INTERNET DATA CENTER
a snapshot view of business evolution, competition, current and future services landscape
Mehmet Cetin, Huawei CA&C, Data Center Solutions
10.2013

Telco Business Trends - WW
Transformation from pipe technology in 2009 to ICT convergence in 2011 - Source： Gartner，Hyper Cycle for telecommunication Industry
Extending beyond the pipeline, and exploring new business models
Surpassing telecom and extending to other industries
Intelligent Perception and Intelligent Control; provide services for industries in order to achieve efficiency, scientific decision making, cost savings

IDC Current Landscape - TR
Mainly co-location and hosting services
DRC services from major telco operators and DCOs
Recent investment and buyouts from carrier independent Europe based DC operators
Local and ME based interest for large co-loco DC green field investments

DCO
Hosting
CSP
xSP Competition Landscape
Data Center
Outsourcers
(IBM, HP)
Infrastructure: Branded hardware, leveraging existing relationships, focus on quality of IT.
Value Proposition: IT management service.
Hosting Providers
(Amazon,
Softlayer)
Infrastructure: Mix of brand and low- cost hardware, service certified.
Value Proposition: Rack density, flexible service.
CSPs
(Singtel, AT&T)
Infrastructure: Mix of brand and low- cost hardware.
Value Proposition: Certified, compliant, pre-integrated.
Hyper Scale Centers
(Google, MSN)
Infrastructure: ODM servers, modular scale-out, low-cost, killer application.
Value Proposition: SAAS

74% YoY growth in DC Investment in Turkey between 2011 - 2012

Gartner’s DC Segmentation
Benefit of own controlling
Benefit of Resource Sharing
Facility
Systems
Applications
Facility
Systems
Applications
Facility
Systems
Applications
Facility
Systems
Applications
Internal
Datacenter
IDC
(Housing)
IDC
(Hosting)
IDC (SAAS)
Service Providers
Own Assets

Possible Steps in Business Evolution
Basic service; co-location, hosting, white space leasing services, profitable when done effectively, efficiently; current market model
IAAS; Provide dedicated and/or shared hardware services; Backend vendor agreements, increase revenue and margins, additional revenue sharing models
PAAS; local Amazon like services for public, private and hybrid cloud hosting
SAAS; rather ecosystem dependent and indirect business modeling unless major change in existing CSP strategy is entertained
DAAS and beyond, ITAAS; market maturity dependent on readiness and willingness needs to be measured; transition when everything else is in cloud

IT is the Business
•In next 5 years, IT related service will become major part of CSPs’ income.
•In 2010, CSPs’ Data center construction projects has increased 500% (Gartner)
CSP Reporting Lines CTIO heading networks and IT, reporting to CEO
• Vodafone
• Telstra
• Deutsche Telecom
• T-Mobile, US
Managers with an IT background and diversified management experience, tend to show the necessary skills for a CTIO role, which requires management of evolving skills, complex and converging technologies and diversified suppliers
Gartner, 2011

Internet data size double every two years - immediate opportunity
Information explosion requires data center to store the information: UCG (Blog, etc), Multimedia, Video data, let to double size of global data every 2 years
Data flow replacing voice, occupies major capacity of CT network
Internet data flow increase 70%/year
Content need be to stored in IDC, to assure customer experience
Others：Clearance between CSPs, Customer experience assurance, etc.
China mobile pay 1M RMB/Gb/month to China telecom

IDC Value Added Services
VPN/MPLS
Target customers: enterprises with multiple operation in the South East Asia region
Data Access
Target customers: Content providers; enterprise need to access centralized mail server globally; business travelers.
DDos Mitigation
Target customers: large web sites and enterprise
Service—Disaster Recovery
Target customers: large enterprise, mission critical system

Typical Operator’s IDC Business Pain Points
1.High Price: Price normally higher than internet companies
2.No business differentiation: Not understanding enterprise customer’s pain points, not able to create business advantage with network
3.Low management automation: IDC management solution not cost effective, poor customer experience
Operator
Internet Companies
Cost Compare
Hardware
Branded
ODM
Price 10% higher
Software
Licensed
Opensource（Linux、 Hadoop、Openstack/ Eucalyptus）
Opensource software no cost
Power(PUE)
2.2-3.0
1.05-1.8
Power efficiency 40% lower
Density
3~4 servers/sqm
10+ servers/sqm
Overall cost 30%+ higher

Huawei’s IDC position
Further WW focus on IDC business beginning of 2013
Expertise in building, operating DCs – IDC, EDC
Over 120 simultaneous DC projects as of 2013H1
Regional DC technology center scheduled end of 2013 in Istanbul
Ready to support DC transformation at business and technology levels

Backup Slides

Industrial IT solutions IaaS+ SaaS Opportunity
CeBit： DT vision — Innovative ICT solution provider; connected life, connected work
NTT Strategy： Provide “Networked IT solution” for industrial customer
Leading operators’ focus on networked IT solutions

Telcos Around the World
Far EasTone Telecommunications is saddled with a relatively small and mature domestic market, telecom carrier has focused on nontraditional services, such as digital books, advertising, social media, digital music and application stores, to boost its revenue. It is focusing on local preferences and culture (through which it can avoid head-on competition with global competitors), and on pursuing opportunities in the cloud computing space.
Telefonica: has set up a mobile banking joint venture with MasterCard, targeting consumers in Latin America. It has participated in social networking (Tuenti), IPTV, media and M2M services. It also has an investment arm seeking out new technology and service innovations.
France Telecom is aggressively pursuing nontraditional service opportunities. It has acquired Unanimis (which provides digital advertising), in addition to participating in mobile payment initiatives. It is also seeking to invest in Dailymotion for online video distribution.
Sprint is pursuing nontraditional service opportunities to remain competitive. Sprint is participating in digital applications such as advertising and music (Sprint Music Plus, for example, in which it leverages its partnership with Rhapsody). It has forged an agreement with American Express to enable its smartphone users to use Serve, American Express' mobile payment service. Sprint was also the first telecom carrier to support Google Wallet, in early 2011. It is also establishing its M2M ecosystem.