Whaleback Swims After MSOs, Carrier Partners
Whaleback is targeting that "repackaged" product, called CrystalBlue Lite, to cable MSOs, telcos, and other carriers that have installed SIP trunking services that allow companies to conduct IP-based communication outside the enterprise. (See Whaleback Private Labels SMB VoIP and SIP Trunking: VoIP's Threatening Opportunity.)
"Lite" marks a bit of a departure from Whaleback's historic business and product models. The five-year-old company started off by offering services through reseller channels, targeting its managed VoIP platform to businesses with five to 100 employees. And, instead of partnering directly with MSOs and carriers, it's been leasing circuits from the likes of Comcast Corp. (Nasdaq: CMCSA, CMCSK), Bright House Networks , and others to provide the basic broadband connections.
Whaleback claims to be managing 10,000 "endpoints" (Polycom Inc. (Nasdaq: PLCM) IP phones), with the majority of its business concentrated in the Northeastern US and in pockets of Florida. Using the partnership play, Whaleback intends to extend its reach to other parts of the country.
"We are not moving away from that [original model], but we are augmenting it with a carrier partner program we expect to populate with MSOs as [businesses] migrate from T1 and PR1 voice to SIP trunks over broadband," says Dave Zwicker, Whaleback's VP of marketing.
Whaleback is also coming out with a partnership program as more MSOs start to go further up market in their pursuit of the commercial services market, and complement existing small business plays that average about 2.5 lines per customer.
And Whaleback believes MSOs and carriers will stronger economic incentive to try the co-op model. Instead of getting 10 percent of Whaleback's revenue per station by providing just the access circuit, the cut could jump to 50 percent under the new partnership program, according to Zwicker.
Whaleback's also hopeful that its model with the "Lite" product will resonate with SMBs that are reluctant to part with cash in the name of modernizing their internal voice and communications infrastructures.
Whaleback manages the whole thing using its gateways and network operating centers (NOCs) in New Hampshire and Massachusetts, but customers aren't required to put in any capital up front for the phones, IP PBX appliances, and other equipment that's required on-site. Instead, those costs are factored into their monthly bills from Whaleback, which gets its return through service contracts that run as long as 48 months.
Zwicker says market trials are already underway with one able MSO and two carriers, but declined to name them. Whaleback hopes to add more cable deals as MSOs start to deploy SIP trunking on a broader basis over the next year or two.
There's not much SIP trunking to speak of on the cable front yet, though Cox Communications Inc. and Cablevision Systems Corp. (NYSE: CVC) are among the early movers. (See Cablevision Offers SIP Trunking to SMBs.)
There are also some protocol and interoperability issues to iron out before cable SIP trunking can achieve scale. However, SIP trunking for SMB services has emerged as one of the first opportunities MSOs will pursue as they upgrade to the SIP-capable PacketCable 2.0, says Heavy Reading senior analyst Alan Breznick. (See PacketCable 2.0: Back on the Front Burner.)
— Jeff Baumgartner, Site Editor, Light Reading Cable