Time for Your Company to Consider Cable?

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A few years back, I predicted that a cable company would supply the lion's share of WAN services to a Fortune 100 company within the year. Still hasn't happened, but there are increasing signs that 2011 could be the start of cable as a serious contender in the enterprise arena.

One reason I think so: the success of Cox, in particular. Cox's business services – specifically for to small-to-midsize businesses -- have skyrocketed in the past decade. In 2000, the company's business revenues were roughly $100 million; today they're over $1 billion. The company says it has more than 250,000 business customers, and is offering a mix of voice, data, Internet, hosted VoIP and Ethernet services.

The influential investment-research firm Bernstein Research estimates that Cox holds 25% of the market for SMB services overall, and Cox says it's growing in the healthy mid-teens year-over year. Over the next few years, the company plans to strengthen and deepen its offerings in the SMB area, as well as expand into larger organizations within specific verticals. And the company is beginning to propose pricing and service offerings that are highly competitive in the enterprise arena.

To top things off, Cox recently announced a rollout of wireless services in a handful of selected geographies in Virginia, Nebraska, and California. The company has made on-again-off-again plays in the wireless space, most recently with an offering that ended in 2008, but this re-entry signals, if nothing else, Cox's understanding of the criticality of wireless services to business.

Graphic: Diego Aguirre
Cox isn't the only player in town, of course, and there are indications that its larger cable competitors -- particularly Comcast and Time Warner Cable -- are taking note. An interesting piece in the Philadelphia Business Journal highlights progress that Comcast is making with business customers. (See "Comcast Commits to Business Customers"). The piece provides the example of Univest Corp., which started out using Comcast to back up its T-1 lines, but now uses Comcast as its main voice and data service provider (with the T-1s as backup). The stars are aligning, in other words, for cable companies to begin capturing some serious enterprise market share.

The catch? Coverage. There are two challenges to cable coverage, in particular. One is the lack of ubiquity - cable companies have divided up the country in a patchwork quilt, so an enterprise that's looking for a single national provider is unlikely to find a cable company to meet those requirements.

The second challenge is penetration within coverage areas. Cable companies' buildout is largely residential, and in most geographies, extending that to cover business locations requires some significant capital expenditure. Cox's success in the business market is the result of a decades-long investment in extending infrastructure to businesses; the other cable companies are just waking up to this opportunity.

The bottom line for IT organizations? It's time to consider cable services. Check carefully to see if they overlap with your current and planned geographic needs.

Johnson is president and senior founding partner at Nemertes Research, an independent technology research firm. She can be reached at johna@nemertes.com.

Read more about lan and wan in Network World's LAN & WAN section.

This story, "Time for Your Company to Consider Cable?" was originally published by Network World.

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