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Table of Contents
Holocom in the Marketplace
Wall
Street Opinions of Sector and Competitors
Trends in Edge Networking
SME
Networking Needs
Media
and Analyst Perception Audit |
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Holocom Networks - Market
Assessment and Positioning Recommendations
Table of Contents
Methodology...................................................................3
Holocom in the Marketplace........................................5
Trends in Edge Networking.......................................12
Holocom Executive Interviews..................................16
Media and Analyst Perception Audit........................45
Positioning
Statement................................................57
Key
Messages..............................................................58
Public Relations Recommendations........................60
HOLOCOM IN THE MARKETPLACE
There are a number of ways to look at both Holocom’s place in the
market and the competitive landscape.
Obviously, Holocom sells into a variety of marketplaces –
corporations for Workplace Solutions, Landlords/REITs for Building
Gateway. While BG would pull in Workplace Solutions, the two units
do sell separately, and will continue to do so for the foreseeable
future.
In this section, we take a look at companies that seem to talk the
same talk as Holocom, regarding broadband to the desktop,
in-building networks, and reusable infrastructure, and at products
that seem similar to Top Runner, and the Passive and Active
gateways. The degree to which they are actual competitors for sales
is important. What’s also important is the degree to which they
muddy the communication waters, by presenting similar ideas and
concepts – from MAC reductions to carrier-neutral infrastructure.
A second way we will look at the competition is who is solving, or
promises to solve, the issues that Holocom address in a different
way, either with a partial solution or a full solution. And that can
be everyone from a Verizon to a CLEC to broadband providers. Beyond
that, other potential solutions that may have captured mindshare
should be considered. Wireless solutions, for example, may not be
widespread for another 12 or 24 months, but they are out there and
on peoples’ minds.
Holocom has, in its own competitive analysis, listed several
companies that we have come across: Eureka GGN, Allied Riser, Elink
Communications, Cypress Communications (now owned by U.S. RealTel)
and XO Communications.
To round out the list of competitors, we talked to media, technology
analysts, and read through Wall Street reports. Some analysts have
told us – as has Holocom – that there is no one doing what Holocom
is doing (but analysts often followed that remark by stating that
the lack of competition indicates that Holocom solutions won’t meet
with sufficient market demand). The list of competitors below is not
exhaustive, but it does include a variety of companies offering
in-building networks and products similar to those of Holocom.
We have done a fair amount of editorializing on the nature of the
competition, and some of the marketing lessons and marketing
challenges that these competitors present.
For the purposes of this report, we did not dwell on the competitive
landscape for Consulting & Services as a stand-alone business, even
though the group may sell its services directly to the marketplace.
For the most part, this group will support the sale and installation
of Building Gateway and to a lesser degree, Workspace Solutions. We
can, however, furnish you with as much information as you like on
the sector, based on research and other client work we’ve done.
IN-BUILDING NETWORKS
There are a number of companies that talk about creating in-building
networks. What follows is a list of sample companies, gleaned from
our research, our discussions with media and analysts, and from
download sessions with Holocom. Some are public, some private. What
is interesting to note is that no competitor is big, and none really
seems to have momentum. We can speculate about the reasons why, and
certainly we’ve discussed the failures of the BLECs, but the lack of
market acceptance to date has implications for Holocom’s sales,
marketing, and PR efforts.
Please note: In our Proposed PR Program, we outline some of the
communication hurdles and solutions to this marketplace issue.
WIRELESS SOLUTIONS
While Holocom’s product can be perceived as a way to speed the
adoption and ease of wireless networks the analyst and the media may
not see Holocom that way. Instead, the media and analyst may see
Holocom’s solution, whether that’s a zone cabling solution or a
Building Gateway, or even a Passive Gateway as a temporary measure
until wireless takes over. Whatever the state of wireless today –
and wireless networks have not yet caught on – wireless is seen as
at least a part of the future.
According to Gerard Klauer Mattison, 39% of Fortune 1000 respondents
plan to budget $750,000 or more for annual wireless data deployment,
9% plan to budget $5 million annually, and 20% plan to budget
$250,000 to $500,000 annually. Smaller companies may actually be
willing to invest more readily, since what’s holding back the bigger
firms is wireless’s unproven track record in supporting enterprise
applications, such as ERP. One other sign that wireless networking
is the wave of the future: new laptops are now equipped with 802.11b
capacity. A wireless solution could be more compelling for landlord
and tenant, because there is less investment in a backbone.
There are any number of wireless infrastructure providers, Cisco,
3Com, Sprint, Verizon are all considered wireless network providers,
as are numerous new comers, such as Aether Systems and Vytek
Wireless. Not to mention the numerous wireless integrators, from the
Big 5 and EDS, all of which promise to put in wireless solutions for
a single department or an entire campus. There is an entire category
of wireless companies that call themselves Broadband Wireless Access
providers, including Alvarion. Harris has a wireless solution for
carriers that want to provide wireless access and DSL services to
Multi-tenant units, called ClearBurst.
While Holocom currently has wireless enclosures, and could enable
wireless currently, getting this story out will take some thought
and some work (we have mentioned that a wireless partnership
alliance might help here).
WORKSPACE SOLUTIONS/PRODUCTS
The competition here is diverse, since traditional methods of
cabling are ubiquitous and the providers of both cabling and
enclosures accepted and in some cases entrenched.
Some executives have said that Holocom does not lose business to
other enclosure companies, but to contractors who prefer to continue
to do home-run cabling. Clearly, resistance from connectivity and
cabling companies is something Holocom will need to overcome (for
possible PR solutions to this, please see The Baxter Group’s
Communications Proposal).
That said, there appear to be other companies offering similar
cable-management or re-usable connections. We mentioned Barnes
Wentworth above, with its LUCI and RICI products, which are
distributed by a third party. The Wiremold Company and SquareD also
appear to be competitors. Wiremold, though, seems to come closest in
both products and positioning.
According to Wiremold’s literature, it has pioneered the development
of fully integrated wire and cable management systems. These systems
are modular, accessible, and expandable. They enable wires, cables,
and outlets to be moved or added quickly and easily. Today’s
integrated wire management systems are the first choice for
incorporating power, data, video, and voice wiring and cabling with
built-in flexibility that translates into ease of installation and
lower life cycle cost.
Interestingly, Wiremold is also in the education market, with
product called Activate, which snaps into the Wiremold 4000 Series
surface raceways. The metal raceway offers full-capacity radiused
corners and features a snap-in divider that creates separate
compartments for power and data/communications cabling. “The way the
schools were constructed with cement, bricks and stones, you can’t
put wire and cable in the wall. The main thing here was to make the
rooms look nice and have access to the wire and cable.”
WALL STREET OPINIONS OF SECTOR
AND COMPETITORS
SUMMARY
To understand Wall Street opinion, we need to divide it into two
categories: opinion about the general sector that Holocom would
belong to, and about more specific competition.
Among Wall Street analysts, Holocom fall into one of several
categories, including Telecom Infrastructure/Services, Broadband
Access Technologies (Lehman), Transport Equipment and Photonics
(U.S. Bancorp Piper Jaffray), Access/Edge (Thomas Weisel).
Companies in those sectors can be anyone from AOL Time Warner to
Advanced Fiber to Cisco to start-up wireless providers. Many
companies sell to carriers (which means Holocom will have to be very
clear that it both belongs in the sector and has a different
business approach). When those carriers are not doing well – as they
aren’t now or for the past year – and the telco capex is falling,
then the Wall Street views are very tough. The CapEx Carrier index,
to quote Michael Brown from RBC Capital Markets, remains weak
indefinitely.
In short, to quote one analyst: “This is a lousy time to be a telco
analyst.”
The problems are well known, but worth repeating here. Before the
dot-com bubble burst, the carrier and cable industries wasted
billions of dollars. Huge quantities of fiber optic cable, far
beyond what was needed, were produced and installed. Companies were
started by promoters who became rich from selling stock long before
the companies tanked.
Generally, Wall Street thinks that companies closest to the
customers are best situated. Companies that will need relatively
little capital spending have a better chance of riding out the
storm. Equipment suppliers are in turmoil because they are removed
from the customer
While Holocom had the opportunity to sit down with an analyst from
Gerard Klauer Mattison (and received limited feedback), we do
recommend that the company seek meetings with other firms that cover
the space.
SECTOR COMMENTS
In 2001, the communications infrastructure services sector lost
56.5%, compared with the S&P’s drop o f 13%. If you’re analyst, you
say the sector is poised to rebound to its traditional trading
multiples.
(This presents an interesting IR issue for Holocom, because it would
be a company in that sector that doesn’t sell to carriers, and
therefore analysts would have to understand the markets it does sell
to.)
The consensus seems to be that wireline infrastructure remains weak
across the board. Optical equipment remains the primary growth
driver. While long haul transport continues to be weak, optical
switching and metro DWDM transport are still growing, albeit from a
smaller revenue base and at a slow rate. Wireless infrastructure
remains slow as 2G stalls and as timeframes for deployment of 2.5G
and 3G networks have stretched out. Wireless companies are looking
for a recovery in wireless infrastructure spending in the second
half of 2002.
Enterprise networking looks to be the first major spending area to
recover, which is good for players such as Cisco and Extreme
Networks.
Piper Jaffray believes that a meaningful recovery in transport
equipment demand is highly unlikely without an uptick in data
service demand, and believes that weak data service demand trends
are one of the drivers behind the latest round of carrier capex
cuts.
In the sector, one of the darlings is Advanced Fiber Communications,
which sells to carriers such as Sprint and Verizon, and to
independent telecom operators. Advanced Fiber seems to be weathering
the capex spending constraints fairly well.
Intrado (a GKM favorite) is in the E 9-1-1 services industry, and is
a leading provider of data management, call routing and notification
solutions for emergency communications. Intrado sells to ILECs,
CLECs, and wireless. Intrado is affected by the general telecom
conditions – domestic wireline capital spending is expected to
continue to slide through at least 1H02. Large carriers have slashed
their 2002 capital spending plans, as have CLECs. Network
Infrastructure Service companies have high exposure to these
wireline market segments.
COMMENTS ON PERCEIVED COMPETITORS
Looking at the opinions regarding two in-building network companies,
TUT Systems and Cypress may be helpful. Tut Systems, Inc. is a
leading provider of broadband access equipment for the multitenant
unit (MTU) market, which allows service providers and property
owners to deliver high-speed Internet access, and has a way to
deliver broadband via copper. It has a central office
fiber-switching system and a street cabinet VDSL switching system.
TRENDS IN EDGE NETWORKING
SUMMARY
It is important to understand the major issues facing IT departments
of Fortune 2000 businesses today, because an IT department can be a
major factor in the decision to purchase Holocom products, or to
seek out a Holocom-enabling building. The two networking trends
covered in this section are the applications which media and
analysts suggest will drive deployment of high-speed networks and
the use of fiber in the LAN. We have also included data on the
networking needs of smaller enterprises (the SME marketplace), which
make up the majority of tenants in MTUs.
DRIVERS
Convergence
Building an IP-based network that consolidates the corporate
communications infrastructure of voice, video and data onto a single
network is a major consideration for Fortune 2000 companies. The
opportunity created for Holocom by this convergence of networks is
that businesses, in doing so, are going to begin building out their
network in a completely different way. This major architectural
change presents a unique opportunity for Holocom to position itself
as the vendor-neutral foundation upon which any sophisticated
network architecture can be built and deployed.
Because IP drives a requirement for low latency bandwidth, voice,
video and data convergence requires a Holocom solution – one that
moves a high-capacity network as close to the end-user as possible -
critical for workgroup collaboration and the sharing of large
amounts of data.
Enhanced Business Communications Drive the Applications That Require
High-Capacity Networking
– 68% of businesses now believe that their network needs to be a
source of competitive advantage (Forrester Research).
– 92% of IT managers believe that their investments in IT need to
support core business strategies (Morgan Stanley Dean Witter).
– Regardless of company size, enabling remote network access is
viewed as a key strategic benefit of data/voice/video convergence
(META Group).
– Applications that are driving convergence are Video/Distance
learning, remote access, SANs and Call Center applications.
The promise of converged networks has remained unfulfilled for two
years largely due to the burst of the dot-com bubble, fallout in the
technology sector and deep cuts made to IT budgets across
industries. But the business drivers behind the trend toward
convergence remains and several large companies (Cisco, Nortel and
3Com) believe that enterprises will implement converged IP networks
to reduce infrastructure costs, network carrier costs, ongoing
network administration and support costs and enhance the
productivity of mobile workers.
Cisco’s AVVID (Architecture for Voice, Video and Integrated Data)
and Nortel’s Succession network architecture products actively
promote the concept of a converged network.
AVVID defines a framework for building and evolving customer
networks that support Internet business solutions. As the industry's
only enterprise-wide, standards-based network architecture, AVVID
provides a roadmap for combining business and technology strategies
into one cohesive model. Cisco’s AVVID describes network elements
for clients (devices with which users access the network), the
network infrastructure (network platforms and intelligent network
services), Internet middleware (software and tools), Internet
business integrator interaction, and Internet business solutions.
Wireless
Wireless LAN technology will be one of the key demand drivers for
mobile computing in 2001 and beyond. A survey conducted by Gartner
Dataquest of IT managers in 200 midsize and large corporations found
that 50 of respondents expect WLANs to be deployed at a minimum of
one of their companies locations in the next two years. And about 21
percent of respondents reported that their companies use WLANs
today. (Corporations Lead the Adoption of Wireless LAN Technology in
the United States, Gartner Dataquest) Availability of 128 and 256
bit WEP (Wireless Encryption Protocol) is helping to allay fears
associated with flimsy security (40 bit).
The decision made by IT to implement wireless is largely driven by
the level of mobility of the workforce. Microsoft is a famously
mobile workforce that has implemented wireless LANs throughout its
campus. As wireless has become more popular, workers have begun to
buy their own access points so they can be mobile – without the
knowledge of the IT department, this becomes a security risk.
This makes the Holocom solution ideal for companies and building
owners that have to support multiple network infrastructures which
are driven by applications such as voice, video, data and wireless
data to meet the needs of a mobile workforce. And for this reason,
we do not recommend Holocom position itself as a strictly “wired”
solution.
Because of the level of expertise required to install a wireless
network (testing to make certain access points are installed in the
correct places for maximum signal strength), it can quickly become a
very complex initiative – especially for small and medium sized
businesses. Therefore, in addition to products, an opportunity for
Holocom Consulting and Services may be in developing optimized
wireless deployment strategies that rely on Holocom products and
network services.
Storage
Explosive growth in e-commerce, data warehousing, and supply chain
management applications has resulted in an exponential growth in
data storage requirements. These applications have become critical
to business success, with employees and customers demanding
uninterrupted access to corporate systems and data. Regulatory
mandates in the banking, financial, and insurance industries are
also driving the need for high levels of system and data backup with
stringent disaster recovery requirements.
Increasing storage management and administration costs has resulted
in significant interest in moving from a direct-attached storage
model to a more scalable and manageable networked storage model.
Storage area networking (SAN) technology has emerged to provide
real-time transaction and database access including data mirroring,
backup, and restoration. In addition, network attached storage (NAS)
technology provides fast, simple, and reliable access to information
in an IP networking environment.
According to Andy Bechtolsheim, founder of Sun and current vice
president and general manager, Gigabit Solutions Business Unit,
Cisco Systems, iSCSI; the network version of an old standard (SCSI –
Small Computer System Interface) is the latest trend in storage.
iSCSI (Internet SCSI; Small Computer System Interface), is a new
Internet Protocol (IP)-based storage networking standard for linking
data storage facilities. By carrying SCSI commands over IP networks,
iSCSI is used to facilitate data transfers over intranets and to
manage storage over long distances. The iSCSI protocol is among the
key technologies expected to help bring about rapid development of
the storage area network (SAN) market, by increasing the
capabilities and performance of storage data transmission. Because
of the ubiquity of IP networks, iSCSI can be used to transmit data
over local area networks (LANs), wide area networks (WANs), or the
Internet and can enable location-independent data storage and
retrieval.
According to Bechtolsheim, the current interest in iSCSI is due to
the fact that the storage industry is huge-it has annual revenues of
over US$40B. “Storage is a lot more valuable to customers if it is
interconnected. Historically storage has been isolated, connected to
a single data center or computer. This [iSCSI] standard enables
storage to be delivered over the Internet, so you can get to a
database from a remote location,” says Bechtolsheim.
He predicts a lot of storage traffic coming to IP networks which
will in turn increase the demand for IP infrastructure equipment.
And because it is the first open standard for storage networks based
on Internet technology, believes it will change the way storage will
be implemented, to a much more centralized and interconnected model.
Security/VPNs
Security remains a major issue among businesses regardless of the
size – and one that increasingly demands greater bandwidth. This
trend is being triggered largely by an increase in telecommuters and
mobile sales forces. Encryption requires a generous percentage of
throughput, which would significantly cut back on useable bandwidth
when using a low-speed connection. Obviously, this makes dial-up
less and less of an option. With broadband, however, encryption
requires only a small fraction of the available throughput and has a
negligible impact on the quality of service.
A STRONG FUTURE FOR FIBER IN THE CORPORATE LAN
A key issue for Holocom, particularly for Building Gateway, but
also, to a lesser degree for Workspace Solutions, is the current
state of broadband within the corporate environment, the limitations
of these current implementations and the anticipated evolution of
fiber as the next generation infrastructure of choice.
Today, in corporate environments, 10Mbps and 100Mbps Ethernets are
the predominant means for interconnection of desktops and servers
using unshielded twisted pair. However, Gigabit Ethernet is no
longer an exotic technology and is being deployed in building
backbone networks and among servers. Given that it has only taken
four or five years for Fast Ethernet (100Mbps) to move from the
backbone to the desktop, it is not unreasonable to assume that PCs
directly connected to Gigabit Ethernet does not lie too far in the
future. Behind Gigabit Ethernet lies 10-Gigabit Ethernet.
Communications Industry Researchers believes fiber to the desktop
provides a better fit than provided by CAT 5 or CAT 6 copper but
cite cost factors and the unwieldy ST/SC connectors as the main
opposition to fiber to the desk. But fiber costs have been dropping
considerably over the past five years, and given the specialized
cooper cabling required to support high-speed Ethernet, fiber and
copper infrastructures may be similarly priced for Gigabit Ethernet
and beyond (CAT 6 wiring will be 20 percent to 60 percent more
expensive than CAT 5 wiring). In speaking to industry analysts for
this report, all believed a credible case could be made that fiber
costs the same or less than copper when factored over the long term
– considering only total cost of ownership. Noteworthy was the fact
that the media believed fiber in the LAN to be cost prohibitive.
Extra costs for copper are also found because, given the distance
limitation of copper, more hubs have to be used in a network than
with a fiber approach. Indeed, replacing copper with fiber can often
reduce the number of hubs down to one. Copper hits the wall at 90
meters for these installations, a devastatingly short distance that
contradicts the entire spirit of the modern, seamless corporate
campus – a technical point that Holocom will want to consider
highlighting.
The past failure of various initiatives to push this technology has
been due to a variety of factors, the three most prominent being:
– Customers – including network managers, building managers,
building developers and local systems integrators - were used to or
familiar with copper or some other medium.
– Fiber optics did not provide equal economics if viewed on a short
term basis; and
– At least in its early stages optical fiber was harder to work
with. For a time, fiber also presented special challenges. Its small
core size and the brittleness of glass did make it harder to work
with than copper. Technicians often require special training. The
mainstreaming of fiber optics is beginning to address these issues.
These issues aside, there have long been organizations that have
used fiber extensively within buildings, although such deployments
generally had a particular demand characteristic that only fiber
optics could address and in such cases, the higher cost was not a
showstopper. (Occasionally, this characteristic was the need for
very large amounts of bandwidth such as for research organizations
that operated graphics intensive applications.) However, more often
than not, fiber was used within buildings to extend the distance
over which Ethernet could be carried or for added security. This
security was either unintentional interference from electromagnetic
interference or from intentional interference from industrial or
political spies. With regard to this latter issue, federal defense
and intelligence agencies have needed fiber because it was a secure
medium and extremely difficult to tap.
Communications Industry Research believes that the main reason why
in-building fiber will attract a considerable amount of user
attention over the next few years will be the rise of Gigabit
Ethernet, which will be followed by 10-Gigabit Ethernet. Copper
solutions will run Gigabit Ethernet over limited distances and will
almost certainly not be able to run 10-Gigabit Ethernet at all.
While the arrival of Gigabit Ethernet as a mainstream option for
in-building systems is a key driver for fiber to the desk, the
initial implementation of in building fiber for Gigabit Ethernet is
more likely to be used in riser cables, horizontal backbones and in
server to server communications than in true fiber to the desk
applications. And for such relatively long haul (by the standards of
in-building networks) applications, fiber is almost always called
for.
SME NETWORKING NEEDS
According to analyst firm Cahners-In-Stat, only 3 to 5 percent of
all multi-tenant units (MTUs) currently have fiber access into the
building (6/2001). Within these MTUs approximately 70 percent of
businesses are small and medium-sized (Yankee Group). This low
percentage of deployments suggests that the market is in its
infancy.
Small-to-medium sized businesses are passive users of fiber-to-the-x
(“x” referring in this context to data center, closet or desk)
because they are not in a position either for financial reasons or
simply a lack of relevant business applications, to specify or buy
fiber systems directly. Therefore, the shaping of the fiber-to-the-x
market is being done by the largest businesses and the property
management companies who control the configurations of the buildings
and industrial parks.
While smaller businesses are limited in the technology they can
deploy, some building owners have begun to recognize that they can
provide broadband much as they would any utility – and capture
revenue from carriers for allowing access to their tenants. It is
worth noting that the concept of broadband as a 4th utility is not
new. And IBM recently rejuvenated it by rolling out a campaign
promoting broadband as the 4th utility. This concept of referring to
broadband as a 4th utility, however, was met with more than a little
skepticism by the media interviewed for this report – one of whom
commented that “this has been tried in the past but no one has been
able to make it stick.” But in any event, media and analysts agree
that the general concept of creating this additional revenue stream
has not been lost on landlords of MTUs.
According to the findings of our perception audit some landlords,
while they may be not be considered technologically savvy, already
market the benefits of a fully wired, smart building to attract and
retain tenants who are willing to pay a higher rent for the very
best and most sophisticated facilities but are not likely to
implement their own solution. Because of this, landlords may be
willing to invest in an infrastructure that enables high-speed
connections to increase their appeal to the best part of the small
business market – business services such as law firms and satellite
offices of financial services companies.
We believe it would be difficult to rely on a pull-through strategy
from Products to create demand among tenants of an MTU and drive
landlord implementation of Building Gateway. Working on the
assumption that the majority of tenants are small businesses,
Holocom would be without a convergence story and a greatly reduced
MAC story (fundamental to large enterprises). That being said, to
overlook the small business market entirely would be an oversight –
both because of the sheer number of small businesses in the US (7.7
million) and because small businesses are the customers of BG target
audience - landlords. We believe the best approach for marketing to
the tenants may be to create general awareness of the benefits of a
wired building with state-of-the-art turn-key offices – guaranteeing
the most modern infrastructure possible. The goal being to move
tenants to ask landlords about the connectivity and wired capacity
before signing a lease – ultimately validating Holocom’s value
proposition to the landlord.
Below are statistics regarding small business that we uncovered
during the course of our research.
– The small business market, as defined by firms with less than 100
employees, accounts for close to 80% of the total number of
businesses in the United States. This is a diverse group of roughly
7.7 million businesses that range from agriculture and mining to
real estate firms. While a broad range of companies are identified
in a recent US Census Bureau study, the top two categories, Business
Services and Retail, accounted for almost 50% of the total.
– Small business telecom spending will grow nearly 70% over the next
five years as demand accelerates for bundled voice and data
packages, high-speed Internet access, Web hosting and ecommerce
service. Estimates of annual spending in today’s market show that
this segment spends approximately $42.8 billion dollars annually for
basic telecommunications, not including wireless phone services and
Internet connections. (Vertical Market Opportunities in U.S. Small
Business Telecommunications – 2001; IDC, Aug 2001)
– Broadband access is one area that area that continues to enjoy
healthy growth, despite recent efforts by service providers to test
market elasticity through monthly service price increases. Over 40%
of all DSL broadband users are categorized as small business users.
(U.S. Small Business Overview: 2001 Communications; IDC, Aug 2001)
The graph below estimates the network consulting expenditures by
company size through 2005 and indicates the extent to which
companies are expected modify or build out their networks. Also,
notable considering the current interest in Holocom among schools,
is while representing only $155 million in service spending in 2000,
the education sector will represent the second-fastest growing
noncommercial opportunity for network consulting and integration
service vendors through 2005. According to IDC research, the
education market (including K-12 and the university level) is
continuing to invest (often with the help of government funding) in
new network infrastructure and resources to effectively enable
applications such as distance learning and global full-text library
access.
MEDIA AND ANALYST
PERCEPTION AUDIT
SUMMARY
Broadly speaking, industry analysts reacted more positively than
media about the concept of fiber within the LAN and believed the
applications which will drive demand for high-speed connections to
be nearer-term - although those requiring the fat pipes of fiber,
while not applicable to most businesses today, are likely to be
farther off. In terms of being knowledgeable about the space, both
media and analysts were familiar with the BLECs failed business
strategy although neither group had heard of Holocom and analysts
didn’t cover the networked building space specifically.
Major take-aways were:
A fully networked building will be important in the future, but is
not a necessity today
– Today’s small businesses do not have a need for Gigabit Ethernet
or 10 Gigabit Ethernet; the exceptions being the satellite offices
of financial services companies and digital editing industries both
of which utilize huge amounts of data.
– As demand for Gigabit Ethernet becomes more prevalent, the
applications that will drive it are likely to be storage, content
(B2B) and VPNs/security.
– General skepticism about considering broadband to be a 4th
utility; calling it more (DSL) unreliable than dial-up.
The benefits of fiber within the enterprise LAN are not clearly
understood
– Media believes fiber is cost prohibitive; analysts believed the
cost to be comparable or cheaper than copper over the long-term.
– Most media and analysts were not aware of the security benefits
associated with fiber.
Landlords will react to tenant demand
– Landlords are increasingly marketing fully-wired buildings in
order to attract and retain tenants.
– Landlords will make use of the copper already installed in older
buildings before undertaking a retrofit.
– The concept of “future-proofing” buildings resonated with the
caveat that costs needed to be kept in line to ensure competitive
rent rates
Neither media nor analysts could name any direct competitor(s) to
Holocom
Media Participants:
– Michael Gottlieb, Reporter, California Real Estate Journal
– Karen Brown, Senior Editor, Broadband Week
– Andy Green, Senior Editor, Teleconnect Magazine
– Mark Leon, Senior Editor, Features, InfoWorld
Analyst Participants:
– Nick Maynard, Senior Analyst, Yankee Group
– Ron Westfall, Principal Analyst, Broadband Infrastructure, Current
Analysis
– Ethan Cohen, Research Director, Communications and Energy,
Aberdeen Group
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