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SPIT Spinoff Seeks Enterprise Niche

Jeff Baumgartner
LR Cable News Analysis
Jeff Baumgartner
12/17/2012
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With the likes of Amdocs Ltd. (NYSE: DOX), Convergys Corp. (NYSE: CVG) and CSG Systems International Inc. (Nasdaq: CSGS) having a virtual lock on the residential billing and customer care market for major U.S. cable operators, a relative newcomer called Cycle30 Inc. believes it can make some hay with a platform that's been tailored to serve business customers.

Cycle30 has been developing and deploying its Service Provider Information Technology (SPIT) products for years as part of General Communication Inc. (GCI) (Nasdaq: GNCMA), an Alaska-based telecom and cable operator. GCI spun off the business about 20 months ago.

Cycle30 has rolled the technology GCI is using today to serve some sizable customers such as Wells Fargo & Co. , BP plc, and the state of Alaska, into a new software suite called Commercial Business Billing. It's designed to handle the kind of complexities that aren't handled in mass residential billing systems.

Cycle30's approach, says President Jim Dunlap, is to provide cable operators with systems that can provision, activate and bill for more services that involve multi-year contracts, different rates for headquarters and branch offices, and other complex pieces that enterprises require. (See Cycle30 Takes On Biz-Class Billing.)

The GCI spinoff is booting up its commercial-class product as U.S. cable operators start to head up-market to serve mid-sized businesses and build on a revenue category that's expected to grow at a rate of about $1 billion per year for the industry, according to Heavy Reading 's latest estimates. (See Cable's Cut of the Biz Services Pie to Eclipse $7B .)

And it's that segment, which might eventual lead cable to serve large enterprises eventually, where Cycle30 thinks it has the biggest opportunity among MSOs. "We think there's a niche in the commercial sector," Dunlap says. "We are confident that there's a sizable market to be had in this sector."

Dunlap says his 92-employee firm expects to close two to three "significant" cable deals in the first quarter of 2013. He's not naming them, but he says "they'll be names you're very familiar with" and that the deals in the works are for enterprise or small commercial services deployments.

Seattle-based Cycle30 hosts its platform on SunGard (NYSE: SDS) data centers in Aurora, Colo, and Scottsdale, Ariz. Its largest win comes from outside the cable sphere -- Arrow Electronics Inc. (NYSE: ARW), a machine-to-machine chip company based in Denver.

— Jeff Baumgartner, Site Editor, Light Reading Cable



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Jeff Baumgartner
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Jeff Baumgartner,
User Rank: Light Beer
1/10/2013 | 4:00:09 AM
re: SPIT Spinoff Seeks Enterprise Niche
...probably won't sit still and let Cycle30 come in and just take this business as operators continue to ramp up their businss-class services. But it's still a good angle for them to take if they are trying to find a way to elbow their way in since it's much tougher to break in on the residential end. JB
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