with Mike Fitz, Vice President, Wireline & Solutions Engineering, Sprint
Fitz (Image source: Sprint)
Mike Fitz, vice president, wireline and solutions engineering for Sprint (NYSE: S), said that what separates Sprint from the pack is its simple approach to serving businesses. What has driven that simplicity is having an integrated team that supports both wireless and wireline services. One of the key initiatives Fitz and his team are driving in 2013 and into 2014 will be the introduction of Carrier Ethernet service, which it will deliver to its business customers to get access to its MPLS network, and provide necessary backhaul capabilities for the service provider's wireless network. Sean Buckley, Senior Editor of FierceTelecom, spoke with Fitz about the trends he's seeing in Sprint's wireline segment.
FierceTelecom: Sprint is, of course, well known now for wireless but has a long legacy in wireline. What differentiates Sprint from the pack on the business services side?
Mike Fitz: I think we have had a different approach to business all along, and it's never changed. We've always had a single account team that has gone after both pieces of the business--wireless and wireline--which is different than the other guys. Our approach to the business is we're selling to a single CIO or we're selling to a single IT manager, and that CIO or IT manager has responsibility across wireless and wireline. So they want to deal with one team who can solve all of their problems for them.
Take SIP trunking as an example. When you get into wireless extensions of SIP trunking you say: Is it wireless or is it wireline? Frankly, even selling wireless-based M2M services, a lot of the questions around our network are why do I trust Sprint's network, and that network is our wireline network except for that last one to two miles from the tower out. To have an integrated sales and sales engineering team, which I run, and answering those questions adds a lot of value to the customer.
We've always been told by our customers that they love working with Sprint because we do have that integrated account team, we understand their needs and we're easy to do business with. I think that's certainly a key thing that differentiates us. We have also have been focused on keeping things simple for our customers. All the way back when we launched MPLS, we said it will be a simple pricing structure of port plus access. There's no additional charge for classes of service. It's just one simple price. Another one is flexibility. When it comes to Managed Network Solutions (MNS), we have always been flexible about what customers want out of MNS. We don't force them to buy a certain MNS package; we don't force them to take the full-blown package from us. They can pick and choose the pieces they want and they want to manage some of it we're perfectly fine with that.
FierceTelecom: Gartner in its latest Magic Quadrant report said that "wireline renewals remained strong in 2012 for midsize accounts." To what do you attribute that factor?
Mike Fitz: One reason we have been as successful in mid-sized accounts, or major accounts as we call them here at Sprint, is it's that level of account below the Fortune 500 that does not have the resources and the IT shop to pick things apart in an RFP or have one person beat you up on pricing. They love the value we have in simplifying things, bundling things, and providing that flexibility to meet their needs. That plays well in the mid-sized accounts.
Upstream, the Fortune 500 and Fortune 100 are to the point where they have an access expert and the managed router expert, and they will come in and beat you down on each element. Bundling and simplicity isn't important to them as they're going to pick you apart anyway. That's the nature of the very, very high end. I think the differentiators I talked are very conducive to satisfying the requirements of those mid-sized accounts.
FierceTelecom: In 2012, Sprint increased wireline spending by 53 percent. Will that continue in 2013?
Mike Fitz: We're certainly investing in the network and investing in the backbone. The foundational network that we're putting in place for Network Vision is the new Carrier Ethernet network we're building and we'll be talking about formally in a couple of months. Starting the buildout of Carrier Ethernet now and laying the foundation for that, our biggest customer initially is the wireless side of our business. A big piece of that increased investment will go there, but also we're continuing to build out our MPLS and other areas like infrastructure as a service (IaaS). I do expect that level of investment to remain at these higher levels as we go forward.
FierceTelecom: Ethernet has become a big area of focus for Sprint. Can you talk about the ongoing expansion efforts and service strategy thus far?
Mike Fitz: Ethernet could touch on two areas. First is what are we doing around Ethernet access to our existing MPLS network. There we continue to expand and expand all over the country. We're at 147 cities in the U.S. with Ethernet access and this year we plan to expand 30 cities, which is a combination of expansions within a city as well as new cities.
We have come a long way with Ethernet access in the last year or two, which has made a big difference with our MPLS network and that's one of the reasons why Gartner moved us up into the challenger box. We'll continue to expand Ethernet access, but then we'll also formally launch our Carrier Ethernet services later this year. We are building that as we speak and are taking customer deals now.
FierceTelecom: Following up on Ethernet, can you talk about the U.S. domestic and international interconnection strategy with existing and new partners like Interxion in Spain?
Mike Fitz: It's simply a matter of getting more and capability around the globe for our network. The last mile is critical, and the more partnerships we can have and the more density we can create in a city for access, the more cost effective we can be. That is the key for us right now when we don't own much of that access or any of that access, we need to have any many interconnections out there as we possibly can to help with price and help with reach.
FierceTelecom: A big selling point for Sprint on the wireline side is the MPLS service. How has that evolved and what should we expect next?
Mike Fitz: We were early players in the MPLS world. I think about it this way: when I talk about wireline to our sales team and the waves of wireline, and you go back to the early days of X.25, Frame Relay, ATM, and IP [which] took off in the mid-90s, IT guys said, 'I like the standardization IP brings, but I miss the VPN days of Frame and ATM so we overlaid MPLS onto IP.'
MPLS is at a point where it has probably peaked in terms of its product lifecycle and that's consistent with us. We have seen MPLS growing every year. I think the next wave is Carrier Ethernet. MPLS has been our bread and butter service for ten years and we're going to continue to offer it for a long time, because there's some features in MPLS that Carrier Ethernet is not quite ready to stand up to. In three to five years, it's possible that that next wave may take root, which is Carrier Ethernet, and we may see MPLS where we saw Frame Relay and ATM seven or eight years ago.
FierceTelecom: Can you provide an update on your relationship with CSC?
Mike Fitz: It has been going well, and we're going to be doing a more formal announcement around the Interop trade show. We picked CSC because of their heritage. They know this business very well and we're partnered to go after that mid-market again. They want us as much as we want them, because the most important investment in cloud is the network. In fact, the cloud was the network when we used to draw pictures years ago. Putting these data centers on the Sprint backbone creates a lot of value for our customers and it's a logical partnership for the two of us.