Successfully reported this slideshow.

Ctam Bus Ethernet D Hold 040209


Published on

  • Be the first to comment

  • Be the first to like this

Ctam Bus Ethernet D Hold 040209

  1. 1. Cable Ethernet Business Services The New Engine of Growth CTAM Business Services Council NCTA Cable Show April 2, 2009 David Hold Sr. Analyst, Current Analysis [email_address] CONFIDENTIAL – NOT FOR DISTRIBUTION
  2. 2. ETHERNET MARKET SNAPSHOT <ul><li>Business Ethernet market opportunities </li></ul><ul><ul><li>Strong growth in 2008 </li></ul></ul><ul><ul><ul><li>According to Vertical Systems, U.S. demand for Business Ethernet service ports expanded 43% during 2008 </li></ul></ul></ul><ul><ul><ul><li>Tens of thousands of new Business Ethernet service installs </li></ul></ul></ul><ul><ul><ul><li>Drivers included lower cost of bandwidth and greater availability </li></ul></ul></ul><ul><ul><ul><li>Most growth occurred through 3Q08; tapered off in Q4 </li></ul></ul></ul><ul><ul><li>Port & Revenue Growth </li></ul></ul><ul><ul><ul><li>Verizon: Revenues increased by 52% from 2007-2008. VZ projecting Ethernet revenues to increase 60%-80% per year through 2010 </li></ul></ul></ul><ul><ul><ul><li>Cable operators experienced similar rates of growth ranging from 30% at Cox to 45% at Time Warner Cable Business Class in 2008 </li></ul></ul></ul><ul><ul><li>Who’s buying cable Ethernet? </li></ul></ul><ul><ul><ul><li>Key verticals include Healthcare, K-12 Education, local/state Government. Other markets include Manufacturing, Finance, Higher Education, Retail and Hospitality </li></ul></ul></ul>
  3. 3. ETHERNET MARKET SNAPSHOT <ul><li>Business Ethernet Market Opportunity </li></ul><ul><ul><li>Telcos control majority of market </li></ul></ul><ul><ul><li>AT&T & VZ account for 36% </li></ul></ul><ul><ul><li>Cox & Time Warner Cable account for 16% </li></ul></ul><ul><ul><li>Other cable operators with measurable market share include Bright House, Charter Business, Comcast Business, Optimum Lightpath, RCN, Suddenlink, among others. </li></ul></ul><ul><ul><li>Point – tiny tw telecom has bigger share than Time Warner Cable Business Class! </li></ul></ul>
  4. 4. CABLE ETHERNET STRENGTHS <ul><li>Cable networks cover most tier 1, 2 & 3 metro areas </li></ul><ul><ul><li>Not just downtown business districts </li></ul></ul><ul><li>Ethernet over Fiber </li></ul><ul><ul><li>Services include Ethernet private line (EPL), Ethernet Virtual Private Line (EVPL) and E-LAN </li></ul></ul><ul><li>Ethernet over HFC </li></ul><ul><ul><li>A few operators such as Cox and TWC-BC have begun to roll out Ethernet over HFC using DOCSIS 2.0 cable modems </li></ul></ul><ul><ul><li>Ethernet over HFC (currently up to 5 Mbps symmetric) can reach the 85-90% of locations not served by fiber. </li></ul></ul><ul><li>Ethernet over MPLS </li></ul><ul><ul><li>A few operators such as Optimum Lightpath and others are turning to MPLS to scale metro Ethernet services </li></ul></ul><ul><ul><li>Layer 2.5 services are independent of physical media and topology, scalable to larger networks </li></ul></ul><ul><ul><li>VPLS in future? </li></ul></ul>
  5. 5. Cable Ethernet Services <ul><ul><li>Source: 2009 Current Analysis Cable Business Services Product Assessment </li></ul></ul>Cable Operator Carrier Ethernet Services Charter Business Type: EPL, EVPL, E-LAN Ethernet over HFC: Yes Ethernet over MPLS: No Cox Business Type: EPL, EVPL, E-LAN Ethernet over HFC: Yes Ethernet over MPLS: Yes Optimum Lightpath Type: EPL, EVPL, E-LAN Ethernet over HFC: No Ethernet over MPLS: Yes Suddenlink Type: EPL, EVPL Ethernet over HFC: Yes Ethernet over MPLS: Yes Time Warner Cable Business Class Type: EPL, EVPL, E-LAN Ethernet over HFC: Yes Ethernet over MPLS: Yes
  6. 6. CABLE ETHERNET CHALLANGES <ul><li>Geographic fragmentation </li></ul><ul><ul><li>Regional and sub-regional clustered networks </li></ul></ul><ul><ul><li>Decentralized operational structure </li></ul></ul><ul><ul><ul><li>Inconsistent SLAs and performance parameters </li></ul></ul></ul><ul><ul><li>National network backbones generally lacking </li></ul></ul><ul><li>Limited business penetration </li></ul><ul><ul><li>Cable networks laid out to serve residential, not business customers </li></ul></ul><ul><ul><li>Cable networks have evolved to encompass broadband, voice </li></ul></ul><ul><ul><li>High speed business grade services are the next stage </li></ul></ul><ul><li>Customer Perceptions </li></ul><ul><ul><li>Many enterprise IT managers do not regard cable-based services as suitable for high availability, non-stop operations </li></ul></ul>
  7. 7. CONCLUSIONS <ul><li>Key Takeaway #1 – Traditional cable markets are approaching limits to growth </li></ul><ul><ul><li>Market saturation, competition from fiber-based Telco TV results in slowing growth, shrinking market share </li></ul></ul><ul><ul><li>Success with Business Broadband & Voice can be followed by Optical and Ethernet </li></ul></ul><ul><li>Key Takeaway #2 – Business Ethernet markets growing at double digit rates </li></ul><ul><ul><li>Cable optical and HFC networks are an under utilized resource that can be leveraged to increase share of high growth market </li></ul></ul><ul><li>Key Takeaway #3 – Cable industry needs better positioning and focus on business grade services </li></ul><ul><ul><li>Practices that were acceptable in SMB market are not acceptable for mission critical large enterprise services </li></ul></ul><ul><ul><li>Industry needs to develop and implement best practices for high availability, non-stop operations </li></ul></ul><ul><ul><li>Changing customer perceptions will take time and persistence – with big payoff for success in long run </li></ul></ul>
  8. 8. <ul><ul><li>Competitive </li></ul></ul><ul><ul><li>Intelligence </li></ul></ul><ul><ul><li>levels the playing field… </li></ul></ul><ul><ul><li>Current Analysis is the only competitive research firm that provides solutions to improve your company’s Competitive Response </li></ul></ul>For more information, please contact … David Hold Senior Analyst, Network Services [email_address] <ul><ul><li>Competitive </li></ul></ul><ul><ul><li>Response </li></ul></ul><ul><ul><li>enables you to </li></ul></ul><ul><ul><li>Win. </li></ul></ul>