The document discusses the growth of the business Ethernet market and opportunities for cable operators to expand their share. It notes that the business Ethernet market grew 43% in 2008. While telecom companies currently dominate the market, the cable networks cover most metro areas and can offer Ethernet services over both fiber and HFC networks. However, cable operators face challenges in penetrating the business market due to geographic fragmentation, inconsistent service levels, and perceptions of cable not being suitable for business. To succeed, cable operators need to develop best practices for high availability services and change customer perceptions.
1. Cable Ethernet Business Services The New Engine of Growth CTAM Business Services Council NCTA Cable Show April 2, 2009 David Hold Sr. Analyst, Current Analysis [email_address] CONFIDENTIAL – NOT FOR DISTRIBUTION
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Notas del editor
I’M GOING TO JUMP RIGHT INTO WHY I SEE BUSINESS ETHERNET REPRESENTING A PRIME OPPORTUNITY FOR CABLE OPERATORS IN SEARCH OF SERVICE AND REVENUE GROWTH. IN AN OTHERWISE DEPRESSED ECONOMY WHERE 10% GROWTH WOULD BE CONSIDERED HEALTHY, ETHERNET EXPANDED BUY 43% LAST YEAR, NOT EVEN INCLUDING OVERSEAS SALES BY US CARRIERS. FIBER COMPONENTS MEAN LONGER SALES CYCLES AND PROJECT TIMELINES WHICH MAY BE STRETCHED OUT BUT ARE LESS LIKELY TO BE CANCELLED OUTRIGHT. KEY DRIVERS SHOULD HAVE INCLUDED DEMAND FOR BANDWIDTH WHICH CONTINUES TO GROW AND MAY BE RECESSION RESISTENT AS COMPANIES SEEK TO CUT COSTS, NOT BANDWIDTH – ETHERNET OFFERS LOWEST COST PER BIT RATIO BAR NONE VERTICALS INCLUDE HEATHCARE – REGIONAL MEDICAL CENTERS WITH MULTIPLE LOCATIONS IN AND AROUND METRO AREAS – LARGE ENOUGH TO COST JUSTIFY FIBER BUILD IF NOT ALREADY IN PLACE – BANDWIDTH INTENSIVE APPLICATIONS INCLUDE TELERADIOLOGY, PICTURE ARCHIVING AND OFF-SITE IMAGE AND RECORDS STORAGE K-12 SCHOOL DISTRICSTS ARE A NATURAL FIT FOR CABLE NETWORKS, ESPECIALLY THOSE THAT COMBINED DIRECT FIBER WITH ETHERNET/OR BROADBAND OVER HFC TO REACH ALL SCHOOLS IN A DISTRICT; HIGHER EDUCATION, INCLUDING COLLEGE CAMPUSES ARE BIG CONSUMERS OF BANDWIDTH, WHILE STATE/LOCAL GOVERNMENT AGENCIES ARE ALSO A GOOD FIT FOR CABLE’S LOCAL/REGIONAL AND STATEWIDE NETWORKS
Worth noting that tw telecom (formerly known as Time Warner Telecom, has about one billion in revenues yet comes in a close second to Verizon. They do this by running fiber to buildings, purchasing special access everywhere else. Meanwhile the largest cable company, Comcast, doesn’t even make the top seven.. Clearly there is a lot of growth potential that is waiting more aggressive moves by cable cos.
Suburban focus makes cable a natural for service organizations with distributed locations; school districts, govt. offices, medical facilities, etc. Even banks with many branches around a metro area are a target of opportunity.
THIS REVIEW SHOWS THAT THE FIVE CABLE OPERATORS WE EXAMINED, MOST OFFER THE FULL RANGE OF METRO ETHERNET DEFINED SERVICES. ALL OF THE MSOS LISTED ABOVE ARE MEMBERS OF THE METRO ETHERNET FORUM, AND SOME HAVE GONE THROUGH THE RIGOROUS CERTIFICATION TESTING PROCESS. ALL ARE USING MPLS TO ONE DEGREE OR ANOTHER, OFTEN FOR TRANSPORT OVER CORE NETWORKS -- ALTHOUGH LIGHPATH HAS GONE FURTHER THAN MOST IN BASING ALL SERVICES ON MPLS.
OUR STUDY ALSO SHOWED A NUMBER OF CHALLENGES FACING THE CABLE OPERATORS AS THEY SEEK TO FURTHER EXPAND INTO BUSINESS NETWORKING…CHIEF AMONG THOSE IS THE FRAGMENTED GEOGRAPHIC DISTRIBUTION. THE OTHER IS DECENTRALIZED NATURE OF CABLE OPERATIONAL STRUCTURE – HAS ADVANTAGES BUT ALSO DISADVANTAGES
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