

uired

inve

stmen

t)

Verylow

Huge

High

Low

Medium

Financial analysis.

Huge

High

Medium

Low

Verylow

Verylow

Huge

High

Low

Medium

Corp

orate

and o

perat

iona

l ove

rhea

d

Revenue potential / time.

Dupont,Ciena

Alcatel,Lucent,Nortel

British Telecom,AT&T, MCI

AOL, Compuserve, eBay, eWorlds,ICQ, slashdot

amazon.com, Yahoo,most portal sites

Inktomi, Microsoft,Netscape, SoundBlaster

Un-born, un-named entities.

Un-born, un-named entities.

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GBE

SiemensIPRs

Customs´ lawexpertise

Commerciallaw expertise

Wireless

01SNI

Carrier

Remotereality

Videoconference

02 03 04 05 06 07 0801

01 Open core standards WDM, TDM, SONET, etc.

02 Core equipment

03 Open equipment API

Currently proprietary (Cisco IOS)

Parlay Group (http://www.parlay.org)

04 Open transport standards ATM, TCP/IP

05 Open hardware standards

06 Open source software

ISA, PCI, VGA, OpenTelecom, etc.

Linux, GNU C/C++, Perl. Python

07

08

Open source applications Apache, Open H.323, GNOME, KDE

New business models [to be created]

Open Standards =Open Software + Open Hardware + Open

Networks

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GBECreate Your Own Future

• With right tools, create alternative futures (Isaac Asimov)• “The future is not what it used to be.” Disruptive, non-linear• Three huge industries in the XXIst Century:

– edutainment (education + entertainment)– experiential tourism– safety / security

• Three massive societal changes in the XXIst century:– rise of the Third Age– transnational companies = global clans– more humans per square meter

• Common thread along all outcomes: I & C technologies.

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GBE„Virtualize“ Siemens Assets, Core Competencies

OpenStandards

E-BusinessLarge system

expertise

Large systemexpertise

Globalsalesforce

Globalsalesforce

Globaldistribution

Globaldistribution

Worldwidetax, legal

Worldwidetax, legal

Financeexpertise

Financeexpertise

Worldwidecertification


CustomersCustomers

Brand nameBrand name

130 LCs130 LCs

Installed baseInstalled base

ManufacturingManufacturing

PeoplePeople

Open BoIP

Trusted globalpartner


SponsorOpen Source

SponsorOpen Source

Integrationmanagement


Forces Siemens’ Unique Assets Courses

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GBEWhat is next?

• „The basic economic resource -‘the means of production,‘ to use the economist's term- is no longer capital, or natural resources (the economist's ‚land‘), nor ‚labor.´ It is and will be knowledge.“ Peter F. Drucker, „Post-capitalist Society,“ 08.

The ability to exploit the firm's „core competencies“ and strategic assets, the building blocks for new businesses.

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GBEThe new role of the CEO

• The notion of white-space opportunities is proving especially compelling for highly decentralized companies such as Hewlett-Packard Co. HP Chairman Lewis E. Platt now believes his most important role in strategy formulation is to build bridges among the company's various operations. „I don't create business strategies,“ argues Platt. “My role is to encourage discussion of the white spaces, the overlap and gaps among business strategies, the important areas that are not addressed by the strategies of individual HP businesses.“

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GBEWhat‘s next

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GBE

OpenStandards

E-Business



Globalsalesforce

Globalsalesforce

Globaldistribution

Globaldistribution

Worldwidetax, legal

Worldwidetax, legal

Financeexpertise

Financeexpertise



CustomersCustomers


130 LCs130 LCs



PeoplePeople

Open BoIP



SponsorOpen Source

SponsorOpen Source



ForcesSiemens’ Unique Assets

Courses TeleMed

Personal CO

SafeLife

Sample Open BoIP Products and Services

OpenBusiness

TeleKnow

TeleWorkReinvestment

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GBEOpen Source Value Creation

Switch

- low margin- low customization

Initial Sale Time

Cum

ulat

ive

Inco

me

After-market

services

Switch

- higher margin- higher value ==> higher volume (bigger base)

eroded traditional after-market services

- revenue on bigger base

- new addon-products and

services

Cum

ulat

ive

Inco

me

Cum

ulat

ive

Inco

me

Initial Sale Time

Traditional Model

OpenBoIPModel

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GBE

Backup slides

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GBEIntroducing OpenSource and GNU/Linux

• OpenSource software (OSS)– Freely distributed with source code

• Widespread acceptance– OSS is at the heart of the Internet:

• Apache ( >65% of all websites)• DNS and BIND (all name resolution)• Perl (behind most CGI scripts)• sendmail (processes 90% of e-mail)

• GNU/Linux, best example of OSS:– Beat common Operating Systems (OSs)– Superior stability and usability*– GNU/Linux, fastest growing Network OS

* - OS of the year, InfoWorld magazine

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GBEThe numbers behind Open Source

• Red Hat: Linux distributor. IPO 30 days ago. US$90/share.• Cobalt: Linux mini-servers. IPO 10 days ago. US$100/share.• Hewlett-Packard: entire business unit only for Open Source;

free e-speak (broker system) and mail server software.• Sun Mycrosystems: will release source code of Solaris; free

Star Office package; publicly available Sparc64 spec files.• IBM Consulting Group: 300 out of 1,800 are Linux experts.• SCO (Santa Cruz Operation): Linux consulting group.

• Microsoft was recently declared a monopoly by a US judge. That will generate a cascade of interest in Open Source.

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GBEVirtualize Siemens assets, core competencies

Corecompetencies

Corporateweaknesses

Turn around weaknesses

CustomersCustomers


130 LCs130 LCs



PeoplePeople

Corporateassets

Slowmoving

Slowmoving

Largesize

Largesize

Obsoletemindset

Obsoletemindset



SponsorOS “geeks”

SponsorOS “geeks”





Globalsalesforce

Globalsalesforce

Globaldistribution

Globaldistribution

Worldwidetax, legal

Worldwidetax, legal

Financeexpertise

Financeexpertise



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GBEExample of Global Business Ecosystem

Siemens

Supportorganizations

Currentcustomers

Currentofferings

Externaldevelopers

Externalcontent

providers

Futureofferings

Open interfaces

Open documents

Joindevelopment

Futurecustomers

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