Sure, you’re ready to compete with cable and satellite and CLECs. But less-than-obvious competitors are ready to pounce as well. Here’s how to spot your weak flanks and plan a defense.

Dumb pipe.

When service providers have nightmares, images associated with those two simple words are sure to dominate. Carriers are absolutely in the business of moving 1s and 0s, but every business is in the business to make money. And carrying traffic – be it over wired or wireless networks – without a chance to deliver the content, applications or services delivered over them – is a recipe for disaster.

Services providers absolutely worry about network-based providers. Cable bandwidth to the home and to businesses represents a full-frontal attack, and wireless alternatives – ranging from wireless competitors like Clearwire today to WiMax and open access 700Mhz competitors tomorrow – represent competitive network options that just could slip through the side door.

But a range of out-of-the-box competitors bear watching too – including would-be rivals such as over-the-top video providers, enterprise unified communications vendors, Web content and applications, cloud-computing giants and next-generation voice-over-IP players -- to name just a few.

So get your pen and pencil ready and your playbooks open as we explore five categories of new competitors ready to eat your lunch – and detail how to successfully fend off their advances.

Category:
Enterprise Unified Communications

Key Competitors:
Microsoft, Cisco, other IT vendors

Line of Attack:
Microsoft’s recent entry into the voice-over-IP market with its Office Communications Server ought to have served notice to telecom service providers. The software giant only goes after big markets, and though it often fails in its early attempts, its ability to leverage its advantages (mainly a huge installed base of Windows and Office users) often rules the day. With Microsoft attacking on the software side and Cisco flanking on the enterprise network front, service providers will be duly challenged in providing value-added apps and services to enterprises large or small.

“The biggest threat to the telcos comes from the biggest hitters in the technology space. Cisco and Microsoft [and their channel partners] plan to dominate the small business space with collaboration-based applications, including voice,” said Steve Hilton, vice president of enterprise and SMB research at the Yankee Group.

So-called unified communications applications have as much to do with the desktop – encompassing applications such as e-mail, messaging, Web portals – as they do with voice capabilities. That could make IT vendors the go-to partner of choice for building mission-critical UC applications.

The worst-case scenario is that “[IT] vendors are going to eat the carriers’ lunch by capturing all the high margin applications tied to voice-over-IP, all those new, rich-functionality unified communications applications,” warned Yankee Group’s Hilton.

Best Defense:
Service providers would do well to ride the outsourcing trend. Many enterprises – particularly small enterprises -- will balk at more boxes and more complexity within their internal IT environments. For all the talk about software-as-a-service (SaaS) applications, large IT vendors still like to get their stuff in-house. Despite all its spin about services, Microsoft’s initial VoIP play isn’t a service at all; it’s yet-another-Windows-server installed on yet-another-Windows-box.