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
From The Founder
Against the odds, Huawei is growing its telecoms networking equipment business in the US -- that should be ringing some alarm bells for domestic vendors.
Flash Poll
Live Streaming Video
CLOUD / MANAGED SERVICES: Prepping Ethernet for the Cloud
Moderator: Ray LeMaistre Panelists: Jeremy Bye, Leonard Sheahan
Between the CEOs
CEO Chat With Jeff Miller, ActiveVideo

8|28|15   |   19:05   |   (0) comments


Jeff Miller, President and CEO of ActiveVideo, talks to Light Reading founder and CEO Steve Saunders about the impact of virtualization on the TV and video distribution market.
LRTV Huawei Video Resource Center
Vodafone: Mobile Money Is About Customer Trust

8|27|15   |   06.36   |   (0) comments


Light Reading spoke with Vodafone's Ian Ravenscroft about the unique responsibilities and opportunities facing operators handling customers' financial transactions over the network.
Telecom Innovators Video Showcase
Palo Alto Networks on Expanding in the Carrier/Service Provider Market

8|26|15   |   07:54   |   (0) comments


Alfred Lee from Palo Alto Networks tells Steve Saunders about their new chassis-based system, the PA-7080, and how it can benefit service providers compared to legacy firewalls.
LRTV Custom TV
Global Services Forum Preview

8|25|15   |   02:36   |   (0) comments


Light Reading's CEO and Founder Steve Saunders talks about Huawei's upcoming Global Services Forum with the help of Heavy Reading's Patrick Donegan and Teresa Mastrangelo.
Telecom Innovators Video Showcase
Infoblox on DNS Threat Index

8|19|15   |   04:39   |   (0) comments


Dilip Pillaipakam from Infoblox talks to Steve Saunders about his company's core network services.
Between the CEOs
CEO Chat With Ihab Tarazi, Equinix

8|14|15   |   20:18   |   (1) comment


Equinix CTO Ihab Tarazi talks to Light Reading founder and CEO Steve Saunders about the dramatic changes in the data center, cloud and interconnect markets and discusses the impact of SDN and NFV in the coming years.
Telecom Innovators Video Showcase
The Netformx Ecosystem

8|14|15   |   09:39   |   (1) comment


Ittai Bareket, CEO of Netformx, talks with Steve Saunders about the Netformx Ecosystem, which employs cutting-edge prescriptive analytics to help solution providers maximize profits.
Telecom Innovators Video Showcase
Versa Networks on Leveraging VNFs

8|12|15   |   07:37   |   (0) comments


Kumar Mehta, founder and CEO of stealth mode startup Versa Networks, talks with Steve Saunders about how providers can best leverage virtualized network functions (VNFs).
LRTV Custom TV
Transforming the Network Through OPNFV

8|5|15   |   7:09   |   (0) comments


Sandra Rivera, VP Data Center Group; GM Network Platforms Group, Intel Corporation, on OPNFV Arno and how the industry is coming together to accelerate the deployment of NFV and transform the network.
LRTV Huawei Video Resource Center
Huawei ONS Product Demo

8|3|15   |   6:01   |   (0) comments


Huawei shows at Open Networking Summit 2015 in Santa Clara how its SDN and NFV solutions embrace openness.
LRTV Custom TV
End-User or Enterprise Benefits to the New IP

7|30|15   |   04:27   |   (1) comment


Andrew Coward discusses what the New IP means to end users or enterprise customers. He explains compelling reasons, including how every customer can get their own network, from the transformation to the New IP.
LRTV Custom TV
Network Visibility & the New IP

7|30|15   |   02:23   |   (0) comments


Mukund Srigopal provides an explanation of what network visibility is and how it is essential as service providers transition to the New IP. In addition, the importance of the network packet broker is discussed.
Upcoming Live Events
September 16-17, 2015, The Westin Galleria Dallas, Dallas, TX
September 16, 2015, The Westin Galleria Dallas, Dallas, TX
September 16, 2015, The Westin Galleria Dallas, Dallas, TX
September 29-30, 2015, The Westin Grand Müchen, Munich, Germany
October 14-15, 2015, New Orleans Ernest N. Morial Convention Center, New Orleans, LA
November 5, 2015, Hilton Santa Clara, Santa Clara, CA
November 17, 2015, Santa Clara, California
December 1, 2015, The Westin Times Square, New York City
December 2, 2015, The Westin Times Square, New York City
All Upcoming Live Events
Infographics
Cisco's cloud and virtualization portfolio can increase business agility and innovation by building a more flexible network architecture.
Hot Topics
Verizon Hums a Driving Tune
Sarah Thomas, Editorial Operations Director, 8/26/2015
Gogo Approved to Speed Up In-Flight WiFi
Sarah Thomas, Editorial Operations Director, 8/24/2015
Could Market Volatility Hurt Tech IPOs?
Dan Jones, Mobile Editor, 8/24/2015
Sprint's Claure: '3 to 5 Years' to Turnaround
Dan Jones, Mobile Editor, 8/25/2015
Like Us on Facebook
Twitter Feed
September 22, 2015
Media Begins With “Me”
Webinar Archive
BETWEEN THE CEOs - Executive Interviews
Jeff Miller, President and CEO of ActiveVideo, talks to Light Reading founder and CEO Steve Saunders about the impact of virtualization on the TV and video distribution market.
Equinix CTO Ihab Tarazi talks to Light Reading founder and CEO Steve Saunders about data center, cloud and the impact of virtualization in the coming years.
Cats with Phones
Cats Are a Smartphone's Best Friend Click Here
Whoever said cats didn't live to please their humans?