© 2006 Cisco Systems, Inc. All rights reserved. Cisco ConfidentialPresentation_ID 1
Stefano SolianiStefano Soliani
The next 10B$ opportunity
case study
The next 10B$ opportunity
case study
© 2006 Cisco Systems, Inc. All rights reserved. Cisco ConfidentialPresentation_ID 2
IntroductionIntroduction
Revenue ModelRevenue Model
The Opportunity: TP MarketPlaceThe Opportunity: TP MarketPlace
Global ArchitectureGlobal Architecture
Segment AnalysisSegment Analysis
Recommendations & Next StepsRecommendations & Next Steps
Organization ModelOrganization Model
Cost ModelCost Model
© 2006 Cisco Systems, Inc. All rights reserved. Cisco ConfidentialPresentation_ID 3
Case Study
Cisco’s next $10B SaaS Opportunity
Challenges–Existing partners and service providers
–Compartners/Coopetition – e.g. IBM, Microsoft, AT&T
–Motivation/Compensation and Organization of Sales force
–Buying Centers – non traditional
Opportunities–Future SaaS Offerings
–Hybrid SaaS service
–TP Pull Through
© 2006 Cisco Systems, Inc. All rights reserved. Cisco ConfidentialPresentation_ID 4
TPMP as a platform to deliver a rich consumer experience that leverages the power of the network and drives TP adoption
TelePresence as the main collaboration tool across all customer segments.
VISIONVISION
STRATEGYSTRATEGYTP MarketPlace for anybody to offer and purchase servicesTie the TP endpoint to the MarketPlace Portal to own the customer experienceMultiple revenue streams from subscription services, add-in applications and advertisementsTP endpoint a truly flexible platform to deliver a rich customer experienceThe fundamentals of TP ease of use are preserved
TelePresence MarketPlace
EXECUTIONEXECUTIONInternet based Portal – the MarketPlaceWorld class global directory and scheduling system accessible through the MarketPlaceTargeted advertising frameworkNew sales force org to capture the opportunityExtend the TP OS, or use the power of the Cloud to inject services into TP session
© 2006 Cisco Systems, Inc. All rights reserved. Cisco ConfidentialPresentation_ID 5
TP MarketPlace – The “App Store for TP”
$160million
“Buying Scenario”
15-20% Pull through sales
1,000,000,000
$ 2.65
© 2006 Cisco Systems, Inc. All rights reserved. Cisco ConfidentialPresentation_ID 6
Global Architecture
INTERNET
TP MarketplaceTP Marketplace TP MarketplaceTP Marketplace
MP Software Services(Gaming, Video recording, Photo Sharing, ….)
MP subsystems(Registration, Billing, Tracking, Directory, ….)
AT&TTP local exchange Intra-exchange
session
VerizonTP local exchange
BTTP local exchange
AT&Tclient1
AT&Tclient2
Verizonclient1
Verizonclient2
BTclient1
BTclient2
Inter-exchange
session
TP Exchange of Exchange(includes global TP directory
© 2006 Cisco Systems, Inc. All rights reserved. Cisco ConfidentialPresentation_ID 77
Shipments and Penetration of Consumer TPHH TAM 12.3M 24.2M 36.7M 49.9M 61.2M 71.1M
Source: IDC - 2009
© 2006 Cisco Systems, Inc. All rights reserved. Cisco ConfidentialPresentation_ID 8
Video Conference Penetration and SMB TAM
Source: IBSG
6,093,061 – US Based SMBs (2007)
82.6% of all SMBs are
using orconsidering VC
ONLY 17.4% Do Not Use
& Do Not Plan to Use
35.4% Currently Use
47.2% Do Not Use
But Plan to Use
5,032,868 – TAM for SMB VC
© 2006 Cisco Systems, Inc. All rights reserved. Cisco ConfidentialPresentation_ID 9
TPMP Revenue Model for Cisco
RegistrationRegistration
Cisco ServicesCisco Services
VPMVPM
TransactionTransaction
AdvertisementAdvertisement
Additional TP salesAdditional TP sales
© 2006 Cisco Systems, Inc. All rights reserved. Cisco ConfidentialPresentation_ID 10
Benefits of Cisco MarketPlace
© 2006 Cisco Systems, Inc. All rights reserved. Cisco ConfidentialPresentation_ID 11
Sales Model
© 2006 Cisco Systems, Inc. All rights reserved. Cisco ConfidentialPresentation_ID 12
SaaS Organizational Model
Establish separate SaaS business unit across Cisco
– Leverage similar SaaS infrastructure requirements – Cisco Collaboration Cloud
– Share back-office systems – billing, reporting, support, etc.
– Shared resources for marketing, sales, and operations
– Develop expertise and share best practices
– Separate leadership team for individual SaaS offerings
Cisco SaaS Business Unit
WebEx Marketplace XaaS
TSBU
© 2006 Cisco Systems, Inc. All rights reserved. Cisco ConfidentialPresentation_ID 13
Cost ModelBuilding Block Level
Pilot approach – US only at beginning – scale up with success of MP
© 2006 Cisco Systems, Inc. All rights reserved. Cisco ConfidentialPresentation_ID 14
TP MarketplaceTP Marketplace TP MarketplaceTP Marketplace
Recommendations Summary
Common SaaS Sales force org, separate leadership teams for individual SaaS offerings
Enriched Cisco TP experience – add features in TP or Cloud
Service offering – Balance Free/Fee - Open policy – TPXX in place Reach critical mass asap
New compensation model for both Cisco and TPMP AMs
Increase partner collaboration by offering new revenue opportunities
TPMP to be funded by TSBU
© 2006 Cisco Systems, Inc. All rights reserved. Cisco ConfidentialPresentation_ID 15
Next Steps
Find an executive sponsor
Review the opportunity with the application development community
Develop a commercial model
Fully assess all marketing information
Understand the technical challenges to achieve our objectives
© 2006 Cisco Systems, Inc. All rights reserved. Cisco ConfidentialPresentation_ID 16
Thank You!Any Questions? Thank You!Any Questions?
© 2006 Cisco Systems, Inc. All rights reserved. Cisco ConfidentialPresentation_ID 17
© 2006 Cisco Systems, Inc. All rights reserved. Cisco ConfidentialPresentation_ID 18
TPMP service example
C2C Class Fee
Video/photo sharing SW basic
TP invitation SW basic
Video message center SW basic
Directory SW basic
Dating apps SW premium
Gaming SW premium
B2C Class Fee
Language translation SW/HUMAN premium
[adult] entertainment HUMAN premium
fortune teller HUMAN premium
psychologist HUMAN premium
telemedicine HUMAN premium
shopping HUMAN premium
training HUMAN premium
consulting HUMAN Premium
Customer Support HUMAN Premium
B2B Class Fee
TP reservation system SW basic
Video mail SW basic
Record&Playback SW basic
Directory SW basic
TP Broadcast to PC SW basic
Data integration SW basic
Connect to VC SW basic
Mix audio & video SW basic
Broadcast to mobile SW basic
Language translation SW/HUMAN premium
Teleprompter/Video receptionist HUMAN Premium
Virtual Background SW Premium
Training HUMAN premium
Consulting/mentoring HUMAN Premium
Telemedicine (next slide) HUMAN Premium
Remote Recruiting HUMAN Premium
© 2006 Cisco Systems, Inc. All rights reserved. Cisco ConfidentialPresentation_ID 19
TP Exchange approach
SOFT
SPs to create their own interconnections
MODERATE
Cisco to facilitate SP interconnection until they create their own
AGGRESSIVE
Cisco to play in video backbone exchange domain
© 2006 Cisco Systems, Inc. All rights reserved. Cisco ConfidentialPresentation_ID 20
Revenue model – TPMP features sales
Year 0 1 2 3 4 5 6 7 8 9 10Volume ForecastMP Service Provider (50% growth) 50 75 113 169 253 380 570 854 1,281 1,922 2,883Service Advertisement (% of total Services) 0% 5% 5% 5% 5% 5% 5% 5% 5% 5% 5%AVG Service per SP 1 1 1 1 2 2 2 2 2 2 2User (100% growth) 150 500 1,000 2,000 4,000 8,000 16,000 32,000 64,000 128,000 256,000Advertiser (100% growth + saturation) 0 1 2 4 8 16 32 64 128 128 128Transactions (100% growth - 2/user per year) 300 1,000 2,000 4,000 8,000 16,000 32,000 64,000 128,000 256,000 512,000Transaction avg value 10 10 10 10 10 10 10 10 10 10 10Transactions on Cisco svcs (% of total) 20% 20% 20% 20% 20% 20% 20% 20% 20% 20% 20%VPM # 0 0 0 0 0 0 0 1 2 4 8
Revenue Source - Average Cost ($)Service Advertisement (ARPS/year) 120 130 140 150 160 170 180 190 200 210 220External Advertisement (ARPA/year) 1,000 2,000 3,000 4,000 5,000 6,000 7,000 8,000 9,000 10,000 11,000Service Transaction fee (% of transaction) 0.0% 3.0% 5.0% 6.0% 7.0% 8.0% 9.0% 10.0% 11.0% 12.0% 13.0%SP Registration fee (yearly) 0 0 10 20 30 40 50 60 70 80 90Service Registration fee (yearly) 0 0 0 5 10 15 20 25 30 35 40Cisco Service - unit avg cost 0 0 0 0 1 1 2 2 3 3 4User Registration fee (yearly) 0 0 0 0 0 10 11 12 13 14 15User Transaction fee 0 0 0 0 0 0 1 1 1 1 1VPM fee 10,000 10,000 10,000 10,000 10,000 10,000 10,000 10,000 20,000 40,000 80,000
Revenue Source Value ($/year) cumulated per sourceService Advertisement 0 488 788 1,266 4,050 6,455 10,252 16,232 25,629 40,366 63,432 168,954External Advertisement 0 2,000 6,000 16,000 40,000 96,000 224,000 512,000 1,152,000 1,280,000 1,408,000 4,736,000Service Transaction 0 300 1,000 2,400 5,600 12,800 28,800 64,000 140,800 307,200 665,600 1,228,500SP Registration 0 0 1,125 3,375 7,594 15,188 28,477 51,258 89,701 153,773 259,493 609,983Service Registration 0 0 0 844 5,063 11,391 22,781 42,715 76,887 134,552 230,660 524,892Cisco Services 0 0 0 0 1,600 3,200 12,800 25,600 76,800 153,600 409,600 683,200User Registration 0 0 0 0 0 80,000 176,000 384,000 832,000 1,792,000 3,840,000 7,104,000User Transaction 0 0 0 0 0 0 32,000 64,000 128,000 256,000 512,000 992,000Virtual Private Marketplace 0 0 0 0 0 0 0 10,000 40,000 160,000 640,000 850,000
total per year 0 2,788 8,913 23,884 63,906 225,033 535,109 1,169,804 2,561,817 4,277,491 8,028,784 16,897,529sales per year 0 2,488 7,913 20,641 53,244 200,842 451,528 999,089 2,216,130 3,579,739 6,620,524 14,152,137
* In red the features that can be ‘sold’ by sales rep
© 2006 Cisco Systems, Inc. All rights reserved. Cisco ConfidentialPresentation_ID 21
Revenue model – TP sales
Year 0 1 2 3 4 5 6 7 8 9 10Volume Forecast% of TP sales due to MP 10% 10% 15% 15% 20% 20% 25% 25% 20% 20% 20%
Revenue Source - Average Cost ($)Avg revenue per TP endpoint 2,000 2,000 2,000 2,000 2,000 2,000 2,000 2,000 2,000 2,000 2,000
Revenue Source Value (K$/year) totalTP revenue impact 30 100 300 600 1,600 3,200 8,000 16,000 25,600 51,200 102,400 209,030
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