The Tao of Enterprise Abundance

Mobility, Technology and Customer Satisfaction

By Matthew Colella

 

There can be no doubt that the current state of our economy, coupled with fluctuations (ahem) in inflation rates has taken a toll on consumer spending.  In fact, The Conference Board (a research organization tracking American economic health for nearly 100 years), says consumer confidence has dropped to its lowest level in 16 years.

So unless you’re in the business of selling high-def TV sets (and probably even still), the desire of consumers to curtail spending is affecting your bottom line.

If we take as a given that consumer revenue opportunities are becoming harder to develop, then isn’t a natural solution to this law of diminishing returns enterprise services?  Chinese philosophy calls it the unity of opposites; the industry’s yin and yang, and recognizing the harmony of consumer and business customers can lead a company down a path to true abundance.

Take Research In Motion, for example, which actualized tremendous technological and financial success with its BlackBerry device.  Researchers at Analysys Mason say the BlackBerry is responsible for users being accustomed to carrying a handheld data device and is why operators should focus on extending that on-the-go concept to other applications.

“Pushing e-mail to the device, instead of requiring users to log in to check their inboxes, transformed a service that people rarely bothered to use into a must have for executives,” writes AM Associate Margaret Hopkins.  BlackBerry’s success, the analyst says, is further proving to the multiplatform industry that impressive revenues and growth from mobile enterprise solutions are not only possible, but highly probable.

But mobility isn’t the only way to generate enterprise wealth.  As we’ll discuss in this issue of The BRIDGE, today’s business clients need reliable ethernet access and satellite systems to make global commerce a reality.  If the multiplatform industry can nurture its relationships with the enterprise market, then surely it can achieve its destiny of profit-margin Zen.

Visions of Enterprise Prosperity

 

Analysys researchers say increasing price competition in the consumer sector makes it difficult to understand why operators continue to focus their efforts almost exclusively on end users.  The firm says by moving beyond their core business models, operators could tap previously untouched revenues by putting more emphasis on business voice and data services accessible in and out of the office.

According to data from Companies and Markets, global revenue from enterprise network services increased 4 percent last year to $359 billion.  The research firm says in Europe alone enterprise markets are expected to generate $33.28 billion in 2012, representing significant growth from roughly $27 billion in 2006.

Researchers at the company say North America will remain the largest market in terms of wireless local area network (WLAN) spending, with enterprises investing more than $500 million in related equipment in 2008.  Globally, Companies and Markets says, enterprise WLAN infrastructure revenues are expected to reach nearly $1.4 billion by the end of 2008, up from $1.07 billion in 2006.

A recent report from Pike & Fischer examining mobile markets for North American businesses says more than 90 percent of enterprise mobile applications spending is now focused on mobile e-mail and messaging.  The study also says the percentage of spending on mobilizing other critical enterprise apps – many of which are “broadband-optimized” – will increase rapidly during the next five years.  By 2012, the firm says total spending on core mobility services in the North American enterprise market will approach $1.4 billion.

One of those applications is mobile location-based services (LBS) which seem to be gaining serious traction among mobile users.  Not just for finding friends, LBS applications such as parcel and vehicle tracking services, employee management and personalized weather systems have all found favor with business clients.  According to a recent study from ABI Research, LBS revenue is expected to reach an annual global total of $13.3 billion by 2013, up from an estimated $515 million last year.

While this impressive growth is being driven on the supply side by the popularity of GPS-equipped consumer handsets, ABI analyst Jamie Moss says enterprise services are projected to be the highest revenue-generating application of LBS technology.  According to the study, LBS apps will push the value of enterprise services to about $6.5 billion per year by 2013.

Surveying Satellite’s Chi

 

Successful location-based services and reliable mobile applications are dependent upon the satellite support systems which enable them.  So it’s centering to hear industry analysts say solid, steady growth in classic enterprise and small/medium sized (SME) broadband VSAT services will be a reality for many years to come.

According to researchers at Northern Sky Research, continued growth in shared-hub and managed services in most regions of the world will generate enterprise service revenue increases at a steady rate through 2011.  On a global basis, the firm says service revenue for the entire industry will increase at an average annual rate of 11 percent over the next five years with single site satellite broadband services having success in markets outside of North America, such as Thailand and Australia.

NSR also says new service launches in Europe and possibly elsewhere in the world could help generate service revenue growth in excess of 22 percent per year through 2011.

“Increasingly fat bandwidth pipes for existing broadband VSAT networks will increase revenues as companies take advantage of standardization to carry on additional IP-based applications to their enterprise networks,” says Patrick French, NSR’s Senior Analyst.

NSR’s latest Broadband Satellite Markets report says classic VSAT networking services for corporate and governmental clients have dominated the greater satellite broadband market for decades.  “The promises first made for satellite broadband internet access services in the late 1990s dot.com heyday are now finally on the verge of being fulfilled,” says French.  “Dividends from the large satellite broadband internet access investments are finally about to be paid out.”

Needless to say, this is very good news for companies like Hughes and WildBlue Communications, two satellite broadband providers that have embraced the enterprise market as cornerstones of their respective business models.

Hughes has been managing large-scale enterprise networks for nearly two decades, and the company’s HughesNet satellite broadband service has been recognized as a top-tier provider by both The Yankee Group and Vertical Systems Group.  With more than 120,000 fully managed locations for 60 Fortune 500 enterprises, Frost & Sullivan tagged the company as its North American Space & Communications Company of the Year Award (2006), and the North American Retail Market Penetration Leadership Award in 2007.

And it wasn’t long ago that WildBlue Enterprise Solutions developed a new dish exclusively for its business clients.  The company says its .98 meter dish is designed to provide greater network availability for the service across its next-generation, Ka-Band spot beam birds.  WildBlue Enterprise also partnered with financial services outfit InteliLease earlier this year to offer business satellite customers a variety of financing products to help relieve the burden of heavy upfront costs.

Despite NSR’s report projecting that revenues from consumer satellite broadband services will overtake enterprise class broadband VSAT network services by 2013, slipping into the number two position will not affect enterprise markets negatively.  Quite the contrary, NSR says, as the two markets (consumer and enterprise) are “intimately linked especially on the technology development level, and gains made in one area are often easily transferred to the other.”

The firm’s study estimates that revenues from the global broadband VSAT networking market will climb from about $1.5 billion last year to more than $2.6 billion in 2017.  Further, NSR says, steady demand from corporate clients in all regions of the world is contributing more than its fair share to future growth as well.

Manifesting Cable’s Potential

 

Various industry analysts have estimated that enterprise services could yield upwards of $60 billion for cable operators if they could attract some of the business traditionally dominated by the local telco.  Every year the cable crowd says they’re getting serious about the business industry, and every year industry press folk like us ponder when they’ll make good on their claims.

But as the saying goes, timing is everything, and it just may be the right time for cable to get serious about the enterprise race.

Market analysis firm Infonetics Research recently released data saying worldwide revenue from hosted VoIP and managed IP PBX (private branch exchange) services jumped 52 percent to $24 billion last year after surging 66 percent in 2006.  The company says these numbers should continue for the next handful of years with projected double-digit growth rates through at least 2011.

Infonetics’ VoIP Services and Subscribers report says that while various roadblocks have kept businesses from embracing VoIP services as quickly as consumers, the trend is about to change as technical issues are being resolved.

“Many PBX manufacturers have already added SIP (Session Initiation Protocol) trunking interfaces to their equipment, and more recently, they’ve greatly expanded the list of certified service providers, and that’s going to fuel the growth in SIP trunking services,” says Matthias Machowinski, the firm’s directing analyst for enterprise voice and data.  “These kinds of developments will boost the overall VoIP business services segment for years to come.”

According to Infonetics, the number of global SOHO (small office/home office) VoIP subscribers grew 60 percent last year to more than 75 million, with the largest gains here in North America and EMEA (Europe, the Middle East, and Africa).  The report also says business customer (vs. consumer) share of worldwide hosted VoIP service revenue will increase from 26 percent in 2007 to 41 percent in 2011.

Not long ago at The Cable Show in Na’lens, a group of cable execs delivered a telling panel discussion on how their companies approach the enterprise market.  Titled Best Practices: Roadmap to business services’ operational success, higher-ups from several major operators opined on the prospects of luring commercial customers away from the telcos.

We heard things like, “our priority is the small- to medium-size businesses first, and then the larger corporate enterprises second,” and “business services are merely an extension of the platforms we already have in place for video, voice and data services.”  Others acknowledged the potential for greater profit margins in the enterprise sector and were crafting business models that de-emphasized putting all of their revenue-generating eggs in a residential services basket.

One company, notably Cablevision and its Optimum Lightpath, has forged its own path into the enterprise market by committing to a separate fiber infrastructure for ethernet business services years ago.  That, the company says, is what enables it to pursue big fish in the enterprise seas like government agencies and other multi-national corporations.  Additionally, Optimum Lightpath can individualize customers thanks to Cablevision’s cable modem business, allowing the operator to offer business services to the office environment that are separate from its fiber-optic pipeline.

In February, Frost & Sullivan gave Optimum Lightpath its 2008 North American Ethernet Service Emerging Company of the Year award for investment in technology innovation, new product introductions and marketing strategy.  In March the company accepted its tenth consecutive New York State Public Service Commission (PSC) Commendation for Excellent Customer Service award since 1998.  And most recently at NXTcomm08, the company received a Communication Innovators Award from New Paradigm Resources Group and an Ethernet Service Provider of the Year award from Metro Ethernet Forum, a global industry alliance dedicated to accelerating carrier ethernet networks and services.

According to the Insight Research Corporation, the overall U.S. ethernet services market is expected to grow from the $940 million it generated in 2006 to more than $5 billion in 2012.  “This accelerated adoption of carrier ethernet, and Optimum Lightpath’s success, are a direct result of medium and large business’s requirements for deploying data intensive and mission critical applications over a fully fiber optic network built for business,” the company says.

Deepening Competitive Relationships

 

Perhaps in part to both the obvious revenue generating potential in carrier Ethernet services and Optimum Lightpath’s growing success, two other cable companies recently unveiled a strategic alliance of their own.  In a move largely unheard of in today’s cutthroat multiplatform industry, Cox and Charter have joined forces in select regions of the country to provide more competitive telecommunications links for enterprise customers.

In March, Cox Business and Charter Business announced that the two companies are teaming on a direct fiber-optic cable link between metropolitan areas outside of traditional service footprints.  Through the joint venture, businesses in Las Vegas and Reno, Nev., now have connectability for offices and data systems with a dedicated SONET, Ethernet connection or IP transport service.  A similar link has also been established between Cox in Orange County, Calif. and Charter in the Los Angeles area, the companies say.

“This agreement brings a competitive choice to businesses that need to communicate with locations in other key commerce hubs in the western U.S.,” says Jim McGann, Charter Business VP and GM.  “While customers have always been able to obtain fiber optic network services within the Charter Business and Cox Business footprints, they were limited to regional telephone companies to connect locations across the two footprints.”

Adds David Blau, VP and GM of Cox Business, “By interconnecting our existing robust networks, we’re able to provide customers with a reliable and competitive choice.  The simplicity of one carrier, one network provider, one bill, one number for technical support and seamless connectivity creates immediate cost and resource efficiencies for our business customers."

Inspiring Telco Efforts

 

Making major waves in the enterprise space is Verizon Business, which during the past several months has launched an impressive array of business-class solutions centered on managed services, mobility, collaboration and security and applications management.  Not long ago, the company launched its high-def video conferencing for both public and private IP networks, rolled out its managed LAN service across Europe, the Middle East, Africa and Asia-Pacific, and expanded the availability of its hosted interactive voice response service in Europe.

The moves helped the company post solid year-over-year revenue growth for the second quarter of 2008, generating $5.3 billion during the period.  Verizon Business’ global sales of strategic products such as IP, ethernet and optical-ring services contributed to its successful Q208 by generating $1.5 billion, an increase of 18.7 percent from the second quarter of 2007.

In May VB joined a consortium of 16 companies to help build a next-generation undersea optical cable system connecting Europe, the Middle East and India.  Dubbed the Europe India Gateway (EIG), the new system is the third major submarine cable project Verizon Business has helped launch in the past four years.  (The company is also the only US-based founding member of the Trans-Pacific Express Cable – a $500 million project that will establish the first high-speed direct link between the States and mainland China.)

This year Verizon Business has increased its total number of private IP ports by more than 45 percent and its ethernet access capabilities by more than 400 percent – establishing new IP nodes in China, Malaysia, the Philippines and South Korea; Bulgaria and Romania; and Argentina, Brazil, Panama and Peru.  Verizon Private IP is now available to customers in 121 countries and territories worldwide, with additional node deployments planned this year in Iceland, Pakistan, India and Russia, the company says.  VB also doubled the number of countries with ethernet access to its private IP network.

And just last month Verizon launched FiOS TV for Business, a new pay-TV service designed specifically for small- and medium-sized businesses delivered via the company’s all-digital fiber-optic network.  Verizon says the service is available immediately in areas of its 13-state FiOS TV footprint for $50 per month.

“The introduction of FiOS TV for Business brings an extraordinary TV experience to the commercial viewing space,” says Monte Beck, Verizon’s VP of business marketing.  “Judging from the positive response we’ve had to FiOS TV, it can give a competitive advantage to businesses that offer TV viewing to their customer.”

And it’s not like we haven’t noticed, but that other telco is offering its own impressive array of digital enterprise services too.  Just a few short weeks ago, AT&T Global Business Solutions announced the rollout of its Digital Media Solutions portfolio of content distribution services and a global agreement with Cisco to provide an industry-first, fully managed intercompany “telepresence” solution for multinational customers.

According to the company, AT&T’s Digital Media Solutions portfolio includes content distribution and management, broadcast video and digital signage services and solutions.  Built upon Cisco's Telepresence platform, platform, the AT&T Telepresence Solution provides business customers with high-def video conferencing systems designed to “improve collaboration among partners, suppliers and customers, accelerate productivity and achieve substantial cost savings through reduced travel.”

AT&T GBS delivered impressive enterprise growth rates during 2Q08 with an 18.4 percent increase in enterprise IP data revenues and a $37.5 million contract to build a single global network for the National Polar-Orbiting Operational Environmental Satellite System.  The telco also released its annual study on business continuity and disaster recovery preparedness, while The Yankee Group named its BusinessDirect customer portal the top telecom carrier customer web portal for the fourth consecutive year.

Reaping the Benefits

 

We all know how you multiplat-form-types love your awards and recognition …  And with everyone jockeying for enterprise service supremacy, we figured you’d be interested in knowing who’s most recently been placed atop of the business services mountain.

So without further ado, here are the winners from the latest round of J.D. Power and Associates enterprise awards.

According to the firm’s 2008 Business Wireless Satisfaction Study, Verizon Wireless ranks highest in overall customer satisfaction for wireless data service, best meeting customer expectations and requirements of both large enterprise and small/mid-size business segments.  The study measures customer satisfaction in terms of eight key factors including (in order of importance): call quality (23 percent); sales representatives/ account executives (16 percent); company image (12 percent); customer service (11 percent); billing (10 percent); offerings and promotions (10 percent); cost of service (9 percent); and performance and reliability (9 percent).

The J.D. Power study says T-Mobile follows Verizon Wireless in the rankings and received high ratings from small/midsize customers in cost of service, offerings and promotions, and sales representatives/account executives factors, and in the large enterprise segment with billing and cost of service.  The study also finds that large enterprise businesses are more likely to have dedicated sales representatives to deal with customer service issues, which tends to lead to higher levels of customer satisfaction.

J.D. Power’s 2008 Major Provider Business Telecommunications Study says Cox and Qwest rank highest in satisfying small/mid-size and large enterprise business customers with data services, respectively.  The study measures customer satisfaction with providers of data services such as cable modem, DSL, T1, T3/DS3, Ethernet and frame relay in six key factors (in order of importance): performance and reliability; sales representatives/account executives; billing; cost of service; offerings and promotions; and customer service.

The study says that while Cox leads the small/midsize business segment and Qwest leads the large enterprise business segment, Verizon follows both companies in their respective segment rankings.

And last but not least, J.D. Powers’ 2008 Major Provider Business Telecommunications Voice Services Study ranks Verizon highest in satisfying small/midsize business customers and AT&T highest for large enterprise customers with their local telephone services.  The study measures customer satisfaction with six factors: performance and reliability; sales representatives/account executives; billing; cost of service; offerings and promotions; and customer service.

With a score of 635 on a 1,000-point scale, Verizon leads the small/midsize business customer segment, with AT&T ranking second with 617.  AT&T ranks highest in the large enterprise segment with its 678 score, with Verizon coming in second at 658.

Interestingly enough, the study shows that just 5 percent of small/mid-sized business customers say they are “pleased” with their local telephone voice service, compared with 21 percent in the 2007 study.  In the large enterprise segment, 12 percent of customers indicate that they are “pleased,” down from 21 percent last year.

Maybe the cable crowd should re-read that last paragraph …•

MultiMAX

2014!

 

NBC-Universal did a pretty good job covering the 2008 Olympics … at least from my shifting vantage points.

The best picture was on my hi-def set (40” Bravia) connected to DIRECTV.  Second best picture was on my older 52” Sony connected to Comcast.

Smallest picture – but by far best experience – was in the seats at the Water Cube, Bird’s Nest and National Indoor Stadium.

Watched Shawn Johnson’s balance beam win.  And the Jamaican Bolt’s bolt.

So why headline this 2014?

Because ESPN says it will be in the bidding next time when the current IOC/NBC deal runs out.

Saw that news in Beijing … but the ESPN ad in Sunday’s (08/24) New York Times was the coolest gauntlet I’ve seen thrown since an Errol Flynn movie … it read:

“THE FIRST ONE

“THE LEZAK COMEBACK ONE

“THE TIED FOR THE MOST GOLDS ONE

“THE LEAKY GOGGLES ONE

“THE FIVE BODY LENGTHS ONE

“THE HALF-HOUR BEFORE THE SEMI-FINALS ONE

“THE HUNDREDTH OF SECOND ONE

“THE HISTORIC ONE

“FOR 9 NIGHTS, WE WEREN’T WATCHING US EITHER.

“ESPN”

Cool.  Gonna be some bidding.•