Transcript IPv6: Identifying the road to revenue

IPv6: Making your Business
Case
North American Global IPv6 Summit
June 24-27 2003
Yurie Rich
Business Director - North American IPv6 Task Force
President - Native6, Inc.
Who am I? Who is Native6
• President - Native6, Inc.
– IPv6 Training & Consulting
• Business Director, NAv6TF
• Active in IPv6 Forum activities
• Focus on IPv6 business case!
– Identifying Opportunities
– Marrying technical advocacy with business
fundamentals
June 2003
Presentation Agenda
• Technology Evaluation Methods
• Method for evaluating IPv6
• Balanced Scorecard
– Financial Measures
– Customer Impact
– Internal Business Perspective
– Improvement & Growth
• Conclusions
June 2003
The IPv6 Business Case
• The business case for IPv6 is simple!
And the answer is....
For Who?
Consideration of IPv6 will vary greatly
depending upon your business model and
your organizational IT goals
June 2003
Evaluating Technology
Technology Adoption Standards
• As with any business acquisition,
technology adoption must meet basic
fundamentals:
– Yield cost savings
– Create or enhance revenue streams
– Generate a competitive or strategic advantage
– Meet a technological imperative
Technology Adoption = Positive ROI
June 2003
Return on Investment (ROI)
• In today’s economic climate, many IT
decisions are viewed mainly by their ROI
• Return on Investment (ROI) can evaluated
a number of ways:
ROI: NPV of input/NPV of output
NPV: CF1/(1+r)1 + CF2/(1+r)2 +.... CFn/(1+r)n
IRR: CF1/(1+r)1 + CF2/(1+r)2 +.... CFn/(1+r)n
June 2003
Other Factors
• ROI is meant to be a precise
measurement
• ROI provides financial measurement,
but often fails to capture other factors:
 Risks
 Intangibles
 Complexity
 Options
Critical to take a broader approach to
technology evaluation...particularly IPv6
June 2003
Balanced Scorecard Approach
Financial
Performance
Customer
Impact/Influence
Strategic
Technology
Evaluation
Objectives
Improvement &
Value Creation
Internal Business
Perspective
June 2003
*Source: HBR, Kaplan & Norton
Evaluating IPv6 in the
Scorecard
Financial Measures
• Cash Flow sources for ROI measurements will
come from
– Cost Savings
– Revenue Streams
• Cost saving can come from operational
•
improvements, reduced administration, improved
integration, cost avoidances
Revenue streams driven by product/service sales
June 2003
Cost Saving Opportunities
• Most compelling is the
long term cost of
maintaining/expanding
IPv4 networks
–
–
–
–
NAT
Address space
Complexity
Limitation in new
technology deployment
– Security
– QoS
Source: Takashi Arano
June 2003
Revenue Streams
• Generated from multiple sources
– Extending the product life cycle of existing
products (porting)
– Innovating products that leverage aspects of
the protocol (new product)
– Innovating new services/features into existing
product lines (product extension)
– Service creation (product support)
June 2003
Customer Impact/Influence
Customer Influences
• Customer perception of your product/services
affected by many factors, including:
–
–
–
–
–
–
–
Price
Quality
Usability
Innovative or “cool” factor
Value perception (quality/price)
Public opinion
Peer influence
June 2003
IP Address Space
• Internet usage continues to increase, despite
market conditions*
– As consumption continues, successful acquisition
of additional global v4 address space decreases
– IPv4 address space not well structured to scale to
the needs of tomorrow’s network infrastructure
• Companies/Consumers must use NAT
– High proliferation of NAT in home networking,
despite its significant drawbacks
June 2003
*Source: ISP-Planet.com, 2003
IPv6 & Product Tethering
• Ability for user and manufacturer to
•
access online devices.
Current model has severe limitations
•
•
IPv6 address space offers ability to
uniquely identify each device
Remote access with an improved
security model
June 2003
Product Tethering
• New product tethering paradigm for
any device that can go “online”
June 2003
Consumer Benefits of Tethering
Remote Access
Autoconfiguration
Web Interface
Service Participation
June 2003
Internal Business Perspective
Internal Business Perspective
• The category is about an organization’s
core competencies
– How do your core competencies support your
customer influences?
– How does your adoption of technology affect
your market position?
– What are the things you need to do best...to
excel at...to service your organizational goals?
June 2003
Core Competencies
• NTT DoCoMo Core
Competencies
Innovation
First-to-Market
Technical Leadership
Tightly controlled
business model
Alliance partnerships
June 2003
Moving beyond the cell phone
• Traditional mobile usage
– Voice, SMS
• New services in last few years
– Picture capture & sending, specialized web
content, e-commerce
• Growing and future services via wireless
– Online gaming, unified communications, video,
streaming media, m-commerce
– Telematics and Location Based Services*
June 2003
*Source: NTT Docomo
Automotive Telematics
• Telematics systems can deliver a wide
variety of services
Emergency dispatching
Entertainment
Driving directions
Roadside assistance
Restaurant location
June 2003
Automotive services
IPv6 in Telematics
• Pilot programs in Japan have already
developed and tested telematic services
enhanced by IPv6*
– Nagoya Taxi pilot program
• Electronic payment
• Passenger information services, driving logs
– Tokyo pilot program
• Content delivery (location based service
information)
• Electronic payment and real-time driving
information (weather, traffic, construction)
June 2003
Source: Internet ITS*
Improvement & Value
Creation
Creating Improvement
• How do you sustain your ability to change
and improve?
Improvement &
Value
Operating
Efficiencies
Continuous
Improvement
Innovation &
Growth
Knowledgeable
Workforce
June 2003
Employ supportive
technologies
Creating Value with IPv6
Employ supportive
technologies
Innovation &
Growth
Improvement &
Value
• Elimination of NAT with
IPv6 allows enhanced
adoption of tools like:
VoIP
Video Conferencing over IP
IM for business
Mobile access
June 2003
Producer Benefits of Tethering (P2P)
Service Upgrades
Usage Data
Telemetry
Troubleshooting
Warranty
June 2003
IPv6 & Workplace Technology
Employ supportive
technologies
June 2003
Conclusions:
IPv6 in the Balanced
Scorecard
IPv6 Adoption considerations
• Identifying how IPv6 will
impact
– Your
– Your
– Your
– Your
product and services
customers
IT services
employees
• Also remember, IPv6 is
inevitable, so what is cost of
waiting to, or not adopting?
June 2003
Financial
Performance
Internal Business
Perspective
Customer
Impact/Influence
Improvement &
Value Creation
Thank you for your time!
[email protected]
Internet Growth
June 2003