Partners on Comcast-Masergy Acquisition: 'Substantial Amount of Work' Remains
Will the acquisition drive competition between Comcast and its "cable brethren"?
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Craig Schlagbaum, senior vice president and channel chief of Comcast Business, expressed his excitement to Channel Futures about the closed deal. He pointed to complementary technology portfolios and go-to-market strategies.
“The combination of our complementary services will bring even more innovative technology solutions to our partners and the market. We already had an award-winning channel program at Comcast Business that we built over last 10 years through our partners, and there we sold world-class connectivity, SD-WAN and security services amongst others. Masergy has also built a very channel-friendly sales organization. Both companies have similar channel-focused cultures focused on growth and customer experience. Now we want to accelerate our sales up-market through our partners in the midmarket enterprise space where our share is more limited, and Masergy helps us realize that goal.”
Kyle Hall is president of Resourcive, a New York-based brokerage. Resourcive recently attained APEX status in the Masergy Zenith Partner Program – the highest level.
Hall expressed optimism for the integration of Masergy into Comcast.
“Masergy’s product portfolio, operations and channel partnerships are aligned well toward global enterprises, while Comcast is strong in the midmarket domestically. I foresee a substantial amount of work in integrating the companies in a way that preserves both of their respective strengths while creating maximum value for their target market. As with any of these transactions that are common in our space, execution will be key. If Comcast is able to bring the white-glove service and security portfolio of Masergy to the domestic midmarket in a way that is inclusive of the partnerships Masergy has historically leveraged, it could prove to be a win for all parties involved – especially the customers.”
Jed Kenzy co-founded partner Innovative Business Solutions and the connectivity-mapping CableFinder.
He said the acquisition signals just how prevalent the secure access service edge (SASE) has become.
“In the past, the midmarket and SMB relied on a premise-based firewall to do all their security. And they relied on their internal security team or outsourced MSP community to do that. And with the implementation of SASE and moving some of that security out into the cloud, it’s going to allow for carriers to take a piece of that, and it’s going to be easier for customers to support because they’re just buying a subscription,” Kenzy said.
As a result, cable companies are becoming much more than “cable companies.”
“I think you’re going to see all carriers raced towards “SOS” – sell other stuff. It’s not just the network that they’re after anymore. It’s the thing right over the network that they want to sell with it. UCaaS, security, SD-WAN. I think they’re going to want the full package, not just the network anymore.”
And the expansion of MSOs into next-gen technologies could signal a new dynamic. Partners noted that Comcast now possesses international capabilities and will no longer need to stay within its geographical cable footprint.
Kenzy said that might spell competition between the cablecos.
“In the past the MSOs have always been very united, because their network doesn’t overlap. And truly, they weren’t competitors. They could all just do things together, because it was ‘Sell cable,’ not ‘Sell Comcast,'” he said.
Historically most of the cablecos have interacted with each other as allies. For example, they collaborated together to make the Cablefinder tool functional for partners. But time will tell.
“I’m interested to see what happens with the ‘cable brethren,’ if you will,” Kenzy said. “Because they truly are becoming competitors, where in the past they were selling similar products but in different markets.”
Peter Radizeski, founder and owner of Rad-Info, disagreed about impending competition.
“Comcast has been solid in the small business sector for some time – and is almost the incumbent for broadband and voice in that sector. Yet Comcast isn’t looking to compete against Spectrum. Comcast wants to win some of the federal contracts like Lumen, Verizon and AT&T pull down – the latest being the $100 million task order for the Post Office that Lumen won. Comcast wants to provide access internationally to go with the Blueface acquisition.
“Anyone who thinks Comcast wants to compete with Spectrum is nuts. Comcast wants to continue to take money from the ILECs like it has done with residential broadband and voice as well as small business connectivity and voice.”
IQ Wired CEO Darcy Nelan agreed with Kenzy. She said that although the MSOs have historically remained in separate geographical swim lanes, that trend may be closing.
“Personally I think that no one’s staying in their swim lane anymore due to convergence. Realistically to think that someone’s going to at this point is naïve in my eyes. Why wouldn’t Comcast leverage any and all of their strengths in order to realize a return on their investment?” she said.
She also said it would make sense for a rival provider to make a comparable acquisition.
“I think the others are now going to figure out a way to do something similar in an effort to keep their service offerings on par at a minimum,” Nelan said.
Nelan also said the movement of MSOs into the mid-enterprise market spells opportunities for the channel. These vendors won’t leave partners behind as they go up-market but rather will rely on them more.
“Usually the larger customers prefer to have a consultant they can work with that can bring all the different solutions to bear. They don’t necessarily want to put all their eggs in one basket with a single provider,” Nelan said. “The cablecos are realizing, ‘We need the channel in order to be able to get to some of these customers. The direct side’s never going to be able to do it.'”
Nelan also said the movement of MSOs into the mid-enterprise market spells opportunities for the channel. These vendors won’t leave partners behind as they go up-market but rather will rely on them more.
“Usually the larger customers prefer to have a consultant they can work with that can bring all the different solutions to bear. They don’t necessarily want to put all their eggs in one basket with a single provider,” Nelan said. “The cablecos are realizing, ‘We need the channel in order to be able to get to some of these customers. The direct side’s never going to be able to do it.'”
Channel partners are giving positive reviews to Comcast‘s finalized acquisition of Masergy.
Now that Comcast has officially closed its purchase, the channel is waiting to see how the MSO integrates Masergy’s software-defined network services into its family.
Comcast announced in August that it had entered into an agreement to acquire Masergy. At the time, partners and analysts praised the deal as a shrewd move that will help Comcast capture larger and more global customers. Masergy brings 1,400 customers in almost 100 countries to the table for the cable company. It also boasts a popular channel program that Comcast executives view as important for reaching the enterprise.
Masergy’s Chris MacFarland
Comcast Business’ Bill Stemper
“This deal fortifies our channel distribution strategy and redoubles our commitment to the channel partner community. The combination of our teams and complementary service portfolios will enhance the value we bring to large and midsize companies worldwide,” Comcast Business president Bill Stemper said.
We reached out to channel partners to see how they’re feeling about the transaction. Many are curious as to how Masergy’s channel-focused culture plays inside its larger acquirer. Others wonder how the acquisition will impact other cable providers.
Scroll through the slideshow above to see their comments.
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