Tech Trends Favor Cable's SMB Play
That's good news for cable investors, says former analyst Brian Coyne, now founder of 3rdRev LLC, a strategic advisory firm for startups and a participant in the "Beyond the Call" panel here.
Serving the business community won't require major infrastructure expenses but will generate higher profit margins. Coyne thinks cable needs to capitalize on its advantages by aggressively pursuing larger businesses and being willing to innovate by opening up their networks to third-party application developers.
Cable is poised to grow its current share of the small business market from a 3.3 percent today to almost double that, or 6.5 percent in 2015, generating $8 billion in revenue, just by continuing to serve SoHo (1-2 employees), micro (up to 20 employees) and small businesses (up to 100 employees), according to New Paradigm Resources Group Inc. 's Craig Claussen. The majority of those companies have either moved to VoIP or are prepared to, making them a willing audience for the services cable sells.
That move to IP services could happen faster as more people adopt a "bring-your-own-smartphone" strategy because employers will be looking to regain control over the key data -- contacts, customer info and sales reports -- that is increasingly housed on employee phones and controlled by the employees, suggests Kelsyn Rooks, director of solutions marketing at Metaswitch Networks . Creating fixed-mobile convergence solutions for businesses will enable cable to play in this market, even without a wireless services, he said.
"Everyone is talking about cloud and that means delivering a fixed-line experience to everyone, wherever they are," Rooks said. Developing advanced IP products also will help cable stay relevant in the battle with over-the-top companies such as Microsoft Corp. (Nasdaq: MSFT) and Google (Nasdaq: GOOG), which offer their own business apps.
Rooks also encouraged cable operators to adopt a micro-transaction strategy for selling features, so small businesses can pick and choose what they want, rather than creating more expensive service bundles that include things they may not use or need.
Greg Thor, director, product marketing at Genband Inc. , suggests creating a mobile client that can use Wi-Fi as part of a high-speed Internet access service for small business and pointed to advanced features such as call-center capabilities, HD voice and videoconferencing that are now cost-effective for small businesses but not yet widely delivered.
"You can also streamline your operations with a small business portal that not only lets them do moves and changes but also turn features on and off," Thor adds.
He concedes, however, that cable companies might not be able to charge extra for adding Wi-Fi. It could be a competitive advantage.
Suddenlink beefs up business ops
The lone service provider on the panel, Kevin Stephens, SVP of commercial and advertising operations at Suddenlink Communications , focused on organizational changes necessary to support an expanded business sales strategy. Too many cable companies have their business sales reps reporting into a general manager who is focused on the residential cable business, he said. Suddenlink has created a totally separate organization with dedicated sales and support teams.
"You need to be flexible and entrepreneurial -- that's our advantage against the ILECs," Stephens said. That means getting product cycle times down, and being able to respond more quickly to customer demands.
"A critical component that has emerged for us is process cycle time and QoE [quality of experience]," he said. Voice has a longer product cycle time than any other service, Stephens added, making it even more critical that all business customers have "a quality experience with us at all touch points."
— Carol Wilson, Chief Editor, Events, Light Reading