Presented Friday, October 23, 2009 at SUPECOMM 2009 by Stuart Taylor, Director, Cisco IBSG Enterprises are increasingly relying on communications, collaboration, and the real-time flow of information to encourage innovation and enable true competitive differentiation. This is prompting higher demand for capabilities to be delivered and managed by third parties as managed services. The rise of cloud computing, ubiquitous broadband, and the move to open platforms are promoting next-generation managed services that offer standardization, reduced costs, managed complexity, and increasing ease-of-use characteristics attractive to both large enterprises and small and medium-sized businesses. This session will focus on the future landscape for next-generation managed services, the evolving needs and expectations of business, and the opportunity that exists for service providers.

1. The Future of Managed Services
in the Enterprise
Capturing the Opportunities for
Service Providers
Stuart Taylor
Cisco Internet Business Solutions Group
SP Consulting Group
October 23, 2009
Copyright © 2009 Cisco Systems, Inc. All rights reserved. Internet Business Solutions Group 0

2. Challenging Times
Industry Consolidation Globalization
Job Uncertainty
Stock Price
Productivity
Employee Morale
New Partnerships
Revenue Growth
Competitive Differentiation
Retaining Talent
Cost Containment
Customer Loyalty Innovation
Time to Market
Innovation
Supplier Viability
Source: Cisco IBSG, 2009
Copyright © 2009 Cisco Systems, Inc. All rights reserved. Internet Business Solutions Group 1

3. Financial Services—Speed to Revenue
Managed Services to the
Industry Challenges
Rescue (examples)
Reduce costs End-to-end managed
technology and business
Improve cross-sell
process to enter new niche
and upsell
markets (US Regional Bank)
Shift Capex to Opex
Expanding banking
relationship with new
services (US Bank)
Copyright © 2009 Cisco Systems, Inc. All rights reserved. Internet Business Solutions Group 2

4. Retailing—Differentiation Through
Customer Experience
Managed Services to the
Industry Challenges
Rescue (examples)
Efficiency Digital Signage (WalMart,
Eddie Bauer)
Cost removal
Telepresence Kiosks (Best
Customer experience
Buy, Home Depot)
Copyright © 2009 Cisco Systems, Inc. All rights reserved. Internet Business Solutions Group 3

5. Healthcare—
Lower Costs and Better Delivery
Managed Services to the
Industry Challenges
Rescue (examples)
Access Healthcare Telepresence
Affordability (United HealthCare at Cisco)
Quality RFID equipment tracking
(hospitals)
Sustainability
In-House Concierge
services (hospitals)
eHealth (insurers, doctors,
hospitals)
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6. Government—Creating 21st Century
Economies and Services
Managed Services to the
Industry Challenges
Rescue (examples)
Building 21st Century Broadband infrastructure
Economies Technology platforms
(education, healthcare)
Delivering 21st Century Online services and collaboration
Public Services Web 2.0 capabilities
Video kiosks, VoIP enabled
Creating 21st Century call centers
Governments Managed services to deliver:
New funding/financing models
Address skill shortages
Integrated solutions
Innovation)
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7. Defining Managed Services
Application Based Managed Services
SaaS (e.g. CRM)
Managed IT
Managed
Hosting Emerging
Collaboration
Computing / CPE Based Managed Services
TelePresence
Digital signage
Back up services
Managed
UC IaaS
Network / Comms Based Managed Services
Managed VPN
VoIP services
Managed firewall
Intrusion Detection
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8. Not Back to the Future
MS 1.0 ― MS 2.0 ―
ASPs and Managed Managed
Hosting Providers Services Providers
Customization and the silo Striking a balance between
effect destroyed economics customization and scalability
Technology Dumb networks forced ASPs Network Intelligence
to use “best effort” delivery provides the ability to meet
SLAs
Customers favored keeping Customer experience
IT in house with outsourcing
Customers Customers were new to the Internet is core to business
internet and new business operations
models
Source: Cisco IBSG, 2009
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9. Technology (R)Evolution
FLUID DATA
Mobile IP
FLUID Fixed IP
PROCESSES
Semantic Web
Semantic Search
Business Performance
FLUID
APPLICATIONS Personal Information
Web Services Exchanges
FLUID
Hosted SOA
MACHINES IaaS
Platform- PaaS
independent
FLUID Software Mashups
NETWORK
Virtual SaaS/XaaS
Machines
High-performance
IP Computing
Network as
a Service
Time
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10. Technology (R)Evolution
FLUID DATA
EC2 and S3 Mobile IP
FLUID Fixed IP
PROCESSES
Semantic Web
Semantic Search
Business Performance
FLUID
APPLICATIONS Personal Information
Web Services Exchanges
FLUID
Hosted SOA
MACHINES IaaS
Platform- PaaS
independent
FLUID Software Mashups
NETWORK
Virtual SaaS/XaaS
Machines
High-performance
IP Computing
Network as
a Service
Time
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11. New Delivery Models
First Second Third
Generation Generation Generation
Custom Solutions Labor Arbitrage Emerging MS
Attributes High degree of High degree of Configurable with
customization customization low degree of
Little or no Little or no customization
infrastructure/ infrastructure /software Focus on SMB
software sharing sharing and enterprise
across customers across customers High degree of
Typically large, Typically large, sharing for both
complex contracts complex contracts infrastructure and
+ software
Lower-cost labor Typically simple
contracts, monthly
fee, and limited SLAs
Examples EDS IBM Wipro WebEx
CSC Unisys Tata Amazon
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12. Variability and Flexibility
Are Driving Companies to the Cloud
Drivers to the Cloud
“ Cloud can make applications more
Unpredictable / customer centric.”
Variable – CIO, Health provider
Resource
Requirement
“ I am all for cloud – in a small
organization, it is very difficult to hire
or retain staff to maintain software
Agility
and infrastructure.”
– CIO, U.S. County Government
Application “ 5 to 10 years from now, I don’t
Functionality foresee that our Data Centers exist in
their present form... We just don’t
have the scale to be cost effective”
Not so Important Very
Important – CTO, Large US State Government
important
Source: Cisco IBSG Research
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13. History and Security Are the Main
Inhibitors of Cloud Migration
Inhibitors of Cloud Migration “ How can I guarantee security in
the cloud? Well, actually, I’m not
guaranteed security in my
Security internal DC either.”
– Global Cloud technology lead, Technology
Labs, Global SI
“ ~20% of our customers will not
Legacy accept multi-tenancy.
Architecture ~60% can be in multi-tenant, but with
strict security requirements.
Another ~20% actually don’t care.”
– ex-CTO, India based BPO with major US/
Capital EU customer base
Preservation
“ Honestly, I think cloud providers can
protect my data better than my own
Not so Important Very small organization!”
Important important – CIO, US County Government
Source: Cisco IBSG Research
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14. Differentiating
Through Network-IT Convergence
Importance of SP Differentiation “ What’s the point in on-demand IT, if
On-Demand you cannot turn up NW as well.”
Provisioning – VP of Infrastructure and
Telecommunications
End-to-end SLA’s
“ Large Manufacturer.”
Enterprise Ready
– Head of NW Strategy, Media/Trading
Billing
Proximity of Data
Canter
“ Don’t build a $5,000 process for
Mobility of
Workloads CPU a $5 bill.”
– Global SI
Enablement of
Communications “ We like the model where the
Features
application is automatically deployed
0 1 2 3 4 5
close to the end-user.”
Level of Importance
– CIO, Auto parts maker
Source: Cisco IBSG Research
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15. “Move Up the Stack” and “Differentiate”
Through Next Generation Delivery
New revenue
Increased revenue
Higher margins “Up and Over”
Move Up the MS Stack Strategy to
Success in Next Increased scalability
Generation and efficiency
Improved cost
Services economics
Reusability of network
and data center
assets
Differentiate Delivery
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16. SPs Are Challenged To Be the Provider
of Choice
Preferred Cloud Vendor
“ Telcos always seem to avoid the
discussion about cost.”
Hosting – CTO, Large US State Government
“ Telcos are in a key position to play:
they group IT and Communications
OTT / ISV services.
I think some players, like BT, will
come back in the race...”
SI / Server – CIO, Global SI/ BPO
Vendor
“ There is no simple answer... until 6
months ago, start-ups were the only
SP-Telco active players. Now, everybody
getting into this (HP, IBM, Verizon). It
is very confusing... Potentially, we
0 0.5 1 1.5 2 2.5
will use different providers for
Least Neutral Preferred different needs.”
Preferred – CTO, State Government
Source: Cisco IBSG Research
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17. Becoming the Provider of Choice
Leverage
Applications
Partnerships
Computing/CPE Build On Foundation
Network Maintain and Grow
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