What can you say about a seminar that blends a basic tutorial with immersive cheerleading?
That it was inspiring? Obvious? Or just ahead of its time?
How do you explain cable operators and vendors who lovingly vow collaborative bliss in order to exploit a new opportunity, but then privately kvetch about each other's wrong-headedness?
That they are exasperating? Competitive? Or just too late to save this rose-petal stroll?
Such were the contradictions at the Cable & Telecommunications Association for Marketing's first "commercial services" seminar in mid-May.
From the beginning, this look into cable's opportunities in the business/enterprise market had all the right pieces: exhibitors (Cisco Systems Inc., Scientific-Atlanta Inc., Narad Networks Inc., Advent and others focused on business systems), vendors and system integrators, plus — most encouragingly — dozens of cable operators.
CTAM's quick sell-out of nearly 150 seats underscored the hunger for a road map into the relatively untapped business telecom market.
It's about leveraging cable's $70 billion capital investment and, at the same time, sticking it to the adolescent Bells and other legacy telecom carriers where they really live — in the business sector.
Ops cheer selves
With that common goal, you'd think there would be a gleam throughout the CTAM B2B seminar.
Indeed, the pep-rally atmosphere began immediately, as co-chairs John Dyer of Cox Communications Inc. and Ken Fitzpatrick of Time Warner Cable — who oversee their respective companies' business and commercial operations — lauded their own progress.
Fitzpatrick: "Our time is here. We need to reinforce that we install better than others and that we have abilities to deliver."
And opportunities abound. Dyer: "There's [a] $9.4 billion commercial potential in our franchise territories, $2.7 billion of which is on or near our network, but we've only tapped $230 million in 2002."
So far, so good. Especially the references to profit margins well above 50% — far higher than most residential video service, with no greedy networks involved!
Researchers confirmed the growth potential. AMI Partners chairman Andy Bose pointed out that small businesses now use 2.4 Megabits per second of data at any given moment, but their demand will grow to 5.8 Mpbs imminently.
Yankee Group's Michael Lauricella focused on the lease-versus-buy attitudes of small and big businesses, respectively.
How to get it
Where does one tap the potential? A Yankee study found that only two-thirds of potential business customers think cable's service is "excellent," although most others were neutral. That two-thirds makes for a useful first-target audience.
How will cable approach them? Common themes throughout the day involved price sensitivity and the need to stress reliability. There were tips about getting companies to experiment with cable-provisioned voice and data services.
That's when a few vendors (the arms merchants to the broadband sector) began to whisper questions about cable's commitment — and ability — to mount a credible assault.
Voice-over-Internet protocol figures into the mix. Some customers might like the price compared to telco switched voice services, but might not be willing to risk VoIP's variable reliability.
It's clear that cable's enterprise initiatives rest on seducing telco customers to the cable option. That's why so many of the "cable people" were new recruits, or refugees from telcos and telecom vendors. ("New faces," as CTAM president Char Beales admitted in her welcoming remarks.)
They're recruits with customer lists to scavenge. Will that work for enterprises of all sizes?
National or local?
Time Warner's Fitzpatrick gloated about having "more success in national sales than we expected." But others think that cable's sweet spot is in commercial customers that can be served by a single, neighborhood MSO.
Again, some vendors (60% of the audience here) questioned cable's appreciation of these customers' needs. Will cable's beloved Data Over Cable Service Interface Specification, in either version 1.1 or emerging version 2.0, be sufficient for business customers?
Skeptics argued that midsized and large companies can't survive on a DOCSIS platform — which means cable operators will have to invest in higher-capacity facilities to win their business. Case in point: Telcos only lost about 6% of their T1 business when DSL and cable-modem service became available as broadband options.
Promoters countered that DOCSIS 2.0, with three times more upstream capacity than DOCSIS 1.1, will accommodate enterprise users that need symmetrical data services.
But contrarians contend that might not be enough for sizable enterprises — and sounded skeptical that the pitch would persuade customers to ditch their familiar Bell.
Ah, the power of inertia. Especially when it comes to getting the business.
Contributing curmudgeon Gary Arlen opines regularly for Broadband Week.