Convergence Spells Opportunity for Managed Services

February 13th, 2007 |
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Gary Kim, managing editor of IT Business Wire, and Andy Randall, MetaSwitch‘s vice president of marketing, chat with PodTech.net at the World Center Marriott in Orlando after a breakfast meeting sponsored by MetaSwitch. The breakfast panel focused on opportunities and challenges for the new competitive local exchange carriers, or CLECs. Kim and Randall discuss home and office application convergence, and the content management and distribution model changes heralded by rising demand for broadband content.

Transcript:

Host: Catherine Girardeau – PodTech

Guest: Gary Kim – IT Business Wire

Guest: Andy Randall – MetaSwitch

Catherine Girardeau – PodTech

This is PodTech.net. Gary Kim is Editor-in-Chief of IT Business and Andy Randall, VP of Marketing at MetaSwitch, join PodTech.net in conversation with Andy Randall and Gary Kim at a breakfast panel sponsored by MetaSwitch at the World Center Marriott in Orlando, Florida.

What we are going to focus this discussion around is what it means to be a service provider in the current climate for CLECs?

Andy Randall – MetaSwitch

I think it’s a really interesting time for service providers that you see the rise of Google, YouTube, all of these Internet based applications and service providers are really juggling within this to try and work out what is it that they are actually providing. Is the application that they are providing transport access to the Internet at large or can they really move up the value chain in terms of services? I think for lot of carriers they are finding it struggle to actually work out where they are on that ladder and even though they want to move up, it is a very different mindset and it becomes a different kind of challenge for them to build, build the applications and it’s all about how fast they can move. I think that’s the large part of it. Carrier tends to think in terms of years and Google thinks in terms of days or weeks. What do you think Gary?

Gary Kim – IT Business Wire

Another way to explain what Andy just said is that something really good or something really bad could happen to the entire global telecom industry, which is about a trillion dollars a year, in annual revenue. So, the really good thing would be that we succeed in creating applications that are like voice on your mobile phone or voice on your PBX at the office, or voice at your home phone, you get paid for providing that application. The really bad thing that could happen is we windup being just providers at the pipes that allow those things to be created. Those things get created by other parties that are not affiliated with you a business sense and you don’t capture much of the revenue from it. So, it’s a huge challenge, it faces all service providers not just the CLECs and it’s an issue we’re going to be facing for the rest of our professional career, that’s very clear.

Catherine Girardeau – PodTech

One of the things that came up in panel discussion had to do with differentiation or convergence between services for home use, mobile use and enterprise use. What are the challenges for service providers with regard to this kind of convergence?

Andy Randall – MetaSwitch

I think those are distinct areas of applications right now. I think the big difference we are seeing at the movement is in terms of video applications. The residential subscribers — the activity that’s happening there is all about video on demands, IPTV and the Internet based video sites. You’re seeing the content creators putting their shows up on the Websites for download. Now, this is completely disintermediating the whole distribution setup is being put in place over the last 75 years. That’s the huge shift in terms of the residential space. Different kind of dynamics happening in the business space, that where that overlap, this happening and this came up in the panel discussion and I think this is really important. I don’t think people are paying enough attention to this is that, the home workers and home office and the mobility of the worker to go beyond their cubicle to mobile space and into there home. I think the service providers that can really capture this dynamic both addressing all of those residential requirements and tie that back into the office environment, that for me could be a killer app, for any kind of service provider.

Gary Kim – IT Business Wire

One of the great inversions we might be seeing and I could be quite wrong about this, is that traditionally the really interesting things human beings can do with communications, start in the business sector, get use there, people get familiar with it and then start they using them at home, fax machines, best example then. What we have seen I think in the last couple of decades though is that the fax machine was about the last technology that actually originated in the office, so much brought home, I think everything else one can make an argument.

Catherine Girardeau – PodTech

Or email, well email.

Gary Kim – IT Business Wire

Sure, it starts in the home and then at some point so many people are using it the enterprise has to respond. I would argue to a certain extent broadband access itself, email, instant messaging, blogs, wiki’s, the use of Internet – open internet right, all of that was created by demand of users that found these things useful and then now the IT departments of the enterprises have to respond and that’s a pretty big shift. I think all of this in that the service provider community need to spend more time looking at how consumers use technologies because those things are going to wind up in our offices, there’s no question about that.

Catherine Girardeau – PodTech

And this is kind of where managed services comes in, especially maybe for small to mid size business, they don’t have the in-house expertise in their IT departments, nor perhaps the person power to deal with the IT demand of this rapidly changing environment.

Andy Randall – MetaSwitch

I was at the trade show the yesterday I was just talking to some customers who — I am talking to how they handle this kind of situation of particularly the kind of things David was talking about with quality of service, but not just in terms of the last mile to the enterprise, but actually going and replacing their network infrastructure, managing the local area network remotely over that wide area network and that’s I think even see more of that where service providers, point to demarkation of the service providers changing from where the T1 goes into the office building, right down to the desktop and they are taking on more of the management if it uses desktop of the network infrastructure and the entire IT applications of the small — particularly small business obviously at a point.

Gary Kim – IT Business Wire

One of the ways to illustrate what Andy is saying I think is that just as people customizes their cell phones by ringtones, we maybe moving towards world and hopefully we are, where end users can actually create their own custom applications, that maybe actually useable just by them personally at the office and it could be that Tom in the cubical next to me doesn’t want to do this, he may create entirely different applications and that’s just a fundamental shift in a way that we have always operated. Always before it’s been — we service providers will decide what you need, package it up, create it and sell it to you and now we maybe opening up our networks a little bit more and with that allows people to create the things that they decide they want without us having to intervene in the middle of it, which is a certainly great thing.

Andy Randall – MetaSwitch

This is the most profound time of challenge that I have ever discovered in all my years, being in the business and it’s a time of great opportunity, not just great risk, I mean both of them are present to you, but both of them are addressed.

Gary Kim – IT Business Wire

I think it’s all about carriers realizing that business model is changing. We could not to see a change in technologies, but also change in people are getting the services from based upon which of the carriers that are embracing those can build these today.

Catherine Girardeau – PodTech

Andy Randall of MetaSwitch and Gary Kim of IT Business, thank you so much for joining me on PodTech.net.

Gary Kim is Editor-in-Chief of IT Business and Andy Randall, VP of Marketing at MetaSwitch, at the World Center Marriott in Orlando, Florida, this is PodTech.net.

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