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Cable Eyes the Enterprise Prize

Craig Leddy
Heavy Lifting Analyst Notes
Craig Leddy
1/29/2016

Over the past several years, cable providers have made tremendous headway by signing up small- and midsized businesses (SMBs) for high-speed Internet and other services. Now the industry is taking aim at a bigger prize: the enterprise market of large businesses and nationwide corporations.

After much talk about enterprise, cable's aspirations are turning into concrete action. According to a new Heavy Reading report, "Cable Has Its Eyes on the Enterprise Business Prize," most of the major multiple system operators (MSOs) are moving up market by seeking to serve larger companies. They are expanding their product portfolios of Ethernet, data, video and voice solutions by layering on managed services and cloud-based capabilities for businesses.

While individual MSOs are ramping up their enterprise efforts, the cable industry has launched a cross-MSO initiative to serve enterprises that straddle MSO service footprints. In December 2015, Comcast Enterprise Solutions, a recently formed division, kicked off the effort in a meeting with major MSOs, including Time Warner Cable (TWC), Charter Communications, Cox Communications, Cablevision Systems, Bright House Networks and Suddenlink Communications. (See LR, Top MSOs Team for National Enterprise Push.)

Cable's growth in the SMB market has been impressive, now producing more than $12 billion annually, according to Heavy Reading estimates. But the enterprise market creates new demands and puts cable squarely at odds with telephone companies and other competitors that thrive on enterprise customers.

By going up market, cable is challenged to up its game, Heavy Reading says. Enterprises have greater telecommunications needs and requirements than most SMBs. Cable providers must adhere to corporate service level agreements (SLAs) that set performance levels and include monetary penalties for failing to meet them.

To meet the more stringent demands, cable is looking to new solutions to enhance business customer care and network management, according to the report. The industry is exploring network functions virtualization (NFV), software-defined networking (SDN), new operations/business support systems (O/BSS) and other means of virtualizing and automating services. Network traffic management, monitoring and service assurance solutions promise to help providers to gain visibility into their networks and flexibly provision emerging applications, such as managed WiFi, managed security and on-demand bandwidth capacity.

MSOs have worked across their territory borders to serve a business or resell access lines to other carriers. But making a cross-MSO initiative work requires a high level of cooperation and automated processes that are coordinated across multiple MSO operations. (See LR, MSOs: We're Not Building National Biz Net.)

The Heavy Reading report explores the prospects for cable to serve the enterprise market and the opportunities and challenges ahead. Much of the information was obtained at the Light Reading Future of Cable Business Services conference in December 2015, which featured extensive discussions among cable providers, tech suppliers and industry analysts about cable's enterprise efforts. Also included are profiles of eight technology suppliers that support US cable's business services and that offer solutions that could come into play as MSOs move up market.

— Craig Leddy, Contributing Analyst, Heavy Reading

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thebulk
thebulk
2/2/2016 | 12:57:28 AM
Re: Back in my day....
I wonder if they will be able to split their focus and still maintain growth in both areas.
craigleddy
craigleddy
2/1/2016 | 8:43:45 AM
Re: Back in my day....
Yes, one of the challenges for cable providers will be to move up market to serve larger businesses without taking their eye off the SMB ball. According to our research, cable captures only about 8 percent of the total available SMB spend on business services, so there's still plenty of room to grow. Ultimately enterprise businesses provide a big payoff though. 
thebulk
thebulk
1/31/2016 | 2:22:01 PM
Back in my day....
When I was a network engineer with Cox it seemed the main mandate for the business sales was small and medium biz. And for a while it seemed to be all we would hear about. 
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