Cisco MOI Forecasts the Opportunity

Comm and IT Image 1_11JAN2016I think most of us take for granted how mobile data services have evolved over the past decade. From simply being able to access email to now watching live video streaming on our personal devices, the pace has been dramatic. Our service providers have also evolved. Now we can log into our accounts and see near real-time information on our calls, texts, and data usage. I can adjust my plan online by myself – add or remove services, alter my data quota, etc.

Our expectation for easy access to and control of our personal services is creeping into our professional lives, as well. For example, I want to customize the metrics I see for activity on web pages to show what matters most to me or my organization. Also, I want to have those results tallied, visualized, and delivered automatically. This is not a one size fits all world anymore. Orchestration, automation, and virtualization, using NFV and SDN technologies, open the door to new possibilities for service providers to bring similar flexibility to their business customers’ experiences.

Service providers have offered Information and Communications Technologies (ICT) services for years so that business customers could focus resources strategically, while outsourcing ICT to those with more expertise. The solutions for delivering these services have evolved to increase efficiency and lower TCO. Employing NFV and SDN is another step in this evolution, but will it have significant market impact?

This was a question we wanted to help our customers understand better so we asked AMI-Partners to survey business customers of all sizes and in different parts of the world. We wanted to find out whether the types of benefits that services delivered using NFV and SDN provide would influence their behaviors when they go to purchase those services. Key benefits put forward to them were:
• Simple and easy self-service ordering of new or incremental services
• Automated service and network provisioning for rapid turn-up
• Control in their hands to turn services on/off on demand
• Scaling services capacity up or down as needed automatically
• Billing based on consumption/usage

Comm and IT Image 2_11JAN2016.jpgNearly 9 out of 10 wanted access to at least one of those benefits. Almost always, across all geographic regions did at least 50% of the business customers surveyed rate each attribute as highly or somewhat desirable. Only once (in just one region for a single attribute) did fewer than 20% of the businesses rate these benefits as highly desirable.

After we understood that the response of business customers was so strongly positive toward the service characteristics, we needed to find out what influence that might have on their purchasing behavior. As the graphic to the right shows, a significant percentage of businesses in every region globally indicated a willingness to switch service providers to get access to these benefits in the services they buy. In addition, large numbers responded that they would adopt more services beyond those planned or currently used (no region < 40%), expand current services to additional users (no region < 55%), and recommend these services to peers and colleagues (no region < 60%).

Based on this study, by 2019, NFV and SDN could create more than $40 billion in incremental opportunity globally for service providers. The results of this analysis are now available by region in our Monetization and Optimization Index (MOI) forecast.

If you are not familiar with MOI, we created it to simplify access to market data for you by analyzing many industry data sources. Not only do we put together the addressable market forecast, but we segment the opportunities into specific services and their respective per-customer revenues. We consider how new technologies and architectures can change your cost of delivering services, as well. Cloud, Mobile, Smart Home and Video are other service areas we dig into with MOI. We break down our global view of these markets, one by one, into regional pictures to show you what will happen closer to home.Comm and IT Image 3_11JAN2016

Click here to view MOI video.

We even share the models online in a way that allows you to customize the inputs to your local markets and see your own results. There is a “fast track” enabling you to change a small set of impactful factors. Or you can choose the “expert track” that exposes more model details to modify to your liking. Either way, you will get results specific to your inputs that you can download and keep.

So check out MOI, or browse through the highlights.  Follow us on Twitter @CiscoSP360 and let us know what you think.


Sidney Kriger

Senior Manager of Business & Technology Architectures

Worldwide Service Provider Marketing