Comcast Business is expanding rapidly and shared its views in a recent analyst meeting in Philadelphia that we attended. Last year, it added $800M of revenues compared to the prior year, and at this meeting, management is pointing to its expectations to hit $10B of revenue soon. The company excels in broadband and has been adding numerous LAN, WAN, communications, and security offerings on top of its traditional offerings. Comcast Business’ most recent, large acquisition was that of Texas-based Masergy, a company that has done well in key markets like SD-WAN. At last week’s analyst meeting, it was clear that the combined team is having success offering Masergy’s SD-WAN services to Comcast’s customers, especially in the upper mid-market. Additionally, Comcast is having success selling outside the US market to one of Masergy’s strongholds, Europe.
We were surprised to see that Chris MacFarland, Chairman and CEO of Masergy, addressed around half of all questions in a panel of four executives. We think it is clear that the Comcast Business team is excited about Masergy’s capabilities. Among the points that MacFarland made during his time on stage was that now that Comcast Business and Masergy are together, the teams now have a “right to win” SD-WAN deals. Also, the team reminded us that 90% of Masergy revenues were indirect before the acquisition and about 90% of Comcast Business is direct. The teams now see significant synergy between the two selling approaches. Also, Comcast Business plans to add even more security offerings in 2023 and beyond.
Security was a key message for Comcast Business at its first in-person analyst meeting since 2019. The company is enhancing its offerings to include Zero Trust Network Architecture, UTM, DDoS, and Endpoint capabilities. We research the security market and expect each of these to grow significantly.
Comcast Business explained that it expects that for its SMB customers, they won’t care much about what vendors’ solutions they are offered – they want Comcast to take care of the service. But Comcast Business finds that its large enterprise customers care about whether they are getting Meraki, Viptela, Silver Peak, Versa, etc. and will often tell them what they want. On a related note, we were surprised at how often the Comcast Business team mentioned its relationship with Fortinet. We must hand it to Comcast – it’s pushing its marketing messages well. It announced “Single Site SD-WAN” across the entire Comcast Business Masergy footprint. The company says this means that single sites get applications from multiple places and that the offering is a like a managed router “on steroids.” Given the marketplace’s excitement about the moniker SD-WAN, Comcast will do well with the “Single Site SD-WAN” offering.
The company gave us a peak at its plans for 2023 and 2024, including new 4G/5G FWA services, enhanced AI-Ops Managed Services, Enhanced MDR, Zero Trust LAN, among others. Peering at Comcast Business’ list of new services, it is easy to take away that the company is rapidly expanding into new, valuable addressable markets that will serve its customers well into the future.