BackChannel Research

Distribution of sales of email Hygene Services USA 2008

2011-12-13T19:33:00.000Z

For the last 5 years we at BackChannel have been tracking the use of email hygiene services by organisations around the world.
We started with Messagelabs - now Symantec.cloud, Frontbridge - now Microsoft, Postini, MXLogic - now McAfee, Blackspider - now Websense in the USA and UK. Over the intervening years we went on to include new and upcoming players like Google, Mimecast, Trend & zScaler and our range of deeply profiled regions expanded to 17 including France, Germany, Australia, Singapore, Hong Kong and Scandinavia.
Today we track the use of 40+ services by over 1 million organisations in upwards of 50 countries.
We are proud to have been able to help many of these companies achieve sales and business development goals and in some cases to support company valuations and investment rounds.
We will shortly be releasing our January 2012 Analysis of the use of these services and we will post our findings for the Fortune Global 500 companies here on this blog.
In the mean time here is a fun interactive 2008 chart showing state by state distribution of the sales by those key players. Have fun comparing them and pondering on why Messagelabs was strong on the East Coast and Postini in the West.

2008 USA email hygiene service sales, by state.

Those of you who know us well may know that we also profile the use of all major telecoms services including Access, Hosting and CDN services. So if you are interested in the services used by a customer or competitor, if you are selling into these markets or if your a CIO who wants to know what their company really buys around the globe; why not contact us on +44 (0)1223 968481 and see what an innovative Cambridge company can add to the mix.

Fortune Global 500

2011-11-29T10:17:00.001Z

500 Companies
20,000 divisions and subsidiaries
$20 trillion dollars of turnover

Every year this exclusive group of the worlds biggest companies buys $740bn of Telecoms services.

Ever wondered where the Fortune Global 500 spend that colossal telecoms budget? BackChannel has been busy finding out.

In the new year we will start to reveal all...

Virtual Machine Company Server replacements lower cost of service delivery

2011-06-30T13:14:00.000+01:00

These guys are starting to pop up a lot in the UK. Their Hyper-dense virtualization appliance is a turnkey replacement for commodity servers and being able to run more VMs in less power and cooling is a great message for these tough times in the hosting world. Worth a look

Virtual Machine Company announces next-generation virtualization appliances

The following release was sent today to coincide with the release of our latest range of Hyper-dense server virtualization appliances

outperforms all current commercial and custom-built servers in independent Geekbench power and performance testing¹
comfortably runs more virtual machines and delivers class-leading savings on energy, cooling, software licensing, and datacentre real estate
the worlds fastest, most cost-effective, and environmentally-friendly commercial computing platform

April 12, 2011 Cambridge, UK

The Virtual Machine Company (VMC) today announced the launch of the next generation of its server virtualization appliances.
Built around the latest AMD 12-core processors, with highly-optimised RAM options up to 512 gigabytes, and fast and cool solid-state storage, the two new servers can host unprecedented numbers of virtual machines running the most demanding commercial computing applications.
The new VMC appliances use less power, require fewer software licenses, and take up less rack-space space than anything else on the market.
For example, a mid-range 24 Core, 192 Gb RAM VMC virtualization appliance comfortably accommodates 50 or more virtual machines running processor and memory-intensive applications of the kind usually confined to non-virtual environments; tasks such as rendering video, enterprise-scale databases, and huge FTP batch operations. All of this while consuming less than 307 watts (1.43 amps) at peak loading. Average power consumption for competitor machines delivering this much firepower is more than 900 watts.

Virtual Machine Company Head of R&D, Nick Hutton, said:

This is exciting, high-performance computing meets boring stability and cost-effectiveness. The top of the Geekbench league table is usually dominated by "custom rigs" built by clever enthusiasts or researchers. I am proud of our development team for productising and normalising unrivalled power and performance with such impressive stability and economy.

AMD Head of Commercial Marketing EMEA, Stefano Chiavegati, commented:

We developed the AMD Opteron 6100 Series processor to meet 21st Century commercial computing demands for the optimum balance between power, reliability, cost and environmental considerations. The Virtual Machine Companys Server Virtualization Appliances tick all of those boxes and more.

¹ http://browse.geekbench.ca/geekbench2/top

Fewer software licences

VMware requires an expensive licence for every pair of processors. Because the new VMC virtualisation appliances use AMDs processor core-dense CPUs, the licence-to-virtual-machine ratio becomes much more favourable. For example, when virtualising an estate of 240 servers running Windows Server, one customer saved an additional £180,000 in year-one capital expenditure by using VMC Virtualisation Appliances to deliver a hyper-dense solution.

Models and configurations

Two standard appliances are available with additional configuration options

VA 1200 Series Server Virtualization Appliance: 1U, Dual Processor 24 Core minimum configuration 64GB RAM
VA 2400 Series Server Virtualization Appliance: 2U, Dual Processor 48 Core minimum configuration 128GB RAM
For detailed technical specifications please visit: www.virtualmachineco.com/virtualization_appliances.htm

Pricing and availability

The new VMC 1200 Series Appliance is available immediately with a base configuration price of £9,500. The VMC 2400 Series Appliance will ship at 2011 with prices starting at £15,500.
VMC Appliances are available in through VMC's exclusive distributor, Computerlinks http://www.computerlinks.co.uk/

Support

Five-year, next business day on-site and 24 x 7 support contracts are available.

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Orange Huawei so good you pay for it twice!

2011-06-16T17:24:00.000+01:00

Sorry for the lack of recent posts but we're up to our ears in the latest development project - A complete profile of the Fortune Global 500. We are busy profiling the telecoms & IP services used by the 325,000 companies, subsidiary companies and regional offices that make up the index.

But I couldn;t let this one pass.

Well here is a great story on TelecomTV. Huawei and Orange are offering a Signal Booster service on all the new Huawei Android phones that switches the cellular traffic out via your wifi, so if you have no phone signal in the house you can still use your mobile... Genius you cry!!

Except it's not - you have to pay for the call, at your normal network rate even though you are using your own broadband connection saving Orange a packet (sic).

I use Skype, a lot, and when I am in the house I route my DDI calls to the Skype on my iPhone and I make international calls outbound same way.

Give it a go it works a treat

Further disruption to Middle-East Internet Services

2011-03-29T12:34:00.006+01:00

Interruptions to Middle Eastern Internet services seem to be a bit of a theme over the last few years; but when you actually look at the maps of the undersea networks in the area you get to see something of the scale of the difficulty. In the same way as virtually all trade with the East used to go through the old Silk Route the modern day equivalent is a cluster of submarine cable systems in and around the Red and Arabian Seas.

Here are very few submarine cable maps that you might find interesting.

SUBMARINE CABLE AND EQUINIX DATA CENTER MAP 2010

http://manypossibilities.net/african-undersea-cables/

http://www.sintelsat.com/fibernetworks/FLAG.html

http://www.telegeography.com/product-info/map_cable/images/cable_map_2010_large.png

Experience with Cloud Computing after earthquake in Japan

2011-03-28T18:23:00.000+01:00

While the Email and Web servers of local governments in the effected areas of Japan went down last month, government staff utilised Social Media technologies on the cloud, such as Twitter, Facebook and Google, to communicate with Japanese citizens.

The resiliency and the effectiveness of these Cloud providers in sustaining and enabling collaboration has been pretty impressive in enabling communications in very difficult circumstances and has done a lot to boost peoples positive view of Cloud services. Whether it is Japanese Government officials using Twitter from their mobiles, or Libyans using dial up Modems to access Facebook.

Lately I have read a number of comments suggesting that it is the resiliency of the Cloud that has been the facilitator, it hasn't it is the underlying architecture of the Internet.

Internet is Internet; a global IP based network, resilient self healing and designed to survive a global nuclear war. On top of which IP has had over 45 years of open development through groups like the IETF.

Cloud however is a philosophy of moving services to a more cost effective shared infrastructure where you gain the advantages economies of scale available there. At the moment what most people talk about as Cloud are a series of commercial services accessible over the Internet, developed to varying levels of resilience and vulnerable to influences such as the financial failure of the provider, the law, change in corporate direction; EMC briefly switched off their Atmos storage cloud service last year, before reopening it again almost immediately.

Whilst it is true that Twitter/Facebook etc are well managed, backed up, accessible and generally robust . We are a long way from the reality of bespoke Cloud delivered services for business that cannot be disrupted, switched off or simply become inaccessible.

Hosted email security: The 2011 market report - Now in it's 5th year

2011-02-02T12:31:00.000Z

Your opportunity to find out who's using these services, who's winning market share and who's falling behind.

Now in it's 5th year BackChannel's flagship survey has been expanded again to cover the use of hosted email hygiene services amongst a million organisations & businesses in 17 key countries.

The reports covers 40+ service providers including all your favourites; Messagelabs, Microsoft, Google/Postini, Webroot and many localised service providers you may not have heard.

It's been an interesting and turbulent year find out who's up, who's down and whether those $100s of millions spent on acquisitions in this sector are paying off.

A must read for executives, investors and any business involved in the delivery or purchase of email security products and services.

Interested in sourcing a copy then drop me a mail and either me or one of the BackChannel team will get back to you.

LTE promises 100Mbps mobile handset, with 180 operators investing in 70 countries

2011-01-18T17:05:00.000Z

LTE, or Long Term Evolution, will hopefully lead us to That state of ubiquitous of connected Nirvana at some point; but don't hold your breath. Verizon in the US is delivering an average of 8Mbps in some urban areas.

But as tha GSA (Global mobile Suppliers Association) reports 180 operators investing in LTE in 70 countries and the EU Government promising to invest in an LTE infrastructure for Europe, maybe we could all be using up our 5Gb a month data allowance in a single morning rather sooner than you might think.

Research from GSA Updated 'Evolution to LTE' report published has confirmed LTE as the fastest developing system in the history of mobile telecommunications.

LTE operator commitments are developing faster than they did for HSPA, which until now had been the fastest developing mobile communications system.

The report confirms 128 firm operator commitments to deploy commercial LTE systems in 52 countries, and a further 52 “pre-commitment” trials or pilots in an additional 18 countries.

The report covers both LTE FDD and LTE TDD modes.

The number of operators investing in LTE in deployments or trials has increased by more than 140% over the past 12 months. The number of countries where LTE systems are deployed or planned has increased by 85% in the same period.

It's anticipated that at least 64 LTE networks will be in commercial service by end 2012, according to the report.

The LTE eco-system is rapidly developing. User devices are now coming into the market in increasing numbers and addressing all product segments including USB modems/dongles, PC cards, routers, personal WiFi hotspots, smartphones, tablets, gaming devices, and more.

All I can say is sooner the better at the moment most of the world is stuck in a halfway house where mobile devices show massive promise but all to often just don't deliver the goods.

Start the New Year with a little light rock

2011-01-16T09:48:00.014Z

Here at BackChannel we hope everyone's new year is off to a great start.
I thought we'd start off as we mean to go on with a little light entertainment.
Not exactly music of the spheres, more music of the servers. But, very entertaining.
This year we are researching the use of Virtualisation Technologies in commercial datacentres. So say tuned...

Seasons Greetings

2010-12-20T13:17:00.000Z

We're closing down for Christmas on the 23rd and will be back at our posts on the 4th of January, 2011. We'd like to take this opportunity to say thank you to everyone for their support this year and to wish you all a very merry Christmas.

Personalize funny videos and birthday eCards at JibJab!

Demand for Colocation outstripping demand

2010-10-13T13:07:00.000+01:00

As co-location requirements soar providers are struggling to keep up with demand.
New data from TeleGeography’s Colocation Database reveal that colocation service providers are struggling to keep up with demand. Despite significant new construction, colocation site capacity is more constrained in 2010 than it was in 2009. More than 41% of sites surveyed by TeleGeography were at least 80% full at mid-2010, up from 34% of sites a year earlier.

Among the worst hit areas are London and the South of England, where surging power costs and a squeeze on physical space are causing colocation costs to rocket. With wholesales power costs set to raise 13% over the next year and potentially over 100% before the end of the decade. The use of power efficient data-centre equipment is going to be critical to the ability of service providers to compete.

Happily our new range of Virtualization Appliances are over 30% more efficient than the average data-centre server

ePrivacy - overlooking the technicals

2010-05-25T09:56:00.001+01:00

As we normally confine ourselves to issues surrounding Data and IP related telephony I had quite forgotten about this:
On 14 April 2009 the European Commission launched an infringement proceeding against the UK concerning incorrect transposition in UK law of EU law requirements concerning confidentiality of communications provided in the ePrivacy Directive 2002/58/EC and the Data Protection Directive 95/46/EC concerning user consent, sanctions in case of infringements and independent authority to supervise interception activities. On 29 October, further to analysis of the UK authorities' response to the letter of formal notice, the Commission proceeded to the next stage of the Reasoned Opinion.

The bottom line is that "There is no legal requirement for UK mobile customers using pre-paid cards (‘pay as you go’ customers) to register with their operators."

It was only this weeks announcements about the scrapping of the much hated ID cards here in the UK that reminded me.

Not usually one for infringement of civil liberties - I think this is wrong-headed, there are plenty of ways of 99% positively identifying an individual ; passports, drivers licenses, credit cards et al. ID cards were just a 'doomed from birth' knee-jerk reaction to 9/11and given that contracts worth over £1bn possibly some fierce lobbying. But, untraceable mobile communications are a standard tool of the underworld, from your friendly neighbourhood 'hoody' drug dealers to international terrorists and every shade in between; and isn;t it just bizarre that as countries like Mexico and Brazil are moving to force registration of all mobile devices, 'uber-liberal' Europe is going the other way?!

Bit like the economy :-(

Another Mediterranean cable cut disrupts Internet Traffic

2010-04-20T11:45:00.000+01:00

Good post regarding the current outage of the SeaMeWe-4 submarine cable, from our friends over at Telegeography - purveyors of fine mapping, graphics, data, etc.
The Middle Easts overworked networks rely on just one major connection to the Web – an underwater cable known as “Sea-ME-We 4” that runs from Europe to the UAE and was last week accidentally severed in the Mediterranean Sea.

The damaged cable carries the majority of the regions internet traffic today but according to Stephan Beckert Director of Research at Telegeography this will drop to around 40% by the end of 2010 as more capacity comes on line.

Mobile data traffic overtakes voice for first time

2010-03-26T18:15:00.000Z

Ericsson reports that traffic generated from 400m mobile data/broadband subscribers is now more than from the 4.6Billion voice users with the traffic crossover at about 140,000 Terrabytes a month.

In terms of the financial implications, Informa Telecoms & Media predicted in January that mobile data revenues will surge to $330 billion by 2013, up from an estimated $208 billion in 2008. more

UK Government to push ahead for Superfast Broadband but for when?

2010-03-23T13:04:00.000Z

Further pronouncements on the eventual roll out of 'Super-Fast' 40-100Mb broadband to every home in the land were made by both major this week. As the UK heads relentlessly towards a General Election in the Spring, both government and opposition have alighted on this 'utility' as a vote winner / chance to bash the other.

But note the confusion over dates 2012 / 2017 / 2020!! In July 2009 BT said it was impossible to get more than 80% of the country on broadband, then in January this year the Digital Britain report said we were all going to get Fast broadband @ 2Mb in 2012, (I can't even get 500kb to my house) Now we're all going to have Super Fast by 2017 (well 90% by 2017 and 100% by 2020)

Well that's pretty good - except that the BT Infinity Service that this relies on is targeting 40% coverage (ie Cities and Metropolitan area) by 2012, and BT's record on delivering things like the 21CN all IP network is pretty poor, so if left to BT it will all be to slow, to late!

In an attempt to speed up the process and with an eye to improved competition the Conservatives are suggesting that BT opens up not just it's exchanges but all of it's trunking and conduits to the likes of Virgin Media, even suggestions now that the NTL Fibre at the top of the village could be broken out and strung from the old GPO telephone pole outside the house.

However the question of funding will almost certainly kill it the 50p tax on landlines is already getting push back and will certainly be an election issue, and the Conservative suggestion of top slicing the BBCs budget by £120m is frankly widdling into the wind, we're talking billions to deliver on any of these promises and no company can afford to raise the amount of long-term debt that would be required.

On the upside opening up the BT trunks would make it easier to run business servics around th Cities which would certainly help and would reduce the number of new digs and roadworks in places like London.

I think the solution is a mixture of public and private investment, with which ever party wins taking the same approach as the Dutch "we will invest in this network and you the service providers can lease the resulting infrastructure from us" If you would like to invest alongside us and own a percentage of the income you're welcome to pitch in"

Fragmented services business makes UK operators takeover targets

2010-03-10T11:57:00.002Z

As their economy stumbles in and out of recession and the pound weakens against almost everything but the Green-back, the UK telecoms market must look like a great place to pick up bargains if you're a service provider looking to break into the European market.
See this article in Global Telecoms Business that we contributed to recently; complete with diagram showing the fragmented nature of UK IP access market.

If I were TATA, SingTel or China Telecom I would start by acquiring key assets in the UK. Especially where there was access to international submarine cabling.

Why?

For those of you not familiar with the history of UK telecoms: Deregulation in the late 1980's, followed by early adoption of Internet, as an alternative to Frame-Relay or ATM networks, led to tens of billions of $'s being invested in Fiber Networks up and down the country around most major cities by extremely well funded startups. There was also massive investment by the likes of Global Crossing, Verizon, Cable & Wireless and AT&T in sub-marine cabling linking the UK to the US, Europe, the Middle East and Africa

After the euphoria of the 90's tech bubble 'run-riot' abated most of these companies went bust and there assets were acquired for very little from the liquidators, and they've since been run as profitable low overhead.

This has however left the market extremely fragmented with a large amount of highly valuable infrastructure split amongst a myriad of small (in xSP terms). We recently saw a Service Provider in London with a metropolitan fibre network that would probably cost £100m to replace sold for about £7m crazy, but that's UK accounting :0)

But surely this stuff is available in mainland Europe! Well to a lesser extent yes but the UKs regulatory environment is more friendly, I cannot imagine the French or German Governments allowing key national infrastructure to be sold off to foreign companies - whereas the UK seems to positively revel in overseas ownership of utilities. See T-Orange merger

Global Telecoms Business is a good source of markets information - we'd recommend taking a look at their site.

High Speed Broadband - UK Failure to Launch

2010-03-08T09:39:00.000Z

I was thinking again about the Google'isation of the world, which mostly involves Google giving people stuff that they want for free - and renting their eyeballs out to all comers. I came back to Google City, or what was once called Topeka, Kansas. Google are planning to roll out a a Gigabit Fiber Network for 50,000 homes somewhere in the US - see previous post.

Compare this with the Netherlands and the UK;

In 2003 the City of Amsterdam funded a pilot fibre network to cover 40,000 homes in May 2009 The Amsterdam Fiber Network was expanded to 150,000 homes & businesses in the City. The Dutch Minister responsible for information stating that "...high speed (Gigabit) Internet was a necessity and should be open for all". City of Amsterdam paid for the infrastructure and now makes a profit leasing it to the private sector.

In the UK a vague target of 2mb for all by 2012 set out in the Digital Britain Report is made laughable by no ideas for funding other than a £6 ($10) a year tax on phone lines which they would probably give to BT and will most likely drop as the UK elections loom over a stricken and debt-riven nation.

Hold this in your mind: the UK Gov' considers 10Mbps Broadband to be "Superfast' This short example shows just how far away Digital Britain really is, and how that impacts on the economy.

We have small sub-office just North of Cambridge we decided to run a Business Broadband line in and use it for long term storage and Disaster Recovery. Despite being just 3 miles from a fiber enabled exchange the best speeds achievable were 468Kbps - which BT informed us was above 440Kbps and wa therefore an acceptable speed for a Business Broadband service - On which planet is that speed acceptable??

Come Google and rain down your love on Cambridge - I am sure we can name a College after you!!

Google, Kansas - Google finally on own maps!!

2010-03-06T09:05:00.000Z

Topeka, the tiny State Capital of Kansas has renamed itself Google - yep, it's true for a limited time the City of Google will be on the map - I wonder if Redmond, VA might do Microsoft the same honour.

Whilst it may seem frivolous there is a a sound economic reason for doing so, and one that should have every Telco in the developed world sitting up and paying very serious attention. Google is building it's own Gigabit metropolitan fibre networks and Topeka wants it to do that roll out there, and why not? With the initial roll out of 50,000 likely to be a success Google says its target id to roll out to half a million homes across the US.

This is one of the first serious telecoms infrastructure roll outs of the 21st century and it's not being funded by a Telco... Or is it?!

BT £9m Pension deficit slams stock price

2010-02-11T18:24:00.000Z

BT unveiled profits from operations up this quarter, mostly off the back of improvements in the group known, or formerly known, as BT Global Services, which is good, yes?! Well no they they also announced a pension deficit of £9Bn, for those of you in Metric that's €10.2Bn or in greenbacks $14Bn. They said they were going into a 17 year recovery plan.

A 17 year recovery plan!! This is a company that has been in recovery since 2001 when it finally figured out that it had a £30bn debt mountain. Whilst smaller atthe time France Telecom and DT where quietly beavering away being modern Telcos BT and their arch rivals CW seemed to lose the plot completely, determinedly launching and relaunching on the International markets, in ever more crazy, expensive and vain-glorious attempts to out AT&T, AT&T.

You have to feel for the current BT management team who will be cleaning up Sir Peter Bonfields mess for another 20 years.

The Holiday Season Arrives

2009-12-17T12:46:00.000Z

The Team at BackChannel, the Directors Nick, Andy and I would like to wish you all a Merry Christmas and a peaceful and blessed New Year.

Try JibJab Sendables® eCards today!

Mail Security: Market Growth Stalls in 2009

2009-12-14T17:58:00.009Z

As we prepare for our end of year reporting and analysis season; some early news is that the BackChannel search engines have identified striking new information on the use of hosted security market.

Over the last few years these services delivered by the likes of market leaders Messagelabs, Postini and MXLogic have seen a 20% CAGR. We now measure overall customer numbers as static.

Despite having seen some of the most valuable/expensive buyouts during recent years; hosted security services are at last starting to feel the pinch.

Messagelabs acquired by Symantec 2008 for $695m
Postini acquired by Google 2007 for $625m
Surfcontrol acquired by Websense 2007 for $400m
Scansafe acquired by Cisco 2009 for $183m
MXLogic acquired by Macafee 2009 for $140m

A lack of uptake by 'new-new' customers has impacted sector growth. There also appears to have been a fair amount of churn amongst the existing install base, as vendors price aggressively for service contract renewals, in what has been pretty much a zerosum game in 2009.

Actual individual services amongst major organisations have dropped 1.5% to 2% depending on the geography and level of local competition. The good news for service providers and their investors is that this is mostly due to organisations consolidating their email domains, so installed base of user seats is holding steady.

Fortunately for the acquiring companies it's less of a downturn in the market, more of a stall and we predict that these figures will start to rise in the latter half of 2010 as confidence returns and the vendors switch tactics. This remains no-brainer technology, economic circumstances don't make it any less so.

In the current climate we believe vendors should be looking at mopping up exercises - pulling in rogue divisions of large customers that have done their own thing. Consolidating is always a good way for a customer to save money, and a supplier to add value.

If you're interested in pricing for the January 2010 Hosted Mail Security Market Report from BackChannel email info@backchannel.co.uk for more details.

Digital Britan stumbles at first fence

2009-08-19T09:08:00.003+01:00

The UK Governments attempts to breath some life into the countries pretty puny broadband infrastructure looks likely to fall at the first fence as new Digital Britain supremo Stephen Timms looks ready to drop the £6 a year tax" on fixed lines. Timid Timms isn't alone in chickening out of backing a project that would extend highspeed broadband down every village, and rurual community in the country, as the conservatives also worry about voter backlash.

Power of the Pipes

2009-08-04T15:37:00.007+01:00

The folks at E&Y have delivered a very good report "The Power of the Pipe" which tells the wider world what we in the industry have known for years - i.e. the companies that own the infrastructure are better long term value than networkless AltNet operators. The UK operation of C&W got a lot of pipes when they brought THUS...

Anyway, pop over to Telecom TV and watch Power of the Pipes Video

The report can be ordered via: GlobalTelecommunicationsCenter@uk.ey.com

In the USA and other countries where the incumbent PTTs have been able to cling to power they will be able to leverage their infrastructure to deliver intelligent value added applications. In the UK pressure from the regulators is likely to handycap BT. This is because after pressure from OFCOM BT Group has spun out ownership of the infrastructure to BT Openreach, BTs services businesses now have to buy dumb pipes at the same price as their AltNet competitors, which might be good for competition but is yet another kick in the teeth for BTs services businesses.

Matt Bross to leave BT - Big Bear heads home

2009-07-22T09:58:00.004+01:00

BT's CTO and CEO of Ignite is to leave BT at the end of July to return to the US and follow other interests. Bross is a popular figure around the industry and is one of those rare things these days - a tech' enthusiast, a champion of the 21CN and more importantantly someone at the heart of BT who is known to have wanted to build bridges, both with BTs peers and other 'new technology' companies. Rumour is that Bross has been increasingly unhappy with the lack of investment in innovation since Verwaayen departed, and the accountants have taken over.

That whole scenario reminds me of the last time BT lost a great CTO, Peter Cochrane; an engineer to his soul and evangelical about the coming explosion in communications, left in 2000. Many felt Peter was sidelined by the Valance/King/Bonfield team as they crashed a previously majestic BT into a pile of debt and confusion. The £30bn($50bn) debt mountain resulted in BT having to sell off assets including BT Cellnet (now O2) and the resulting restructures set the scene for the collapse of Global Services in 2008.

Bross' departure is loss to BT not because he was a great business driver, but because of what he represents; BT has a big old hill to climb as it tries to reposition itself from a traditional telecoms company to a provider of converged networked services, it needs people like Bross to stand up the front and shout "We believe!!!" If BT truly believe, their customers will believe as well.

Industries need their cheer leaders and I'm sure Bross, like Cochrane, will continue to entertain and inform us for years to come it's just a shame BT lets these guys go just when they needed them the most.

CW to spin-out DEMON Internet

2009-07-08T10:27:00.005+01:00

In acquiring THUS, CW got it's hands on a mighty NextGEN network, major MPLS infrastructure and associated high value customer-base, datacentres, a sticky product set, skilled engineering team etc. Essential elements in taking on BT & Verizon in the modern enterprise.

As with any house sale they also got some bits they don't want; where as most of us would have put those on eBay or dropped them off at the tip - reports are coming in that CW management have appointed Rothchild to help them clear out the cupboards. Which almost certainly means Broadband ISP Demon Internet is up for sale. Suggestions of a £75-£80m asking are being floated - a nice 'find' as the daytime presenters would say.

But if history is anything to go by I expect CW to find a lot more value than just the sale price. Those of you with half decent memory will remember Bulldog the CW subsidiary voted as 'Britains worst broadband provider'. After Pluthero and the Energisers got hold of it they sold off Bulldogs customers in a deal that ensured the acquiring company had to lease network from CW in order to serve them.

So, I expect more of the same. Double's all round!

Rackspace Customers in Bristol

2009-07-05T18:39:00.000+01:00

We have been improving the mapping in our Market Intelligence product. Here's a screenshot showing a selection of Rackspace customers in the Gloucester area.
In the software you can drill down and see details on both the customer and the services they buy.

CW Wins £207m National Grid Deal

2009-06-24T17:02:00.006+01:00

While BT Global Services is finding it increasingly hard to win major corporate business, CW continue to show that if your focus is outbound, nimble and forward looking there is still plenty of major projects still out there to be had.

Hot on the heals of several recent major bid wins; CW today announced that they have been awarded a £207m, 15 year deal to run National Grids core telecommunications infrastructure. As well as taking over operational management of the existing network CW will undertake design & build the National Grids new NGN based system for the control of electricity distribution.

It's not so long ago that CWs mould breaking (mangling, more like) CEO John Pluthero was being lambasted by all comers for radically downsizing and reorganising the UKs oldest telco, and sending it off on a more energetic modernising agenda - but he has been proved right. Can BT follow suit? given the size of the problem and economic climate it will be more difficult than if they had done it 3-4 years ago when it really needed addressing.

I've visited the sales floors of both companies lately and whilst one has an air of nervous tension where quarterly job appraisals and voluntary redundancy are the main topic of water-cooler conversation, the other is vibrant, directed and full of people with a sense of purpose.

And yes, I do know CW are still cutting staff.

BT Global Services to be broken up

2009-05-16T17:33:00.001+01:00

BT is restructuring its struggling Global Services business to focus on three separate areas after its "unacceptable performance" led to the group losing more than £1.3bn.

BT Global Services recorded an operating loss of £134m. It lost £1.2bn due to cost overruns on big contracts with the NHS and Reuters and another £100m on other smaller contracts.

read Karl Flinders Original article...

Further BT Job Cuts 15,000, this year and more in 2010

2009-05-14T10:47:00.005+01:00

Things continue to look gloomy for BT. This mornings announcement seems to have been a bigger surprise than had been expected.

BT suffered a 40% slump in pre-tax profit during the fourth quarter, forcing the firm to slash its dividend and announce plans to axe another 15,000 jobs. Fourth quarter pre-tax profit plunged to £429m from £714m a year ago and by 21% for the full year to £2.08bn.

The firm also reminded us that it had cut 15,000 posts in the last 12 months, 5,000 more than they said they would. This morning they joined Banks & Miners amongst the FTSE's largest fallers.

BT's stated aim is to cut the jobs through natural wastage, non replacement and voluntary redundancy and had no plans for compulsory lay-offs. With some suggestion that it'll be even more agency staff going.

Next Generation Communications platforms, Ethernet-based solutions, unified communications applications, and International Private Leased Circuit (IPLC) are key are to BTs ability to compete at home and abroad. BT cannot afford to fall behind the innovation curve

It seems to me that the right thing to do no matter how painful is to follow C&Ws lead - look at the skills they absolutely must have in their company and organise their people accordingly.

Abovenet Customer Distribution

2009-04-28T17:20:00.000+01:00

Following on from my earlier post today here is a nice article on fibre rings and whether the OK Government should invest directly in laying fibre. They mention US based Abovenet's success in the greater London Area after it invested in multi-gig' fibre in he late 90's. I thought I would have a quick look at 1,500 random Abovenet customers. See below...

And whilst they do have a good regional spread the investment has certainly paid off.

THUS Customerbase: Geographic Distribution

2009-04-19T18:08:00.000+01:00

THUS Telecom (whose recent acquisition by C&W went almost un-noticed) were famous for having a strong base of customers in Scotland and the North-West. So here is a picture of our GUI showing their customers in London area plotted on a Google Map.

Nokia N97: Upsetting the Apple Cart.

2009-03-11T14:07:00.004Z

Nokia have apparently upset a few of their carrier partners by shipping a native Skype client on the new N97 mobile computer, well what did they expect? that Nokia's flagship mobile communications platform was going to leave out a key communications component. People are finding a way to get VoIP on iPhone, I use Fring, it's great, I can chat to people in the message window and if I really need to I can speak/crackle at them free; great for me I have a software developer in Brisbane.

Operators cannot turn back the tide, or squeeze the Genie back into the bottle. Nokia are right to offer it because if they don;t they will lose share to someone who will. If service provider doesn;t want to carry the N95, it's a free country... But one of their competitors will, that's a free market...

I switched to iPhone because my old Communicator lacked features the N97 now has. Though Mac compatibility may remain an issue, I don;t know yet.

Commercially the service providers are right to resist, and try to limit the leakage of voice minutes; they have shareholders and jobs to protect. But, in the longer term they must find a model that accommodates all aspects of ubiquitous and free Wireless Internet.

Maybe it's to charge a small fee for providing high quality long-distance backhaul for mobile VoIP users. Now, I'd pay for that.

Rain Cloud Computing

2009-03-10T13:01:00.003Z

Having spent a long time in the business of information security I always get nervous when people talk about shared services; having seen poorly configured 'shared' firewalls allow one customer to find themselves on the intranet of another, sniffers installed on shared networks, and numerous less legitimate/benign activities.

The problems usually stem from programmatic errors, logic breakdowns, or misinterpretation of specifications by developers; this is likely to be the problem with Cloud computing for the next few years; it almost certainly what caused the problems experienced recently with GoogleApps.

Should this put you off Cloud computing? Probably not 10 years ago we had all the same problems with websites. It takes a while to learn how this new stuff works.

Cisco the latest to announce Dis-employments

2009-02-10T10:39:00.005Z

The reduction in the build out of new networking infrastructure has led the worlds leading provider of telecommunications hardware,Cisco, to sort of announce a round of redundancies. Around 2,000 staff are to be "restructured out of employment" from the global workforce of about 70,000.

A great company, but perhaps as Scott Adams observes, one that could afford to thin the ranks just a little.

An iPhone Accessory that won;t sell anywhere it snows

2009-02-06T17:48:00.008Z

I was pleased to see another clean tech (or electric) vehicle manufacturer loving the iPhone it's there in the interior shots just like the Chrysler Peapod. The oddly cute Aptera 2e looks like a Cessna with the wings lopped off and is due to ship later this year, .Maybe, if I lived in Silicon valley I might buy one; except of course the roads there are jammed with big cars and giant trucks, and drivers on PCP.

Back in the 80's I got a lift to work in an ancient Morgan 3 wheeler which spent the entire trip going sideways. with the rear wheel hopping from rut to rut at random intervals.Morgan; No iPhone adaptor, No Wimax, Not great in the Snow... but likely to be around longer than the 2e.

Oh good grief: Digital Britain - Digital Donuts

2009-01-28T17:40:00.003Z

Per the norm; Despite having been one of the most innovative nations in the introduction of Internet, the Worldwide Web, and Digital Media. Britain's politicians and business leaders still cannot get their 1980's brains around the online world.

Lord Carters main hopes seem to be that consumers will behave online, that BT will roll out broadband to their remaining exchanges a bit faster. That the BBC might get together a small team to look into this digital media stuff. No mention of investing in or supporting the British high tech business sector, or ISPs, or the computer games industry which makes more for UK Plc than the Film industry.

Top marks chaps, a few more kids able to download music and housewives able to order groceries... Yep, that'll see us through!

Banking Crisis: May force Governments to invest in Telco infrastructure

2009-01-28T14:25:00.006Z

I spend a lot of time with Telcos, ISPs and equipment vendors in the UK and EMEA and their is a constant stream of; Headcount cuts, projects put off, scaled back, '08/'09 capex suspended and no clear visibility into this years budgets.

Problem, inability to raise debt to fund infrastructure. Banks won't/can't lend for all the reasons we hear in the press. Confidence in a banks is linked to their stock price & their market capitalisation, they can't value their assets properly and that effects the amount they can lend, blah, blah, blah... and, that impacts on their attitude towards lending money to Telco, which lost it's low-risk utility status many years ago.

I wondered how bad was it for Banking last year? Well take a look at this...
Not a pretty picture, but interesting.

I wonder how European many countries will follow President Obama down the Keynesian route of the US government investing directly in telecommunications infrastructure, the same way they invested in physical infrastructure in the 1930's. we heard today that the Canadian government will start a programme of investment this year. The question is whether the European governments have the guts to ignore EU rules and directly subsidise the telecoms industry in their home countries - I doubt it, but we live in hope.

A quick guide to the 4G

2009-01-26T19:51:00.012Z

TelecomTV have done this great intro to 4G. Had my eyes reeling from the three letter acronyms (mostly 4, sometimes 5)

I tried to embed it here but for some reason the blogger app' keeps blocking it so just follow the link

Don't worry you have at least 3 yrs before the standards start to roll out, in which to learn all the acronyms.

BackChannel Website down - Victim of Tiscali vs 186k spat

2009-01-19T11:39:00.004Z

Not quite Russia vs Ukraine - but rather like those poor freezing souls out in Bulgaria, Tiscali's disagreement over payments and legals, has resulted in a load of innocents disappearing off the Network again with zero notice, and yes that includes us at BackChannel.

186k has a long and troubled relation ship with Tiscali and they have issued this public notice saying that they are migrating to a BT based infrastructure. About time!!!

Nortel Networks Files For Chapter 11

2009-01-13T13:48:00.003Z

More bad new as yet another major telco supplier bites the fiscal dust. Infrastructure equipment vendor Nortel Networks has today moved for Chapter 11 Protection.

Nortel Networks, which faces a $107 million bond interest payment this week, filed for Chapter 11 protection in U.S. liquidation Court in Wilmington, Del., dragged down by a sudden drop in demand for its formerly lucrative voice-only telecom network.

In 2000 Nortel was worth an estimated $250bn.

What more can you say, with Alcatel-Lucent in the deep sticky,. Nokia selling off non-core businesses, and as I type this rumours have just that Chinese "Cisco alike" Huawei may be intersted in buying Nortel , whilst Nortel is a nominally a Canadian company I can't see the American Government smiling on that one. Expect Cisco to enter the fray...

As Baltimore goes live, Sprint's Head of 4G talks WiMAX Strategy

2009-01-06T12:58:00.007Z

Today Sprint's new subsidiary Clearwire went live with their first commercial WiMAX service in the US city of Baltimore, MD. As you know we're big fans of WiMAX here at BackChannel, so it is great to see the technology being rolled out in large metropolitan.

Sprint is the telco part of a consortium which includes Intel and Google that is making a total $12bn invest in WiMAX pioneers Clearwire.

In this podcast Sprint's Vice President of 4G / WiMAX Todd Rowley says that they expect the new service to cover most of the US by the end of 2010. It's a bit cheesy, but once you get past that there is some worthwhile news and views on a technology that will really impact the lives of mobile Internet users.

At the end of December Sprint launched the first Dual 3G/4G modem which will allow mobile users to flip to the new 4G services as they move into areas that are covered by the Clearwire Network. Should I wait a while before getting BT to send me that wireless broadband dongle?

Phorm Management leave sinking ship

2008-12-19T17:17:00.004Z

Debate continues to rage about spyware vendor Phorm.

This week sees there management team run for the door with their hair on fire... Phorms indominatable CEO Hugo Drayton and CFO Lynne Millar both resigned this week, saying that it had all been very rewarding - I hope they meant in terms of pay, because I doubt it's done their careers any good.

Just last week Hugo Drayton recently put up this spirited defence of Phorm and it's business model. While talking to the folks at TelecomTV

It's about time for BT, Virgin, EasyNet et al, to follow Hugo and Lynne over the side of the boat; So folks, if you're listening, . Stop it now! It poisons everyone who goes near it. It's a PR disaster, even the people who work their know it

Also, stop trying to steal each others marketshares by cutting the prices it just leads to churn which is incredibly expensive let the little guys have the small price sensitive customers like my mum who uses it to shop at Tesco online and email recipes to her friends in the WI, and get back to selling people a good product that homeworkers, businesses and people who want streaming media; they will be prepared to pay a fair monthly fee.

Obamafication of the Internet: We will renew Information SuperHighway

2008-12-10T09:32:00.005Z

In his weekly address to the US President Elect Barack Obama staed that it was unacceptable for the US to be ranked 15th out of 30 developed nations in the adoption of Broadband.

Your Weekly Address from the President-Elect @ Yahoo! Video

In his regular Saturday broadcast, Obama has promised that he would make the single largest new investment in our national infrastructure since the creation of the federal highway system in the 1950s. A high-tech new deal if you like, though he does suggest that his administration will move to bring all schools and hospitals on line so that they can communicate and share data across the Internet; I can hear Richard Granger and his NHS National Program for IT team dusting off their CV's as I type. But seriously in a month when over 1/2 a million Americans were released form their jobs and a further 1/4 million contractors sent home the proposals to revitalise the economy by investing tax $ in infrastructure and training is a lead that other countries should be following, giving people who have been laid off the opportunity to earn, learn and contribute to the future of their nation, perhaps for a short while it might remind people that creation of real things is what carries civilisation forward; not, pretend trading in made up things that benefit the very few.

Sprint and Google show Wimax has legs with $3.2Bn Clearwire investment

2008-12-08T23:00:00.006Z

Google, Comcast, Time Warner, Intel & Bright House have coughed up $3.2bn (about £2.1bn) and Sprint has 'donated' their country wide Wimax license to a new company Clearwire.

As a connectivity nut I've been waiting for this since I first saw Wimax demo'ed at Intel back in 2003, it was low powered and pretty ropey but it worked. How things have changed take a look at this Clearwire Demo 7mb up 3mb down when your driving around, ok it's a demo: then again a $3.2Bn investment in the middle of the worst recession in 70+ yrs, tells me that they're sure it's going to work.

The reality of a truely mobile wireless high speed "broadband" internet is interesting (exciting) enough, but when it finally becomes ubiquitous as it will, forget personal Internet access for a moment think of the huge array options for in car entertainment, roadsafety, traffic management; streaming audio, video, headup displays, location based services and advertsing etc... I for one can't wait to see what opportunities this will eventually deliver.

In the realm of personal communications you can shove a lot down 7mbs; most of us will no longer need land-lines for home broadband, or telephony; most former PTTs can wave goodbye to their cash cows. You can see why the mobile service providers who have been poo-poo'ing Wimax for years, and who spent all those billions in overhyped auctions are certain to keep the Andrex puppy in dog biscuits for the next few years.

Remember as late as 2000 BT and Co were denying DSL Broadband would ever be widely available and that ISDN, X-25 and Dial-up was here to stay.

AT&T Cut even more staff

2008-12-06T15:50:00.004Z

After cutting 7,000 staff in October, Randall Stephenson CEO of AT&T (pictured) announced that another 12,000 are to go in 2009. The cuts represent 4% of the total workforce and is the largest single staff cut since the 1998 when it axed 15,000 in a bid to cut costs.

What is interesting is the difference in the cuts as a percentage of the overall headcount. In '98 AT&T had 130,000 staff and the redundancies in that round made up 12% of headcount. With the US economic situation far worse AT&T's current headcount at over 300,000 is likely to carry on shrinking.

Let's hope they don;t make the same mistake as BT did, and allow their top IP engineers to take the very generous redundancy option; leaving Global Services short handed and costing the CEO is job.

Don;t pay for 0870 to contact Government helplines: Robbed by the DVLA

2008-12-01T17:06:00.005Z

I've come over all Martin Lewis today! I've just spent £3.50 on a 20 second conversation with the DVLA, @49p/min.

I wasn't aware that public service help lines had become a government profit centre; but apparently they are.

According to Hansard: The Driver and Vehicle Licensing Agency has received the following amounts from its use of revenue sharing phone numbers for each of the last five years.

		£
2007-08		3,381,649
2006-07		2,894,284
2005-06		2,423,517
2004-05		1,945,131
2003-04		874,965

What a great scam! Apparently premium rate numbers were introduced in 1999 to "Not there to raise money but to flatten out discrepancies in the amount paid to call Swansea from different parts of the UK"

Well as a reader of On the BackChannel I'd like to introduce you to SayNoto0870 and if you ever need to phone DVLA here is the number you should call to get around the rip off 01792 782341.

BSkyB to raise $600m bond to pay for Tiscali

2008-11-18T09:27:00.002Z

That's about £240 per customer. To be honest it would be cheaper to run a decent TV marketing campaign and a special offer "First 3 months free to Tiscali customers". I wonder how much Tiscali's TV campaign cost them. Surely the Sky broadcast network could be employed.

I suspect BSkyB won;t be to bad a home for the poor users, but buying another companies unhappy customer base is a quick fix; and quick fixes always come back to bite you, as Tiscali has already found out.

The reality of consumer broadband; Only BT can win

2008-11-17T15:31:00.007Z

Excellent week for consumer broadband again; Talktalk breaking apart, BSkyB to rescue Tiscali, and Virgin Media losing 15% of it's staff.

We don;t normally talk about Consumer Broadband; primarily because we believe that unless you own the network you will eventually go bust. But the last few days have gone so far to prove our theory, that we just had to cover the latest developments.

Back in 2006 the launch of a free Broadband service from everyone's favorite mobile phone store was hailed as the way forward. Despite losing Carphone warehouse £45m($70m) in the first 6 months, industry analysts claimed it was the future, and Ofcom said this was proof that they were taking a tough regulatory line: "Look at these 700 shiny, independent ISPs, we're doing a fine job". The elephant in the room was of course that virtually all of them relied on BTs infrastructure.

Since then a good number of these Standalone ISPs have failed; the prefered term I believe is "were acquired by Tiscali", and loads of little providers have been lost, failed to flourish, or just given up .

In the same period NTL was sold to Virgin Media for 4 pence, just before it went upside down, EasyNet was hoovered up by BSkyB. Now the same analysts who said Free Broadband was the future are urging Carphone Warehouse to split out (dump) Talktalk in the delusional hope that someone like Vodaphone might pay £1bn for its customer list, Virgin are cutting staff, and it looks like Tiscali is going to vanish.

BSkyB and NTL are only short term winners; yes they own network, but not enough to cover the country, they too rely on BT to reach their "off-network " customers and in the current economic climate there is no chance of finding the money needed to expand the networks; even these groups TV assets cannot be relied on to fund network coverage as people switch to freeview (you can get the BBC and Dave; what more do you need?!).

So it comes to this: Accelerated by the recession, the dream of a diverse, vibrant, multiplaying broadband led consumer teletopia has come down to three big players, none of which can deliver the whole convergence dream and eventually there will just be BT; just like back in the last big recession.

BT to shed 10,000 jobs

2008-11-13T08:45:00.003Z

Less than 24 hrs after Virgin Media announced they would be shedding a 2000+ jobs. BT have announced further 10,000 job cuts with contractors out the door first.

I say further because anyone who follows BT will be aware that they have already reduced their global workforce by 1/3rd, down from nearly 250,000 in 2006. In October 2007 a representative of the Now Connect Union, which represents BT middle management, suggested that only the generosity of the voluntary redundancy packages avoided a strike. Unfortunately the result of that generousity is that some highly experienced engineers and network designers took the deal and left BT Global Services, the division now pulling BTs numbers down.

A BT insider recently said to me "...it's like 2001 again, lots of people in the office looking busy; waiting for the storm to hit!"

THUS it came to pass, that CW finally squared up to BT...

2008-10-22T13:27:00.006+01:00

For a couple of years we've felt Cable & Wireless has been heading in 'sort of' the right direction; focusing on profitable customers, core product lines, win-able business, etc. along with some pretty radical structural and staffing changes.

However, patience seemed to be wearing a bit thin after a business update for City analysts back in March this year, comments were made along the lines of "... this is all good stuff; but on this business plan, we don;t think you can turn it around fast enough!" Here's the presentation, and what you won't see in there, is any reference to plans to grow the customer base in SMB, mid-market, business broadband, or increased infrastructure investment in the UK.

I guess the city feedback must have focused minds on shorter term revenue generation. For just 6 weeks later, in a stunning volte-face CW announced plans to acquire THUS Telecom; possibly the most successful mid-market ISP in the country, Bringing with it customers in each of those categories, as well as £450m in new revenues, some tasty data centres, a mass of IP services expertise and a country wide NextGen IP network.

The change in the market place is profound. BackChannels own research data shows that over the last two years the "re-Energised" C&W has turned the corner; increasingly good at serving the larger corporate market, with significant project wins and a marked decrease in customer churn, they are starting to give Verizon and Sprint a run for their money. In the UK market the merged company forms the only broad-spectrum competitor to BT.

The ability of C&Ws management to listen to its shareholders and then to turn the whole company on a dime, must be keeping a few people awake over at BT Centre.

Hmm... Wonder what they'll do with Demons broadband customers :0)

Bill Throttled

2008-10-08T13:21:00.004+01:00

The Campaign to stop an amendment to the European Telecoms Bill appears to have been successful, although the European parliament has left the door open for President Sarkozy come back with a modified proposal.

Those of you who've have been following this will be aware that the Hollywood funded Digital Rights (Anti-Piracy) lobby has been pushing for ISPs in the EU to be made responsible for infringing EU Citizens civil rights i.e. freedom of speech, association and communications by cutting them off from the Internet permanently if they believe (don;t have to prove) that they or a member of their family has downloaded copyrighted material from the web.

The first self regulated attempts have been a fiasco with errors in billing records leaving ISPs open to legal action, and we've seen ambulance chasing companies tracking down suspected miscreants and selling their details to the DR folks - what ISPs legal team is going to stand for that?

Things you might find in an O2 Shop

2008-10-02T11:07:00.008+01:00

In response to my ravings, so common of a new iPhone owner, a friend sent me this today.

The Chrysler Peapod.
Is it the ultimate iPhone accessory? Will we be seeing it in the O2 shop in Cambridge any time soon? I hope not, it's pug ugly.

Integrating a mobile 3G device directly into the vehicles onboard systems, is going to add a whole new dimension and opportunity in mobile content. You thought SatNav was big... mix it with location based services and maybe even guide books.

Thanks to our friends at The Register for the original post.

Wall Street Crash: Upcoming Telco Chaos

2008-09-17T15:25:00.016+01:00

With the sudden and forced mergers of some of the worlds largest financial institutions, Telco and ISP major accounts teams will be preparing themselves for several months of travel, client meetings and late nights as they try to make sense of their position in the combined entities.

As overnight bags are stuffed and expense forms dusted off; here are some highlights of the fun to come.

Lloyds TSB has strong links to both C&W and BT.However, the major accounts team at C&W will be less than pleased to find that BT's position has been enhanced by virtue of BT being IP Services provider of choice at HBOS.
On the voice & legacy data side, things are likely to be more complicated, as with 3yrs still to run on Lloyds $1Bn outsource agreement with IBM, you can be sure that the IBM account team will be lobbying hard to get access to HBOS' branch network; currently supplied by "...strategic partner, BT"

Tiscali brands innocent customer criminal

2008-09-05T13:19:00.006+01:00

Two articles caught my eye this week on the proposed EU Telecoms's package, a law that if passed, will effectively mean that ISPs will become unwilling Enforcers for the Digital Rights lobby.

The first is the surprise involvement of the European Data Protection Agency, whose Supervisor has come out against the act, stating that parts of it relating to the tracing of IP addresses, breaks existing EU data protection legislation, enabling the mass surveillance of Internet users. If true the ISPs will be spending a lot of money on legal fees.

The second proves that there will be trouble ahead for ISPs. It appear that Tiscali wrote to a chap accusing him of illegally downloading a TV show. OK, but this chap isn't a customer of theirs; he had left them a year before and his old IP address had been dropped back into the pool. The cause "Computer error" Nothing to worry about then, that hardly ever happens.

Imagine the damage to Tiscali's Brand, had it gone all the way to the guy being permanently expelled from the Internetit would have made national/international news; it's the modern equivalent of having your eyes put out...

New Heatmap feature shows installed services

2008-09-03T17:22:00.009+01:00

Following customer feedback we have added a new Heatmap feature to the BackChannel Account Manager. This makes it possible to see not just where your customers offices are located, but where they have services installed.

This screen shot from within the application shows where HBOS have their primary IP services installed.

Google polishes up Chrome to support GoogleApps

2008-09-02T18:03:00.001+01:00

Whilst it has been slow to take off in Europe and the rest of the World, GoogleApps for Business have been as huge success in the US. In Mid 2007 we electronically surveyed 550k US companies to see who was using GoogleApps mail services and it hardly hit the Radar.

Re-running the Survey in Mid 2008 the results couldn't have been more different. GoogleApps had arrived, and the demographic is right in the heart of the US business, companies with between 20-250 employees.

You're probably all Google Chrome'd out by now but a significant part of the Chrome announcement is that it has an application development kit called Gears that allows Web App Developers; like ourselves, Salesforce, etal, to build Off-line features into our products, making them portable.

For Google, this means that users of GoogleApps for Business will soon be able to compose a Gmail that includes a GoogleApps Spreadsheet sitting on a plane, and have it sync up and send as soon as they are connected to the Internet again.

Protect the European Internet industry from Copyright Hawks

2008-07-28T20:47:00.007+01:00

BackChannel strongly supports Telcom TVs "Throttle the Package" campaign, we ask that you do too and that you sign the petition to get it stopped.

Check it out; because if EU legislation proposed for passage into law in September goes through; your kids could get you and your family 'permanently' removed from the Internet.

With three aged between 6 and 15, the chance that they will stupidly download a song or watch a copyrighted clip on Youtube which could result in me permanently losing access to the Internet, and changing my life, is a real issue.

Having bamboozeled the French government, and the lunch time o'boozers in Brussels, the US copyright hawks are finally winning the war to end the principle of network as a conduit; a principle that has previously protected the personal privacy and human rights of the individual, and ensured that ISPs are not forced to act as on-line content police for the media industry.

If you're an ISP think what it would do to your business if you're forced to monitor the traffic on your networks and maybe hand over your customers details in order that they can be permanently remove from the online world.

Sub-sea Cabling Map

2008-07-22T18:25:00.003+01:00

I spent an hour sorting out various service providers network maps this afternoon, and found this one that is rather good.

Global Submarine Cable Map 2007

In a world that is becoming more IT dependent it highlights the lack of redundancy in the global network of sub-sea cabling.

That C&W takeover of THUS Telecom people are talking about

2008-06-26T13:50:00.015+01:00

As the 30th June deadline looms and THUS Management remain coy about their plans, we take a look at how a combined CW/THUS entity would address the IP services market in the UK.
In this graph we see the customers of each player by turnover. The first thing that strikes you is that where CW is weaker than the market average (0 on the 'Y' axis), THUS is stronger and vice-versa. A combined entity would have a significant increase in market strength across the whole business IP services market.

CWs undeniable success in controlling costs, reducing unplanned churn, and bringing its customer base back to those it finds most profitable to serve; has led to a fall in its 'overall' market strength. It's position in the profitable £2m-£20m Turnover bracket is particularly effected, see below.
For CW being able to leverage THUS' position amongst this group could quickly address the concerns that some analysts recently expressed that CW has pulled back too far, too fast.

Given that unlike India, Big Vision in UK Telco sadly took a pasting in the 2001 crash, What is the Pluthero vision that is big enough to accommodate the acquisition of THUS?

THUS is a strong company, has a lot of potentially profitable customers, a UK wide NextGen powered network, and growing reputation for delivering value to customers & shareholders. CW, is a global brand, has a focus on increasing profit per customer, and access to a global network which makes them increasingly attractive to multinationals transitioning from legacy to all IP NextGen services.

My opinion is that both companies are growing in strength and left to it would thrive independently; together the potential is extraordinary.

"Vodafone is a national operator in mobile and we'll take that philosophy to the fixed line world as well"

2008-06-06T12:28:00.008+01:00

In recent years New Zealand has become the place where technology companies go to test products, and hone business models prior to releasing them on a world stage.

After my comments on the likelyhood of Vodafone buying up more fixed line capability, one of my colleagues passed me this news report on Vodafone's LLU 'Red' Network in New Zealand.

Vodafone Red has unbundled half the exchanges in NZ's major cities and is busy working it's new triple-play across the country. Russell Stanners CEO of Vodafone NZ said " Vodafone is a national operator in mobile and we'll take that philosophy to the fixed line world as well,"

NZ's a small country so costs are manageable, but if Vodafone were planning such a move in the UK, they should look at THUS Plc. THUS already has the country wide LLU network in place and their Demon Internet subsidiary has many years of experience in providing consumer broadband and telephony.

Tiscali to sell off Broadband Business to Vodafone

2008-06-04T12:15:00.004+01:00

Tiscali's 2million UK subscribers are to be sold on again as yet another consumer broadband company does a Python; exit stage right shouting "run away, run away".

The tiny premium proposed on the share value underlines what we industry watchers have long been saying; that there is no value in the consumer broadband as a standalone business. It only makes sense if you either own the networks, or can supply it as part of a total communications package; even that model is unsustainable.

I strongly suspect that long term Vodafone will look buy more NGN/LLU providers. They've shown capable with the piecemeal acquisition of Arcor Germany's No2 telecoms provider last week.

Rely on Emerging Markets Players...

2008-05-30T16:37:00.003+01:00

... to make Telco world interesting again.

So Vanco is to be acquired by Reliance Globalcom the highly successful telecommunications and services company based out of Mumbai, India.

Reliance is a conglomeration of three companies: Flag Telecom, Yipes Communications, and the original Reliance Communications.

The VANCO acquisition establishes credible base of customers for Reliance in Europe. Flag provides a global network of undersea optical cabling; Yipes, managed carrier Ethernet services (including VPLS) and Reliance's experience of building its India-wide network of wireless and wired services, including large scale MPLS deployments, sets it in good sted for an assault on the European markets.

Reliance joins TATA Communications amongst the Indian Companies who are taking the experience of building infrastructure and supporting western service providers, and who are now determined to play on the world stage.

Accenture bid to run a ViNO in a brewery

2008-05-12T18:53:00.003+01:00

Thanks to one of our readers for pointing me at this. The VANCO story continued to gather pace with speculation rife that bids could be expected and on Sunday this appears to have been confirmed, with IBM and Accenture named as separately interested in a bid for the failing Virtual Network Operator.

Hmm, Accenture & Telco - as Accentures primary customers include some of the worlds largest "real" Telco's they may find that a successful bid would put them in direct conflict with some there largest customers.

Where is the next VANCO

2008-05-11T17:32:00.000+01:00

In May 2008 respected stock watchers The Motley Fool rated Savvis as the worst stock in the world like Vanco they offer VNO services and boy have they had a rough year.

I thought it was a little harsh; at least they have some of their own network real estate. But we're already pulling reports off our systems on Savvis' customers, alongside those of VANCO, so watch this space.

Overall, we think 2008 will be a difficult time for VNOs large and small, they are effectively margin traders, and the big network providers seem pretty hostile to them just as their customers are putting the elbow on them to keep their prices down.

Many of the larger players have started offering VNO style services themselves and I am picking up quite a lot of undisguised glee from the bigger ISPs.

Vanco demise: Real beats virtual...

2008-05-06T20:18:00.004+01:00

Great news for traditional telco as customers discover that sometimes, real beats virtual...

Vanco looks like going the way of the many margin traders - just like the city boys they too have been caught out by in the credit crunch.

Vanco is fundamentally a buy low, sell and live on margins, business. They're now finding that as the market turns against you, you had better hope and pray that your backers will cover the gaps in your cash-flow.

Having seen the April earnings announcements I was a bit surprised to read the news, especially to discover that analysts, whose praises just weeks ago drove the stock to an all time high, saying "we don't expect to see any value in the companies equity."

Could they have seen it coming? with hindsight probably: 3 things coming together have almost certainly caused a crunch in the companies cash flow, and collapse in the confidence of its backers and investors.
1) Tightening of economic climate causing slow payments from debtors
2) Channel stretching the elastic in the supply chain to breaking
3) Creditors unwilling to increase their risk and extend fresh terms

BackChannel work with enough Telco and ITC companies to know that the big customers are using their buying power to push out average payments, and with a growing and aggressive channel this will have been compounded by the number of links in the cashflow system.

This is always going to be an uncomfortable time in any board room especially bearing in mind and a few months ago Vanco CEO, Allen Timpany, hinted that their backers were not a very amenable bunch, "they want us to build a £200m business when we should be building a £2bn business". After they issued a profits warning in Aug 2007 we can only speculate how the relationship between founders and backers went, but it might have been opportune for someone should have reminded them of the Golden Rule: The man with the Gold makes the rules!

SofNet 2008 - The great BT love-in

2008-04-30T16:18:00.004+01:00

Barring a fire on the last day, the Sofnet 2008 conference and exhibition has been a great success, just about every industry Journalist and Analyst I know, or know of, has beaten a path here to London's Olympia Conference centre.

So for an event that emphasizes the convergence of the global ' telecom networks with software, why the 10meter stands filled up with hardware vendors? Juniper, Alcatel-Lucent, Hauwei, Nokia all showing a presence (no Cisco). I guess the answer is the identity of the host sponsor, BT, and in the list of speakers and panel members, which is rather heavy on BT senior staffers.

People tend to be a bit dismissive of BT on a world stage, but here is why the great and the good turn out to fate BT: - A report from the department of innovation, universities and skills shows BT as the UKs largest investor in R&D and in fixed line infrastructure. So for the vendors it's great opportunity to share a platform and network with the golden geese that will see them through the credit crunch.

Security Industry Blog: Infosecurity Show, London

2008-04-23T20:42:00.000+01:00

Due to our backgrounds being in information security inc' ISS, CESG and CheckPoint; we've have been invited (with promises of beer) to guest blog for Security consultancy 360is, so here is the first one - looking at the run up to Infosec London and reports on the RSA Conference in San Francisco.

New Corporate ISP League Table for 2008

2008-03-10T11:03:00.004Z

Our New Corporate ISP League Table for 2008, can be picked up free from our here.

This is our January 2008 baseline. It shows you exactly where the UKs largest companies sourced their Internet Services on the 20th of January, 2008.

Your chance to catch up with BT's ongoing battle with Verizon for the top slot. The new league table has been widened to include the Internet services of the companies that make up the "FTSE All Shares Index", including BAe, Tesco and Tomkins.

The big news is, that as the Internet services market suffer it's heaviest downturn since the Tech' Crash, UK based service providers are once again struggling to compete with their US counterparts.

Register when you pick up the league tables and we will send you the figures as soon as we have them.

Julius Baer backs down over Wikileaks

2008-03-06T18:24:00.005Z

A good day for free speech as Bank Julius Baer (BJB) decides not to pursue further action against the whistle blower site Wikileaks. If you recall they won an injunction in February to close the site down, that caused a mixture of concern about restrictions to freedom of speech and high entertainment over the inept methods of both Bank Julius Baer and the California courts to get the information off of the web.

But we shouldn't be too pleased, the law found in BJB's favour. BJB, has decided not to proceed because of the negative publicity the exclusive Swiss financial management company has received from the story. It has been posted on thousands of blogs and news feeds around the world, reaching in turn 100's of thousands of people who had never heard of either party - a sort disastrous viral anti-marketing!

CW: PanAm or VirginAtlantic

2008-03-06T13:44:00.007Z

This weeks analyst call was a toughie for CWs pilgrim and his team of Energisers. I just watched webcast; skip the bit about the Caribbean, it's all phone minutes.

Times Online reported one analyst saying: “Their plans are far too long term for this market. They need a quicker fix than this.” Mate! Go find something else to analyse! If you haven't worked out that there is no quick fix for telco, you're' in the wrong job.

It's not a CW specific problem; it is the same for all the Telco's: After 100yrs of selling voice minutes somebody invented the Internet, and that's having the same effect that airliners had on oceanliners. Massive increase in traffic, loads of competition, and a huge drop in revenues per head as customer choice expands.

In todays financial markets this is a recipe for volatility, and volatility = risk. SO, vicious circle; everyone's risk averse, so everyone's looking for the quick fix, and there isn;t one. The answer for the service providers is to sell core services, to valuable customers over their own networks, and, once they have those customers keep them. Not so simple as it sounds.

After years of volatility, crashing stock prices and stranded passengers; the airline industry introduced Revenue Management in the '80's. They filled their planes with the customers who provided the best economic return. First class, business, early bookers, flexi-tickets, block bookers, loyalty card holders, late bookers all became categories that were given quota's, and managed using sophisticated booking models. They didn't invent anything, or come up with fabulous new killer services! They just provided a core service and managed their customers more effectively.

Telco's must do what the airlines did, introduce Revenue Management and fill their networks with valuable customers. It was realising this fact about 4 years ago that caused us to give up the day job and start BackChannel.

So, CW, PanAm or Virgin Atlantic? Personally, left to it's own devices I think CW has the potential to become a truly global telecoms provider; they have the network, the services, the contacts and the mindset to do the job. Question is; Do they have the time?

BackChannel has new products and a new website

2008-02-29T14:16:00.010Z

Just a quick note to say thanks very much to those of you who were able to provide feedback on the new BackChannel website it was valuable, valid and consistent.

So, we learnt a lot and made some changes. Thanks to one particular mega value reviewer for his excellent critical analysis - " you really know how to mangle a metaphor !?" Regular readers will also have spotted I can't spell ether.

The release of the new product is driving this change, beta trials at number of carriers have been completed and initial feed back is that it both saves a great deal of the sales peoples time in gathering customer intelligence and reveals a lot of otherwise un-knowable detail on the use of IP Services by large organisations and within Fiber served buildings.

We will of course be continuing with our regular free reporting and market intelligence services: when you're monitoring nearly a million companies you learn some interesting stuff.

Google take stake in Unity TransPacific Fibre

2008-02-26T14:58:00.006Z

Google has taken a stake in the Unity TransPacific super fibre linking the US Westcoast to Japan.

This is the Google that purchased a 270,000sq ft interconnect facility in New York in 2005. The Google that has a division engaged in acquiring dark national, international and metro-fiber. Is investing heavily in consumer WiMax, a mobile phone platform, mobile applications, oh and spectrum

Still think Google is a search engine and advertising company? Read on...

In 2006 Google was recognised by the American Registry of Internet Numbers (ARIN) as an ISP, when it was granted a large allocation of IPv6 addresses.

At the time of the allocation ARIN's director of external relations , Richard Jimmerson, said. "Any organization that has received (IPv6 addresses) has met that criteria -- and that would include Google,"

Note: IP v6 will enable the Internet address space to several trillion, trilion addresses, more than enough to absorb the current 4 billion IPv4 Internet addresses several times over. They must be planning an awfully big grid network, or is there more to it than meets the eye?

Nervous now? Get in line behind Microsoft; a queue is forming.

UK ISPs to face legal sanction's over downloads

2008-02-22T08:59:00.010Z

The British government has given ISPs till April '09 to "get on board or face legal sanctions".

The moves follow similar legislation in France due to come into force this summer.

The Media folks will identify the file down-loader by joining BitTorrent storms, then pass lists of offenders to the ISPs and then require them to identify repeat offenders and cut them off from the Internet, probably by invoking breach of contract.

As Tiscali found - If it goes wrong, (surely not) you're on your own.

Judge in WikiLeaks driven Dyna"dotty" as archives go P2P

2008-02-21T13:15:00.006Z

The Wikileaks train now seems unstoppable. As due to massive pressure on their remaining servers the Whistle Blower has posted it's archives on a number of P2P sites including the notorious Piratebay.

Some good comment over on El Reg regards the Julius Baer/Dynadot/Wikileaks debacle, which shows that the judiciary have no clear understanding of how the Internet works, or even that its geography extends beyond the bounds of their jurisdiction.

Being a working guy, and unlikely ever to need their services, I had hardly heard of Julius Baer and their spat with Wikileaks. If you want to know more about the "due process" take a look at Cryptome it has chapter and verse including all the legal two'ing and fro'ing

This is the kind of viral marketing JB could do without.

ISP Executives in firing line as Governments move on online privacy

2008-02-19T13:53:00.013Z

Senior Executives within ISPs will be calling in the lawyers this week.

Why? well it's been an interesting week for on-line privacy, freedom of speech and data protection; with the ISPs being moved firmly centre stage again.

In the UK, the Labour government has presented a Green Paper that will coerce ISPs to monitor their customers Internet traffic for illicit content. Recidivists will have their connection cut off, and to stop them doing it again, their names could be entered into a central database of law breakers, to be circulated to other ISPs, government agencies and potentially even to the owners of the content.

In the USA, the Protect America Act has been passed allowing the NSA to filter the day to day emails and web content of both Foreign and US Citizens, in the ongoing search for Al Queda.

Finally, Tiny Californian ISP Dynadot which hosts whistle blower site Wikileaks was forced to hand over the site, contents, supporting literature and all log data to the courts.

So what is the potential fall out for the service providers?

The US government has stated that ISPs who voluntarily co-operate will be protected from litigation by their customers. But we know from experience that won't stop the lawyers having a bash at a few multi-billion$ class actions.

The UK Government has also promised protection for the ISPs. But refusal by the media industry to indemnify the likes of Tiscali against costs involved in fighting prosecution, has already caused that company's attempt to implement the "three strikes" proposal to collapse in disarray. As the process is equivalent to asking the postal service to open and vet every package and letter in the system, there is surely plenty of scope for litigation.

Even after the legislation I foresee many IT Illiterate parents carted away as their kids continued to download music without their knowledge, as well as the media industry choosing to pursue teenagers for individual criminal actions.

It's just a matter of time before ISPs find themselves under siege from the lawyers of those prevented from accessing the Public Internet, email and possibly even phone services, or for abetting the media companies in malicious prosecutions.

Dynaspot shows that ISPs will increasingly being held accountable for the content and themes of web sites that they host, and the authorities will support action against them.

So why should the Senior Executives worry; well there is currently little protection in law that will protect them from irate customer. Reviewing the 2002 Electronic Communications Act (figleaf) passed to protect ISPs who remove content from customers websites.

The Dynaspot case is the final proof that if ISPs don't co-operate they will face court action, heavy fines and even jail.

Oh you're outside the US / UK! "Don't get comfortable folks" - the gaming industry thought they were safe until their CEOs started finding themselves held in US jails for wire fraud and racketeering.

Those ISPs in hosting havens like Finland and Norway should bare in mind that a US arrest warrant cost Swedish Skype founder Niklas Zennstrom $100m, he can afford it, but can you!

Managed Hosted Service in USA: Comparitive strength of vendor

2008-02-06T21:04:00.000Z

As part of a wider survey of the use of Internet services by over 500,000 organisations in the USA we surveyed the Messagelabs/Postini/MS Frontbridge market for Managed AntiSPAM - AntiVirus services.

Courtesy of our friends at ManyEyes (IBMs visualisation business) Here is something for you play with; just click on the charts title.

The Control is the normal distribution of organisations by state.

Pipex Business to lose prime asset - It's name!

2008-02-04T11:08:00.000Z

Tiscali's acquisition of the Pipex Broadband last year, has had an interesting knock on. It appears that as part of the deal Tiscali acquired the PIPEX brand; so the business end of the operation has got to change it's name. The new name for PIPEX Business is apparently Vialtus .

It's been a long journey for the PIPEX name, since the Monday morning in 1991 when the original founder, Peter Dawe, bounced into my office and said "hey Steve; Public IP Exchange - PIPEX, what do you reckon?!" I doubt it mattered what I thought, but he was clearly excited. For weeks he had been struggling to find a really "meaningful and pointy" name for the UKs first commercial Internet services provider.

Despite many changes of hands, PIPEX has remained a benchmark of the UK internet scene; justifiably known for it's quality products, support and services ethos. Pipex continued to grow business customers even as it became better known for its consumer offerings.

Losing such an established brand identity is a big issue for any business. But for an established ISP, ouch!! Ofcom reference over 500 ISPs in the UK; even when you take out those who are just reselling other peoples services, it's still over 170 competitors servicing UK business.

The market is overcrowded, economic situation is tightening and competition for corporate customers is now from international players like AT&T, Colt, Verizon and Rackspace. Even with a big bag of money from the sale of the consumer business; it's a brave time to launch a new brand.

So what next, well with the PIPEX name gone we think another power brand is likely to step in and pick up the business; as well as a lot of customers it has some very desirable physical assets.

Cable & Wireless, THUS, and Oakley Capital have all been named as possible suitors. Given their stated strategy of shedding customers, it would be mixed signals to the city from C&W, Oakley would probably want it for "parts", increasingly successful UK operator

THUS would seem to make much more sense.

Who knows, BT might even re-enter the fray; our latest research data, published next week, shows it could sorely use a couple of percent more market share in it's ongoing battle for corporate IP customers with US giant Verizon.

Managed Hosted Service in USA

2007-12-05T12:27:00.000Z

More Visualisation trials: This shows the distribution of sales of a Managed Hosted Service by six service providers. In the drop down you will see companies 1-6 and a Control. Control is the distribution of businesses in the Continental USA.

The sample data are 552,000 US Organisations, excluding Micro-Business. Use the zoom facility it is very cool, hopefully we will get it down to City level on this sort of public interface; In our client systems we are there already and can map down to street/building level.

Visualisations role in data presentation

2007-12-04T16:13:00.000Z

We are more and more experimenting with visualisation tool kits to find ways of representing the huge data sets we are working with.

Here is a small data set of 203, presented with Many Eyes; part of the IBM visualisation project. It represents a raw count of the IP services consumed in 5 major London office blocks including Tower 42 in Old Broad Street and CityPoint 1 Ropemaker Place.

This was part of a project we undertook earlier in the Year for a company on that list who wanted to take some business off of their competitors.

CWs Pilgrim continues to progress

2007-11-14T21:39:00.000Z

We have promised to keep you abreast of what John Pluthero and his team of re-Energisers are doing at the revitalised Cable & Wireless.

On arriving at C&W The Pilgrim's shocking mantra was "Only sell to profitable customers!", with instructions to the whole business to start shedding those customers who didn’t add solid value to C&W's bottom line.

What he saw clearly in C&W was the need to manage the revenue of each and every customer, and if the customer isn't profitable, they have to come off the books.

More importantly the new management team accepted something fundamental; It's not about the number of broadband subscribers you can boast or the cool new Linux hosting service; running a successful Telco' is about increased profit and improved execution.

And, there is no doubt this is paying off. Cable & Wireless announced half year figures this week and showed a jump in earnings of 29% EBITDA (Earnings Before Interest, Tax, Deductions and Amortisation), alongside a reduction in turnover of some 10%.

This turnaround has earnt Pilgrim a kick upstairs with the notice that John Pluthero is taking the reigns of global operations with immediate effect, announced at the same time. Former chief of International, Harris Jones, heads back to the pavilion with a reported £4.6m stuffed in his back pocket.

NB: BackChannels ongoing analysis of ISP market share amongst major corporate accounts shows C&W continues to have very low, in fact negligible customer churn in amongst their major accounts, we’ll let you know if this rolls over into international for them.

NextGen Network roll out threatens ISP Major Accounts

2007-11-06T10:42:00.000Z

BackChannels latest research shows that 77% of Telco' major accounts buy their Internet access from other providers and this rockets to nearly 90% for hosted Internet services such as web hosting, collocation, managed email and DNS services.

It appears that a 'network as a utility' mentality has developed in the purchase of Internet services, and that represents a significant threat to Big Telco's core revenue streams.

Customers see technology migration as an opportunity to tender out, and due to the flexible nature of IP this 'utility' mentality in the acquisition of Internet services is slowly starting to effect customer attitudes to Private IP infrastructure.

As the telecommunications industry progresses towards all IP Next Generation Networks (NGNs) new threats to their position are arising all the time; VoIP, Streaming media, Web 2.0, Software as a Service, Google… All are becoming more & more stable and running over super cheap bandwidth that business now buy like electricity.

So, as providers of private data networks race to transition to IP based infrastructure, they need to have strategy and tactics in place to manage the process.

Over the next few months BackChannel will launch a series of new sales management and business support systems that will help the successful migration process.

Tiscali buys out PIPEX Consumer Business

2007-07-18T14:07:00.001+01:00

This weeks announcement that PIPEX is to sell off it's consumer business to Tiscali for £210m ($420m) will be no surprise to those who are following the increasing desperate consolidation of consumer Internet access.

A surprise to some, and relief to it's many business customers is that PIPEX plans to continue as a provider of Business DSL. Assuming that the deal is along the lines of the Bulldog customer account transfer this looks like being a result for PIPEX, having paid £109($218) each for Bulldogs customers they have sold them on for in excess of £400($800) each.

As media and the mobile operators are driving the price of consumer Internet down to "not free, but just about" . PIPEXs move back to higher value business services comes at just the right time.

Only question is what will happen to the Hoff, will he stop dyeing his hair maybe buy a Lexus and a nice suit?

Google and Postini Senior Execs Talk about the Acquisition

2007-07-10T13:19:00.000+01:00

It's worth a trip printing off the charts below and heading over to ZDNets Blog to listen to Dave Girourd, vice president and general manager, Google Enterprise, and CEO, Postini Scott Petry, founder, CTO and exec VP of product development, talk about the thinking behind the acquisition and the integration of Postini.

It gets a bit nerdy in places but is worth listening to get a view of how the combined company plans to interoperate with other alternative application vendors such as the Mozilla Foundation, and to make the experience for the serious business user, well 'more serious'.

Google to acquire Postini leading US Mail security vendor

2007-07-09T17:05:00.000+01:00

Breaking news in the informartion security area is that Google is to acquire the US leading email security vendor Postini .

In April this year Postini and Google announced a strategic tie up for the consumer oriented Gmail.

Now (July 9th) it is announced Google will acquire Postini for $625 million in cash, subject to working capital and other adjustments, and Postini will become a wholly-owned subsidiary of Google.

Dave Girouard, Vice President and General Manager of Google Enterprise. said "The response to Google Apps has been tremendous, with more than 1,000 small businesses signing up for the service every day. At the same time, large businesses have been reluctant to move to hosted applications due to issues of security and corporate compliance. By adding Postini products to Google's technology, businesses no longer have to choose -- employees get the intuitive products they want, and the company achieves the security and assurance it needs,"

CEO Eric Schmidt commenting on the addition of Postini to the Google Apps portfolio said "With this transaction, we're reinforcing our commitment to delivering compelling hosted applications to businesses of all sizes. With the addition of Postini, our apps are not just simple and appealing to users -- they can also streamline the complex information security mandates within these organizations,"

The news comes as this sector hits hypergrowth. As second quarter of 2007 saw a hockey stick in the adoption of managed hosted mail security, it also saw Googles arch rival Microsoft growing deployments of the Exchange Hosted Services Portfolio based around their strong Frontbridge solution.

This strategic move by Google looks to have slipped them ahead of the game;

Here is the market share data for use of these services amongst some of the worlds largest corporates. The FTSE350 and the Fortune 1000.

As you will see, we left the old names on but here for completeness...

Postini = Google, Frontbridge = Microsoft, BlackSpider = Websense and Messagelabs well there still Messagelabs.

Notes on the potential auction of Virgin Media

2007-07-04T11:57:00.000+01:00

On the 2nd July it came out that Carlyle Group had made an offer of about $11bn for Virgin Media $11bn for Virgin Media

On the 4th of July it was reported that Virgin Medias bankers inc' Goldman Sachs were preparing detailed financial presentations for other prospective suitors amongst the Private Equity community.

We've often commented on the similarities between the ISP businesses of Virgin Media and BSkyB, NTLTelewest and EasyNet respectively.

Both these companies are in the UK 'top ten' business Internet market shares Each has about 3% share of the UK businesses with a turnover up to £125m ($250m).

The chart below profiles each companies Internet Access customers (amongst a representative sample of 80,000 in January 2007) as I mentioned before each company has near enough 3% share overall.

NTL Telewest, which claims to offer service coverage to 85% of UK business, is an established and interesting ISP, one that has managed to retain a leadng position in the UK ISP marketdespite suffering from the failing strength of the NTL consumer brand.

As the second largest provider fixed line telephone services and having already sunk an estimated £13bn into its NGN/All IP infrastructure. Perhaps a move into the hands of a private equity firm might see a resurgence in it's fortunes.

Protecting legacy customer revenues

2007-07-03T13:58:00.000+01:00

BackChannel is offering a major account profiling service, which allows service providers to gain a complete overview of the Public Internet services brought by their largest strategic accounts on a country buy country, or worldwide basis.

The worlds’ largest Telco operators have thousands of major accounts that generate billions of $ in revenue from a mixture of fixed & mobile telephony and legacy private data services.

These legacy accounts are the corporate crown jewels of the business providing some with up to 70% of their turnover.

Big Telco’ around the world have become experts at weaving themselves into the fabric of these customers strategic private telecommunications infrastructure; not so their public facing IP infrastructure.

BackChannels latest research shows that 77% of major accounts buy their Internet access from other providers and this rockets to nearly 90% for other Internet services such as web hosting, collocation, managed email and DNS services.

A ‘network as a utility’ mentality has developed in the purchase of public Internet services, and that represents a significant threat to these core revenue streams.

Customers see technology migration as an opportunity to tender out, and due to the flexible nature of IP this ‘utility’ mentality in the acquisition of Internet services is slowly starting to effect customer attitudes to Private IP infrastructure.

As the telecommunications industry progresses towards all IP Next Generation Networks (NGNs) new threats to their position are arising all the time; VoIP, Streaming media, Web 2.0, Software as a Service, Google… All are becoming more & more stable and running over super cheap bandwidth that business now buy like electricity.

Messagelabs: Jolly Hockeysticks

2007-06-26T14:32:00.001+01:00

Hosted Email Security Services hit an inflection point at the beginning of June 2007 with a sudden uptick in installations across the board in the UK.

For those of you not completely familiar with this service it is an "In the network service" where inbound email is redirected to a 3rd party data centre where the email is scanned for SPAM, Viruses and then returned all clean and shiney.

Whilst it is not to be confused with email hosting by a service provider, many of the large email hosting providers like Cobweb offer the service as an option.

The largest gainer was Messagelabs, whose extensive partnerships with the likes of Verizon, Star, HP and IBM has added greatly to their global market reach; as shown by their strong gains in the USA over the last 12 months.

Amongst FTSE 350 companies the increase is most noticeable, use of hosted mail security services jumped 80% from 135 companies to 244 in 12 months.

Microsoft made the fastest market entry amongst these major UK corporates; having launched in Europe in early 2006, Microsoft gained 5% share from a standing start. Seeing the future Microsoft acquired Frontbridge in 2005 and have been marketing it under their Managed Hosted Exchange brand..

BackChannel released our first Hosted Email Security market in June 2006. We now measuring the actual use of these services by FTSE, DAX, CAC and Fortune 1000 companies around the world, amongst 68,000 businesses in the UK, and plan to extend this to other regions in the near future.

Note: In this blog we're talking explicitly about hosted email security but for those of you interested in the whole subject of email hygene here is a link to the Gartner Magic Quadrant report for 2006.

Cable & Wireless: Breaking up is not so hard to do

2007-04-30T10:59:00.000+01:00

Over the weekend the Observer broke another story about the potential break up of the UKs No.1 Alternative Telco.

CW has been operating separate Consumer, National and International business strategies for some years and the break up would not be unthinkable.

Focus on high value customers core operations and improving utilisation of assets worked well for the International business, the UKs more generalist operation was seen as holding them back.

Now the UK operation is taking a more business like approach; i.e. selling the right products to the right customers and making a profit on each one.

So, maybe it is time to give the UK their head and let them run things.

Who won the battle for Bulldog: C&W of course!

2007-04-26T11:30:00.000+01:00

Having sold off the Bulldog customer base to PIPEX earlier in the year, Cable & Wireless are likely to be having there cake and eating it too. As they appear to be on the verge of striking a deal to supply broadband Internet and telephony services to Virgin media over that same Bulldog LLU network.

Coming late to the BT, AT&T way of working CW are now clearly benefiting from the miracle of bandwidth wholesale.

Virgin Media and BSkyB: 'Two houses both alike in..." more than Broadband

2007-04-16T20:13:00.000+01:00

Here is a thought on how an acqusition of Pipex might help BT to broaden its position in the consumer quad play

I have just been watching an interview with Steve Beynon the MD of NTL Telewest Business on www.telecomtv.com where he was discussing the strengths of the NTL network and how the wide national coverage and its performance capability comes from the fact that the network was built to facilitate the predicted high demand for streaming HD TV, and the decision by Virgin Media to allow them to continue on building and managing the networks and serving the business community.

Then it struck me that a few days ago I had been reading similar comments from David Rowe the founder of EasyNet, acquired by BSkyB to allow them to extend their media reach onto the net.

Whilst these two feuding media giants appear a million miles apart in style it is curious how similar their ISP businesses are in structure.

Both owned by global media brands, both working towards triple/quad play, both being extremely savvy about how they position their product offerings for consumer and business.

They have both chosen to run their home-user broadband business' with consumer friendly 'media' brands, Virgin and BSkyB, and the have also chosen to manage the both have highly successful

For business and for the construction of a national network infrastructure they have NTL Telewest and EasyNet, both long established business Internet service providers

NTL Telewest Brand to continue - is this a trend?

There is a lot more to PIPEX than "The Hoff"

2007-04-12T11:40:00.000+01:00

PIPEX the 'Consumer DSL company" are in fact the UK's 8th largest provider of IP Services to Business.

BackChannels analysis of PIPEXs customer base shows that they perform well in the midmarket and have quite a number of major corporate' on their books as well. Where will those high value business customers go when Carphone warehouse buys them?

Bet they're all looking forward to calling Carphone Warehouses 0870 hotline for tech support .

Will it even be Carphone warehouse? You have to wonder, with the others appearing to have pulled out it just leaves Carphone but don't be surprised if BSkyB comes back for another go, when Carphone have forced the price down a bit of course.

BSkyB has a natural home for all the business services as well - EasyNet. They have proven to every ones surprise that you can be both 'fish and fowl'. Using the highly efficient Sky billing systems to handle the consumer end of the business whilst allowing EasyNet to continue running as a highly successful Business ISP.

BSkyB and BT are the only ones who would get the full benefit of the money they might spend.

Niche and Easy does it

2007-01-18T21:28:00.000Z

The profile we produced of Cable & Wireless' customer base last month caused a bit of a stir.

As promised here is the THUS Profile.

The data were part of a wider project we undertook into how ISPs and Telcos market themselves, the impact that has on their customer base and how it defines the way they need to organise themselves operationally to support their customers most profitably.

Dry I know, but it has long been understood that most succesful companies fit into a niche. You don't want to waste money promoting super resilient VPNs to the finance industry, if your main business is selling masses of DSL to SMBs, or outsource third line support to Elbonia if your customers are 24x7 city dealing rooms.

Our research underlined some simple truths: Incumbent BT are present and perform well across the board; PIPEX are the boys to beat in mass market business DSL; THUS have a good cross section of customers but excel in the lower mid market, C&W are very strong in high value UK based upper mid market and notable major accounts; Verizon are historically embedded in high value major accounts where there is a strong international element, and whilst AT&T have a relatively small number of UK accounts - boy are they the cream.

The growth strategy for these companies is to play to their strengths, to structure the core operations of their business around retaining a core portfolio of profitable clients, serve them effiecently, whilst shedding / avoiding those who could be drain on resources. We call it Yield Management, it's what C&W are trying to do, it saved the airline industry can it save telco?

So what about everybody else: we identified 175 notable ISPs in the UK survey. Big, or small these companies need to know who their customers really are, and focus their whole business behind that position. Those who can't or won't might as well get their coats now.

A Pilgrims Progress: Cable & Wireless

2006-12-01T14:43:00.000Z

As promised we have been keeping a close eye on Cable & Wireless UK operation.

Since the reverse merger with Energis, things seem to have gone pretty well. Certainly the CW people we meet are increasingly chirpy.

As well as showing a notable turnaround in the companies stock market position, they have continued to fare well in the IP Services market and despite some apparent weakness in the web hosting area, they retained their top 3 position amongst the FTSE350 companies and most impressively have experienced no significant churn amongst their largest Internet Access customers.

The chart above is a unique profile of C&W customers segmented by turnover, based around a normalised or "neutral" axis. As you can see C&Ws profile shows a heavy bias towards major accounts and the upper mid-market. Whilst at the smaller end typically served by business DSL their presence is well below the line.

This striking new data supports the decision by CWs management to sell off their struggling Business DSL business to PIPEX. PIPEXs profile by the way is an absolutely perfect match for that low-end of the market.

Having cast off the burden that was Bulldog, cleared out the first layer of unprofitable customers, CW seem to have made it through the Wicket Gate, but still some way to the Celestial City and BackChannel will be there to keep an eye on "their" Progress.

NB: If anyone would like a free copy of the PIPEX, THUS or Verizon profiles please email steveb"AT"backchannel.co.uk, "AT"=@.
NBB: John Bunyans The Pilgrims Progress is available as a free audio book from Librivox , a really different commuting experience awaits you.
NBBB: We promise no more Pilgrims Progress references

Telstra market share slides as former PTT cancels NGN investment.

2006-10-24T22:16:00.000+01:00

Rather like its stock price Telstra' share of the business IP services market continued to slide in the first half of 2006.

As the markets tee up for the Australian governments sell-off of 1/3rd of its remaining holdings in former PTT Telstra, BackChannels latest research shows that the G9 Consortium, led by Optus(Singtel) and Powertel continues to pile on the pressure at the high end.

With its market share amongst ASX200 companies slipping to just 30%, Telstra CEO Sol Trujilo must view data for the highly deregulated UK market with trepidation. Here former PTT British Telecom' share of the large business accounts is just 18.2%.

Remarkably for the market leading telco, the company has announced that it has cancelled investment in its Next Generation, or Fibre To The Node (NGN/FTTN) Network. Saying that it prefers instead to wait for the G9 consortium to roll out their own NGN and they will happily buy wholesale bandwidth from them. This could well be a political gambit aimed at reducing the pressure from the Australian regulator , which Telstra has increasingly blamed for its poor results claiming that meddling by the ACCC is impacting its ability to compete fairly.

For a developed country like Australia it is untenable to not have a NGN network spanning the country, and in reality it is unlikely that a consortium like the G9 would ever really be able to come together and roll out a national shared infrastructure, which leaves either the government (hmm, what do you think), or Telstra.

For the momnet it looks like a Mexican stand-off, but Telstra knows what all former PTTs know, ownership of the physical infrastructure. is key to long term survival in the Telco market and that owning the cables will always you give the upper hand.

Service Disruption

2006-10-05T11:13:00.000+01:00

Our apologies to those of you trying to reach the BackChannel website this week. This is due to our service provider 186k pulling the plug on our service, and seeming to be unable to get us back on line.

Having raised a couple of trouble tickets recently we also noticed that the incremented numbers on the trouble tickets indicate that they are receiving an staggering number of new trouble tickets a day.

For those who are interested our TT numbers are 180462 and 187683 raised 5 working days apart, therefore 186k are getting 1,444.2 new TTs every day.

186k is a B2B ISP owned by Yorkshire Internet entrepreneur Dominic Marrocco who also acquired Mailbox Internet, Elite, and a stake in Middlesborough based Onyx Internet in 2005.

Verizon Business drops to No.2 Access Provider to the City for the first time in 10 years.

2006-09-24T23:27:00.000+01:00

Verizon Business drops to No.2 Access Provider to the City of London for the first time in 10 years.

Verizon' slide continues their 2005 trend with competition from UK based IP service providers and high levels of customer churn taking their toll on Verizon' position. Making BT the number one provider of Primary Internet Access to the largest FTSE companies.

Loss of client accounts to a competitor, or "Churn" is one of the most significant factors effecting telco profitability. Verizon' churn of corporate accounts is around 12% p.a for this sample group. BT are subject to a churn rate of 6% p.a. in the same period. These rates should be compared with THUS who have had 0% churn and a customer "acquisition" rate of 20% p.a.

We have mixed feelings about the change as both BackChannel founders and most of the team here have at some point worked for the company that has over time been Unipalm/PIPEX/UUNet/Worldcom/MCI and now Verizon, Steve having been with PIPEX on the day the doors opened.

THUS continue to power up the charts, while BT and Verizon tough it out for the top slot

2006-08-24T23:43:00.000+01:00

The Summer season has seen some changes in market position amongst all players

THUS Plc continue their 2006 upward trend, moving up on Cable and Wireless and putting further distance between themselves and Telstra UK.

BT has also moved up and are now level peggings with Verizon Business for Top Slot in this league table.

Verizons position is consistent with BackChannels wider UK market survey, which shows that whilst having a relatively small overall footprint in the UK, Verizon has a proportionately larger number of major accounts than average, reflecting the businesses historical focus on high end customers.

BackChannel Guest Blog at Telco2.0

2006-07-17T17:58:00.000+01:00

The Telco2.0 initiative is a collection of like-minded telecom practitioners and stakeholders: investors, managers, analysts, consultants, suppliers and customers, looking for a sustainable economic model for connectivity providers. Among other aims, the initiative aspires to cure traditional network operators from the fear of dumb pipes. As those of us in the UK already know, utility businesses can be very profitable given the right cost base, and funding/pricing approach.

The golden rule (the guy with the gold makes the rules)

2006-07-14T12:55:00.000+01:00

Surfcontrol,(SRF.LN) an Internet content hygiene company based in the UK, has just put down £20m for BlackSpider, one of a number of companies offering Email scanning services such as protection from Spam and Viruses. The spiders are also based in the UK, privately held and venture funded. Their business received £5.7m (£4.6m from VC) of investment in 2004.

Valuation of companies has always been more art than science, and has given rise to a myriad of methods for answering the question, "What's this thing actually worth?". Somewhere between DCF, revenue multiple, and book value, a deal is done and the speculation ends.

It is because valuations are so subjective that analysts are so very interested in recent transactions, benchmarking potential deals against what sold recently. Here is how the UK market shares break-down for BlackSpider and their competitors.

Given the hype levels surrounding managed services of this kind, it is interesting to note the level of penetration of the UK market. BlackSpider and their peers are only 10% into this market.

Secondly, when we look at those who make-up that 10%, not all is as one might expect.

(*) UK business market is comprised of the 80000 largest companies or organisations in the UK.

Messagelabs have capitalised on being the first into their home market, as you would expect they occupy the top spot with an overwhelming majority. However it will come as a surprise to many that BT's very own in-house service takes second place, with BlackSpider a distant 3rd. BT's customers are smaller in size than the others on this chart, but still their sheer number is impressive. Seeing this reminds me of report that crossed my desk from Goldman Sachs Investment Research (Rick G. Sherlund & friends) in January. Their report credited ISPs with the power to impact pricing of pure-play security service providers, by bundling similar services with Dedicated Access or making them easy "+1" sales at point of order. If you can find it, read it. Looking further down the list, the sleeping giant at the moment must be Frontbridge, now owned by Microsoft. The company has been pretty quiet in the UK, how much longer will that last?

Given BlackSpider's valuation of £20m and declared revenues of £1.8m, what can we say about the relative value of the UK business of the other players in this market? Or the whole UK market in total?

Using the BlackSpider transaction as a guide, Messagelabs UK business is worth £112m today (6x the UK customers of BlackSpider, 6x the acquisition price) and Frontbridge UK £8m. This valuation is based purely upon customer numbers.

BlackSpiders revenues were £1.8m, and it was acquired for 11x that. Our table has Messagelabs UK at about £10m in revenues, their annual report doesn't clearly break out UK numbers for just the message scanning business, but a figure of £40m revenue worldwide looks possible, meaning the home market is still responsible for 25% of revenues. A figure of £40m worldwide revenues would suggest a valuation of £440m (11x revenues) for the whole operation ignoring non message-scanning business units. Given the relative ease with which customers can churn from one service to another, does anyone really believe this multiple? Perhaps there was still a lot of cash on hand or assets of value in the £20m BlackSpider price. Figuring £5m of assets leaves us with an 8x ratio of price to revenues.

With any valuation model must come assumptions, and here we've a boatload of them. We assume that a BlackSpider customer has roughly the same value as any other customer in this market, we already know this is not the case for BT with its large number of tiny accounts. We assume that the overseas operations of BlackSpider did not significantly contribute to its valuation. As it happens, the company has no customers among the S&P500 or the ASX200 so this may not be such as bad assumption after all. As stated above we also ignore whatever portion of the £20m acquisition price was for assets and cash.

At the end of the day, something is worth what someone will pay for it.

THUS Plc "hot on the heels" of Cable & Wireless, again.

2006-07-13T13:52:00.000+01:00

These updated figures come from BackChannels 2006 half year figures for ISP performance amongst the FTSE350, the UK largest commercial users of telecoms services.

THUS Plc power up the charts increasing their share from 4.6% to to 6.8% of this most valuable group of customers, adding amongst others United Utilities, Bodycote and Temple Bar Investment Trust to their list of major corporate customers

The first 6 months have shown mixed fortunes for the challengers THUS, C&W and Telstra. Whilst C&W continued to hold firm on high value Access services. Contender THUS are also putting some serious Surf between themselves and Aussie owned Telstra, who dropped to 4.3% this year.