Service providers to make OTT home automation play; Broadband services drive SMB growth

Service providers tune into home automation: A growing number of service providers are finding that home automation services are an add-on revenue stream for their broadband customer base. According to Infonetics Research, over 70 percent of survey respondents said they will offer home automation services by the end of this year. "One of the more interesting trends we're seeing in the home automation market is the concept of a provider offering services to end customers over another operator's broadband connection," said Jeff Heynen, principal analyst for broadband access and pay TV at Infonetics Research. "Verizon (NYSE: VZ) has been experimenting with trials of over-the-top (OTT) home automation services as a way to secure revenue from out-of-market customers." From a vendor perspective, iControl has become the dominant equipment and software supplier, followed by 4Home, Cisco (Nasdaq: CSCO), Control4 and Huawei. Release

Home automation market drivers

U.S., Europe colocation costs differ widely: Expect to pay more for colocation services in the United States than in Europe. A study from TeleGeography reveals that U.S. colocation costs are almost six times higher than they are in Europe because of cross-connect pricing. "Operators surveyed charge between $251 and $322 for a fiber cross-connect in colocation facilities in the U.S., but only $33 to $59 per month in Europe," said Jon Hjembo, a TeleGeography analyst. "Colocation providers in the U.S. see connectivity as a part of their revenue stream, while operators in Europe rely more heavily on space and power charges to generate revenues." In Miami, for example, a colocation provider would charge on average about $1,104 for a cabinet with 4 kilowatts power density and about $322 a month for the cross-connect. In London, the price of a cross-connect averages $58 per month, accounting for less than 3 percent of the $2,269 average monthly cost of a cabinet. Despite the price disparity, overall colocation rental costs in major U.S. and European cities are similar. In 13 of the 15 metro areas surveyed in the U.S. and Europe, companies that want to rent a cabinet with a power density of 4 kilowatts and one fiber cross-connect would pay between $1,500 and $2,000 per month. Article

Telegeography fiber cross connect prices

SMBs turn to CLECs for broadband, IP services: The small to medium business (SMB) market is quite diverse, but the Broadband Coalition says in a new paper, "Broadband Innovators: Driving Small Business Forward" that those companies that  "adopt broadband and internet services are the fastest growing market segment." The group said that out of about $326 billion spent na­tionally on IT budgets, SMBs spend $293 billion. One of the key requirements of small businesses that participated in the Coalition's survey was more competition from broadband service providers. "The ability to choose from more providers" was a key factor in improving communications and Internet services. As SMBs adopt cloud and IP-based services such as Ethernet and VoIP, they are turning to competitive service providers such as CBeyond (Nasdaq: CBEY), tw telecom (Nasdaq: TWTC), and XO Communications. Besides promoting the benefits of IP services, what competitive providers bring to the table are a set of tailored IT solutions that enable them to focus scaling their business. Post (.pdf)

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