Building the 'Field of Dreams'
Cable operators can effectively transition from serving only residential customers and become purveyors of commercial services–if they're willing to be flexible, listen to the customer's needs and provide a reliable network.
That was the essential message of last month's CTAM Commercial Services Seminar, which attracted nearly 300 attendees–roughly double the number who attended last year.
"There is no wrong way to go after the commercial services sector, as long as there's a commitment to do just that–go after the sector," said Ken Fitzpatrick, senior VP of Business and Commercial Solutions at Time Warner Cable, who co-chaired the event in Washington, D.C.
By all accounts, the "commercial services" market opportunity is huge–approaching $120 billion annually, according to one source. But to date, the cable industry's largest MSOs have collectively garnered just over $1 billion from such services. Obviously, there's plenty of untapped opportunity to go around.
But at long last, cable operators looking for new revenue sources are finally making real investments in the sector. The industry spent roughly $300 million last year alone, building backbones, upgrading network operation centers, providing last-mile access and putting back office pieces in place, said Bill Stemper, VP of Cox Business Services. Why? To become more attractive to businesses of all shapes and sizes.
And what's driving these businesses into cable's lair? The answers are myriad, but the ones that seem to resonate most include: flexibility and diversity of product portfolio; a willingness to act as a partner and assume some risk; reliability; scalability; and price.
One convert is Sentara Healthcare, a $1.5 billion, Virginia-based healthcare provider that counts among its holdings hospitals, assisted living centers, nursing homes and a variety of other facilities. It has partnered with Cox Communications to solve its growing telecom and data needs.
For Sentara CTO Jerry Kevorkian, it's been important that Cox has treated him as a partner, not a mere customer. "I always felt like they were personally involved and on my side," he said. "I got no flexibility when dealing with the ILECs. Same with the technology."
A similar refrain was sounded by John Gregory, president and CEO of the Northern Rhode Island Chamber of Commerce, whose needs were much simpler than Sentara's, but no less important.
Gregory said his office implemented Cox's cable modem service because it's fast, reliable and affordable. He initially had to wait for the office park to be built out before he could gain access, "but it was worth it," he said.
Still, in spite of the success, those closest to the business will tell you that mentally embracing the commercial sector can be a challenge. "The biggest selling job we have is internal," notes Kevin Potente, VP of Commercial Services at Cablevision, citing the industry's heritage as a provider of residential, video-based services. But those old perceptions are slowly dying off, because business really is a business. Potente said Cablevision had a staff of 30 sales and support personnel in 2002 dedicated to the sector that has since grown to 80 persons.
Time Warner Cable Road Runner President Jeff King later added: "You must overcome the mentality of not extending your plant. Every building you go into will be the 'Field of Dreams'–you build it, and they will come."