With the market for Ethernet services in the UK worth £600m and growing rapidly we speak to John Kiernan, Senior Marketing Manager at BT Wholesale, to find out what he thinks are the key business drivers for data connectivity and Ethernet services.
The demand for Ethernet is now showing among businesses of all sizes, especially among SMEs. This is due to the desire for more bandwidth and the greater use of cloud and hosted applications. The channel can capitalise on the demand for Ethernet connectivity and in turn create a richer portfolio and stickier customers.
Ethernet services have been one of the key fast growth product markets in recent years. This has been mainly driven by larger business and public sector demand, and a key feature has been replacing legacy infrastructure with a more flexible and scalable service. However businesses of all sizes are now looking to buy Ethernet services. The current UK Ethernet market is worth around £600m, but 10% of that is now serving small and medium businesses. The reasons for this demand are based on both improving business processes but also enabling the adoption of new applications.
Managing the organisation through the recession and keeping cost-competitive means that SMEs are reviewing infrastructure costs. A survey for OFCOM on business connectivity services for organisations with 10+ people, demonstrated the scale of activity. 90% of businesses with 10 or more employees had reviewed business connectivity services within the last three years, and 60% had made changes as a result of a review. The most likely changes are adding a service or changing a supplier.
When asked what is the key driver for spending on connectivity services, the top answer was ‘more bandwidth’. However to see more detail on the changing demands, the survey showed the usage patterns. While internet access and remote access to the network are still the main uses, there is a growth in demand for voice, video, storage and other cloud services. These demands mean the IT decision maker needs support in building and maintaining the best connectivity network.
The biggest factor seen by many is in enabling the use of the cloud market by all businesses. Making the most use and having complete trust in the cloud application is only as good as the quality and reliability of the connectivity. Research for the Cloud Industry Forum (CIF) shows that 78% of UK businesses use at least one cloud application, but this will rise rapidly to 90% by the end of 2015. The CIF go on to state:
“Convergence of fixed/mobile, voice/data communications and IT will continue to be a core enabler of effective Cloud adoption”
Within the organisation there are demands for faster, secure access especially for uploading and downloading the range of business applications. However no organisation is an island thesedays, so another set of demands is effectively connecting the customer-business-supplier chain. Greater collaboration on projects, more use of converged voice and video services as well as sharing significant amounts of data have become a critical factor in successful business relationships.
So the IT decision maker is looking for ‘broadband plus’ or more than just broadband services – a range of flexible, business-grade, high-speed options that satisfy the internal and external clients. The range of access options (and costs) provided by ethernet over fibre and increasingly ethernet over copper (EFM) and GEA FTTC means that the comms provider can offer the best solution to the customer. EFM and GEA FTTC are ideal to start selling into SMEs up and down the country.
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