'Shift Happens': Cable's World Changing ... Again

Oct. 1, 2014
"Shift Happens." With these two words that could mean, oh, so much, Tony Werner, EVP and CTO of Comcast (NASDAQ:CMCSA), summed up ...
"Shift Happens." With these two words that could mean, oh, so much, Tony Werner, EVP and CTO of Comcast (NASDAQ:CMCSA), summed up not only the focus of the General Session last Tuesday morning at Cable-Tec Expo, but also the waves of increased competition cable has had to ride and the way the industry has always responded by leveraging its scale and technology.

Giving a nod to longtime friend and this year's SCTE Chairman's Award recipient, Mike LaJoie, EVP, CTO and chief network operations officer of Time Warner Cable (NYSE:TWC), who helped him coin the aforementioned phrase, Werner noted that cable has not only survived, but also thrived against competitive advances first from Blockbuster and the VCR, then from direct to home (DTH) satellite and the telcos. Today, technology continues to erode barriers to entry, and cable is experiencing an onslaught of new competitors, some with networks and some without, that have value propositions that are hard to duplicate, "great" customer service and fulfillment, and products that are available at retail, Werner said.

"They are spreading in a way that is viral in nature," Werner said. "This will make (cable) stronger, and we will adapt to this like we did in the past."

Cable needs to sweat the details, from customer service to the physical packaging of products. In other words, CPE has to look like it's coming from a high-end consumer electronics company and not from a power tool manufacturer, Werner said. And the user interface is "critically important."

"Content is king, but we also believe there is a queen - a rich content navigation system that allows (viewers) to find content, curates it, and recommends it for (them), Werner said.

Cable also has to learn critical lessons from competitors who have a fast time to market, which delves into the concept of DevOps and agile development. "(The concept is to get a) minimal viable product out to market so fast and then evolve it," Werner said. "This takes years out of the process .... While competitors are using this as they come in, these are the same techniques and tools that we as a cable industry have to use."

Rob Lloyd, president of development and sales for Cisco (NASDAQ:CSCO), echoed this sentiment in his keynote address. The industry has to move from waterfall development, with six-month release schedules, to the DevOps model with real-time prototyping. "The Internet guys are releasing twice a day," he said. "If we are really good, we may release twice a year."

Cisco already is seeing results as it has taken the first of its development groups through the transformation. "We have had big transitions in the past, but the move to the cloud, agile development and DevOps will be transformational for all of us," Lloyd said.

In March, Cisco announced its intent to spend $1 billion over two years to expand its cloud business, including the creation of an Intercloud, or a network of clouds, with select partners. The idea is to allow organizations to share applications and data across clouds. Customers in a particular industry could access the building-block apps that make sense to them. It would take what is delivered from an appliance and put it into the cloud, Lloyd said. "The thing is to work with partners that want to build open stack infrastructure as a service model."

This is the type of thinking that will allow companies to react to market conditions and not have to wait to build an infrastructure. During the General Session panel, "Cable's Cloud Forecast," Mark Muehl, SVP of product engineering for Comcast, noted that during the last Olympics, his company was able to work with NBC Universal, which developed some specific apps to be delivered on set-top boxes. This was only possible because the cloud architecture allowed them to scale the resources as need required, Muehl said.

"(You) can stand up (a service) and tear it down, and the resources go back into the pool," Werner said. "With a legacy system, there is no way possible to do something just for the Olympics."