One of three in a series of blogs dedicated to the AltNet space.
Managed network and security services key to boosting brand, customer trust and profit margins.
The third article in our series examining the fortunes and ambitions of alternative network providers (alt nets) in the UK focusses on Tier 1 suppliers – companies which have taken advantage of the government’s Project Gigabit investment and delivery plan to build their networks and launch their own retail Internet Service Provider (ISP) d services on top of their existing infrastructure.
Prior to its disposal from Bigblu Broadband this time last year, East Yorkshire based alt net Quickline Communications was busy doing exactly that. Valued at around £92m, the company continues to focus on accelerating the delivery of gigabit capable fixed wireless and fibre to the premise (FTTP) services to rural parts of the UK. Other Tier 1 alt nets in the game include Telappliant, Converged Communications Solutions, Swish Fibre and OrbitalNet.
Service layer essentials
Most of these alt nets already support high volumes of data traffic and have established customer bases and peering relationships which reach into multiple UK towns and cities, and even other countries in some cases. The focus for them now is less on building out their network, and more on developing a compelling service layer orientated to attract and retain new subscribers.
Like Tier 3 alt nets, the Tier 1 players have a keen eye on their own profitability, not so much to ensure their long-term survival but rather to deliver value to shareholders which have invested in what for many is a public limited company. With the cut throat arena of consumer broadband services like to deliver low profit margins for some time to come (or at least until what looks like an inevitable market consolidation starts to bite), Tier 1 alt nets are also more likely to be keen on offering managed services to business customers which tend to offer better returns.
MSS in demand
Managed security services (MSS) represent a significant and growing element of that proposition considering the unrelenting volume of cybercrime directed against UK businesses. Statistics from the National Fraud Intelligence Bureau (NFIB) calculate that the UK reported almost 500,000 cases of fraud and cyber-crime which resulted in financial loss in the twelve months to November 2021. In the first six months of 2021, individuals and organisations reported losses of £1.3bn, almost triple the £415m in the same six month period of 2020.
Market sizing estimates suggest the scale and regularity of those incidents is pushing up enterprise demand. A report from the DCMS conducted by Ipsos Mori estimates that MSS generated around £5.8bn in cyber security related revenues in the last, most recent financial year, up 12% on the prior twelve month period, for example.
EDR/XDR and SIEM to the fore
To offer these services and build their MSSP credentials, Tier 1 alt nets need suitable provisioning and management platforms which support enterprise specific applications. And endpoint (EDR) and extended (XDR) detection and response tools which can be hosted and managed from the provider’s security operations centre (SOC) are a good place to start.
As its name suggests EDR continuously monitors multiple endpoints (servers, PCs, laptops, smartphones and IoT devices for example) for signs of suspicious behaviour that may indicate a cyber attack is imminent or underway, then sends warning alerts to administrators. XDR widens that scope to provided extended visibility, analysis and response for devices connected across different networks, domains and off-premise cloud platforms.
Some providers also offer security information and event management (SIEM) services that also provide real time system monitoring overview of business customers cyber security defences, including event log management and incident notifications which flag up potential vulnerabilities.
Embedded hardware and infrastructure support
Having EDR/XDR and SIEM capabilities built into their telecommunications hardware is a big advantage for alt nets looking to minimise the cost of infrastructure implementation and management by converging connectivity and security functions into a single piece of kit. Juniper Networks delivers regularly updated, actionable intelligence to its SRX Series firewalls, MX Series routers, Juniper wireless access points and EXSeries and QFX Series switches for example. These devices also send threat log data collected from thousands of endpoints to the Juniper Secure Analytics virtual SIEM appliance for analysis to help accelerate incident detection and remediation.
Nor is it just a business sell. Fibre access equipment suppliers like Adtran also partner alt nets to provide virtual private network (VPN) solutions to their consumer customers, whilst simultaneously helping them manage wired and wireless local area networks LANs and security tools in residential premises.
Demand for combined managed network and security services is likely to further expand with the growth of the Internet of Things and Industrial Internet of Things (IoT/IIoT) over the next five years. Tier 1 alt nets which can embed the appropriate provisioning, management and billing platforms now with the help of their infrastructure partners will find themselves well placed to capitalise.