Strategy for Cable Broadband Data

Strategy for Cable Broadband Data Strategy Paper for Overcoming DTAG Market and Technology Advantage

This paper was created for a venture capital company and subsequently used to target cable accessible markets in Germany. The paper has been parsed in this forum to separately cover Digital TV, Broadband Data, Video on Demand, Telephony, Interactive TV, Gaming and Colocation.

BROADBAND DATA

Broadband Data, otherwise known as ISP, is currently dominated by DSL offered by DTAG. Substantial penetration and marketing hurdles are inherent in offering this service. Another consideration is that this service is offered "across the board" by DTAG, i.e. to residential and business consumers.

We suggest pursuing Broadband Data consumers because of the competitive nature of the enterprise, and the constraints inherent in DTAG's position. DTAG's upside – Customer recognition, excellent DSL operations reputation, tie-in capabilities for telephone, mobile phones, etc. DTAG's downside – Size i.e. DTAG cannot make quick decisions or quickly respond to challenges, governmental constraints, high overhead, slow installation, price. DTAG's downsides make them a very vulnerable target, while their upsides can be overcome by establishing a great reputation by performance, offering Broadband Data as a package within the group of products the enterprise offers, and partnering with stellar companies which offer Broadband Data services as their core competency.

The consumer ISP portion of this enterprise should be outsourced. Sourcing partners should be done by establishing x considerations.

1. Market reputation – Rather than taking the time to establish a reputation for excellence, quality and service, it would be much more economical to use existing companies which have already established brand recognition. This offsets DTAG's advantage in this area.

2. Quality of Service – Working with a company with a stellar "Quality of Service" lowers the probability of alienating potential customers, garnering adverse publicity, lowers the cost of doing business through the low percentage of rework and high percentage of successful implementation.

3. Scalability of Infrastructure – The company the enterprise partners with will need to be able to transparently (to the consumer and the enterprise) add millions of customers while offering an excellent experience. This will take an infrastructure design built to scale well when additional resources, forecasted and unforeseen, are needed.

4. Staying power – The companies selected must be financially sound and able to operate under increased workloads throughout the period of our contract. Having to convert customers from one ISP to another is guaranteed to adversely affect the reputation of the enterprise even though the enterprise is not operating the ISP. The ISP and the enterprise are considered one and the same in the customers eyes. In addition to this, the enterprise would face a financial hit, in some scenarios quite extreme. Sourcing financially sound companies has no downside.

5. Competitive bidding - The enterprise has a potential customer base of millions to offer ISPs. This is an extremely strong negotiating position for awarding bids. Competitive bids should be accepted for contracts of fixed length extendable for fixed lengths indefinitely. Through bidding the enterprise can realize some of the value of it's customer base, be "pre-financed" for some upgrades and help lower uncovered CAPEX expenditures.

6. Amount of control the enterprise will have with this partner – Control of the quality of customer experience, and technology interfaces is imperative to make this strategy succeed. Hence, responsiveness to the concerns and fiats of the enterprise is imperative. The customers serviced by the ISPs are owned by the enterprise, as such, the enterprise must be extremely proactive in projecting the image it wants the world to see, and extremely protective of it's reputation.

7. Geographic location – The ISPs selected must be easily accessible physically and datawise to the enterprise and it's customers, on a "best in market" level. This means that latency must be the lowest in market, bandwidth must not be a contraint, downtime cannot be allowed, the enterprise must be able to easily connect into the ISP infrastructure without occurring extraordinary costs. Performance provided must be better than anyone else in the applicable geographic area for the customer.

8. Amount of funds the partners are willing to invest in ISP infrastructure within the enterprise – As this is a partnership, the ISPs will be expected to assume some, if not all, of the cost of "plugging into" the enterprise. Also part of the costs entailed in making (upgrading) the enterprise infrastructure to carry data should be amotized and charged to the ISP partners.

9. SLA's and guarantees – This should be outlined in the RFP or RFB (Request for Proposal or Request for Bid). The ISPs must go into bidding knowing that the enterprise will allow 0 maintenance downtime, expects 99.999% uptime, latency from consumer computer to ISP external router of no more than 15 ms, will be mandated to work with gaming networks using common ldap, certain protocols (e.g. tcp/ip, mpls, QOS, etc.) are a necessity. Quarantees entail strong penalties for not meeting standards. Penalties run the gamut from financial up to and through summary termination of contract.

10. Technology (ability to interface with enterprise) – Technologies used by the ISPs must "play nice" with the systems deployed in the enterprise. Interfaces should be common and non-proprietary. In short, the ISP needs to be able to "plug-in" to the enterprise, and in the unfortunate event of ISP insolvency, contract breach, etc, must be able to "unplug" from the enterprise. This should be transparent if possible.

With the proliferation of ISPs, the enterprise has no need to invest in systems, manpower, training, skills, infrastructure, marketing, installation, etc. to offer Broadband Data services. Email addresses must be of the enterprise domain, as opposed to the domain of the ISP. The ISPs would individually market this service.

About the Author:

Sean DAniell is a internationally seasoned I.T. executive with highly effective technology and organizational management experience that increases profitability. Mr. DAniell has extensive experience in creating, managing and guiding thriving, successful startup and Fortune 500 technology departments. www.abilenegroup.com

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