Broadband Expansion to Benefit Small Businesses

Sep 14
2009

Feature

Harsh Realities of the Digital Divide

Video

Coldwater Vision Relies on Cisco

Harsh Realities of the Digital Divide

As owner of the only eye clinic in Coldwater Miss., Kris May, O.D., needed broadband to his home to facilitate a high level of patient care around the clock. His local telecommunications provider, however, turned him down. Not even an offer to pay for the last two miles of cabling from the central office could entice the local provider to give in.

“Even with a substantial outlay from me, it’s still not cost-effective for them,” says May, of the Coldwater Vision Center.

> Read More

DSL, cable Internet and even cable TV are simply not options in many rural homes because no wires exist to carry these technologies. (See the sidebar, “Harsh Realities of the Digital Divide.”)

Even in populated areas, small businesses aren’t likely to enjoy the same speed as large enterprises, which generally lease fiber optic carrier lines directly from a major backbone provider. In many office buildings where small businesses lease space, this isn’t an option.

Stimulus spending on broadband could change all that, giving small businesses lots of ways to compete more effectively.

Video Puts Products in a Better Light

One potentially powerful tool is video. With better broadband, small businesses can use high-resolution video to more effectively showcase products and services to customers. The ability to send a vivid and persuasive video demonstration or sales kit to potential clients anywhere in the world can help companies close more sales and shorten the sales cycles.

Pennell recalls a Northern California-based builder of custom stone fireplaces he discovered while researching potential home renovations. The company used video to demonstrate its step-by-step installation process, highlighting the extra attention taken in every step.

This kind of presentation can provide tremendous peace of mind for homeowners purchasing high-ticket items online, says Pennell. “Being able to look at this video could make the difference for the consumerand make the sale for the company,” he adds.

Even lower-priced goods such as snack foods or cosmetics, can be marketed more effectively using video or Web animations. Video can help wholesalers find new distribution partners. And it can increase the effectiveness of sales training, making product demos or scenario-based sales instruction readily available to a remote workforce.

Maximizing Employee Timeand ROI

Faster downloads also mean greater efficiency. “Every time one of my employees clicks on something and waits to get a response, I’m paying someone to look at a monitor and load a page,” says optometrist Kris May, who employs 14 people at his Coldwater Vision Center in Coldwater, Miss. “When everything is working right, that trickles through to productivity.”

Even more importantly, that efficiency lets May stay focused on his real job: patient care. “If I’m not fumbling around pulling up files that take forever to load, I have more time to talk to patients,” he says. “And that kind of benefit is very hard to come by.”

Knowing that better broadband is on the way also makes huge modernization projectssuch as digitizing forms and filesless risky for small business owners, who often don’t have the capital to invest in projects that won’t pay off immediately.

Reaching the Cloud

Higher bandwidth could also allow small businesses to pursue savings through cloud computing. Simply put, cloud computing is a way of sharing and accessing computing resources such as processing power or storage over the Internet. Applications hosted in the cloudoften called on-demand or hosted applicationscan be less expensive than buying, installing and maintaining in-house software.

“Small business is where the majority of innovation comes from. If you’re helping small businesses innovate faster, you’re expanding the nation’s ability to accelerate economic recovery.”

Ian Pennell, SVP, Small Business Technology Group for Cisco Systems

But executing transactions involving large files on a remote server requires a certain level of bandwidth to be practical. Because existing bandwidth limitations can’t guarantee a reliable connection to access critical applications, many small businesses today have to pass on valuable services from willing providers.

Applications are just the first step for small businesses as they move toward cloud computing. Many now require dedicated IT talent to perform tasks such as security, network configuration and e-mail filtering. Once the bandwidth exists, they can take advantage of hosted services rather than dedicating headcount to these tasks, says Pennell.

Connecting Remote Locations

With direct access to a fiber-optic network infrastructure, small businesses can look forward to 50Mbps or even 100Mbps in both directions, says Steve Hilton, vice president of enterprise and SMB research for Yankee Group Research. And these speeds can comfortably accommodate two-way videoconferencing.

Small businesses’ multiple locations frequently run like islands, each more or less isolated from the others and with duplicated resources. One solution could be real-time collaboration via videoconferencing, which allows employees from two or more remote offices to meet to share knowledge, ideas and new procedures. The ability to teleconference with claritywithout dropped connections, choppy video or pour sound qualitymeans multiple sites can share the expertise of just a few specialists, rather than hiring one for each location.

“Doctors, architects and other professionals who regularly need to look at and share large image files, such as CT scans or blueprints, need higher-speed broadband to do it,” says Pennell. “Fast broadband means two or more professionals are able to move those documents and look at them together while having a conversation.” Applications such as Cisco WebEx deliver this type of functionality today, but file sizes and video quality are limited by the users’ available bandwidth.

How Fast Are We Talking?

Theoretically, today’s broadband can download data at about 0.75 Mbps to 15 Mbps. Upload speeds lag, averaging 0.5 Mbps or less. In reality, however, Americans average download speeds of about 3 Mbps, according to a March 2009 study by The Information Technology & Innovation Foundation, a non-profit policy group based in Washington, D.C. Upload speeds come closer to the theoretical mark, at a mean of 0.435 Mbps, the group said.

That’s not quite enough to stream broadcast-quality standard definition TV (which requires about 4 Mbps download speeds). Current speeds fall short of the mark for high-definition video conferencing, which needs 15 Mbps in both directions.

Next-generation broadband will start with 50 Mbps downloads and 10 Mbps uploads and grow from there, experts say. As that capacity grows, so will the possibilities for small businesses.

Until then, small businesses must wait for bandwidth to catch up with their demands. But for SMB solutions providers, such as Cisco, it’s critical that the right service offerings are available to the small businesses market ahead of the coming bandwidth revolution.

“Small businesses don’t want to know how the car works, they just want to drive it,” says Pennell. “We’re working on all of the technologies involvedsecurity, identity, mobility, voice, storage, surveillance, switching, routingmaking them work more robustly and tightly together so small businesses can just trust that it will work the way they need it to it.”

Lori Piquet Cleary is an editor and writer based in Bellevue, Wash.

Computers-Plus