Prospects and Pitfalls of Out-of-Footprint Selling

Craig Leddy

By Craig Leddy

As cable providers jump into the SD-WAN fray, there’s another important story that’s developing. SD-WAN represents the first product that U.S. cable providers are selling on a nationwide basis, beyond the boundaries of their franchise territories.

The ability of cable to act in an OTT (over-the-top) manner and virtually overbuild incumbent service providers has long been predicted. It usually is prophesied as a cataclysmic event when the traditionally collegial cable industry breaks into open competitive warfare. The expected catalyst has been the ability of a large provider to launch a residential OTT video streaming service with nationwide and global reach.

Instead it’s been the business services arena that is seeing the advent of OTT-like strategies — and the result is likely to produce more cooperation between companies, not less. In promoting their SD-WAN products, which ride upon virtualized platforms, both Comcast Business and Charter’s Spectrum Enterprise have promoted their ability to provide nationwide reach.

Sure, Comcast and Spectrum could elbow each other as they pursue customers, as any good capitalist enterprises will do. But they cannot truly offer nationwide reach without some cooperation from other internet providers that provide connectivity to the businesses that they wish to serve. That requires partnering with cable providers in other territories and even telcos and other broadband providers.

As Comcast was preparing to launch its SD-WAN product, which runs on its ActiveCore SDN platform, the provider set itself up to aggregate network components and work with both its cable brethren and its competitors, said Jody Hagemann, director of product management, Comcast Business.

Comcast Business’ Jody Hagemann

The driving force behind the trend is business customer demand. “We have a tremendous amount of customers that are coming to us for our SD-WAN solution that are either bringing their own connectivity or ours,” Hagemann said. “We’d love you to bring Comcast connectivity but if not this is truly an over-the-top solution.

“We have enabled customers who come to us, give us their site list and say, ‘Procure the internet connectivity on our behalf. I want it on one bill, I want one last-mile management, I want you to handle it even if it’s not on-net to you.’ We’ve seen tremendous adoption of that,” Hagemann said.

When Spectrum Enterprise announced its SD-WAN product, which runs on an SDN/NFV platform, it immediately positioned it for availability beyond its service territory. “The Spectrum Enterprise Managed SD-WAN Service is available nationally with simplified pricing and bundles with multiple connection options,” the company said in its March announcement.

Other cable providers want to benefit from cross-territory selling for SD-WAN and other products. Cox Business is seeking strategic partnerships with fellow cable companies as well as local exchange carriers (LECs) to “follow customers out…

…of footprint,” said Brian Rose, senior director, product development, Cox Business, during a Light Reading conference.

Mediacom Business, with cable properties primarily in the Midwest, increasingly is relying upon channel partners to get alerted to in-territory and out-of-territory customer opportunities, according to Dan Templin, senior vice president, Mediacom Business.

The only reason that cable providers serve separate territories is that most still are tied to individual franchise areas initially set up to establish cable TV service. Cable franchises are not exclusive and incumbent operators sometimes face competition from overbuilders, but most enfranchised companies have sought to avoid the cost of construction involved when invading another cable territory. The internet cloud enables cablecos to break their bounds and provide services nationally or even globally.

“The idea of ‘we’ve been given a franchise and put some kind of boundary around it and nobody else is allowed to play in our space’ is going away quickly,” Templin said.

Similarly, when it comes to delivering business services across service territories, the “us versus them” mentality between cable and telcos is starting to dissolve. Cable and telecom providers are transforming their relationship from one of friends versus enemies to frenemies in order to jointly serve customers.

“Traditionally there’s been two labels: you’re either us or you’re the competitors. Those labels don’t apply,” Templin said. “I have people I buy and sell from that also are competing with me in my same market. It’s an odd situation from a classic cable perspective but the reality is that’s the competitive nature of the business services market.”

Some Tier 2 and Tier 3 cable operators (aka the little guys) have voiced concerns about virtual overbuilding by larger providers. On the other hand, those small companies may not have the wherewithal to provide SD-WAN or other products on their own and may be open to wholesale relationships with larger providers. In certain respects, the smaller cable companies become channel partners for the larger companies.

Many channel partners want more cross-territory sales opportunities. In the new 2019 Cablecos & The Channel: State of the Cable Market survey, partners ranked 19 channel program attributes in order of importance to their business. The second highest-ranking attribute is “access to multiple cablecos through one agent agreement,” a capability that could facilitate cross-territory selling.

Serving business customers through multiple providers can be challenging. Who owns the customer and who has primary responsibility? For large customers, SLAs must be uniform and enforceable no matter which companies are involved. Put more simply, when something goes wrong, customers want one throat to choke.

Cable providers have been developing customer portals, quotation engines, mobile apps, service assurance platforms and other digital tools to support multi-provider pre-sales processes and post-sales..

…delivery. According to Hagemann, a Comcast Business customer can even check on the status of their network by asking Alexa.

“From a customer experience perspective, we talk about the digital experience,” Hagemann said. “That’s the type of innovation that’s coming around this.”

Ultimately, cross-territory selling should benefit providers and partners of all stripes as they seek to serve various multi-site organizations, including large financial institutions, healthcare networks and retail store chains.

Facing this new frontier, Templin said, “It’s evolving for us and it’s part of our key strategy for growth.”

Movers & Shakers

Brian Snortheim, known to Channel Partners colleagues as a former vice president of sales, has been named director of enterprise channel sales for Spectrum Enterprise, moving from a recent channel marketing position at Avaya.

Comcast Business named Brittany Fuller as a senior field engagement manager for its indirect program. Most recently with Windstream, Fuller will work with master agents and the cableco’s platinum and gold partners on go-to-market campaigns, business development and field engagement.

RapidScale, a Cox Business company, hired Byron Price as a partner experience manager, the company’s fourth new client experience manager in four months. Price, based in Atlanta, has responsibility for partnerships in the Southeast.

Quick Bits

Comcast has acquired Deep Blue Communications, a provider of managed Wi-Fi network planning, engineering and installations across industries, including hotels, retail, entertainment venues, marinas and more. Comcast Business said the acquisition, made for an undisclosed amount, supports its efforts to provide managed Wi-Fi to key verticals.

Craig Leddy is a veteran cable industry writer, speaker and market analyst, and a contributing analyst for Light Reading and Heavy Reading, with are Informa properties. Leddy founded Interactive TV Works, a media consultancy, to promote understanding of advanced digital services. He is a former editor of Cablevision magazine, senior analyst for The Myers Group and contributing editor for Multichannel News. He teaches the popular How Cable Works industry courses that include CTAM’s Advance Executive Education. He also founded and hosts the Interactive Case Competition, a leading case study contest for business students. Follow him on LinkedIn or Twitter.