The recent $150 million acquisition of IMAKE Software andServices Inc. by 24/7 Media Inc. is clearing a path to the cable industry for bothcompanies and elevating the already-software-centric cable industry to an even higherlevel of software dependence.
The growing demand for Internet access, high-speed-dataservices and cable modems is pushing more cable operators into electronic commerce andenhanced services and forcing them to rely heavily on integrated software packages thatallow several key disciplines -- such as billing, field operations and marketing -- towork together.
IMAKE -- customers of which include the Americastconsortium (The Walt Disney Co., GTE Corp., Ameritech Corp., BellSouth Corp. and SouthernNew England Telecommunications Corp.), Bell Atlantic Corp. and Motorola Inc. -- gives 24/7the technology needed to converge Internet technologies with broadband video programmingthrough its "e.merge" products.
The deal also brings one of the world's largestInternet-media and technology companies closer to the cable industry.
Nearly 60 percent of online users in the United States arereached through 24/7's online-advertising and direct-marketing networks. The24/7-IMAKE combination is expected to drive the companies deeper into cable'sInternet-access, data and modem markets -- a space neither has played in much before.
"We've been successful with the RBOCs [regionalBell operating companies] that were investing in cable, like Bell Atlantic, Americast, GTEand others. But cable seems to be the one most needing our services now, and they'retaking a leadership role in this marketplace," IMAKE president Mark Schaszbergersaid.
IMAKE, with its flagship e.merge product, provides a suiteof business applications designed to manage marketing campaigns, back-office supportsystems and the integration of broadband-video programming with Internet-enabled services.
Its new alliance with 24/7 is expected to fold IMAKE'ssoftware and technology into 24/7's real-time-profiling and targeted-advertisingsoftware, allowing the partnership to offer advertising and marketing campaigns across Websites, e-mail, electronic programming guides, wireless, set-top boxes and otherappliances.
As part of the deal, 24/7 also acquired Sabela Media Inc.,a global ad-serving, tracking and analysis company.
For cable systems, working with the wealth of software andtechnologies needed to integrate and manage their growing data and digital-videobusinesses can be tricky and complicated. But most agree that it's absolutelymandatory.
"As an industry, we've migrated our operations toa much higher scale, and it's causing huge changes in the software arena. Thesoftware that has lived in other industries that see large-scale call centers, forinstance, is now in cable, because our call centers have 1,000 agents instead of 20,"said Brian Lambert, vice president of operations and customer care for MediaOne'sGroup Inc.'s Northeast region.
MediaOne offers video service to 1.4 million subscribersand high-speed data to 125,000 customers. It also offers digital-telephone service to25,000 customers, and it recently launched digital video service. The addition of theseservices, Lambert said, is stretching MediaOne's software requirements.
"Our biggest demand is in integrated services andtaking orders for four products in an integrated environment. There's a whole newskill set needed to integrate all of the software, and that's where software hasbecome so complex," Lambert said.
MediaOne must integrate billing and subscriber-managementpackages that interact with a central office, and each requires more than the traditionalbilling of customers to include provisioning and marketing data.
The company must also work with 11 outside agencies such aslocal RBOCs, directory services, E911 emergency service and more, and each demands aseparate software package.
Despite the dizzying complexities of integrating dozens ofseparate software applications, however, cable operators can't live without software.Lambert admitted, "High-speed data is completely dependent on software, and marketinghas a huge need to develop databases, which requires more software. Plus, services andoperations like 911 and digital-phone packages require full network reliability, so theyare totally dependent on software packages to status-monitor the network."
IMAKE and 24/7 aren't alone in the integrated-softwarespace. The demand for creative software products and related platforms is on the rise anddriving new business models at many cable systems. A new generation of companies realizesthat.
"The cable industry is reinventing itself, and thesoftware tools and intelligence in them is the new thinking," said Kenny Van Zant,executive vice president of BroadJump Inc., a provider of integrated software andtechnology products. "Software is built to allow cable operators to becomemultiservice companies and to bill for new services and provisions. Operators all get itthat a one-dimensional market is in the past."
BroadJump is one of several companies competing in theburgeoning software-application market, with the cable industry atop its hit list.
The added revenue generated from enhanced services such ascall waiting, caller ID and others offered by phone companies is a road map for cable, VanZant added.
"Their profitability comes from the add-on services,and they're done through intelligent software and platforms, which is a much largercomponent throughout the communications segment, particularly in cable," he said.
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