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description
SAP Billing and Revenue
Innovation Management
Monetizing M2M
15 November 2012
© 2012 SAP AG. All rights reserved. 2 Public
Why now ?
Source: Economist Intelligence Unit, 1Q 2012
• Falling costs, wider connectivity and maturing technologies
• Regulatory mandates
• A growing range of successful applications and business models
• A maturing provider ecosystem
• Rise of the cloud
© 2012 SAP AG. All rights reserved. 3 Public
Value to the end user
“ Successful technology has two great attributes:
They are invisible to the customer and
they solve a fundamental human need “ Martin Cooper, pioneer of cellular telephone
Connecting the physical world to the online;
your machines works for you
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M2M market forecast
Source: Economist Intelligence Unit
M2M will contribute to >5% of global operator revenue by 2015 ~ $65B
Source: Informa & SAP, 02/2012
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M2M = low ARPU?
0 5 10 15 20 25 30 35
Less than $3
Between $3 and $5
Between $5 and $7
Between $7 and $9
More than $9
Source: Informa & SAP, 02/2012
Average monthly ARPU per SIM, US$, % of survey respondents
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Secure M2M profitability #1
LOW VALUE CONNECTIONS
LOW ARPU
Affordable and re-applicable low cost model
Low ongoing cost of platform ownership
Reduce operational cost
Automation
Business Challenges and Billing Requirements
!
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Connected devices and M2M
7.5
15.0
22.5
30.0
Billio
n d
ev
ice
s
Sources: Machina Research,
GSM Association 2010 2012 2014 2016 2018 2020
© 2012 SAP AG. All rights reserved. 8 Public
M2M connections and growth
0
2
4
6
8
10
12
14
16
YoY adds
Source: Berg Insight, April 2012
Mill
ion C
onn
ectio
ns (
end
201
1)
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Secure M2M profitability #2
HUGE REAL-TIME TRANSACTION VOLUMES
MASSIVE SCALE
Billing Platform to scale for high volume
High performance and high availability architecture
Business Challenges and Billing Requirements
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Future value shift in M2M communications
M2M
revenue
distribution 2012
2015 Service Enablement
Application Services
Connectivity &
Hardware
Vertical Industry specific solutions and managed services
Decision support, Reports and alerts, Data collection storage and analytics, Device monitoring and control, Development toolkit and system integration
Communications services, associated communications hardware (modules, terminals, devices)
Source: Informa/SAP (2012), Berg Insight (2012)
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Source: Informa & SAP, 02/2012
Top 5 M2M operational focus areas CSP
Telecom
equipment
vendor Integrator
Telecom
software
vendor / ISV
Device,
module,
chipset maker
Cloud
service
provider
End-to-end service mgmt ▲ ▲ ▲ ▲ ▲ ▲ Partner mgmt ▲ ▲ ▲ ▲ ▲ Flexible billing ▲ ▲ ▲ ▲ ▲ ▲
Security & fraud ▲ ▲ ▲ ▲ Network traffic
& signalling loads ▲ ▲ ▲ ▲
Ordering & provisioning ▲ Cross-border roaming ▲
Business analytics ▲ ▲ ▲
Secure M2M success
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Multi-sided Partner Revenue Sharing
Consumers
App developers
Corporate
Clients
App/Service
Store
Resellers
¥
$
€
Module and Terminal
vendors
System integrators
Specialized solution
providers
Specialized
communication providers
€
$
£
¥
€
£
$
NW operators
Specialized service
providers
Service
Provider
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Secure M2M profitability #3
Business Challenges and Billing Requirements
RAPID COMBINATIONS AND VERTICAL SPECIFICS MANAGING AND MONETIZING COMPLEX PARTNER RELATIONSHIPS
CHANGING VALUE CHAIN/S
Enable and drive smart partnership value generation,
including Multi Industry Billing support
Handle settlements & commission for global,
complex value chains
Analytics for service differentiation, and additional
end-user value
!
© 2012 SAP AG. All rights reserved. 14 Public
12,7%
3,6%
0,9%
2,7%
4,5%
10,9%
11,8%
11,8%
14,5%
15,5%
20,0%
20,0%
27,3%
46,4%
51,8%
Don't know /…
Other
Military / defence
Agriculture / food
Oil and gas / mining
Manufacturing /…
Integrators
Public safety
Consumer…
Operators / MVNOs
Health
Financial services
Automotive
Utilities
Transport and…
% of CSPs
CSPs’ target industries
Opportunities:
Seek horizontal scale of M2M services and apps
Focus is shifting to specific apps versus specific industries
Monetize the value that lays in the data
M2M focus and trends
= =
Felony
tracking & alerts
Patient
tracking & alerts
Parcel
tracking & alerts
Source: Informa & SAP, 02/2012
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Revenue capture in the M2M value chain
RUN IT
IaaS
Infrastructure as a Service
BUILD IT
PaaS
Platform as a Service
USE IT
SaaS
Software as a Service
App based
Revenue share
CHANGE
AHEAD
© 2012 SAP AG. All rights reserved. 16 Public
Secure M2M profitability #4
Business Challenges and Billing Requirements
LONG-TERM EVOLVING MULTI-SERVICE CONTRACTS CAPTURE VERTICALLY SPECIFIC ROI
RAPID TTM
NEW BUSINESS MODELS
Real-time and Convergent Charging & Billing; supporting a
mix of recurring and usage based micro payments
Flexibility and Agility for Pricing Innovation and flexible
multi-sided business models
Support retail and wholesale price models
Fast TTM; configure not program
!
© 2012 SAP AG. All rights reserved. 17 Public
Monetizing M2M - Billing requirements summary
LOW ARPU MASSIVE SCALE
NEW BUSINESS MODELS CHANGING VALUE CHAIN/S
What is
needed ?
is key to support vertical differentiation
and abstract value vertically
ensures flexible partner management
– thus your success
is needed to cope with the high
M2M transaction volumes
Low TCO;
Low cost footprint
Simplified operation
helps you to sustain the M2M
low value transactions
Scalability
Real-time
High performance
Innovative pricing
Fast TTM
Fast recombination of offers
Vertical specific or horizontal
Complex partnerships
Thank You
Contact information:
Name: Christina Giraud
Email: christina.giraud@sap.com
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