Special report: The new connectivity
Broadband infrastructure is key to delivering the converged and mobile applications and services that customers now demand
Perhaps the boldest prediction that came across our desks this week was the claim from a Silicon Valley consultancy that soon a company will emerge that makes $1bn but needs hardly any staff.
The consultancy, Magister Advisors, worked out that Microsoft, for example, has 92,000 staff today worth $3m each, when you divide up its market cap. On the other hand, new media upstart Instagram has just 13 employees, worth $77m each.
Magister's conclusion sounds slightly insane until you remember that all companies today are pushing for maximum value and super-efficiency. Furthermore, the most successful companies are demanding the capability to transport application data almost instantaneously between users and ecosystems, using whatever means, including mobile networks and increased bandwidth.
If the infrastructure is available, the opportunity for a super-efficient business to create value - and create it quickly, with fewer resources - may be larger than it has ever been.
Even the UK government seems to have some understanding of this fact, announcing in the March 2012 Budget that £100m will be spent on 10 UK cities to "super-charge" broadband infrastructure, and another £50m invested in small cities. Government believes this will give 90 per cent of the population access to faster broadband, which will stimulate industry as well as overall economic growth.
Andy Lockwood (pictured, left), product delivery and marketing director at network operator TalkTalk Business, agrees that connectivity and the infrastructure that supports it are absolutely key to all businesses today. And there is a variety of routes to improved access that businesses can already take, in conjunction with the right technology providers and channel partners, he says.
"Improved mobility of firms across the country is essential in rebuilding the British economy," he adds. "Following an investment of £600m in the network, we, for example, are now able to deliver superfast broadband to more than 90 per cent of the UK, providing access to 2.1 million businesses nationwide."
He notes that investment in true business-grade technology will provide the support needed to boost businesses across the country. TalkTalk Business - formerly Opal - can claim some success in this matter, since it already serves 180,000 business and public sector customers and has about 350 wholesale partners
and 750 resellers.
It has now "dramatically changed" its portfolio, Lockwood says, to offer a range of flexible hosted solutions - including datacentre, contact centre, and other voice and data offerings such as SIP trunking, IP PBX, and unified communications - supported by its next-generation networking.
"You need to rely on the network to connect all these services [that businesses want today]," Lockwood says. "You have to have the right network and services, the right datacentres, and the third layer is the right application hosted in that datacentre."
This all has to be done cost effectively, which means paying attention to things once thought only "nice to have" such as ecological sustainability and the overall environmentally friendliness of the infrastructure. TalkTalk's new datacentre, which harnesses methods such as adiabatic cooling to minimise power use and wasted heat, has a power usage efficiency (PUE) rating of 1.2, of which it is justly proud, Lockwood says.
Lawrence Jones, chief executive of Manchester-based server hosting and cloud hosting provider UKFast, agrees. The big thing, he says, is to invest in the hosting, and the infrastructure, to ensure the end user gets the service that is really wanted.
Very successful businesses such as Facebook, Twitter and Google have not spent anywhere near as much on the front end of their operation as on the back end. They have the grunt, one could say, to deliver the services and applications that all kinds of consumers increasingly expect.
When the grassroots national infrastructure is not there - as it isn't in many parts of the UK, he points out - you can still make massive improvements to connectivity by working with what you do have. That might mean investing in server improvements, boosting efficiency in all areas, and better datacentres - perhaps by choosing the connectivity provider with the right capabilities and motivation, suggests Jones.
That might mean simplifying what is on offer so the provider can deliver it and deliver it fast. Do not assume that the richer experience is always what the customer wants - many customers want what they had before, or even less, but instead want to get it all done as fast as possible. Channel partners, too, should take note, he indicates.
"Our job at UKFast is to speed up the customer's infrastructure, so they do not have to rely on one typical connection," says Jones. "Look at the hosting provider's networks, and speed those up."
Andrew Saunders (pictured, right), head of product management and marketing at Oldham-based independent ISP Zen Internet, says there is definitely increasing demand for better connectivity to support the required applications and services.
Zen offers a range of products including fibre, Ethernet in the first mile (EFM) and synchronous DSL (SDSL), but Saunders agrees that the key is not the technology used but whether or not it provides for the individual customer's needs.
This can be more about service level agreements than about whether the connectivity is delivered via ADSL2+, SDSL, EFM, or over fibre optic cable.
"And the business is growing. Through partners it has grown to about 25 per cent of our total business, so that is very significant to us, and it grew at about 30 per cent year on year last year. The business overall has grown eight per cent," Saunders says.
While internet provision as an industry can be seen as relatively mature, demand for new services is continuing to expand and even accelerating. So profits are growing even though the technology used is becoming cheaper and delivers faster data speeds in both directions. There is certainly margin in it for partners, Saunders confirms, especially when it is all about differentiation and value-add.
Dominic Carroll, product manager at Zen Internet, agrees, adding that Zen has added a new fibre offering that doubles its current speeds to 76Mbit/s downstream and 19Mbit/s upstream. Zen's EFM service now supports speeds of up to 35Mbit/s. EFM - also offered by TalkTalk Business - is a resilient, symmetrical service delivered through multiple copper pairs and can be provided within 30 working days, half the time of a traditional Ethernet service.
Zen Internet also recently announced a new £4m datacentre at its north-west headquarters for its managed, hosted and co-location services offering. Some customers are still on ADSL, but more are looking for higher speeds when it comes to connectivity, says Carroll.
Demand for services is spreading
Dave Joplin, head of indirect channel at London-headquartered Ethernet WAN specialist Exponential-e, says that a wide range of companies are looking to take the next step up in connectivity terms. Its latest offering is a business-focused 1Gbit/s service, PowerNGN1000, which it believes will appeal to its financial services customer base.
Even traders and other financial services professionals, Joplin says, are increasingly reliant on online communications and cloud-based applications - at the same time requiring high security levels, top speeds and exceptional availability.
Gone are the days, Joplin suggests, where massive bandwidth was only required by media companies, broadcasters and the like. All kinds of businesses are demanding infrastructure improvements with an RoI that not only supports current needs around converged services, but to some extent at least future-proofs their offering to their customers. It is about everything from voice to disaster recovery and testbeds for private or public cloud.
"Next-generation networking is the ability to deliver multiple services down a converged infrastructure into customer sites; support critical apps and, usually, future-proofing," says Joplin (pictured, left). "Sixty per cent of what we sell is a service converged on some form of SIP trunking and an additional 30 per cent has some form of converged app on it. And the channel can add the value here."
Jason King, head of business partners at Virgin Media Business, says connectivity is now "extremely important" to UK businesses, not least because almost everything today needs to be connected.
"It is crucial for the transportation of data over the WAN to carry out jobs such as emailing, but also increasingly to access cloud computing, the SAN, and other applications based off-site," he says.
Virgin Media Business, in response, is aiming to deliver more services with unconstrained bandwidth. Virgin has the UK's largest nationwide fibre optic network and says coverage is available to 85 per cent of UK businesses as well as offering local support to its partners. It offers scalable fibre to the premise, with up to one Gigabit of capacity.
"For nearly two years Virgin Media Business has successfully been running its business partner programme," says King. "[Partners] have been given access to a special online portal featuring marketing campaign materials and information, as well as an easy-to-use pricing tool. We also allow partners in the top two tiers to apply for marketing funds."
Everything is connected
Andy Hollingworth, director of partners at TalkTalk Business, says resellers are important and absolutely integral to its business. "They essentially make up the DNA of our business. Partners understand their customers implicitly, whether that means customers in their local area or in other areas. They know the customers, and our business should be created around customer needs," he says.
Hollingworth says that partners are supported throughout, and also listened to when it comes to product development. Its partner programme and website PartnerZone has been developed and recently relaunched to ensure mutually supportive incentives and processes.
"We have built a partner programme that provides more resources and more total support to our partners. Each partner has access to a person who is able to understand the partner's customer business and vertical market, [giving] specialist hosting voice-and-data account management," says Hollingworth.
"We seek voice partners, data partners, ISPs and SIs. Then we design the support around particular segments."
Siemens Enterprise Communications found in a 2012 State of Enterprise Communications survey of 1,000 global organisations that perhaps 40 per cent of UK businesses are planning cloud deployments in 2012 as well
as improvements to their use of collaborative technologies supported by mobile devices such as smartphones and laptops.
Key applications on their agenda, according to Siemens, include web collaboration (92 per cent), videoconferencing (88 per cent) and UC (86 percent).
Dave Ellis, director of new technology and services at distributor Computerlinks, confirms that as people put more applications into the cloud, using more devices, connectivity and infrastructure that supports it becomes ever more important.
"This is something that customers need to think about - getting their businesses connected and how they need to manage that," Ellis says. "People are bringing all these devices into work - I heard it called ‘corporate bling' the other day - and they are using them to connect to the network. In addition, enterprises are starting to provide for them as part of their standard infrastructure."
It is not just about executive toys, but a range of variations on the theme of mobile working or remote log-in that companies are demanding to boost efficiency, make savings and increase productivity in a range of areas. The infrastructure, often wireless as well, needs to be there - as well as managed and secured - to support all this new functionality and ease of access, or it simply will not work, agrees Ellis (pictured, right).
"These create different challenges for partners, but the connectivity is absolutely vital," he says. "And events such as the Olympic Games coming up mean organisations will have to think about it. Strike while the iron is hot."
His conclusions were prefigured by Google UK's head of enterprise partners, Peter Lorant, on ChannelWeb almost a year ago. Lorant believes "100 per cent web" is the future of the channel.
This is not only about the growth of cloud computing, but helping business customers to stay ahead of their competitors, retain customer loyalty, and collaborate more efficiently. A UK Future Foundation study, Lorant wrote, had found an 81 per cent correlation between collaboration and innovation.