Roundtable: State of the Industry

The economy is an opportunity as much as a challenge. From an opportunity standpoint, in this environment where budgets are tight and resources are few, enterprises are looking more closely at alternatives to the ILECs in order to see if they can obtain more cost-effective communications and network solutions.  At XO, we are definitely seeing an increase in the number of opportunities in the enterprise segment. Its also feedback that enterprises are providing to industry analysts and research firms such as Gartner. So, for XO and our partners, we see this as an opportunity for XO to increase our market share in this segment. However, economic uncertainty and tight IT and telecom budgets mean longer sales cycles, particularly for projects that lack immediate cost reduction or revenue generation benefits. The other challenge the economy presents is how to drive revenue growth in this environment. For service providers and the agent community, this will driven by continually offering new, differentiated services and solutions that help customers operate more efficiently and increase productivity. The other driving factor, and the most important, is having a fanatical focus on delivering the best customer experience in the industry. These work hand-in-hand in attracting new customers and then retaining customers for the long term. 

Managed services present a significant opportunity, particularly as network and IT staff are required to support more applications across their networks and with fewer resources. In this economic environment, which is expected to continue for several years, businesses will therefore have an increased need for external support in managing the complexity of their data center, IT, network and converged VoIP environments. We expect managed WAN, managed security and managed application and hosting solutions to see double-digit growth for the next five years. There are inherent cost savings, efficiency and performance improvements that businesses can address with managed solutions.

Service delivery transformation will be another major opportunity within the industry for years to come. Cloud-based services whether its cloud-based VoIP services, hosting, security or application services are now at the forefront of the minds of IT and network staff. Were now at a point where technological and economic trends have converged and are increasing the demand for more flexible and inexpensive IT infrastructure and managed services. For service providers and for the agent community, this will be an important differentiator in terms of whether you want to just deliver a commoditized bandwidth service or you want to differentiate with value-added applications on top of the network that drive real business value for customers.

One dilemma is the availability of quality of service and cost effectiveness of implementation. By providing both voice and broadband over the same circuit from the same service provider, customers will have access to quality voice calls. Additionally, service providers can monitor call flows and perform active troubleshooting on the network. QoS is a prioritization process where voice packets are prioritized over data packets during a call flow. Many small businesses or home office users have opted to use different providers for voice and broadband. Unfortunately, in this scenario, if a problem with a call should occur, neither provider will be able to identify the problem or solution. Most business voice providers will insist on providing both broadband and voice service so that they can guarantee certain service level agreements for both broadband and voice.

Staying in front of the increased need for affordable but larger broadband is necessary. Broadband needs are increasing steadily, due to the increased adoption of VoIP, simultaneous use of e-mail, Internet browsing, peering, videos and chat applications. The use of these communication services requires more bandwidth without adding unnecessary costs. Over the last year, business Ethernet over copper became a very scalable and affordable option to traditional T1 service and has left many, many providers scrambling to build out their footprints.

Security continues to be a challenge for broadband and voice providers and the businesses they serve. Companies should purchase broadband from providers who provide a high level of network security and are able to provide security applications. Security is now a larger issue as businesses look toward cloud computing to save money and resources. Even with VoIP, security concerns remain a barrier to adoption, due to the misperception that calls are easily tapped. The new MegaPath managed services and security solutions can add an additional layer of protection.  This may be one of the major topics of the year.

Michael Robinson, CEO and President, Broadview Networks Inc.

Providers sometimes need to move away from commodity products and services, or at least de-emphasize them so the target customer sees value-added services. In other words, how can the telecom/IT services provider help the customer run their day-to-day business better by providing services that dont just cut costs but also help with the efficiencies at the customer level? Moving from access to application is one of the mantras that we focus on at Broadview Networks to make sure our team knows our direction as we work to help customers with more value added services.

While traditionally it was desirable to own” as much as possible for end-to-end service delivery, that often is not practical or even necessarily the right business decision. Whether the convergence of IT and telephony applications or the convergence of wireline and wireless/Wi-Fi services, partnerships are often the best way to get to market in an efficient manner. New entrants and new technologies are everywhere we look in the telephony/IT arena. No one has ubiquitous access and control over all technologies, all sales channels or all physical networks. So it makes sense to intelligently use partnerships where they are mutually beneficial and help the end customer receive a better service experience. Broadview Networks has partnered with software and hardware vendors, as well as network providers to make sure that we deliver a superior IP solution.

Providers need to optimize the channels that work for the product and services they offer. There are times when they need to step back and make sure that they have the right way to deliver to their customers, and this starts with the sales channel. Back to the roots of the CLEC sector, there has been a close partnership between carriers and interconnect vendors and channel partners. With the advent of more hosted and managed service offerings, customers are being faced with technology decisions that involve change. That change is often facilitated with the assistance of a trusted partnership that the customer has in place. In late 2009, Broadview rolled out a new product on a national level and had the challenge of introducing our company to a new group of channel partners at the same time we were introducing a new product to our target end customers. We elected to go primarily through channel partners as we launched this product outside of our traditional footprint. This allowed us to focus on some of the things we believe we do well: packaging technologies and delivering them via our world-class OSS.