"All of these companies have recently received significant funding rounds and are deploying their networks in Tier 1 metros to serve enterprise customers without relying on RBOC facilities," writes Maynard.
The carriers set to offer these services are independent providers that aren't burdened with legacy networks the way RBOCs (regional Bell operating companies) and IXCs (inter-exchange carriers) are. They have lots going for them: They can upgrade services quickly. Having spent less than CLECs (competitive local exchange carriers) on their facilities, they are well-positioned to start peddling new offerings. And, thanks to an ongoing market shakeout, they're facing a minimum of direct competition.
But there are hazards too: The emerging Ethernet value-added service providers must cope with a jittery customer base that's been burned by the failure of many CLECs. They'll have to offer enterprises a better deal than the RBOCs do. Many will have to keep an eye on their funding. And when it comes to long-haul connectivity, they'll be challenged to keep costs down.
According to Maynard, metro carriers will also need to maintain a mix of value-added services, instead of sticking to just one type. This strategy should enable them to circumvent the problems undergone by carriers who failed in attempts to offer just one service -- the so-called application service providers (ASPs) and storage service providers (SSPs).
Yankee's findings appear to be borne out in recent trends among metro providers. Indeed, there's clear evidence that some key players realize there's more opportunity in building on existing offerings than in expanding their facilities (see Metro Providers Retrench).
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