Ethernet a cable bright spot

While most of the cable industry earnings seem headed for the doldrums at best, Ethernet sales to businesses could well represent the rare bright spot. At Optimum Lightpath, the business arm of Cablevision, growth in Ethernet sales has almost doubled this year.

“Ethernet is so well-suited to the business market, and it is an ideal fit for us,” said David Strauss, vice president of marketing for Optimum Lightpath, in an interview today. “I cannot speak for the other cable companies, but I think it is safe to say that at Cablevision, the business market is an important market. The consumer business sort of dominates, but there is no doubt when you consider the fact that, generally speaking in the business market, we are not the incumbent. The traditional telephone company has a larger share of market, so there is a greater opportunity for cable to chip away at that. There’s no question, this represents an opportunity.”

Optimum Lightpath converted to an all-Ethernet strategy in January of 2005 and has ridden the wave of Ethernet demand ever since. According to Insight Research Corporation, the U.S. Ethernet services market is expected to grow from $940 million in 2006 to more than $5 billion in 2012.

“The economics of it make it pretty compelling,” Strauss said. “As we head into ’08, CIOs will be quite cost conscious, and there is a substantial savings opportunity to using Ethernet, relative to legacy services. Whether it’s burstable bandwidth or another application, as needs grow, in a tighter economic environment, cost-consciousness grows.”

According to Strauss, the company is seeing demand for Ethernet from multiple major vertical markets, including healthcare, financial services, government, and education.

“The applications they are running, their need to move the data and voice traffic as well, is stimulating greater demand for greater bandwidth,” he said. “And the reliability, efficiency and simplicity of Ethernet meets that demand.”

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