Cox and Comcast are cashing in with cloud-based services and transport to data centers.

You know that cloud services, cloud computing or anything else “cloud” related have reached the saturation point when they start cropping up in ads for big box retail chains.

With almost everything in technology headed toward the cloud, cloud computing has become almost ubiquitous with mainstream consumers, but cloud services, or managed services, have been infusing cable operators’ bottom lines for years. Last year, Cox, Comcast and Time Warner Cable each racked up more than $1 billion in commercial services revenue, with small businesses accounting for large chunks of those profits.

So from a cable operator’s perspective, what are cloud services?

Kevin O'Toole“I think cloud services are any type of service that a customer can pull down off of the Internet or from a private data center facility,” said Kevin O’Toole, senior vice president of product management and strategy for Comcast Business Services. “At the very low end, those are typically completely end-to-end managed services.

“Customers right now are really trying to adopt the cloud. That’s the buzzword. They’re always talking about the cloud, the cloud, the cloud.”

Greg Rothman, director of voice and managed services product management for Cox Business, said that, in general, customers are becoming more and more comfortable with cloud services that are now managed in the network as opposed to the customer’s premise.

Cox Business launched its Cox Business Online Backup and Cox Business Security Suite offerings across all of its markets last year.

For online backup, Cox Business partnered with Mozy, while the security suite is powered by McAfee SaaS security technology. Cox Business’ approach was to find best-of-breed partners to offer cloud-based managed services to small businesses that typically have less than 20 employees.

“I can say the uptake has met our expectations,” said Roger Crisman, director of data and video product management for Cox Business. “We did a fair amount of customer research before deciding to partner with Mozy on that service. Storage and online backup was actually the No. 1 requested managed service, or cloud service, from our target customers.”

Roger CrismanWhile cloud computing conjures up images of rows and rows of servers purring quietly along in sterile data centers, the services themselves have been a lifesaver for the small businesses that use them.

Burt Heacock is a partner with Paul-Tittle Search Group, which is an executive search firm based in Washington, D.C., that specializes in executive recruitment for telecom, IT, Internet, professional services, government systems integration and e-commerce-related clients.

Heacock said that prior to using the Cox Business Online Backup Service, his company was backing up critical information on tape.

“That’s not a very good way to do it,” he said. “It means that someone has to do it every day, just the cycle that it takes, and then you have to carry them offsite. Frankly, the people who work for me that were supposed to often didn’t do it. I’ve been in the IT business long enough to know that the day that you don’t have a valid backup is the day that you’re going to need it.

“I started looking at ways to backup in the cloud. In fact, I paid for a couple of services, and then Cox came along and offered me a service essentially wrapped up in my Internet service. From a cost standpoint, it was great. The initial service was replaced last year with a better product that uses the Mozy system and that actually allows you to backup open files, which is very important for us. When I walk into the office in the morning, I get a message that says that the backup was successfully completed. I love that.”

Customers can use Cox’s My Account Web portal for a single sign-on that allows them to manage their online backup and security services, as well as their Cox managed VoIP Business Voice Manager service.

“They have some pretty robust management capabilities, and the thing small business customers really like about it is it’s essentially a ‘set and forget’ capability,” Crisman said. “They can determine how often to backup, when to backup, and it’s all very user-friendly and intuitive.”

For medium and enterprise customers, Cox Business has offered metro Ethernet services for some time. Metro Ethernet can provide transport to and from cloudbased service applications.

Cox Business has partnered with Cisco to offer a managed PBX service in its Las Vegas and Oklahoma systems. While managed PBX doesn’t fit the Internetbased definition of cloud services, it does reduce the complexity of unified communications for companies.

“We see that for customers who would like to have a PBX on the premise but don’t want to manage it themselves,” Rothman said. “We also will be launching an IP-Centrex solution where they can use IP phones and get a little more functionality than they would get otherwise.

Greg Rothman“We are seeing small business customers ask about cloud services, but on the enterprise side, it’s a little more mixed where they do want to have the equipment on premise, and for voice, we’ll offer SIP trunking. We’re in five markets with that, and that is going well.”

The IP-Centrex offering is slated to launch in the fourth quarter of this year.

For small businesses, Cox is also trialing a hosted Microsoft Exchange service for unified communications in its Virginia system, which was the same market that pioneered online backup for the company. Cox Business has partnered with Aptix in the trial.

“That’s going well,” Rothman said of the trial. “We offer a voicemail solution that is a cloud-based solution, and one of the popular features is unified messaging, where they can receive their voicemail as an email attachment.

“We’re looking at what other functionality customers with under 20 employees and below are most interested in.”

Last year, Boston-based Callanan & Klein Communications won a technology makeover contest courtesy of a magazine and Comcast. While Callanan & Klein was already a subscriber to Comcast’s triple-play services, it gained access to the cloud-based hosted Microsoft Exchange Communications suite of services – which included the Microsoft Exchange infrastructure and SharePoint – that’s part of Comcast’s business-class Internet service.

“We were probably technology-wise a little bit of a disaster, or very much in the early 2000s with the technology that we were using,” said Erin Callanan, founder and managing partner of the company. “We were using Microsoft Outlook, but we were not on an exchange server. If I wanted to find out if my colleague had time for a meeting on Wednesday, the solution was to yell across the office to see if he could tell me his calendar was open.

“If we wanted to share a document, I would email it to him, and he would email it back to me. We would make our edits in the document, but we kept emailing back and forth to each other. There was no version control, and there was no access to calendars. If I didn’t remember to sync my phone before I left the office, none of my emails that I had downloaded that day were on my phone.”

Comcast’s O’Toole said small business customers can also set up Wiki sites amongst themselves, and the service comes with anti-spam, anti-virus and backup capabilities.

“We’re just blown away by how much SharePoint and the Exchange servers have really helped us,” Callanan said. “It has made a significant difference in how we manage our day-to-day activities, and that’s fabulous.”

With Comcast’s DOCSIS 3.0 business-class wideband tier, which features up to 100 Mbps on the downstream, customers can also better access their cloud-based files.

“If you think about it, in business class right now, we offer 100 Mbps downstream and 10 Mbps up for $369 a month,” O’Toole said. “That’s less than a lot of companies have been paying for a 1.5 Mbps T-1. If you’re on a T-1, it’s really hard to consider taking an office of 10 to 15 people and saying, ‘OK, everybody move all of your information up to the cloud,’ and share a T-1 to do it. Whereas we can, for less money, give you 100 Mbps to make sure that everyone can really get access to their information.

“I think small business owners have faced an unsavory choice: Either they had to spend a lot of money on servers, infrastructure and support to have access to these tools because they had to do it at their location, or they just had to forgo using the tools because they couldn’t afford them. So now all of a sudden these productivity-enhancing tools, like our Microsoft solution, you put it into the hands of small business owners for just a few dollars a month, and it’s revolutionary.”

Cloud services shaped for SMBs
By Kristine Faulkner, vice president of product development and management at Cox Business

Cloud services have been around for years but were primarily utilized at the high end of the enterprise market. In the last several months, it has become a household phrase as grandparents learn how to download tablet applications and store pictures and children play online games “in the cloud.” These services were once reserved for some of the most complex IT organizations in the world, and now they are at the fingertips of very small businesses.

Kristine FaulknerGenerally defined as products, services and solutions delivered and consumed in real time over the Internet, cloud applications can support broad business functions, such as customer service, data management, accounting and network infrastructure.

Cloud-based storage, security and Web hosting scored highest in interest and value in recent Cox customer studies among small and medium businesses. Unified communications and remote LAN and PC management were close behind.

With limited IT and labor resources, small businesses are typically the best candidates for and the most enthusiastic users of cloud services. With the right tools in place, enterprise communications characteristics can be leveraged at all levels of the market. Software vendors have recognized this, and applications are now designed specifically with small business owners in mind. Cox has offered services to small businesses for 18 years, and cloud-based managed services are a natural extension of our trusted partnership with these customers.

Cox Business’ hosted IP voice service – Cox Business VoiceManager – allows customers to build disaster recovery, remote office and intelligent call routing into their operation without any capital investment and with limited operational expense. These capabilities were previously only available for very large companies with large telecom budgets.

Based on customer research, Cox has aggressively launched its Cox Business Online Backup and its Cox Business Security Suite in all of its service areas; they are included free with Cox Business Internet. The services were recently enhanced to address the growing data management requirements among customers, and the Cox Business Internet email platform was upgraded to provide more business features.

IDC’s 2010 study indicated that more than 70 percent of small and medium businesses subscribe to additional services beyond basic voice and data; 47 percent of those surveyed outsource managed security, 39 percent storage, 36 percent hosting and 32 percent support services. Sixtyfive percent of customers subscribe to at least some of these services from their broadband provider and cite trust as the top reason. The 35 percent that do not use their existing provider for additional services list lack of awareness as one of the top reasons.

We’ve seen early traction from these offers and believe that cloud services represent a significant opportunity for cable providers. The effective presentation, implementation and support of products and services that help customers more efficiently and effectively support their business operations will continue to secure our place as trusted providers.

Last month, Comcast officially unveiled its metro Ethernet services, which launched in more than 20 markets across the nation. While Comcast has had a lot of success with small businesses, the metro Ethernet services allow it to target medium-size businesses with 20 to 500 employees.

With its metro Ethernet services, Comcast can deliver bandwidth from 1 Mbps up to 10 Gbps, which can be remotely scaled in increments of 1 Mbps, 10 Mbps, 100 Mbps or 1 Gbps and is offered with three different classes of service.

Comcast’s fiber-optic and IP network reaches across 45 percent of the nation. When paired with Comcast’s DOCSIS 3.0 tiers, which are deployed across 90 percent of its footprint, Comcast has a solid one-two punch for providing transportation to and from cloud services.

“What happens when you adopt the cloud and move your applications into the network is that the last-mile connection becomes that much more important because everything you do traverses that last mile,” O’Toole said. “I think our last mile is an incredible, unique asset, and the more ways that we can come up with to take advantage of that to meet the needs of small- and medium-size businesses, the better off we'll be.

“We think there’s a lot of additional upside to be had in the metro Ethernet space as we go forward.”

Comcast has also been busy rolling out a primary rate interface (PRI) trunk replacement offering across its footprint since the third quarter of last year, and it's currently in place in 85 percent of the cable operator's footprint.

In an effort to move into mediumsize business-class services, Comcast has been pairing its Comcast Business Class Trunks with its DOCSIS 3.0-based 100 Mbps offering.

“Down the road, we are looking at hosted PBX," O'Toole said. "About a year ago, we purchased a company called New Global Telecom, and now we are in trial with our hosted PBX offering up in Boston and in western New England.”

O’Toole said Comcast was focused on using its transport network as an “infrastructure as a service” to get customers to and from private or semi-private clouds.

“We’re really focused on being the best way to get to the cloud, whether you’re using a fully managed service from a third party, or whether you’re trying to get to a data center, we want to be the best way for you to get to that cloud,” he said. “I think for the time being, we’re likely to be very, very focused on enabling the transport.”

As for launching new products, O’Toole said there are still plenty of business customers out there that are ripe for the plucking.

“Don’t underestimate the extent to which those core needs are still being unmet,” he said. “We continue to see customer dissatisfaction with the slow speeds of DSL, the egregious prices of T-1s and bad customer care experiences from phone companies that really aren’t focused on the small business customer.

“Part of the reason we’re not doing lots and lots of new products is because there is so much opportunity from the customers who just aren’t having their core needs met.”