Vision : Making People's lives better in the Networked society

Executive Summary

Interoperability solution provider to Healthcare Industry

- Interoperability solution provider in the healthcare ecosystem

- Standard data gathering platform provider to small/middle sized hospitals

Healthcare

Mobile Network provider to enhance current electricity system to the next level using smart grid technology

- Advanced Meter Infrastructure for electricity network

- Mobile electricity monitoring system

- Mobile payment service for the electricity

Energy

Executive Summary

Vision of Ericsson is to make people's lives better in the Networked society. In the healthcare industry, Ericsson will enable the industry to act as a solu-tion provider in terms of Interoperability solution provider in the healthcare ecosystem, and as a standard data gathering platform provider to small/mid-dle sized hospitals. And in the energy industry, Ericsson will be a mobile network provider to enhance current electricity system to the next level using smart grid technology with the basis of advanced Meter In-frastructure for electricity network, mobile electricity monitoring system, and mobile payment service for the electricity

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How should Ericsson shape the future of the Healthcare and Energy sectors?

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Ericsson / BU Case Competition

March 26, 2011

1. Vision & Summary

Agenda

2. Analysis and recommendations for Healthcare

3. Analysis and recommendations for Energy

4. Conclusions

Vision : Making People's Lives Better in the Networked Society

Vision & Summary

Interoperability solution provider to Healthcare Industry

- Interoperability solution provider in the healthcare ecosystem

- Standard data gathering platform provider to small/middle sized hospitals

Healthcare

Mobile Network provider to enhance current electricity system to the next level using smart grid technology

- Advanced Meter Infrastructure for electricity network

- Mobile electricity monitoring system

- Mobile payment service for the electricity

Energy

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Healthcare

Healthcare is one of the highly disruptive potentials and quick to changes → Need to Find Opportunities from low consumption area

Disruptive Potential of ICTDisruptive Potential of ICTHow low-end disruption occurs

over timeHow low-end disruption occurs

over time

High

Speed of update

MedMed High

Utilities

Consumer goodsBanking/Financial Services

Education

Security

Healthcare

Government RetailTransport/automotive

Healthcare as a highly disruptive potential

Disruptive potential

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. National Health Expenditures per Capita has increased dramatically

* Between 1999 and 2008, the cumulative growth in health insurance premiums was 119%, compared with cumulative inflation of 29% and cumulative wage growth of 34%; Source: Kaiser/HRET Survey of Employer-Sponsored Health Benefits,1999-2008

. Hospital and Clinical services are the biggest part of national health expenditures (>50%)

Status of US Healthcare expenditure structure

National Health ExpenditurePer Capita

National Health ExpenditurePer Capita

Distribution of National Health Expenditures

Distribution of National Health Expenditures

Significant Pressure to bend the Cost/Quality curve

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Win–Win Hospital

. Become a part of Healthcare Ecosystem. Making Data Interoperable. Hospitals save CAPEX, OPEX due to Cloud server powered by Ericsson

. Credibility powered by Ericsson

. Saving server maintenance cost. Synergize with Ericsson. Saving server maintenance cost

Hospital

Recommended Biz. Model in Healthcare

A part of Healthcare Ecosystem as Network solution provider

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NetworkOperators

Hospital

CustomizedDiagnostics

DataTransformation

DataTransfer

Patients

Hospital

Recommendation 1

Becoming Solution provider for interoperability in the healthcare ecosystem

Service

Infra

Infra

Broadband

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Diagnostics

ProcessingReporting

Filming

PACS

Data Transfer

Hospital A

Legacy systemMiddleware

Solution by Ericsson

Partner Hospital

Pharmaceutical companies

Cloud Server Powered by Ericsson

Diagnostics

ProcessingReporting

Filming

PACS

Hospital B

Data

$

Standard Data gathering Platform

Recommendation 2

Standard Data gathering platform provider

PACS : Picture archiving and communication system

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NetworkInfrastructure providers

Service Solution Providers

DeviceManufacture

Operator

Competitive Landscape 2015 in Healthcare

Ericsson is the first position in Network provider

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Revenue uplift expectations in US region in 2015,

1. Strategic partnership for Healthcare IT sector

2. Strategic alliance with Healthcare device company

* Size of US Healthcare IT market in US expected to be $6.6B with assumption that Ericsson takes 30% for solution provid -ing, and McKesson takes 50% of the market. Y/Y growth rate is 3.4% (From www.globaldata.com)

** Assuming that Ericsson takes up 30% for providing NW solution to GE Healthcare which has $3B in 2010 US market. Y/Y growth rate is 3.4% (S&P Healthcare Index)

Total financial impact

Financial Impact from alliances

$ 1.2B *$ 3.6B **

$ 4.8B

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Energy

A Networked Society Should Conserve Energy

Electric powercompany

House

Building

A smart grid is a form of electricity network utilizing digital technology

. The market for the smart meter, which monitors electricity bill information is expected to increase.

. Electricity transactions & prices are supplied to consumers in real-time.

. Consumers can generate electricity using solar or wind power systems to sell it to other customers or electric power companies.

Electric powercompany

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Smart Grid MarketSmart Grid Market

Unit : Billion

870

CommunicationComponent

AMI* Hardware

AMI System

Grid Solution

Smart Grid Value ChainSmart Grid Value Chain

Smart Grid Trend and Value Chain

* AMI : Advance meterInfrastrue

Smart Grid market will be increased by 6 times in the next 20 years

Ericsson is targeting for AMI hardware and AMI system

CE/표준

CE/표준

CE/표준

CE/표준

CE/표준

CE/표준

CE/표준

CE/표준

CE/표준

CE/표준

CE/표준

CE/표준

CE/표준

CE/표준

134

870

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Recommended Biz. Model in Smart Grid

1. Provides the Advanced meter infrastructure (AMI) for electric-

ity network → Alliance with Itron corp.

2. Supplies a mobile electricity monitoring system

→ Utilization of Sony-Ericsson smartphone

3. Offers a mobile payment service for the electricity

→ Alliance with PayPal corp.

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2011 2015

Competitive Landscape 2015 in Smart Grid

Become a leader in mobile Elec-tricity Monitoring & Payment Sys-tem

Alliance with Itron will result in increase of market share due to increment in AMI market

Alliance with PayPal will result in increase of market share: Smartphone demand increases if Ericsson invents mobile payment

systems, Ericsson will have a competitive advantage over competitors

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Key Partnership & Alliance in Smart Grid

Mobile Electricity Payment Service Smartphone users are able to use mobile electricity payment services in anyplace, anywhere, anytime.

Why PayPal? PayPal is a leading online transaction processing company that has a high level of online payment technology.

Mobile Electricity Monitoring System Itron can provide electricity monitoring system devices (i.e. smart metering)

Why Itron? 1) Market shares (ranked 2nd in the world) 2) technical fundamentals

2011 2012 2013 2014 2015

Completion of alliance with Itron and PayPal

Completion of developing the mobile electricity payment system (w/ PayPal), & constructing the cloud system for the electricity database. (w/ Akamai)

Launch of the mobile electricity payment system

Extension of cloud and network systems(demand for electricity payment will be expected to increase)

Completion of Partnership

Completion of developing healthcare system & constructing the cloud system for the electricity database

Extension of cloud and network to Europe and others

Managed services

Execution Roadmap of EricssonTeam Dallas

Vision : Making People's Lives Better in the Networked Society

Interoperability solution provider to Healthcare Industry

- Interoperability solution provider in the healthcare ecosystem

- Standard data gathering platform provider to small/middle sized hospitals

Healthcare

Mobile Network provider to enhance current electricity system to the next level using smart grid technology

- Advanced Meter Infrastructure for electricity network

- Mobile electricity monitoring system

- Mobile payment service for the electricity

Energy

ConclusionsTeam Dallas