Transcript GS UKC & MNC UK Marketing

What Service Innovation Means to Me
George Miller, Client Industry Executive, Global Partner Group, BT Global Services
June 14th 2010, Manchester
1
What Service Innovation means to me
•…the greatest opportunity to improve our world/ our
quality of life everywhere
•…an opportunity to work on some of the human race’s
most significant challenges
•…the chance to work with some of the brightest, most
determined, & most entrepreneurial people you could ever
meet
•…the potential to make a profound impact rapidly
•…the possibility of earning a good living…and perhaps
more
2
Unlimited, unprecedented, universal services value creation
…Let’s learn from some of the greatest entrepreneurs &
leaders of our generation
• Business model innovation (e.g. new ways of creating/
delivering/ capturing value)
• The organisation in its environment (e.g. open/ distributed)
• Innovation management within an org (e.g. governance/
methods/ tools)
• Process innovation (e.g. consumer led)
• Technology innovation (service innovation through use of
technology/ incl. in ICT)
3
Project your thinking into the future, and
work back to today
“There is no fate…the future
is what we make”
TERMINATOR 2
Future we create
STRETCH
Future based migration path
Future we accept
Present
Past
SOURCE: STRATEGOS
4
Traditional extrapolation
Future we are
exposed to
FIT
Defining innovation
Whatever you can do, or
dream you can, begin it.
Boldness has genius and
power and magic in it.
GOETHE
SEE what everyone else has seen
THINK what no-one else has thought
DO what no-one else has dared
Hard Work
5
Networking
Passion
Courage
Innovating your business model
The “game” is to Make the Cake bigger
Focus on
solving
customers’
problems
$7.5k
$1566bn
Increase
efficiency
$1.85k
$380bn
$2K
$420bn
Value paid to
other
stakeholders
Value of
revenues
Optimise
pricing
strategy
$2.5K
$522BN
Differentiate
from
competitors
$10k
$2,000bn
$150
$32bn
Shareholder
value
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SOURCE: PA CONSULTING
Customer
perceived
value for
money
Capturable Availability of Customer
customer competitor or value of
value
substitute
benefits
products
Building and managing an innovation pipeline
Seek new opportunities to innovate at the intersection of lenses
Discontinuities
Customer Insight
What new growth
opportunities or
alternative business
models might exist that
we (others) are not taking
advantage of today?
Orthodoxies
Core competencies
Economic engine
SOURCE: STRATEGOS
7
Business models
Three technology “laws” that continue to change our world…
1. Moore’s Law: “The number of transistors
on a chip will double about every two
years”.
2. Gilder’s Law: “The value of a
telecommunications network is
propositional to the square of the number
of connected users of the system (n2)”.
3. Metcalfe’s Law: “The total bandwidth of
communication systems triples every
twelve months”.
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The promise from IT is great…but can we accelerate value realisation?
9
From…
To…
Architecture (bus/ proc/ serv)
DIY
Standardised/ Templated
Regulation/ compliance
Client controlled
Collective control/ responsibility
Inter-operability/ changeability
Siloed/ Incompatible
Inter-operable/ inter-changeable
Service delivery
People centric
Automated
Interface/ Access
Complex
Intuitive/ simple/ controlled
BPaaS
Segregated/ bespoke
“Snap & Click”/ Composite
CaaS
Islands/ Staccato
Embedded/ Frictionless
SaaS
Monolithic
Open source/ Modular
PaaS
Distinct applications
Aggregated/ Orchestrated
INFaas/ KMaas
Business intelligence systems
“True” Intelligence
DBaaS/ DaaS
Client managed and controlled
Federated/ Integrated
IaaS
Silos/ fixed devices
Clouds Services/ Mobile devices
NWaaS
Separate fixed and mobile n’works
Integrated networks, CoS, QoS
SMaaS
Multiple infrastructure SLAs
Business SLA/ ISD/ Cloud Broking
SECaaS
Best efforts
Security SLA/ Transparency
Let’s think about large numbers…
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…with Service Innovation things can soon add up
$1million in $100 bills
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$1billion in $100 bills
…and just keep on adding up
$1trillion in $100 bills
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Smart Metering: Revolutionising the way we manage & consume energy
Biggest UK energy impact since North Sea Gas in ‘70s
13
Investment
Benefits
Service Model
£9bn UK programme
• £1,000 av. fuel bill
• Target: 3% annual
savings (…but 10% US)
• …26m UK households
• £1bn pa UK savings in
2020
• 4 fewer power stations
•Visible consumption
•Energy deals to spread
loads
•Remote home device
management
•Sell home produced
energy to grid
Technical Solution
Future potential
Time horizon
GPRS/ long-range radio/
hybrid
Smart Grid
Smart Home
From 2014- 2020
Collective Intelligence: Revolutionised the way Politicians campaign
• US “Politician-made” You-Tube videos views: 150m
• “Consumer-made” political video You-Tube views: 1.5bn
• Internet main source of political views: 2004…10%;
2008…33%
• 18-29 year olds…49%
• Obama 18-29 y/o share of votes: 66%
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Collective Intelligence: Revolutionised the way Politicians campaign
15
Obama
McCain
Number of Facebook friends on Election Day
2,397,253
622,860
Number of unique visitors to the campaign
website for the week ending Nov. 1
4,851,069
1,464,544
Number of online videos mentioning the
candidate uploaded across 200 platforms
104,454
64,092
Number of views of those videos
889 million
554 million
Total amount of time people spent watching
each campaign’s videos, as of Oct. 23
14.6 million hours
488,000 hours
Cost of equivalent purchase of 30-second TV
ads
$46.9 million
$1.5 million
Number of Twitter followers
125,639
5,319
Number of blog posts using the phrase
“voting for ______”
79,613
42,093
Number of references to the campaign’s
voter contact operation on Google
479,000
325
Source: Politico, The Web, 2008’s winning ticket
Gartner’s 10 disruptive technologies to 2012
16
1
Multi-core & hybrid processors
2
Virtualisation & fabric computing
3
Social networks & social software
4
Cloud computing & cloud web platforms
5
Web mashups
6
User interface
7
Ubiquitous computing
8
Contextual computing
9
Augmented reality
10
Semantics
Source: Gartner
Just a few of the companies making a big difference to our planet…
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Intel
BT
Microsoft
Oracle
Salesforce.com
Apple
Google
Facebook
RIM/ Blackberry
You-Tube
Linked-In
Twitter
Skype
Nuance
….not forgetting the founder of the internet era
• “Today, just 20% of global
population have internet access…”
• “There are 3bn mobile users…”
• “…but only 15% of these can get
online”
Vince Cerf
VP & Chief internet evangelist Google
• Attack plan: mobile access/ low or
medium orbit satellite (30m/s round
trip)…Africa/ central LatAm/ Pacific
Islands/ fibre where feasible/ local
WiMax
Designed TCP/ IP protocols & basic
architecture of the internet
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Intel: Revolutionised our ability to create the small, powerful, low
energy use computing devices….now being embedded everywhere
Robert Noyce
Gordon Moore
Dates
b.1927- d.1990
b.1929 -
Intel
Co-founder
Co-founder
Impact
Co-inventor of the
integrated circuit
President & CEO
Other
16 patents on
semiconductor
methods, devices
& structures
Moore’s Law
Net worth
NA
$3.7bn
…and not forgetting Andy Grove, CEO from 1987 - 1997
• Intel now delivering 32nm technology
• World has c10 quintillion transistors; 10,000/ ant; 1.5bn/ person
• Intel market cap: $114.91bn
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Innovation management insight: Tick Tock
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Year 1: "Tick“
New silicon process technology (transistor density/ performance/ energy efficiency).
Year 2: "Tock“
Entirely new processor micro-architecture…optimize value of new transistors/ tech.
BT: Revolutionised services access through ubiquitous broadband
Ian Livingston – CEO BT Group PLC
Age
45
Previous roles
CEO BT Retail
CFO BT Group
Group FD Dixons
• £1.5bn investment…fibre in 10m UK homes by 2012
• Top speeds 100mb/s; potential for 1000mb/s
• BT Infinity now launched: Downstream 40mb; upstream 10mb
• Faster: surfing…downloads…uploads…online experience
(Infinity-powered downloads up to x7 faster on iTunes; online
gaming up to 30% faster).
• Dedicated: business user “fast lane”
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Vodafone: Revolutionised our ability to communicate anywhere
Sir Gerald Whent
Founder, CEO
1982-1997
Sir Christopher
Gent
CEO
1997-2003
Arun Sarin
CEO
2003-2008
Vittorio Colao (47)
CEO
2008-
• Now largest company in FTSE 100
• £41.7bn annual revenue; £11.5bn adj. operating profit
• Growth drivers: Intl presence (esp India); fixed broadband
(Europe); consumer & business data services; smart phones;
machine-to-machine
• Now targeting Google’s mobile search/ advertising revenues
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Business model insight: Tiered mobile bandwidth pricing
Idea
Charge mobile broadband customers a premium if they want access to
higher bandwidth.
What?
Manage levels of network usage through price discrimination.
Why?
Data explosion…levels of mobile data usage predicted to grow x3
How?
Demand driven…customers pay more to get a higher quality of service,
including better speeds
Success? Yet to be implemented…although some traffic management already in
place…EU/ OfCom consultations Spring 2010.
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Microsoft: Revolutionised how we work through accessible software
Bill Gates
Age
54
Forbes 400
debut
Aged 30
Debut year
1982
Wealth then
$320m
Wealth now
$53bn
• 2009/10 Q3 revenue: $14.50 bn (+6%)/ $4bn net income
• Windows +28% (10% of all PCs globally run Windows 7)
• Growth drivers: Windows 7; Bing Search; X-Box Live;
emerging Cloud Services
• Market cap: $224bn
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Business model innovation: MS Bing helps you cut through the clutter
Challenges
Google attempting a move on MS ownership of operating system
market with Chrome OS; MS is targeting Google’s core profitability
driver – search (SVP Yusuf Mehdi).
Customer
insight
Explosive growth of online content continues; c30% of searches
abandoned (source: comScore Inc); 66% of people using internet
searches to make more complex decisions (source: MS research)
Bing value
proposition
A decision engine – for faster, more informed decisions, through
deeper insight and knowledge from the web (launch June 3 2009).
Features
• Bing Social: incorporates Facebook & Twitter in experience
(tweets/ updates/ links/ trending topics)
• Personalised interface: Users can select own background image
(Google now copied)
• Four “verticals”: Making a purchasing decision; planning a trip;
researching a health condition; finding a local business
Benefits
Deliver great results; a more organised experience; simplify tasks;
provide insight…resulting in faster, more confident decisions.
Service
Design
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Search: Best Match; Deep Links; Preview; Instant Answers
Organised Experience: Explore Pane; Web Groups; Related
Searches; Quick Tabs.
Oracle: Revolutionised the way we store, manage and access data
Larry Ellison
Age
66
Forbes 400
debut
Debut year
Wealth then
Wealth now
$28bn
• “Oracle” originally a CIA database project
• Inspiration: “A relational model for large shared data banks”
• Started Oracle in 1977; first release: Oracle 2
• Initial focus: midrange/ microcomputer segments
• Operating systems supported: UNIX, Linux and Windows
• Market cap: $111.8bn
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SalesForce: Revolutionised how we manage business processes
Marc Benioff
Age
Forbes 400 debut
Debut year
Wealth then
Wealth now
•
•
•
•
•
•
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$1.3bn
Founded Salesforce.com in1999
Vision: “the end of software”
Force.com cloud platform (2007)
AppExchange
2010 $1.3bn annual revenue/ net income $80m
“1-1-1 model”
Apple: Revolutionised how we interact with software…device design…how
we consume music…and now how we consume published material
Steve Jobs
Age
55
Forbes 400
debut
Aged 27
Debut year
1982
Wealth then
$100m
Wealth now
$5.5bn
• $43bn (+14%) total sales…
• i-phone $13bn (+93%)
• i-tunes store $4bn (+21)
• portables $9.5bn (+9%)
• i-pod $8bn (-12%)
• 2m i-pad sales in 2 months
• Market Cap: £232.91bn (June 4th 2010)
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Business Model Innovation: Apple i-pad raises stakes for eReaders
Customer
insight
Anyone who wants to consume multi-media on the move.
Value
proposition
Multi-media anywhere… a new category of device – positioned
between the Smart Phone & Laptop; Apple’s alternative to the Kindle
& the Nook.
Features
•
•
•
•
•
•
•
•
•
Benefits
Better digital experience for eBook, magazine & newspaper reading;
also general internet surfing (speed/ responsiveness/ intuitive
interface/ rich display detail).
Services
• iTunes store; App Store; MobileMe; iBookstore
29 Business
model
Multi-touch display sensitive to fingertips
i-pad specific apps (also those for i-pod/ i-phone)
Wi-Fi or 3G
Wi-Fi trilateration provides location information for Google Maps
3G data connection (3G version contains a GPS)
3 axis accelerometer (portrait/ landscape switching)
Magnetometer
Battery life: 10 hrs video/ 150 hours audio/ one month on standby
Digital rights management: Remote delete of apps/ media/ data
• 70% service revenue share to publishers
Blackberry: Revolutionised the way we work through push-email
Michael Lazaridis
Age
49
Forbes ranking
437
Debut year
Wealth then
Wealth now
• Revenue $14.93bn
• Net earnings $2.46bn
• R&D spend $946m
• 41m users globally (3% global mobile users)
• …incl. President Obama
• …target is 100m
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$2.2bn
Google: Revolutionised how we source & sort information…and now
how we manage IT infrastructure
Sergey Brin
Age
36
Forbes 400
debut
Aged 31
Debut year
2004
Wealth then
$4bn
Wealth now
$17.5bn
Larry Page
31
Age
36
Forbes 400
debut
Aged 31
Debut year
2004
Wealth then
$4bn
Wealth now
$17.5bn
Technology innovation: The search engine that changed our world
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Challenges
Scaling…index millions (now billions) of pages; respond daily to
millions (now billions) of queries; technical…exploit the additional
information contained in hypertext…deliver search precision
Precedents
1994 World Wide Web worm could index 110k pages…and received
1500 queries per day; in 1997 best search engines (e.g. Altavista)
could index from 2m to 100m pages…and handle 20m queries per
day
Requirements
Efficient storage of indexing/ optionally documents; process hundreds
of gigabytes of data efficiently; handle thousands of queries p/s
Google
design goals
Improved search quality (avoid “junk wash out”); push more
understanding into academia; build systems many people can use;
support novel search uses
System
features
Use web link structure to “quality rank” each page (PageRank);
Anchor Test – associates text link with page link points; location
information; proximity search; visual presentation details (e.g. font
size); retain full HTML of pages.
Amazon: Revolutionised how we buy goods…and now how we
manage IT infrastructure
• 2009 net sales
+28% $24.51
billion (x15
1999).
• Free cash flow
+114% $2.92
billion
Jeff Bezos
Age
Forbes 400
debut
Debut year
Wealth then
Wealth now
Consumer:
• 50% more items/ 21 new product
categories
• 7m customer reviews added to
site
• US Kindle Store: 460k books/
8.9k+ blogs/ 120 countries/ 6
languages
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“We
46
$12.3bn
Corporate (AWS):
• Relational d’base service
• Virtual private cloud
• Elastic Map Reduce
• Cloud Front Streaming
• S3 streaming
seek to be Earth’s most customer-centric company for three primary
customer sets: consumer customers, seller customers and developer customers”
Governance Insight : Goal setting
2010: 360 of Amazon’s 452 goals will have a direct impact on
customer experience.
• The word revenue is used eight times and free cash flow is
used only four times.
• In the 452 goals, the terms net income, gross profit or margin,
and operating profit are not used once.
…but in practice they have rigorous financial goals behind
all these
34
Business Model Insight: Amazon Mechanical Turk
Idea
“Artificial” Artificial Intelligence…AAI
What?
A crowd sourcing internet marketplace: enables “Requesters”
(programmers) to co-ordinate use of human intelligence… perform tasks
which computers cannot.
Tasks?
e.g. Choose best store-front photo; writing product descriptions; identify
performers on music CDs
How?
Requesters set tasks…Providers browse tasks…complete for payment
set by Requester (reward: from 1 cent to $10+).
Success? Still in Beta…March 2007 100,000 Providers from over 100 countries
35
Facebook: Revolutionised how we network with others
Mark Zuckerberg
•
•
•
•
•
•
•
36
Age
25
Forbes 400
debut
Aged 24
Debut year
2008
Wealth then
$1.5bn
Wealth now
$1.6bn
Business founded: 2004
12 month user growth: 130%
Total users: 400m
Overtook Yahoo as #2 internet site in US (Jan 2010)
Facebook visitors to other sites “more sticky”
…but only 57% click on ads cf 79% wider internet
Business value: $15bn
Business Model Innovation: Exploit existing offline social behaviour
Customer
From college students (driven largely by dating activity)…to
“everyone” engaged in social networks, & “everywhere”
Solution
From high utility online student directory service, enabling preexisting offline social behaviours;…restricted registration to .edu for
given college; …limited search & browse; …credible “face” (MZ);
…”viral” audience build; …roll-out prioritised by student request
…the world’s #1 social networking site (aggregation of a series of
deeply penetrated micro-communities)
37
Model?
Advertising, event listings, e-commerce, lead generation (targeted/ inday, in-day, in-week audience contact)… exploiting brand value/ user
recall/ trust; audience characteristics; service role/ usage
Competition?
Early competition… MySpace/ Bebo; now…??
Outlook?
• Be acquired (sustaining app for another business)?…e.g. 2006
Yahoo/ Microsoft talks c$1bn valuation
• Develop/ evolve compelling (disruptive?) business model
Business Model Innovation: 5 reasons why Facebook is so successful…
1. A huge untapped market…established competitor
Friendster targeted at twentysomethings & fading;
MySpace < 5% penetration in 2005
2. Experience designed by students…for students
3. Privacy… “walled” social networks
4. Economics…attractive initial segment…elevated perceived
status
5. “Sticky” Features…organisation by classes; “the poke”;
groups; directory; simplicity; “lightning fast”
38
The organisation in its environment: Clever VC funding negotiation
Negotiated
value
April 2005 first round VC negotiated valuation $85m… when
generating <$500k pm revenue
How?
Initial pre-money valuation $20m… climbed when Facebook
approached both VC’s and potential acquirers simultaneously
Who?
• Seed-corn funding: Peter Thiel $500k for c5%-10% of equity?
• 1st round VC 2005: Accel Partners (…other VC’s thought Facebook
would exit at c$200m/ $300m…x3 return not worth the risk?)
• 2nd round VC valuation 2007: $550m
39
Linked-In: Revolutionised the way business people network
Founders: Reid Hoffman, Allen Blue, Jean-Luc Vaillant, Eric Ly, and Konstantin Guericke.
Reid Hoffman
Age
42
Forbes 400
debut
Debut year
Wealth then
Wealth now
• Founded 2003
• 60m users (Feb 2010); growth rate 5m in 2 months
• 50% user-base ex US; …from over 200 countries
• Execs from every Fortune 500 company
• Value: in excess of $1bn
• Revenue model: Job listings/ subscriptions/ advertising
40
You-Tube: Revolutionised how we share ideas and experiences
Sold to Google
October 16 2006
$1.65bn
Chad Hurley (34)
c700k Google
shares
$345.6m @$470
per share ($487
10/06/10)
Steve Chen (31)
c625k Google
shares
$326.2m
Jawed Karim (31)
c137.5k Google
shares
$64.6m
• Business founded: January 2005
• 2bn video viewings per day
• Every minute 24 hours of video uploaded
• User base 18-55; 51% use weekly or more
• In 2007 consumed bandwidth equivalent of entire internet in
2000
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Technology Innovation: Near instant response online video service
42
Challenges
The world’s No1 site for video demands several terabytes of data per
day…20,000 plus views per second; av. search 70m/s; “normal”
servers would take several minutes per request.
Precedents
Google
Design goals
Scalability; speed
System
features
Exploit Google advanced caching; each video stored as duplicate
(multiple online back-ups); popular content moved to CDN (replicated
by geography); less popular content on local sites…but “long-tail
effect”; “thumb nails” (x4 per video) stored separately.
Twitter: Revolutionised how we relate through “instant communication”
Jack Dorsey
Age
31
Forbes 400
debut
Debut year
Wealth then
Wealth now
$100m+
• Business founded: 2006
• 31 employees
• Tweets per qtr: 2007…500k; 2008…100m; 2009…2bn; Q1
2010…4bn; and now 50m per day…600 per second
• 2013 projections: Revenue $1.54bn; earnings $111m; users 1bn
• Business value: $250m+
43
Business Model Innovation: Exploit the desire to “reach out”
44
Customer
People who desire an easy means of one-to-many communication
Solution
Web interface that allows 140-character messages, plus replies,
private direct messages, & search
Model?
Launched as a free-to-use, no revenue stream business
Competition?
Facebook/ blogging/ me-too – e.g. Yammer (charges companies for
closed employee networks)
Outlook?
Two ways to monetise:
•Be acquired (sustaining app for another business)…e.g. Facebook
•Develop compelling (disruptive?) model…e.g.
Google adwords on user profiles pages?
Pay-to-reach-users?
Product feedback from Twitterers?
Channel to advertise products?
Integrated search? (advertising model)
Charged for features/ analytics
Business Model Innovation: CNN Twitterbuzz
45
….and now Jack Dorsey launches Square: revolutionising payments
46
Areas of current interest
New/ improved ICT enabled service
business models
Collective
intelligence
Standardisation
Cloud Services
Smart Systems (e.g. Smart Energy)
47
End
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