Comcast Business is rolling out a new branding strategy promoting broadband-enabled services that go beyond basic connectivity and high data transmission speeds.
At its annual industry analyst event in in Philadelphia earlier this month, Comcast Business unveiled the new strategy, which is focused on promoting services that are enabled by broadband but go beyond pure connectivity itself. The company is calling this campaign "Beyond Fast."
The centerpiece of the Beyond Fast concept is Comcast's nascent, but quickly growing SD-WAN offering, known as ActiveCore. Comcast Business leaders highlighted the product's benefits, emphasizing its scalability, lower infrastructure requirements, reduction in network complexity and quicker time-to-market. (See Comcast Packs More Powerful SD-WAN Punch and Comcast Woos the Enterprise With SD-WAN.)
Comcast Business President Bill Stemper provided a high-level view of the commercial services unit, citing such statistics as its 12.8% revenue growth rate and 2.2 million business customers at the end of Q2. That all adds up to a $7 billion+ annual revenue run-rate for the division today, compared to just $256 million in 2006 when Comcast started getting serious about the commercial space. Stemper shared a few more details about Comcast Business's growth, highlighting its 150,000 managed enterprise sites and an Ethernet connection rate of 2,900 new sites per month.
One of the big questions on analysts' minds was whether Comcast would follow its mobile initiative in the consumer space with an SMB offering. Although they made no firm commitment, Comcast officials indicated that they are considering a market trial sometime in 2019.
Comcast executives went into some detail about their successful enterprise "wedge" strategy, which starts with capturing the remote connectivity business opportunity for a distributed enterprise by offering fast, relatively low-cost cable modem connectivity to branch offices, franchises, etc. Comcast officials noted that they have established a solid partnership with Charter Spectrum and Cox when customers require out-of-region connectivity, while at the same time leveraging connectivity from telcos as a secondary source when needed. It will be interesting to follow this cable-partnership arrangement as MSOs continue to stretch their networks and enterprise offerings nationwide, setting the stage for more cable vs. cable battles over new commercial customers.
In addition to serving as the centerpiece for the "Beyond Fast" branding concept, Comcast's SD-WAN offering stood out as the main emphasis of most of the presentations. One executive portrayed the telecom industry as being in the midst of a "generational shift" where the anticipated slow erosion of MPLS would occur much more quickly than many analysts are forecasting as SD-WAN matures. Comcast executives compared the trajectory path of SD-WAN with IP-PBX -- a technology that existed for years before it really took hold, but once it got started, rapidly replaced embedded legacy voice systems.
Comcast officials also highlighted SD-WAN's ability to simplify the network by freeing customers from the "tyranny of the boxes," referring to the reduction in edge routers. They added that many of these "boxes" cannot handle broadband speeds above 100 Mbit/s, which is limiting as businesses shift towards higher and higher speeds.
Comcast executives discussed such other efforts as making innovations in hosted voice, focusing on enhanced audioconferencing features, extending the X1 residential video platform to hospitality customers and simplifying pricing in their SmartOffice branded surveillance and analytics service. In particular, they stressed their efforts in cybersecurity, indicating that it is an area where the analyst community should expect growing investment and innovation.
Analyst take: The branding move to separate value-added services from "fast" may take some time to resonate with potential customers. While Comcast officials want their company to be known for more than speed, they are also well aware that superior networks win business, and they have built a superior network. Growing the business segment at double digits year after year while many of your competitors are constantly losing share might make a company complacent. But Comcast has indicated that it is ready to evolve, and it's hard to bet against a company that has executed on most of its key strategies over the past decade.
Want to learn more about the cable industry's latest moves in the commercial space? Then join me and hundreds of others at Light Reading's Future of Cable Business Services conference in New York on Thursday, November 15. Senior executives from eight of the biggest US MSOs -- Comcast, Charter Spectrum, Cox, Altice USA, Mediacom, Cable One, RCN and Atlantic Broadband -- will discuss their strategies there. Plus, I and several other industry analysts will be sharing our insights. To sign up for the conference, please click here here for more information.
Hope to see you in the Big Apple.
— Matt Davis, Principal Analyst, Independence Research