The connectivity needs of organisations across the UK have evolved dramatically in recent years, with many consuming more data than ever before across an increasingly disparate workforce.
There is widespread agreement that, at a minimum, the pandemic sped up this change. Some believe the pandemic was the catalyst for the organisational changes needed to embrace new ways of working, whether fully remote or flexible.
Alex Mawson, product director for voice, mobile and connectivity, Digital Wholesale Solutions, said, “Whether its application is in the residential market or an enterprise level business, there’s no question that effective connectivity solutions have become an essential requirement for everyday life.
“This fact is all the more apparent following the pandemic, with vastly increased demand for connectivity solutions to underpin hybrid working models and associated dependencies such as IP voice, video, and collaboration.”
Mawson explained that this new reality calls for dependable connectivity. He said, “In a connected world built on cloud-based solutions and an increasing move to remote and mobile working, reliable, fast, and agile connectivity solutions are critical.”
That chimed with the view of Steve Hackley, managing director, Sky Business. He said, “The connectivity market has increased exponentially in recent years, with businesses becoming more reliant on connectivity to run their operations. With that comes the need for more reliable and high-capacity services.
“Our partners, who previously offered connectivity as a side product to their core offer, have pivoted to leading with connectivity, understanding the importance of a solid platform and single ownership to deliver all the value-add services that are reliant on a strong internet connection.
“For smaller businesses, the rollout of full fibre broadband products can’t come soon enough. However, the Channel has come to realise how quickly things can change and why scalability is so vital, resulting in the demand for 10Gbps ethernet services dramatically increasing.”
Thea Tanner, commercials and propositions director, BT Wholesale, added, “Connectivity needs have significantly changed in recent years. People now expect instant access to information whether it’s on the move, at the office or at home. Work is no longer constrained to a single location, with people now doing their jobs from multiple places at different times.
“Therefore, flexibility is as important to people’s daily lives as it is to their work-life balance. So, the channel must ensure its business customers have a range of options to stay connected.
Tanner agreed with Mawson that mobile is now central to many organisations’ connectivity provisions. She said, “Demand for mobile connectivity has surged since the pandemic. Mobile data traffic has grown by an average of 40 per cent year on year as people increasingly use mobile phones for more work-related tasks.”
Pete England, head of product development, ITS Technology Group, discussed the impact of cloud adoption. He said, “Digital transformation and migration to the cloud have substantially changed the demands that are made on connectivity services. Businesses need both bandwidth and reliability in order to really make the most of these game-changing technologies.
“We’re also seeing increasing requirements for dark fibre from data centre, carrier, and public sector customers, enabling more control, scalability and flexibility, as well as creating diverse and triverse resilience.
“We’re seeing a sea change in the type of connectivity our partners are accessing for their customers. Our core business is our premium leased line products, but there is growing demand for FTTP products at the lower end, that will help end-users to switch over from copper.
“This is driven by the sunsetting of the copper networks, but also the adoption of cloud technologies that need bandwidth and in-built reliability to perform effectively.”
The shift from consuming minutes to data is disrupting the channel. Craig Walker, VP, cloud services, North Europe, Alcatel-Lucent Enterprise, explained, “There has been an evolution from a telephony-only driven communication from businesses to customers and to partners, to something that is more than just telephony, and it is multi-media.
“What do I mean by that? Well, just five years ago, if you wanted to talk to a partner or customer, you would get on the phone, and call either their landline or their mobile.
“That has changed now and it will be the other way round. If you are going to do it via telephony or PSTN, it would be mobile-first before landline. The other side is that, if you are going to use a unified comms solution, it is via the data channel rather than the telephony minutes.
“As such, the mix of minutes has changed and you are seeing a decrease in telephony minutes. With the change in the market from selling telephony minutes, it means that channel has had to look at other services generate revenue.”
Building connectivity offerings
In this hyper-competitive marketplace, how can channel businesses differentiate their connectivity offering? Hackley, from Sky Business, pointed out the opportunities presented by the upcoming PSTN switch off.
Hackley said, “Channel businesses have both one of the largest opportunities and most significant challenges to navigate, with a huge portion of their customers being in a position where they need to change from one technology to another.
“This will of course create huge churn risk and therefore means the Channel must be seen as an educator and proactive in helping take their customers onto the next stage of technology, whether that’s to FTTP or higher bandwidth ethernet products. Those that stand still will be left behind, so changing to a front-footed approach will be increasingly important.”
Walker, from Alcatel-Lucent Enterprise, said the winners that emerge in the years ahead will be those who focus on offerings built on more than price. He said the key is the “the add-ons” and “the wrap arounds”.
Walker explained, “With so much competition in the market, competing on price is a race to the bottom. Basic connectivity is just a race to the bottom. Where you are going to make your money is flexibility, the ability to deliver connectivity services, to be able to secure that and manage that easily. And you have to look at the value-added services on top of that.”
He gave an example for networking and communications providers, who could embed communications into more processes. This could provide organisations with context and details so that actionable information is available sooner.
He added, “Other areas where channel partners can look to add value are network monitoring, performance optimisation, managed security services, 24/7 customer support, and proactive troubleshooting. By offering these additional services, channel businesses can create a more comprehensive and valuable solution for their customers.”
Lee Sutch, head of B2B, Freedom Fibre, said channel companies could stand out from their competitors with XGS-PON solutions.
He commented, “The real art is being able to deliver the service and the guarantees in a way that gives [businesses] the confidence to embrace this new technology. Challenges in delivering this upgrade in connectivity lies predominantly with price, standardisation, and market requirements.”
Sutch explained that the Channel can address those challenges in a number of ways, with price challenges managed by looking beyond traditional routes and opening up connectivity solutions to more suppliers and embracing alternative networks. He said standardisation is “tough” to address as “all alternative networks have different standards of operation”, but “standardisation will come”.
England, from ITS Technology Group, also discussed the advantages of XGS-PON. He said, “As a wholesaler of full fibre connectivity solutions, we have ensured that we have future-proofed our networks by adopting XGS-PON. Not only does this support multi-gigabit symmetrical speeds, but it is also a far more energy efficient and sustainable networking solution compared to older technology.”
Andie Walton, head of marketing, ITS Technology Group, added, “This is a noisy sector. The key to standing out in the crowd can be around price, customer care, and the ‘over the top’ services and wrap. Businesses often require more than just a broadband connection.
“Their reseller or managed service provider can take on the role of the IT department, offering advice and consultancy services. End-users shouldn’t need to be IT experts, they just want to use their technology to help them perform their jobs.”
For Jon Daniel, head of product, marketing and pre-sales, Glide, experience is key. He said, “In addition to pure speed, businesses need symmetry – ensuring that upload speed and download speed are the same. Many service providers still provide asymmetric services in large part to protect their networks from excessive capacity growth, as the asymmetric service reduces the effective download speed.
“They need to allow bursting up to the full speed limit where spare capacity is available to allow it. This has two benefits for customers: users get a much better experience, and it allows customers to back up a leased line or full fibre broadband connection with a much lower cost full fibre service.”
The adoption of new and emerging technologies is also impacting on the connectivity services organisations are using. So-called “smart technologies” are one area in which this is particularly apparent.
Sarah Mills, chief revenue officer, Neos Networks, said, “The rise of smart technologies, from singular devices to full scale smart cities, all require reliable, high-capacity connectivity to operate effectively. Coupled with the adoption of machine learning and automation, this creates an environment that simply cannot run without reliable, resilient connectivity infrastructure.
“In addition, businesses are increasingly reliant on the cloud for data storage, communication, software testing, development and more. This also requires failsafe connectivity to ensure organisations can continue to work. AI is also a rising technology which is changing connectivity demands. Its development and growing use cases are driving increased demand for high capacity networks.”
Alcatel-Lucent Enterprise’s Walker agreed with that perspective, with 5G expected to push possibilities further. He said, “5G is revolutionising connectivity with ultra-fast speeds, low latency, and high capacity that enable seamless connectivity for a wide range of applications, including IoT, autonomous vehicles, augmented reality, and smart cities.
“5G really does offer tremendous opportunities for channel businesses to deliver enhanced connectivity solutions that support the increasing demands of data-intensive applications.”
SD-WAN is playing an increasingly important role in enabling organisations to manage their networks. Mark Hollman, VP, partner development and success, Colt Technology Services, said, “The industry is experiencing growth in demand for SD-WAN and on-demand solutions in particular.
“This is being driven by cloud deployments and hybrid working, alongside increasing enterprise network complexity and a fast-evolving security threat landscape. This growth presents the channel with access to exciting new revenue streams and profitable markets.”
The connectivity market is ripe with opportunity, but there remains many challenges for the Channel. Product availability is particularly front-of-mind for many.
Mawson, from Digital Wholesale Solutions, said, “The most immediate challenge is product availability when considering the PSTN switch off and race to full fibre. There are still over ten million lines that must be migrated to replacement services in the next 18 months. The longer this takes, the greater the strain that will be put on the channel’s finite resources.
“Encouraging businesses to make the switch early is, of course, the best way to minimise disruption in this area. Issues like a lack of awareness, appreciation of the urgency, or indeed an understanding of the benefits of migrating, seems to persist in the business community.
“To help our partners to overcome this challenge, we’ve developed white-labelled content that they can use to raise awareness and highlight the benefits of making the switch.”
The lack of education in the consumer space around the benefits of moving to full fibre is mirrored in the business community. Walton, head of marketing, ITS Technology Group, explained, “The misconceptions surrounding fibre versus FTTC continue to be a challenge for our channel partners. There remains an apathy to switch to fibre, often requiring a change of mindset.
“Through our campaigns we are helping to educate end-users on this technology: shining a light on the hidden productivity losses that go hand in hand with slow, unreliable connectivity services.
“We talk about fibre as a strategic enabler. Many of our channel partners have said that their end-users had not anticipated the benefits that fibre has delivered for them, that it has to be seen to be believed.”
Ensuring connectivity reaches everywhere is another key barrier. Brendan Hourihane, senior director, Freshwave, said, “There’s going to be more demand for connectivity in challenging environments as technology is only to become more embedded and important.
“Complex indoor and outdoor environments are often not appropriate for Wi-Fi due to the cabling needed, plus even the latest Wi-Fi tech uses unregulated spectrum. A good mobile connected layer will allow channel partners to offer their customers exciting new applications.”
Despite these challenges, all stakeholders remain optimistic about the Channel’s role in bringing reliable and fast connectivity to every business and organisation in the UK. BT Wholesale’s Tanner said, “It’s an exciting time for the channel as the new era of connectivity gathers pace, with a range of opportunities out there for channel partners and their customers.”