Light Reading
Sales cycles are getting longer, but reasons vary from political uncertainty to technological complexity

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
Flash Poll
From The Founder
It's clear to me that the communications industry is divided into two types of people, and only one is living in the real world.
LRTV Custom TV
Advantech Accelerates 100G Traffic Handling

10|17|14   |   7:56   |   (0) comments


Paul Stevens from Advantech explains why handling 100GbE needs a whole new platform design approach and how Advantech is addressing the needs of equipment providers and carriers to give them the flexibility and performance they will need for SDN and NFV deployment.
LRTV Huawei Video Resource Center
Holland's Imtech Traffic & Infra Discusses Huawei's ICT Solution and Services

10|16|14   |   4:49   |   (0) comments


Dimitry Theebe is from the business unit at Imtech Traffic & Infra which delivers communications solutions for transportations. His partnershp with Huawei began about a years ago. In this video, Theebe speaks more about this partnership and what he hopes to accomplish with Huawei.
LRTV Huawei Video Resource Center
Huawei's Comprehensive Storage Solutions Vital for SVR

10|16|14   |   6:16   |   (0) comments


SVR Information Technology provides cloud services for academic and special sectors. With Huawei's support, SVR and Yildiz Technical University has established Turkey's largest and most advanced High Performance Computing system. CSO Ismail Cem Aslan talks about what he hopes Huawei's OceanStor storage system will bring for him.
LRTV Huawei Video Resource Center
Mexico's Servitron's Impression of Huawei at CCW 2014

10|16|14   |   6:35   |   (0) comments


Servitron is a network operator in Mexico that has been in the trunking industry for the past 20 years. Its COO, Ing. Ragnar Trillo O., explains at Critical Communications World 2014 that his company has been interested in the long-term evolution of LTE technology and its adoption for TETRA.
LRTV Huawei Video Resource Center
Building a Better Dubai

10|16|14   |   2:06   |   (0) comments


Abdulla Ahmed Al Falasi is the director of commercial affairs, a telecommunications coordinator for the government of Dubai. Their areas of service span across multiple industries, including police, safety, shopping malls and more. In this video, Abdulla talks about his department's work with Huawei.
LRTV Huawei Video Resource Center
Huawei Lights Up Malaysia Partner Maju Nusa

10|16|14   |   1:59   |   (0) comments


Malaysia's Maju Nusa is an enterprise partner to Huawei in networking, route switches and telco equipment. At this year's Critical Communications World in Singapore, CTO Pushpender Singh talks about what Huawei's eLTE solutions mean to his company and for Malaysia.
LRTV Custom TV
Evolving From HFC to FTTH Networks

10|15|14   |   2:19   |   (0) comments


Cisco's Todd McCrum delves into the future of cable's HFC plant, examining how DOCSIS 3.1 and advanced video compression will extend its life and how the IP video transition will usher in GPON and EPON over FTTH.
LRTV Custom TV
Exploring the Future of Cable Access

10|15|14   |   6:23   |   (0) comments


Cisco's Brett Wingo looks at where cable access architectures are heading, discussing the impact of DOCSIS 3.1, CCAP, Remote PHY, SDN, virtualization of cable networks and related technologies.
LRTV Custom TV
Optimizing & Monetizing WiFi

10|15|14   |   5:53   |   (0) comments


Cisco's Vince Pandolfi outlines the reasons for cable WiFi's rapid growth, lays out the issues with the technology and explains the new Cisco tools that can help operators monitor and improve their WiFi delivery.
LRTV Huawei Video Resource Center
Emulex & Huawei Collaboration Mutually Beneficial

10|14|14   |   4:17   |   (0) comments


US company Emulex collaborates with Huawei in areas such as blade servers and workload documentation. Mike Heumann of Emulex believes that Huawei has done incredibly well moving from a telecom company into servers and networks, working closely with customers to realize their needs.
LRTV Huawei Video Resource Center
Chile's VZION Looks Forward to Seeing More of Huawei

10|14|14   |   4:43   |   (0) comments


VZION is a systems integrator company in Chile with a focus on virtulization technology. In this video, Cesar Alcacibar talks about the challenges in virtualization and how Huawei helps his company to achieve the best results possible. Alcacibar is expecting more adoption and integration of Huawei technologies in Chile.
LRTV Huawei Video Resource Center
Pro-Datech & Huawei for a High-Tech Singapore

10|14|14   |   2:59   |   (0) comments


Pro-Datech Systems is a specialty IT solution provider based in Singapore. For an added value to its customers, the company uses Huawei's hardware and trusted performance and features for a total solution. It's looking forward to the creation of a lab, to be based in Singapore, for the two companies' coorporation on total storage solution.
Upcoming Live Events
October 29, 2014, New York City
November 6, 2014, Santa Clara
November 11, 2014, Atlanta, GA
December 2, 2014, New York City
December 3, 2014, New York City
December 9-10, 2014, Reykjavik, Iceland
June 9-10, 2015, Chicago, IL
Infographics
WhoIsHostingThis.com presents six of the world's most extreme WiFi hotspots, enabling the most epic selfies you can imagine.
Hot Topics
Forget the Internet, Brace for Skynet
Stephen Saunders, 10/15/2014
HBO Will Go OTT in 2015
Mari Silbey, Independent Technology Editor, 10/15/2014
Google: Carriers & Cloud Providers Need to Cooperate
Mitch Wagner, West Coast Bureau Chief, Light Reading, 10/16/2014
CBS Takes OTT Plunge
Mari Silbey, Independent Technology Editor, 10/16/2014
iPad Air 2 Lets Users Switch Carriers Any Time
Mitch Wagner, West Coast Bureau Chief, Light Reading, 10/17/2014
Like Us on Facebook
Twitter Feed