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IBSG - 1Copyright © 2007 Cisco Systems, Inc. All rights reserved.Cisco Confidential IBSG - 1Cisco Confidential
Web x.0 & Beyond
City Telecom Analyst Event
Andy Wong - Cisco Internet Business Solutions Group (IBSG)
28th March 2011
IBSG - 2Copyright © 2007 Cisco Systems, Inc. All rights reserved.Cisco Confidential IBSG - 2Cisco Confidential
Cisco is the Strategic Partner of HKBN
• Cisco, with 40B+ revenue, 75k+ employees across 165+ countries, is the leading IP technology and business partner helping our customers to catch market transitions.
• We are the company with leadership across multiple segments from routing and storage to video and collaborative Web 2.0 technologies.
• We have a long term strategic relationship with HKBN since earlier 2000 by implementing the Metro Ethernet IP networks and the next generation optical core.
• The Cisco Internet Business Solutions Group (IBSG), is the global strategic consulting arm of Cisco with ~200 consultants worldwide, help grow our customer business by designing innovative business process and integrating advanced technologies.
IBSG - 3Copyright © 2007 Cisco Systems, Inc. All rights reserved.Cisco Confidential IBSG - 3Cisco Confidential
Market Dynamics
Source: Cisco WWSP, IBSG
Internet Video• US’s Hulu, Netflix Internet video,
Netflix has 21%US’s traffic
• UK iPlayer provides 7 days BBCTV programs, consume 10%-20% traffic
• Facebook has 620M users, 550k+ Apps
• GoogleTV= SmartTV (search +
Internet content + TV)
Service Provider• US’s cable TV operators, for
example, Comcast, TWClaunch TV Everywhere
• US’s telecos, for example : Verizon FiOS and AT&T U-verse roll out IPTV, implementing TV Widget
• SP considering B2B2Cmodel
Media & Broadcast• US CP delivers contents
directly to end-users via Internet, or via 3rd content aggregators e.g. Hulu
• TV broadcasters roll out hybrid-TV, for example, UK’s Canvas project (terrestrial TV + Internet TV) and European’s HbbTV
Consumer Electronics• CE embed Internet-enable
features into electronics products, for example: TV, STB, gaming consoles
• AppleTV operating on a walled garden platform
IBSG - 4Copyright © 2007 Cisco Systems, Inc. All rights reserved.Cisco Confidential IBSG - 4Cisco Confidential
Video Ecosystem
Source: Cisco IBSG
Content Provider
Content Aggregator
Platform Devices
1Public Internet
2Walled-garden
5
Comcast’s Fancast
6FiOS TV Everywhere
YouTube on FiOS
3Public Internet
4Public Internet
IBSG - 5Copyright © 2007 Cisco Systems, Inc. All rights reserved.Cisco Confidential IBSG - 5Cisco Confidential
Infinity Contents
Middle
Source: Cisco IBSG
Content quantity
Viewing frequency
Long tail
Characters:
• Social, non-exclusive
• Amateur
• No QoS guarantee
• Low content value
Digital Hollywood
Character:
• Exclusive contents
• Professional
• Mass market
• QoS guarantee
• Consumer like different types of contents, i.e. viewing from Hulu‘s VoD
• Netflix, though does not provides direct TV nor
premium contents, able to attract 20M subscribers via multiple access devices (PC vs CE; 27%:73%) and simplified user interface, 2nd largest SP after Comcast
• UK’s iPlayer provides 7 days catch up TV, taking up 10%-20% internet traffic
Internet
More Contents
IBSG - 6Copyright © 2007 Cisco Systems, Inc. All rights reserved.Cisco Confidential IBSG - 6Cisco Confidential
Multiple Devices / n-Screens
More Screens
PC TV Mobile
iTunes
Direct TV Channel
Catch up TV
Premium Contents
(Episode, Movie, Sports,
Music)
UGC
OTT Strategy: collaborate with
consumer electronics, leverage
Internet open platform to deliver
video contents to multiple devices
(exclude Apple TV wall-garden)
Content Providers: CP handle
content intellectual property right
carefully, for example: Hulu,
according to agreements, only
authorized to deliver contents to
PC, and not allowed to deliver
contents to TV unless it is on
subscription basis(i.e. HuluPlus)
Though watching Internet video
over PC is common, increasingly
more through game consoles and
mobile handsets. For example,
15% of iPlayer is via game
consoles and iPhone.
Source: Cisco IBSG
IBSG - 7Copyright © 2007 Cisco Systems, Inc. All rights reserved.Cisco Confidential IBSG - 7Cisco Confidential
Interactive, Social Network are Key Growth Drivers
• Consumer like more controls and choices (contents,
time to watch and devices), VoD, Time shift, Catch
up TV become fundamental features
• From Apple experience, consumer like different
variety of applications, simplified user interfaces. In
2009, number of apps downloads reached 2Bn. On
average, each iPhone / iTouch user owns 40 apps.
• Facebook has 620M users, 550k+ apps
• Pay-TV operators collaborate with OTT to provide
search, social networking, photo uploads
Source: Cisco IBSG
More Controls
IBSG - 8Copyright © 2007 Cisco Systems, Inc. All rights reserved.Cisco Confidential IBSG - 8Cisco Confidential
Video 1.0 to 2.0 to 3.0, Offering New Interactive, Social Network TV Experience to Internet Users
� Non-real time networks
� Limited content
� Static short tail
� Few services
� Few streams
� Non-mission critical
� TV screens
Video 1.0
� Real time ingest of all live TV
� Large content stores
� Dynamic long tail solutions
� Many services
� Stream per screen
� Availability is critical
� Many types of screens
Traditional Sources
Community
Video 2.0
Long-tail Concept
� Digital
marketplace
“more” era
� more video
devices;
� more video
services; and
� more video
traffic
Video 3.0
IBSG - 9Copyright © 2007 Cisco Systems, Inc. All rights reserved.Cisco Confidential IBSG - 9Cisco Confidential
Next Generation Video = Data Center + Network + CPE
Internet ConvergenceLow High
Low
High
Interactive capability
Internet Video
3rd Wave Video
Direct TV
Source: Cisco WWSP, IBSG
Unified Network
Cloud Computing Platform
Multiple End-
Device
STB, S/W, Home Gateway
Infinity Content
Content Distribution Network
IBSG - 10Copyright © 2007 Cisco Systems, Inc. All rights reserved.Cisco Confidential IBSG - 10Cisco Confidential
Cisco’s Visual Networking Index (VNI)
Today’s Media Marketplace Has Entered the Age of “More”.. More video-capable devices, more video services and more video traffic than beforeToday’s Media Marketplace Has Entered the Age of “More”.. More video-capable devices, more video services and more video traffic than before
Global Usage TrendsGlobal Forecast Data
The Cisco VNI Global Forecast methodology relies upon various independent analyst forecasts as well as fixed and mobile data usage surveys.
IBSG - 11Copyright © 2007 Cisco Systems, Inc. All rights reserved.Cisco Confidential IBSG - 11Cisco Confidential
Global IP Traffic Projection 2009 - 2014
Exabytes per month
Cisco VNI Forecast 64 Exabytes per Month of IP Traffic in 2014
Source: Cisco VNI, 2010
Internet
Managed IP
Mobile data
Mobile data
Managed IP
File sharing
Internet video
Internet TV
Web & data
VoIP
Online gaming
Video calling
Internet
Business IP(13%)
Business IP
Consumer IP
34% or 4.3x(CAGR 2009-2014)
64
Consumer IP (87%)
15
3
55 Web-based video
conferencing
Mobile video66
11
22
44
Internet video
surpass P2P as
top traffic type
Multiples of bytes:
Gigabyte (GB) 109
Terabyte (TB) 1012
Petabyte (PB) 1015
Exabyte (EB) 1018
More Traffic
= 12 billion DVDs across the Internet
IBSG - 12Copyright © 2007 Cisco Systems, Inc. All rights reserved.Cisco Confidential IBSG - 12Cisco Confidential
Broadband Internet Traffic Will Continue to Experience Tremendous Growth Momentum in Hong Kong
Broadband Internet Traffic in Hong Kong
Source: OFTA, Cisco IBSG Analysis
Broadband Subscribers
(in Million)
Average usage
(in GB/month/sub.)
Usage growth at
26%CAGR (2003-2010)
Quantum leap of broadband usage with the introduction of FTTx access
~88% household broadband
penetration rate
3
11
22
Broadband Sub (LHS)
Average Usage (RHS)
IBSG - 13Copyright © 2007 Cisco Systems, Inc. All rights reserved.Cisco Confidential IBSG - 13Cisco Confidential
Future Proven Routing Technology is Key to Gain Cost Advantage in a High Traffic Growth Environment
US$’000/Gbps
23% Cumulative Average Price Drop Annually
23% Cumulative Average Price Drop Annually
Cost per bit down with each new generation of routing technology
CoreRouting
93%
Note: Based on Cisco listed price
(Note)
GSR Router CRS-1 CRS-3
IBSG - 14Copyright © 2007 Cisco Systems, Inc. All rights reserved.Cisco Confidential IBSG - 14Cisco Confidential
HKBN’s “One Infrastructure Multiple Service” is Key to Bring Business Agility and Cost Saving…
Source: HKBN, Cisco
Service
Network
Different Optical Fiber Cores/Ducts
PSTNFR/ATM IP IPTV
Vo
ice
Co
rpo
rate
Data
Inte
rnet A
ccess
Pay-T
V
Traditional Silo Vertical ModelOne Infrastructure Multiple ServiceIPNGN Infrastructure (e.g. HKBN)
Bro
ad
ban
d
2000
Vo
IP
2002
Bro
ad
ban
d T
V
2003
Co
rpo
rate
Data
2004
1G
Bro
ad
ban
d
2005
WiF
i H
ot
Sp
ot
2008
Optical Fiber Core
IPNGN Platform (All IP)
IBSG - 15Copyright © 2007 Cisco Systems, Inc. All rights reserved.Cisco Confidential IBSG - 15Cisco Confidential