October 5, 2006

Business as Usual?

There’s been some renewed talk about how cable can start serving the so-called business enterprise customers.

By Jim Barthold, Communications Technology

There’s been some renewed talk about how cable can start serving the so-called business enterprise customers. Cox Communications and Time Warner Cable have been making inroads into the large contracts arena, as has perennial maverick Cablevision, via its Optimum Lightpath division.

(In that light, so to speak, we look forward to the keynote address that Optimum Lightpath EVP and GM David Pistacchio is scheduled to deliver at the SCTE Business Services Symposium in Chicago on October 17.)

Yet while cable may not be the vendor of choice for mega-corporations – or even government, as evidenced by Florida’s choice of BellSouth for a statewide network this week - the industry in general has a better shot at the small-medium business (SMB) segment because, frankly, the telcos have tended to either underserve or price gouge these folks to the point where they’re open to a new provider.

Just as satellite grew in response to cable’s tactics, the CLECs were at least a partial response to the RBOCs’ disregard for their small business customers. While CLECs have had a rough row to hoe because of the intrinsic nonfacilities-based foundation of their businesses, cable operators can step in and deal with some eager customers.

If they do it right. This is no residential best-effort deployment. They may be small, but they’re still businesses. At any rate, that’s the segment that many vendors are targetting. Case in point, Intelliverse, with its private label hosted VoIP service for SMBs called Talking Planet Business. The company’s plan is to package its expertise in launching communications service providers who want to serve the very small end of the SMB market with operations that have fewer than 20 lines.

Pitched to cable

Not surprisingly, Intelliverse has pitched the idea to cable companies – outside the top tier providers who are expected to do it themselves. Somewhat more surprisingly, there’s been interest.

“SMB was something they wanted to dip their foot into a little more,” said Frank Paterno, vice president of marketing at Intelliverse. “They’re getting good initial feedback from their potential customers on it, but they’re not willing or not ready or not skilled enough to take the whole launch into a business-like service.”

That’s where Intelliverse will happily help. The company has the technology and expertise in deploying hosted IP systems and, even more importantly, understands the nooks and crannies that pockmark the road to provisioning a business customer with quality service.

“There’s a whole lot more complexity in there in building out a good auto-attendant and (other) interfaces … and there just seems to be a lot more value there for somebody else to do it rather than somebody like a cable company trying to bite it off and do it themselves,” said Paterno.

The commercial niche, he said, is pretty open right now as VoIP gets some market validity.

“The big softswitch companies are going for the larger enterprise and for the smaller residential, which is fine by us,” he said. “I think we can find some good opportunity right between the two of them.”

Right for cable

That opportunity would also be right for cable.

“I think the cable companies should be looking at this kind of stuff long and hard,” said Brian Washburn, a principal analyst with Current Analysis’ business network services.

Cable has an important ingredient to bring to the mix: Its PacketCable mechanisms include QoS, which some other broadband service providers lack.

“This could take them to the next level where they provide a broadband service and eight lines,” he said. “I wouldn’t be surprised if this kind of service would be a way for them to edge into higher line count SMBs in the market.”

- Jim Barthold