Broadband Week for October 25, 1999
NEON Lights Solution To Cable Software Mix
By CRAIG KUHL October 25, 1999
The cable industry's growing dependence on software and network solutions for activating and managing virtually every aspect of its business -- from the back office to customers' homes -- has created a puzzle about how disparate software can communicate.
The complex mix of new software and how it blends with existing software -- frequently itself a grab bag of off-the-shelf products -- is gaining mission-critical status for many cable operators as MSOs morph into multimedia companies through the addition of new technologies for Internet access, Internet-protocol telephony and digital video.
This expanding software patchwork also draws a new breed of company rarely seen in the cable industry but likely to become familiar: the software integrator. New Era of Networks Inc. (NEON) is one such firm.
NEON is a five-year-old Denver-based software-integration company. Its 2,000 customers have included such powerhouses as AT&T Corp., British Telecommunications plc, Hewlett-Packard Co., IBM Corp., Lucent Technologies and Nortel Networks.
Now, it's turning to a fertile cable market, as MSOs scramble to install software solutions that speak a common language.
"This is an entirely different approach for cable operators," said Dick Abramson, president of the newly created communications-industry group at NEON. "The time and cost advantages are great, and the businesspeople at cable systems know that. Their jobs get less complicated by using one application."
Abramson said that for NEON, that one application is its "Enterprise Application Integration," which is designed to eliminate what he termed "inter-applications spaghetti," or the dozens of applications that need to work together but don't.
NEON provides software that replaces the spaghetti with a hub-and-spoke architecture designed to get disparate software to communicate through its hub, where the software language is broken down and information is channeled to the right applications at the right time in the right format.
The result, Abramson said, is a "blueprint service" that can provide cable operators, utilities and telephone companies with a road map through the complex world of software integration.
"We look at the business recommendations from the technology and business-feasibility aspects, suggest how services can interact and develop a map to integration," he said. "Our technology can become a 'wrapper' around older applications until newer ones are ready."
With the hub-and-spoke approach, cable-system disciplines such as order management, customer records, network-interface systems, order entry, billing systems and the entire system's inter-application environment flow through NEON's EAI hub, which, in turn, translates myriad software languages.
EAI can translate any software language because "we define the rules with each procedure and make decisions based on content," NEON vice president of marketing Fred Thompson said.
NEON's application also has marketing implications, Thompson said. "It can build profiles, databases and data warehousing, and it can capture profiles in real time. The real challenge for cable systems like AT&T is to pull together customer databases and billing records," he added.
The move into the cable industry by software-integration companies such as NEON reflects cable's emergence into a multiservice business and its growing need for integrated networks. With that emergence, however, come challenges, including outdated and disparate software.
"Cable is beginning to see a lot of the technical and business challenges the telcos have seen the past 10 years," Thompson said. "Our challenge is to see how we can apply our service to those."
According to analysts, cable operators may have little choice but to make the best of their piecework software.
"Few companies can afford $300 million to $500 million to develop end-to-end solutions, and it's not possible for one software company to provide that. So the only choice is for point-to-point solutions and to patch things together," said Harry Tse, vice president of research for The Yankee Group, a Boston-based market-research firm.
Finding a software company to do the patching is a challenge in itself, Tse said. "Industries such as cable, telecommunications, utilities and insurance have no product commercially available to them because the risk-reward isn't attractive enough for a software company to sell products to those industries, which have lots of requirements and are moving targets. So these companies have no choice but to hold on to application foundations," he added.
That's precisely why NEON is moving into cable's neighborhood at the right time, Tse said. "The new class of software is EAI, and NEON is the largest supplier of it. They've done well on the health-care side, and next is cable and the telcos," he explained.
Yet the path into the cable industry for NEON has speed bumps.
"[EAI] is not easy to describe or sell. NEON must hire cable and telco marketers and people who know those businesses. Plus there is competition on the way from smaller companies such as Active [Voice Corp.] and Vitria [Technology Inc.]. They both went public with lots of attention, so there are no shortcuts," Tse said.
NEON is aware of the impending competition, and it is searching actively for strategic alliances and mergers.
"Our merger-and-acquisition strategy is very important, and it is part of our future," Abramson said. "With the growth of our company, we can't get to our goals without them."
Getting there, he added, will require the company to take a hard look at electronic-commerce, which is a key component in NEON's growth plans.
"Those markets are growing, and if we're a company that can keep up with that growth, we must have the technology, alliances and acquisitions, as people understand how to 'e-enable' their businesses," he said.
Regards
Neil |
