Business Bandwidth Demand Pushes Current Limits

  • Bandwidth
BOSTON -- Two-thirds of businesses say they need to increase their Internet bandwidth in the next 12 months to keep pace with business needs, according to a new survey by Altman Vilandrie & Company.

Significant business opportunities exist for cable and telecom providers, especially in underserved urban and rural regions, to satisfy the demand of U.S. businesses for faster Internet speeds and expanded bandwidth. The demand is driven by factors that include new applications and greater adoption of off-site data center services.

The survey also demonstrates the challenges faced by providers and policy makers who want to meet that need in a timely manner. “Clearly businesses are hungry for more bandwidth,” says Altman Vilandrie & Company director Stefan Bewley, who oversaw the research and analysis. “More companies are adopting cloud or traditional off-site data center services that require high-bandwidth connections between employees and the company’s data. As businesses of all kinds use data and technology applications to reach new customers and streamline business operations, the demand for more bandwidth will continue to grow dramatically.”

The survey found that:

  • Bandwidth isn't everything: The most important reasons for businesses to buy new Internet services were network reliability, price, customer service and technical compatibility. Even though two-thirds of respondents said they needed more bandwidth, bandwidth was only the fifth most important factor, suggesting that cable companies and other providers must do more than simply offer more bandwidth to attract new business customers.

  • Bandwidth was more important for large businesses (500+ employees) than for small businesses. Network reliability was the most important factor cited by survey respondents, while bandwidth and technical compatibility were tied for second.

  • Mid-sized businesses (25-99 employees) reported the highest rate of bandwidth demand growth - 22 percent, or more than double the overall annual total bandwidth growth demand of 11 percent.

  • For businesses with more than 99 employees, more than half of respondents had upgraded their bandwidth in the past year

  • Adopting new technology applications, such as cloud-based CRM services, was the most commonly identified reason for the bandwidth upgrades, and was more than twice as common as any other single factor.

  • Bewley also noted, “The beginnings of an economic recovery further support the structural trends of locating data and applications in off-site servers away from the office. With fiber and other high-bandwidth solutions, providers have a great opportunity to gain new customers or expand services to existing companies by reaching currently underserved business locations.”

    Altman Vilandrie & Company’s research was drawn from a survey of more than 700 businesses conducted late last year.


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