DENVER--Cable operators can no longer rely on business as usual and must instead focus on developing new products, improving their customer service and leveraging the scale of their networks if they want to remain competitive in the future.
Werner (Source: Comcast)
Speaking at Cable-Tec Expo 2014 here, Tony Werner, EVP and CTO of Comcast Cable (NASDAQ: CMCSA) and the Cable-Tec Expo program committee chair opened the conference by telling the audience that the industry's push to deliver fiber, as well as the move toward all-IP networks and the growth in cloud technology is lowering the barrier to entry to deliver content. And that is prompting the growth in OTT providers. "We now have a new wave of competition that is coming to us from all angles," Werner said.
Werner added that some of these competitors are providing a value proposition that cable operators are having difficulty duplicating--such as great customer service and fulfillment. He then called upon the cable industry to make sure that the products they sell are "well designed" and look like they come from a high-end consumer electronics company instead of an engineering firm.
He said that the triple-play bundle is no longer enough for consumers, noting that Comcast Xfinity Home, which is the company's home security product, is "showing promise." He added that half of all XFinity Home customers are new to Comcast and of those, more than half, purchase all four Comcast services-voice, video and broadband--in addition to the home security product.
But Werner also chastised the industry for its need to raise the bar on customer service, noting that the cable industry hasn't even lived up to the old bar when it comes to this crucial area. "We are a long ways from where we should be," Werner noted.
Werner also suggested that his fellow cable operators take a page from their competitors that are able to bring new products to market quickly by taking advantage of cloud storage, cheap broadband and talented virtual workforces. "We need to embrace these same tools and techniques," he said.
In particular, he urged companies to leverage cloud technologies as a way to become more agile in the market. As an example, Mark Muehl, SVP, product engineering at Comcast talked about how Comcast has both an internal cloud which it built coupled with cloud services that it purchases from Amazon (NASDAQ: AMZN). "We have a significant relationship with Amazon," Muehl said. "We use [Amazon's cloud services] as an insurance policy and also to do quick prototyping."
Muehl went on to describe how Comcast used cloud to help it provide content during the 2014 Olympics. Specifically, Muehl said that NBC and Comcast teamed to build applications for the Olympics that they deployed in the cloud. However, after the first night of coverage of the Olympics Comcast quickly realized they needed more virtual machines to handle additional applications. Muehl said that they were able to do that quickly by using cloud services.
In fact, he estimates Comcast's efficiency is much greater than what it was prior to using the cloud. "In the past we would have made a bunch of equipment available. Now we have 10 times efficiency."
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