Light Reading

Enterprise RFPs Are Up – Contracts Not So Much

Carol Wilson
10/9/2012
50%
50%

DALLAS -- Comptel Plus -- Many competitive carriers are seeing increased interest from enterprises and quotes for major network upgrades, but many of those solicited contracts are sitting unsigned for longer than usual.

The explanations for this vary, from political uncertainty to the complexity of making a major transition, such as moving to the cloud.

And those carriers that sell both wholesale services to other network operators and enterprise offerings see their network business as more stable right now.

"Our carrier business is right on target," says John Hoffman, Ethernet product manager with Tata Communications Ltd. , in an interview conducted via Tata's Chicago telepresence suite. "But on the enterprise side, we are seeing softness in general. It's not for lack of interest -- we're getting lots of RFPs, but they are signing only about 5 percent of the quotes."

Hoffman believes general economic uncertainty is the major factor -- not only from the presidential election but from the financial cuts that loom if the U.S. Congress can't agree on a debt ceiling increase, as well as from European financial woes and a perceived economic slowdown in China.

As a result, enterprises are trying to get by where they can, and only spend on what is "a guaranteed home run in terms of cost reduction or increased revenues," he says.

FiberMedia Group LLC , which is selling high-speed connections in the New York-New Jersey corridor and to data centers in Cleveland, is also seeing a longer sales cycle with enterprises, but John Panzica, senior vice president of sales and marketing, is attributing that to the higher complexity of sales, more so than economic uncertainty.

"These are complex enterprise solutions, particularly when you are talking about moving the IT spend into the cloud," he says. "The amount of scrutiny and the process behind these large complex solutions is more involved, particularly because they also involve decisions about staffing and budgets."

Beyond the network, these deals have many moving parts including the convergence of mobility, the cloud and hosted software, Panzica says, and that's prolonging the decision cycle.

tw telecom inc. (Nasdaq: TWTC) isn't seeing any market softness, but CEO Larissa Herda admits it could be around the corner if Washington doesn't resolve the budget crisis.

"Last summer, when the financial cliff was ridiculously upon us, because of the debt ceiling debate, customers did delay their buying and they may go into the same mode if it happens again," she says.

For some markets – content providers are a big one -- the wholesale traffic volume just continues to rise.

"Quoting volume is through the roof," acknowledges Greg Spraetz, senior vice president of wholesale services for Level 3 Communications Inc. (Nasdaq: LVLT), which is also seeing major growth for its services into Latin America from every other part of the globe. Sometimes the sales cycle is more prolonged, he adds, but that's often in situations where a carrier is trying to determine how to optimize its operations.

"A lot of larger carriers are looking to consolidate the number of preferred vendors," he says. "We think it helps us because we have a lot to offer as a single vendor, after the merger [with Global Crossing]. We can go in and help them do network optimizations that help a carrier with a couple of thousand enterprise circuits operate more efficiently."

Financial services has also been a growth market, particularly for those with low-latency offerings, but there is some caution in the market about future government regulation of high-frequency trading, says Joe Cumello, vice president of marketing for Sidera Networks Inc. .

"They know the government is looking at the high-frequency trading market and whether it needs to be regulated, but for now, financial services are buying, and we are finding strong growth also in wholesale and content markets," he says.

— Carol Wilson, Chief Editor, Events, Light Reading

(0)  | 
Comment  | 
Print  | 
Newest First  |  Oldest First  |  Threaded View        ADD A COMMENT
Flash Poll
From The Founder
Network architects aiming to upgrade their networks to support agile, open, virtualized services in the 21st century need to consider new criteria when choosing between technology suppliers.
Live Streaming Video
BTE 2015 Sponsor Keynote: HP
Dr. Prodip Sen, CTO, Network Functions Virtualization, HP
LRTV Documentaries
IoT in Action

6|30|15   |   1:39   |   (5) comments


Two co-workers discuss the benefits of IoT technology.
LRTV Interviews
Ericsson Opens Up on OPNFV

6|30|15   |   14:16   |   (0) comments


Martin Bäckström, VP and head of industry area Datacom at Ericsson, talks to Light Reading founder and CEO Steve Saunders about the emergence of OPNFV, the importance of standards and Ericsson's OPNFV plans.
LRTV Custom TV
NetNumber Founder Discusses NFV/SDN Impact on SP Networks

6|26|15   |   4:15   |   (0) comments


NetNumber Founder Doug Ranalli examines why SPs need a new network infrastructure for service agility. While NFV and SDN are the tools, the old ways of thinking about signaling control are inhibitors. Doug provides his recommendations.
LRTV Custom TV
Orchestrating NFV vCPE Services Across Multivendor Networks

6|26|15   |   5:46   |   (0) comments


Nirav Modi provides an overview of vCPE, the fastest-growing NFV use case, showing how Cyan's Blue Planet orchestrates vCPE services across a multivendor infrastructure to rapidly deliver new managed services for business customers.
LRTV Custom TV
ZTE at LTE Summit Amsterdam 2015

6|26|15   |     |   (0) comments


As one of the leading global telecommunications providers, ZTE presented its cutting-edge technology at LTE World Summit 2015 in Amsterdam. On display at ZTE's booth were the latest R&D achievements in wireless, 5G development, HetNet, deep convergence of FDD and TDD, and RCS/IMD/iSDN/vCN.
LRTV Documentaries
OPNFV Director Opens Up on Women in Tech

6|25|15   |   3:25   |   (0) comments


Heather Kirksey, the director of the OPNFV, gets real about the gender disparity in open source and standards and discusses how we can change both the conversation and the gender dynamics.
LRTV Custom TV
Symantec's Service Provider Security Strategy

6|24|15   |   7:06   |   (0) comments


Didi Dayton explores Symantec's emerging enterprise security strategies for service providers. Highlights include 'killing the password,' self-defense, advanced analytics and adaptive response in a service provider architecture.
Between the CEOs
Debating Network Evolution With Cisco's Cedrik Neike

6|23|15   |   12:54   |   (2) comments


Cedrik Neike, SVP of Global Service Provider, Service Delivery, at Cisco, talks to Light Reading founder and CEO Steve Saunders about solving service provider customer problems in a virtualized, DevOps world, including multivendor support and the future of network procurement.
LRTV Documentaries
Vodafone: What's Good for Moms Is Good for Business

6|23|15   |   3:04   |   (3) comments


Megan Doberneck, the general counsel for Vodafone Americas, discusses her company's progressive maternity policy, explains why promoting women in tech is good business and offers some some good advice for any women in the industry.
LRTV Interviews
NFV: Ready for Prime Time

6|23|15   |   05:09   |   (1) comment


At BTE 2015, Vip mobile CTO Dejan Kastelic talks about how NFV is ready for the real world and how Telekom Austria is introducing centralized resources for its group operations.
LRTV Documentaries
Tykes Talk Tech

6|22|15   |   02:30   |   (9) comments


What does optical fiber look like? When will 5G arrive? What's the WiFi password at Ikea? Light Reading sat down with three 8-year-olds to answer some of the communications industry's most burning questions...
LRTV Huawei Video Resource Center
Huawei Partners With TDC for World's First Early DOCSIS 3.1 Field Test

6|22|15   |   3:06   |   (0) comments


In a move to enhance user experience, Denmark's TDC aims to become an early adopter of DOCSIS 3.1. In partnership with Huawei, TDC recently ran the world's first field tests on its coax network that reached speeds nearing 1 Gbit/s.
Upcoming Live Events
September 16-17, 2015, The Westin Galleria Dallas, Dallas, TX
September 29-30, 2015, The Westin Grand Müchen, Munich, Germany
October 6, 2015, The Westin Peachtree Plaza, Atlanta, GA
October 6, 2015, Westin Peachtree Plaza, Atlanta, GA
October 14-15, 2015, New Orleans Ernest N. Morial Convention Center, New Orleans, LA
All Upcoming Live Events
Infographics
Hot Topics
Staying Productive With My Office-in-a-Bag
Mitch Wagner, West Coast Bureau Chief, Light Reading, 6/25/2015
Who's Feeding Fiber to LinkNYC Hotspots?
Mari Silbey, Senior Editor, Cable/Video, 6/29/2015
What's in Your Office-in-a-Bag?
Mitch Wagner, West Coast Bureau Chief, Light Reading, 6/26/2015
Eurobites: Activist Investor Takes Stake in AlcaLu
Paul Rainford, Assistant Editor, Europe, 6/30/2015
Like Us on Facebook
Twitter Feed
Webinar Archive
BETWEEN THE CEOs - Executive Interviews
Casa Systems has been going from strength to strength over the last couple of years. In 2013, it became the first vendor to ship an integrated CCAP device -- the ...
Cedrik Neike, SVP of Global Service Provider, Service Delivery, at Cisco, talks to Light Reading founder and CEO Steve Saunders about solving service provider customer problems in a virtualized, DevOps world, including multivendor support and the future of network procurement.
Cats with Phones