Time Warner Cable Buys NaviSite, Illustrates Convergence of B2C and B2B Worlds in the Clouds


Posted on February 2nd, by thinkstrategies in Uncategorized. Comments Off on Time Warner Cable Buys NaviSite, Illustrates Convergence of B2C and B2B Worlds in the Clouds

Time Warner Cable’s planned acquisition of NaviSite not only intensifies the M&A activity in the managed hosting arena that was ignited last week by Verizon’s purchase of Terremark, it also shows how the corporate and consumer web services markets are converging.

As Glenn Britt, Time Warner Cable’s Chairman and CEO, stated in the company announcement, “Our commercial services business is a key growth driver for the company and one in which we continue to see great opportunity.”

Thirty years ago, I was wrapping up a full-time MBA program at Boston College and was fascinated by an article in Data Communications Magazine about the impending diversiture of AT&T and the prospect of new players entering the enterprise data services market. In particular, the article suggested that the rapidly evolving cable companies of that time could capitalize on this opportunity. I pitched a Boston-based cable company on the idea of surveying major corporations in its operating area to see if they would be interested in the company’s “institutional services”. My research project found that the local corporations would be willing to learn about the cable company’s services, but were unlikely to abandon their existing service provider, New England Telephone.

Fast forward thirty years and we see an entirely different competitive landscape. Cable companies are increasingly offering Internet and communications services to small- and mid-size businesses (SMBs). They have generally penetrated SMBs via the small-office/home-office (SOHO) market with services that are not much different from their consumer services.

In retaliation, Verizon (in place of long-gone NE Telephone) is now pushing its Fios residential service to steal away the bread-and-butter home entertainment services provided by cable companies.

As consumers and corporations become fixated on web-based (“Cloud”) services, the opportunity to bridge the gap between these two markets has never been greater.

For instance, Amazon has leveraged its extensive consumer experience and the strength of its consumer brand to create its powerful Amazon Web Services (AWS) capabilities and generate unprecedented success in the corporate world.

The consumerization of IT began as the unauthorized acquisition of personal computers and handheld devices, and has evolved to include sanctioned procurement of Software-as-a-Service (SaaS) applications to meet a widening array of corporate needs. The success of the SaaS movement has spawned the larger Cloud Computing phenomenon. Both have been driven by corporate ‘consumers’.

The Time Warner Cable acquisition of NaviSite is the latest response to this trend. I’m betting that Comcast will make a similar move soon, unless its NBC Universal acquisition proves to be too much of a distraction.







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