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Analyst Urges U.S. Enterprise Service Market to Rethink Competitive Strategies

By | September 18, 2012

      [Satellite TODAY Insider 09-19-12] Enterprise market incumbents to the telecoms industry will need to completely review go-to-market strategies, revamp traditional segmentation and create new integrated service offers if they are to withstand pressure from increased competition in the United States, according to an Ovum research report published Sept. 18.

         The report identifies the United States as the largest in the world for enterprise services. Ovum said investment and growth in the U.S. telecoms industry has given birth to a number of viable alternatives to the incumbent carriers that will drive better services for enterprises.
         Recent consolidation and reorganization in the U.S. market, along with the limited focus of some incumbents, has created an opportunity for challengers to pick off enterprise services businesses and wireline enterprise providers, according to Ovum Principal Analyst Mike Sapien.
         “The advantage for challengers in the United States is that they can provide the sort of unique offerings and differentiated services that are often missing from the established carriers’ portfolios,” said Sapien. “These challengers are in such a position that they do not need to offer the full range of enterprise services or serve all enterprise segments. The US market is large enough to support many alternative providers.”
         Sapien added that the tendency for incumbents to focus on revenues, regional location, number of employees and existing service segmentation is too broad, and leaves gaps that challengers can fill. “Win-back programs are no longer sufficient,” said Sapien. “We recommend preventative action through business intelligence, reviewing segmentation, and new channel tactics. Using analytics and market research to predict and model customer behavior will help anticipate what services and tactics should be used to manage and maintain close customer relationships across all segments.”
         The report said that the financial turmoil of the Internet boom and bust has created concerns for enterprises about choosing more risky challengers over incumbents. To ensure that a service provider is a good fit for the individual enterprise, Sapien recommends gathering “like-customer” references, examining geographic service coverage and reviewing the terms of service failures – including the option of returning to a former provider).
         “Most customers do not focus on the terms of service failure or repeated outages until things go wrong,” said Sapien. “After failures or repeated outages occur is not the best time to consider penalties, outage credits, or moving back to your previous provider.”

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