Spotlight on North America
The demand for broadband is ubiquitous in North America, spurring healthy growth across all Hughes market sectors: enterprise, government, small business, and consumer. Let’s take a look at what’s going on in these markets.
The Outsourced Enterprise
Today, enterprises are moving away from direct operation and maintenance of their wide area networks. Instead, they are seeking a single entity to manage all their network needs. To respond to the changing enterprise, we’ve expanded our offerings to include terrestrial wireline and wireless capabilities. Bridging the best of terrestrial and satellite technologies, HughesNet Managed Services provide comprehensive network operation, control, installation, and maintenance for broadband wide-area networks. This gives customers a single point of contact to deploy and operate networks throughout North America, and a platform for global networking arrangements through Hughes’ extensive international facilities and partners.
Another trend contributing to growth in our U.S. enterprise business is that after five years of flat spending, capital budgets in major companies are now funding new IT initiatives. With proven productivity gains from such expenditures, enterprises are moving to a new level of performance by implementing the latest broadband communications. Our high-speed broadband networks, VPN support, hybrid network technology, and backup services are attracting strong interest in the enterprise community. Security is also a critical area, which offers us an opportunity to add value with payment card industry (PCI) compliance support and other security-oriented services. Because Hughes can meet the PCI standard, we help customers achieve PCI compliance—creating more secure networks and fighting electronic theft.
The Word in the Marketplace
Each year, Hughes brings enterprise customers together to discuss the latest technologies, present ideas and challenges, and provide feedback on how we can improve our products and services. The overwhelming feedback in this year’s Executive Advisory Council and Hughes Users Group (HUG) meetings was that customers like our managed services concept. Customers who have adopted a Hughes managed service said they are very satisfied. In addition, we saw great interest in expanding and upgrading networks, and adding new products and services. In fact, some customers have been pleasantly surprised at the speeds our satellite networks now achieve and the extensive reach of our managed services.
At a recent Industry Analyst Day, we heard from several analysts who showed considerable interest in our managed services strategy and provided positive feedback on its potential.
Serving Public Needs
As part of the U.S. federal government’s Satellite Services-II (SATCOM-II) program, Hughes was recently awarded a five-year contract to supply an array of satellite products and services to federal agencies. This program opens the door to significantly extend the reach of satellite broadband throughout the federal government, arming agencies with vital broadband applications such as maintaining continuity of operations (COOP) for government missions. We also have initiatives that apply our extensive technology and success in building complex mobile and fixed satellite networks for defense and military organizations.
Crossing the Divide
Satellite communications is increasingly being recognized as a viable, cost-effective means to reach the millions of homes and small businesses that are not served by terrestrial broadband. This so-called Digital Divide is now a common topic in the media and Congress. With over 350,000 subscribers and a rapid growth rate, Hughes is helping cross this divide and will continue to lead in developing new broadband products and services for this critical market.
We’re very excited to announce the successful launch of SPACEWAY™, the world’s first satellite to feature onboard switching. When the post-launch testing is complete, we’ll provide the best services in the world on our new satellite—higher speeds, more capacity, bandwidth on demand, and a unique capability to provide mesh connectivity. As SPACEWAY-enabled services go online in 2008, I expect an acceleration of customers signing up, and for enterprises to take advantage of the high-speed access and mesh connectivity that SPACEWAY offers.
The Mid-Market—A Growing Opportunity
Between the large enterprise and the consumer/small business markets lies another market—the small enterprise, also known as the mid-market. It’s the company with, say, 25 or 50 employees and several locations—for example, an accounting firm with three offices across a city. These businesses form a huge market segment that is an important part of our strategy going forward. We are currently configuring and launching significant new services in this market, which we expect to be a strong contributor to our success.
Looking to the Future
What Hughes has achieved is directly attributable to the excellence of our employees and their focus on the customer. Those are the most important elements to a company’s success. The change to managed services has been a significant one, and we look forward to exciting times as Hughes continues to evolve. We’re investing considerable energy into perfecting our logistics and support capabilities. And we expect to see even greater changes as we deploy the advanced services that SPACEWAY will enable.