October 25, 2007

It's a Small Business World

By Jim Barthold

Cable claims (and who are we to dispute what cable claims?) that it’s focused on the small-medium business (SMB) sector because the big telcos - Verizon, AT&T and Qwest - aren’t. Apparently someone forgot to tell that to Qwest, which this week introduced an integrated voice and data solution for so-called mid-sized business customers.

The new offering can connect six to 48 employees per location (sounds pretty damned small to us) with a T-1 local loop, router and Internet port and front office equipment that includes a console and handsets. Qwest, in turn, will manage the communications network and provide technical expertise, security firewalls and a hosted VoIP network.

Hmmmmm, since it sounds a lot like what cable would like to do with its SMB offering, perhaps, as Shahar Bar is so adamant in claiming, cable is driving Qwest to do this.

"There’s a lot of competition, but it’s all very regional," said Eric Bozich, vice president of national services at Qwest, and who said competition is just part of doing business in Qwest’s 14-state footprint.

"Being an incumbent has its advantages," said Bozich. Competition is a bit livelier, he said, in areas where Qwest is a CLEC, but being a phone company pitching a business has its advantages as well. On top of that, Qwest is making things "cookie cutter" easy for the SMBs to deploy.

This ease of use and ability to consolidate a number of functions under the watchful eye of a telco is drawing the attention of normally self-serving IT managers at bigger corporations who are considering letting the telco take over responsibility for pesky remote offices.

This, said Bozich, is "something that is resonating more than we thought it would. There are large companies coming to the conclusion that these solutions that integrate things ... have a strong enough value proposition that they’re considering it."

Large corporations, as anyone in the cable space will tell you, are the primary customers for telcos, so when they start pushing small office business the telcos’ way, that’s a red flag. On a standalone SMB basis, Qwest, like everyone in the telecommunications space, recognizes that just because they’re small doesn’t mean that the little guys don’t want to sit at the same table with the big folks. If there’s merged voice and data on the menu, they want a chance to chow down.

For now, that menu treats video almost like dessert, said Bozich, although it is "becoming more and more easy to get your arms around" as "not even an extra feature, just part of the package."

In Qwest’s case, and this is the telecom mentality at its best, video is video conferencing, either via small screens or the giant you-are-there products being offered by some vendors. Video, as an entertainment option for the small office waiting room or as a way to keep track of news and stocks, is not on the Qwest radar, even with IPTV.

"That’s not really elegant today," he said, but "ultimately, that too will be a bolt on."

And wouldn’t it be strange if the ability to offer video entertainment - or at least video programming - proved to be an advantage for cable in the SMB space?

- Jim Barthold