Almost two years after setting up shop, Seattle-based billing software provider Cycle30 is launching its first cable-centric product — a commercial services billing solution aimed at small cable operators — and is beginning to sign up customers.
Cycle30 was spawned from the IT department of General Communication Inc. (GCI), developing software and billing solutions for that Alaskan cable and telecom operator, as well as developing cash-to-order and machine-to-machine software.
GCI provided the unit with about $50 million in technology assets and intellectual property when it spun off two years ago, according to Cycle30 president Jim Dunlap, the former chief information officer at GCI. Cycle30 started out with about 70 employees in Seattle and has grown to about 92 workers today.
GCI spun off Cycle30 in part to help with its diversification strategy, under which the company has agreed to buy three broadcast television stations in Alaska, Dunlap said. GCI remains Cycle30’s biggest customer, Dunlap said, adding “it is highly likely we will announce a couple of cable deals in the first quarter.” He would not name the prospective customers.
“We’re hopeful that is going to lead to a whole market opportunity where we can just focus on the commercial sector and leave it to others to fight it out for the residential business.”
Commercial service has been a profitable venture for many large operators and is one of the fastest-growing segments in the cable industry. SNL Kagan estimates industry-wide commercial-service revenue will more than double by 2021, hitting $12.8 billion per year.
Sanford Bernstein cable and satellite analyst Craig Moffett recently reported that big operators like Comcast, Time Warner Cable and Charter are collectively growing their commercial-services revenue stream at a 30% clip.
The Cycle30 commercial-services solution taps what Dunlap calls an underserved market — small operators trying to offer commercial business services.
Because commercial accounts are more complicated than residential accounts, small operators usually don’t have the software and technology tools to bill those customers efficiently and accurately, he said.
Commercial accounts, Dunlap said, might have 10 phone lines in one location, 20 in another and different requirements for high-speed data bandwidth at different locations.
Also, commercial deals usually run for multiple years and can involve different tax and government jurisdictions.
In larger commercial accounts, the relationship between a paying “parent” entity, such as a state, and non-paying “child” entity, such as a department, can go thousands deep and wide, creating a daunting challenge for current billing systems.
The software also helps small operators target mobility services.
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