Calix has been one of the major success stories in the highly competitive technology communications sector over the past several years. While it’s a company few consumers will immediately recognize by name, Calyx cloud and software platforms empower Internet service providers of all categories and sizes to transform and electrify their businesses.
On a more practical level, Calyx’s capabilities and tools allow business service providers (BSPs) to support and promote their customers through compelling experiences, which we’ll explain in more detail. For BSPs, this translates into building a stronger, stickier bond with customers through more substantial customer acquisition, increased loyalty and long-term revenue potential.
Calix’s strategy of focusing on BSP, in an almost manic way, has paid off with business results. The company recently reported record revenue of US$236.2 million for the third quarter of its fiscal year 2022, despite challenging supply chain issues. Calyx is on track to exceed its 2021 revenue to $679.4 million, a 25.5% improvement over fiscal 2021.
SMB and MDU market opportunity
Calyx announces new solutions on November 16 specifically designed to help BSPs expand their footprint in the SMB (small and medium-sized business) and MDU (multi-dwelling unit) markets .
Built on a foundation of Calyx’s proven appeal in the single-family home market, these new products will leverage use cases that solve real connectivity problems in small businesses, apartment complexes, duplexes, triplexes, quadplexes and mixed-use properties .
Calyx has good reason to believe that its managed Wi-Fi strategy, which has enjoyed strong appeal in the single-family home market, will experience significant traction in the SMB and MDU markets.
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There’s a healthy demand for ubiquitous Wi-Fi coverage in these markets as well, and the management aspects are often the same pain points as single-family homeowners. Said slightly differently, most SMB and MDU customers do not like to deal with the hassle of managing the technical complexity of router setup, maintenance, and upgrades.
The SMB and MDU markets are not small. The US Small Business Administration reports 32.5 million small companies – broadly defined as businesses with fewer than 500 employees – operating in 2021, a remarkable 99.6% of all businesses. In addition, it is estimated that there will be 126.7 million multi-family dwellings at the end of 2022, up from 68.8 million in 2019.
New Wi-Fi systems meet connectivity needs
Calyx introduces two new systems, the GigaPro GPR8802x and the GigaSpire Blast u4g. Both products are explicitly designed to meet the wireless connectivity needs of the SMB and MDU markets.
The GigaPro GPR8802x is a “purpose-built” switch designed for use by SMB and MDU customers. At a technical level, it is an Ethernet-based managed switch/ONT (Optical Network Terminal, aka modem) solution that provides seamless WAN integration, leveraging the ability of BSPs to manage it as a single system. makes it easy.
This aspect is important because it provides end-to-end visibility and management to the BSP with the Calyx Support Cloud and the Calyx Operations Cloud. With eight configurable Ethernet ports, eight analog voice ports, and automated service provisioning, this switch can open up new markets for BSPs who wish to grow their value proposition within their local communities.
The Calyx Family of Gigaspire Blast U4 Systems | Image credit: Calyx
The appeal of Calyx’s managed services gets a shot of adrenaline with the Gigaspire Blast U4G, an integrated GPON (Gigabit Ethernet Passive Optical Network) with residential gateway capability. Calyx designed this product with an “aesthetic shelf appeal” that homeowners and renters will find fresh and cool. The product supports fast Wi-Fi 6 wireless connectivity, making it ideal for apartment or condo dwellers in large properties or buildings.
benefit to BSP
From a business perspective, the Gigaspire Blast u4g could potentially optimize the opportunity for BSPs to attract the residential market as it can provide formidable and highly secure Wi-Fi to MDUs. Most importantly, the product integrates well into the Calyx Revenue Edge platform to reliably transport the company’s growing list of managed services.
The following examples come to mind that outline what the business impact can be:
- BSPs can use these solutions to help provide apartment owners with the ability to provide highly secure surveillance services in their units, for example, smart door lock control and video surveillance.
- From an SMB perspective, BSPs can use these products to provide retailers with the ability to provide guest Internet services with interesting e-commerce and advertising implications.
- Calyx’s ability to provide BSPs with a customized mobile app — not to mention BSP co-branding possibilities with SMB and MDU customers — sets it apart from larger, institutional Internet providers like Comcast and Spectrum.
These solutions set the stage for Calyx to perfect its “SmartTown” concept, which will allow BSPs to support continuous, seamless Wi-Fi to homes, businesses and schools in local communities.
analyst view
It’s hard to deny the momentum behind Calyx’s strategy, which has been under way for the past several years. Clearly, the favorable market winds are in favor of what the company is trying to accomplish in the communication and connectivity sectors.
Interview with Michael Wenning, CEO and President of Calyx
First, consumers are tired of the seemingly endless parade of new “alphabet soup” wireless topologies that hit the market every 18 months or so.
Even though new wireless topologies offer substantial speed and latency advantages for consumers in gaming, working from home, videoconferencing, and video streaming, many users resist upgrading their wireless routers themselves to avoid the hassle .
Wi-Fi 6 and Wi-Fi 6E are rolling out now, and yet, many consumers won’t upgrade if the complexity is bothersome and the benefits of upgrading aren’t made clear and compelling.
Second, Calyx finds that SMB and MDU customers are just as interested in the new wireless capabilities as single-family homeowners.
Renters, in particular, want to enjoy the speed and latency benefits of a faster router but don’t want to invest in their own hardware. In addition, there are significant incremental revenue opportunities for landlords who can offer their tenants bundled value-added wireless services that are fast, secure and easily managed.
SMB customers depend on fast, operational and reliable wireless connectivity at the “guest client” level. Unlike enterprises, SMBs often lack the dedicated IT staff and necessary resources that a local BSP can provide to manage the small business’s wireless system and support any value-added services offered by the BSP. Can do.
marketing priorities
It cannot be overstated that the broadband market is highly competitive. Calix is acutely aware of this and is taking significant steps to differentiate itself with platforms and solutions that allow BSPs to reduce operating expenses, provide more value-based “sticky” services to their customers, and allowing them the ability to customize their offerings.
Going forward, Calyx should continue to create examples of unique, compelling and highly extensible use models that BSPs can adapt and convey to their customers.
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Creating and delivering new, easy-to-understand marketing content (especially videos), including subscriber testimonials, that homeowners, SMBs and MDU residents can wrap their heads around should continue to be a priority for the Calyx marketing team.
The company’s relative anonymity with consumers hasn’t deterred Calyx as it is clear in its view that its success is highly dependent on the success of its BSPs.
From a business outcome perspective, this has proven to be highly effective as Calyx happily plays a behind-the-scenes role that allows BSP to build solid and sustainable relationships with its customers.
With this backdrop, there’s little reason to believe the Calyx PlayBook won’t work in the SMB and MDU markets, given the similarities of challenges, needs and long-term desires shared with the single-family homeowner market.
