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

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

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

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

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

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

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

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

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?

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

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

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!!

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

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

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.

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Mail Security: Market Growth Stalls in 2009

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

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

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

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

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

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.