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Comcast Business Seeks Out Midsize Enterprises with Metro Ethernet Offer
| May 18, 2011 | Network Access and VPN Services
| Analyst: Cindy Whelan
Event Summary
May 16, 2011 -- Comcast announced the availability of a suite of metro Ethernet services over its fiber optic network in 20 U.S. markets. The operator is targeting businesses with 20-500 employees with Ethernet Private Line, Ethernet Virtual Private Line, mesh Ethernet, and Ethernet Dedicated Internet Access services. The services have MEF 9, 14 and 18 certifications, scale in bandwidth from 1 Mbps to 10 Gbps, and offer businesses a lower cost per megabit compared to legacy leased line transport technologies.
Quick Take
Analytical Summary
• Current Perspective: Moderate on Comcast’s Ethernet service portfolio, because the move is an integral step in the operator’s strategy to move up-market, targeting businesses with up to 500 employees. Comcast has offered Ethernet services for several years, but it is now taking steps to develop and emphasize its Ethernet capabilities further to underpin the next phase of its business services strategy. Interest in and uptake of Ethernet services are on the rise as enterprises look to Ethernet as a more cost-effective, flexible alternative to traditional private line services.
• Vendor Importance: High to Comcast, because its high-capacity, symmetric Ethernet services backed by SLAs support the operator’s plans to move up-market and strengthen its competitive position against telcos and CLECs. Comcast needed metro Ethernet offers to support its efforts to move beyond its traditional customer base of small businesses to attract mid-market and enterprise customers. Comcast's Ethernet services also enable the operator to address the needs of wireless operators looking for mobile backhaul.
• Market Impact: Moderate on the Ethernet services market, because as one of the largest cable operators in the U.S., Comcast has the size and scale to challenge telco-side competitors. However, it does not have the track record in delivering services to midsize enterprises that other contenders do. Incumbents AT&T and Verizon and competitors such as Level 3, XO Communications, tw telecom, and Masergy have a lengthy tenure in delivering Ethernet services as well as well-established customer bases. Comcast is off to a good start, with a full suite of Ethernet services available to 20 major U.S. markets, and can establish a position as a provider of enterprise-class services over time.
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Comcast Introduces Metro Ethernet Services to Address Bandwidth, Application and Reliability Requirements of Mid-Sized Businesses
MEF-Certified Offerings Provide Scalable Capacity Up to 10 Gbps to Support Cloud Computing, Business Continuity/Disaster Recovery and Bandwidth-Intensive Vertical Applications
Services Now Available in More Than Twenty Major Markets Coast to Coast
PHILADELPHIA, PA – May 16, 2011 – Comcast Corporation (Nasdaq: CMCSA, CMCSK), one of the nation's leading providers of entertainment, information and communications products and services, today announced Metro Ethernet services as part of an ongoing strategy to expand its portfolio of business services to meet the requirements of larger customers. Targeted at mid-sized businesses with 20 - 500 employees, Comcast’s Metro Ethernet services provide access to the Company’s next-generation fiber optic network that provides a better choice for businesses with high-bandwidth needs and often multiple locations. The services are now available in more than twenty major U.S. markets, with expansion into new markets planned in the months ahead.
Analysts expect the U.S. business carrier Ethernet services market will continue to grow by double-digits as mid-sized businesses look to streamline the cost and performance of their wide area networks (WAN) by upgrading to Ethernet from legacy technologies such as T1 lines, Frame Relay and ATM. Today, customers with those services typically must rely on bonding multiple T1 lines or fractional T3 lines. Doing so can result in an expensive and limited capacity solution unable to address escalating bandwidth requirements for cloud computing, business continuity, business process automation, software-as-a-service (SaaS) and other applications.
Comcast Metro Ethernet services are delivered using the Company’s industry leading fiber-based IP network. Unlike competitive carriers that simply resell the phone company’s network, Comcast is giving customers a true alternative network to maximize the performance and reliability of their business communications and applications. Comcast delivers bandwidth from 1 Mbps up to 10 Gbps that can be remotely scaled in increments of 1 Mbps, 10 Mbps, 100 Mbps or 1 Gbps, and offered with three different classes of service. Comcast is the first carrier of Metro Ethernet services to have all three certifications from the Metro Ethernet Forum (MEF 9, 14 and 18), which are backed by strict service level agreements, and monitored 24x7x365 from Comcast’s dedicated Network Operations Centers.
“Our fiber-rich network powers our Metro Ethernet services and provides a secure, reliable and cost-effective solution for mid-sized businesses’ data needs,” said Bill Stemper, President of Comcast Business Services. “Metro Ethernet is quickly overtaking T1 and other legacy services as the preferred technology for business communications. Just as broadband supplanted dial-up in consumers’ homes, our new Metro Ethernet services are designed to help businesses compete and win using our fast and scalable digital platform.”
Sandra Palumbo, Research Fellow at Yankee Group, commented, "As mid-sized businesses increasingly operate within a virtualized IT environment of cloud and SaaS resources to improve productivity and reduce operational expenses, their demand for secure, reliable and high-performance connectivity will continue to grow. This market segment has high-bandwidth requirements across multiple sites and values the lower cost of ownership, simplicity and scalable capacity of Metro Ethernet. Significant last mile networks and investments in advanced Carrier Ethernet network infrastructure are vital.”
Delivered from an industry leading fiber-based IP network featuring more than 147,000 miles of fiber optic cable and serving 20 of the nation’s 25 largest markets, Comcast offers four Metro Ethernet Services, including:
Ethernet Private Line Service – point-to-point connectivity between two customer sites for bandwidth-intensive applications.
Ethernet Virtual Private Line Service – a point-to-multipoint connection that allows customers to tailor bandwidth, performance characteristics and cost to meet the needs of their applications.
Ethernet Network Service – multipoint-to-multipoint connectivity to connect organizations with high-bandwidth requirements and multiple locations across Comcast’s network.
Ethernet Dedicated Internet Access Service – continuous, high-bandwidth connectivity between customers’ LANs and the public Internet.
Comcast currently provides Metro Ethernet services in the following markets: Atlanta, Baltimore, Boston, Chicago, Denver, Detroit, Harrisburg (Pa.), Houston, Indianapolis, Jacksonville, Miami, Nashville, state of New Jersey, Oakland, Philadelphia, Pittsburgh, Portland, Sacramento, Salt Lake City, San Francisco, San Jose, Seattle, Washington D.C. and western New England. Additional markets will be launched on an ongoing basis.
Source: Comcast
