Transcript No Slide Title

Nortel Competitive Assessment
Offer Capabilities in the
New ASP Space
Bill Terrill
SPN Market Insights - CI
March 3, 2000
@ gsp
Competitor
&
Industry Insights
Nortel’s ASP Supply Chain
Nortel is playing across all supply chain spaces to provide a tightly
integrated end-to-end solution...
Network
Services
• Core IP/ATM ntwks
• VoIP solutions
• Wireless ntwks
• IP VPNs
• Optical MANs
Hosting
Services
Preside ServiceWare
Applications
Integration
Managed App. Global Prof. Svcs.
Svcs. Initiative • Internet infrastructure services
• Messaging
• eCommerce • Network-enabled
transformations
• Workplace
• Service-enabled
eCommerce
solutions
• e-customer care
• Managed-network
services
Support
Data Center
Support
Applications
Services
(ASP)
Enterprise
Customer
• OSSs
• Billing
• Product
Marketing
Marketing &
Sales
Sales Channels
• Nortel 15,000
global VARs
• SAFECO 17,000
agents
• Service Control
• Customer Care &
Billing
• Service Activation
• Policy Services
• Service Assurance
@ gsp
Competitor
&
Industry Insights
Not ASP Specific
ASP - Dedicated Labor and Software
Development Resources
ASP - Specific Supply Chain
& Channel Resources
Network Services
Nortel’s Network Services delivery architecture and network
products provide:
•
•
•
•
End-to-end infrastructure, security, QoS and INM
Set up of optical, ATM, FR, and MPLS connections
A complete view of the network to activate new services
Accounting for any services rendered so SPs can bill on usage, QoS
parameters, etc.
• High-speed Internet access using Promatory’s IMAS DSL platform (acquired
1/00) provides broadband capabilities to residential users
• Optera optical switches will be the basis for a new high-performance data
center strategy
• Contivity extranet switch-router is best selling IP VPN product that provides
secure shared infrastructure
Nortel’s Service Provider customers are wooing ASPs
@ gsp
Competitor
&
Industry Insights
• AT&T has made the strongest pitch yet to be ASPs’ infrastructure with its
Ecosystem network services platform
• provide co-marketing
• distribution for ASPs
• professional services to develop further applications
• Other major SPs, like Level 3, Frontier-Global Crossing and Qwest,
• already provide data centers and management functions for ASPs
• have their own ASP activities underway
Hosting Services: Preside Service-Ware
Preside architecture
Applications
Hosted Applications - Unified Messaging - Ecommerce
and
APIs
3rd party
Management
Systems
Service Control
Serviceware
Service
Creation
Environment
Customer Care and Billing
Service Activation
Policy Services
Service Assurance
Infrastructure
Data - Optical - Telephony - Wireless
@ gsp
Competitor
&
Industry Insights
• Preside comprises five functional
integrated service-enabling software
applications called Serviceware
• Enables fast, easy service creation,
deployment and management
• Delivers user policies to enable
service differentiation (I.e. Silver,
Gold, Platinum)
• Allows SPs to rapidly and easily
create high-value, high-margin
services
• Allows 3rd party programmers and
ISVs to use open APIs for specifying
networking qualities like QoS and
bandwidth parameters
• APIs to ease ISV development of
network aware applications
• APIs are currently in beta-testing with
ISVs; expects results in few months
Hosting Services: Preside Offer Enablers
Preside offer is enabled by several management and servicerelated acquisitions and alliances:
@ gsp
Competitor
&
Industry Insights
• Bay Networks: acquired in 8/98 for $9B for Optivity enterprise data management
capabilities
• Novell: strategic agreement announced 11/98 to develop and market network
services that integrate Novell Directory Services (NDS) with Bay’s Optivity Policy
Services policy management application suite (delivers on previous 10/97
Novell/Bay agreement)
• Shasta Networks: acquired in 4/99 for $340M for service-enabling gateways and
subscriber policy management systems at the “subscriber-edge” of IP networks
that manage IP services across platforms
• X-CEL Communications: acquired in 5/99 for carrier-grade SLA and network
performance management solutions to be integrated into Nortel’s Integrated
Network Mgmt (INM) offer
• Clarify: $2.1 billion acquisition announced 10/99 for eFrontOffice suite of CRM
software applications which will be integrated with SP backbone infrastructure
through OSSs and network management systems
• Sun-Netscape Alliance: announced 1/00 to develop a new directory-enabled
solution that will enable ASPs to offer customized and packaged solution sets
• Talarian: announced strategic relationship in 2/00 to test, develop and market
next generation of real-time eBusiness infrastructure and integrate Talarian’s
SmartSockets software into Nortel’s solution
Hosting Services: Preside Offer Marketing
Nortel Emphasizes the Internet “Value Sell”
Interactive Multimedia
Applications
“The Networked Economy”
Managed IP-VPN Services
for Applications
“The Business Class Internet”
Value
Margin
Managed Network
Services & VPNs
Extranet, Internet, Intranet
Managed Bandwidth
X.25, SMDS, ATM, FR, IP
Traditional Voice,
POTS
Sophistication
of
Service
Competitor
&
Industry Insights
Revenue Potential
Portal Services
Call Centers
ERP
Hosted Applications
New Services...
@ gsp
…Mean New
Revenues
Intranets
Extranets
VPDNs
Advanced
Services
Value Added
Services
Managed
Bandwidth Established
Services
Applications:
Managed Applications Services Initiative
Nortel’s Managed Applications Services Initiative for ASPs
• Announced 12/99 a string of services aimed at kick-starting the sale and rental of
software over the Internet
• Working with Hewlett-Packard and ISVs
• Integrating solutions that allow ASPs to deliver and maintain software solutions for
small and medium sized businesses
• Will help Applications Service Providers (ASPs) to certify, deliver and support
applications
Solutions scheduled for 1Q00 include:
• Managed Messaging --- uses HP Smart Internet Messaging suite coupled with
Software.com’s Intermail as the managed messaging application
• Managed eCommerce --- provides complete e-commerce solutions leveraging
Intershop’s web storefront creation capabilities
• Managed Workplace eCommerce --- delivers Concur’s suite of web-based,
workplace e-commerce solutions including T&E management, HR self-service, and
corporate procurement
Announced strategic alliance with SAFECO in 2/00
@ gsp
Competitor
&
Industry Insights
•
•
•
•
First global leveraged buying eCommerce trading network for SMB market
Concur Business Advantage connects users to suppliers over Internet
Made $35 million equity investment in Concur
Microsoft to invest marketing and R&D resources to optimize solution for
Windows 2000
Integration, Support, Marketing & Sales:
Nortel’s Global Professional Services
Nortel launched its Global Professional Services organization
• Announced 12/99 the appointment of Kannankote Srikanth as president (former
VP&GM of Compaq’s professional services division)
• Will be global in scope and will target both carriers and enterprises
• Consolidated multiple professional services organizations within Nortel
• Division is augmented by Nortel’s channel and systems integrator partners which
can also provide a SMB sales channel to ASPs
• Mission to provide more customer value in building the infrastructure solution
Offers will fall into five groups
• Internet Infrastructure Services: addressing the design and building of optical,
access, and wireless network infrastructure
• Network - Enabled Transformations: providing for network convergence and
migration from circuit-switched to IP networks
• Service - Enabled Solutions: such as outsourcing, operations support systems
integration and architecture and solutions consulting
• e-Customer Care: supporting new e-business applications division placing strong
emphasis on CRM and call-center software
• Managed - Network Services: address integration and data center needs of ASPs
@ gsp
Competitor
&
Industry Insights
Acquired Dimension Enterprises Inc. (DEI) for $65 million in 2/00
• Improve ASP offers with best-in class Internet data center capabilities
• Specializes in business strategy consulting, Internet security, IP networking,
enterprise application integration, and data center implementation
Nortel’s Key ASP Events
Oct. 27, 1999 - Introduces Preside product portfolio aimed at ASPs
Capabilities that enable the creation and delivery of profitable services via the Internet.
Dec. 13, 1999 - Announced Managed Applications Services Initiative for ASPs
String of services aimed at kick-starting the sale and rental of software over the Internet working with HP and ISVs to certify, deliver, and support applications, and also created an organization specifically
addressing the needs of ASPs
Dec. 16, 1999 - Appointed President of Professional Services
Responsibility for global professional services strategy and organization to provide customers with
comprehensive services in network and systems integration, network and applications outsourcing, as
well as architecture and solutions consulting
Jan. 10, 2000 - Announced joint effort with Sun-Netscape Alliance
Develop a new directory-enabled solution that will help enable ASPs to offer customized and packaged
solution sets
Jan. 30, 2000 - Selected as solutions integrator for EINSTEINet, facilities-based ASP
Includes high-speed Internet access, Optical Internet, Internet Data Center infrastructure, and
application software and service capabilities worth $200 million over three years
Feb. 8, 2000 - Announced Talarian agreement for real-time eBusiness Infrastructure
Combine Talarian’s SmartSockets software and Nortel’s high-performance Internet solutions
Feb. 9, 2000 - Acquired DEI to offer ASPs Internet Data Centers
@ gsp
Help Nortel design and engineer data centers which house eBusiness content
Competitor
&
Industry Insights
Feb. 23, 2000 - Concur, Nortel, SAFECO announce strategic alliance
Create the first global leveraged buying eCommerce trading network application for the SMB market
Key Conclusions, Issues and Take-Aways
• Nortel understands the hot buttons in the ASP business case and
is addressing them in in its solutions
• QoS for applications on a per user basis making for an application aware
infrastructure
• Provide a quick market entry strategy for IP services to include provisioning
and integration
• Robust computing platforms to support multi-tenant services
• Open application platforms that facilitate ease of development for ISVs
• Created an organization specifically addressing ASPs
• Richard Caruso is president, Applications Service Providers Market Segment
• Mission is to focus all Nortel resources for success in the ASP market
segment
• Focused and accountable organization could build a sustainable advantage in
the ASP market space
• Nortel’s strategy is to serve as an end-to-end solutions integrator
@ gsp
Competitor
&
Industry Insights
• Will use alliances and minor equity investments more and more to optimize
capabilities to address a specific market segment (e.g., ASPs)
• Moving away from being a telecom manufacturer and marketer
• Will follow strategy to increase ability to focus on customer requirements for
software technology and high-value network solutions