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There's Energy in IP Communications

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September 01, 2009

There's Energy in IP Communications

By Erik Linask, Group Editorial Director


More than a decade ago, PAETEC (News - Alert) predicted the majority of telecom purchasing decisions would be made by CIOs within 10 years. That prediction has obviously come to fruition.

 
So, when PAETEC CEO Arunas Chesonis (News - Alert) took the stage for his keynote at ITEXPO West in Los Angeles this afternoon to a crowd inspiring pop rhythm, looking to create energy in the crowd, one could only assume he was again looking to create a rift in the time-space continuum to make another bold prediction.
 
Why? Because energy is the future of telecom, he believes. At least it’s the future of PAETEC.
 
His prediction: Within another 10 years, the majority of energy purchasing decisions will be made by CIOs.  In fact, back-up power sources, data center energy usage, energy efficiency, green initiatives, real estate coordination are increasingly coming under the purview of CIOs already. The process is perhaps being hastened by the economy, but it was bound to happen in any case – sooner or later power and cooling costs would come under intense scrutiny.
 
Almost two years ago, PAETEC bought a two-person energy brokerage business in upstate New York, which it has since grown to eight employees of PAETEC Energy.
 
Indeed, there is a natural synergy between communications and energy, in that the entire communications infrastructure has rather significant power requirements that warrant careful consideration when studying cost analyses.
 
In many ways, this move shouldn’t come as a surprise. PAETEC has a legacy of making bold investments well in advance of market trends. Chesonis rationalizes the strategy by suggesting that, in order to grow a business, you have to sow the seeds well in advance of when the market ripens.
 
Chesonis believes that PAETEC can become a competitive electric supplier in some 12-15 states in the Northeast and Midwest. He estimates some 5,000 of PAETEC’s existing customers spend more than $100,000 annually on energy; of them, 40 percent are the raving fans ShoreTel (News - Alert) CEO talked about during his keynote. When you consider an opportunity to help those raving fans save on their monthly energy bills, that presents a significant opportunity, not only purely in terms of energy conservation, but in terms of building relationships.
 
One of Chesonis’ key strategies at PAETEC is finding a way to get even small piece of business from a customer – then kill them with kindness (or quality service, in this case), which more often than not leads to an increased business with PAETEC.
 
“If you’re helping a company with energy and power,” he says, “they become more likely to work with you on telecom.”
 
The other side of this strategy comes a new evolution of PAETEC’s EFS (Equipment for Service) program – Energy for Service. PAETEC has found significant success over the years by effectively funding various projects with telecom contracts. For instance, Chesonis suggests one idea might be to fund a solar panel array in exchange for a percentage of the company’s network and telecom contracts. Again, this helps builds partnerships that can mature on their own.
 
Energy Expense Management (the energy version of TEM) is also high on the list of strategic initiatives. How many people are aware that it is 50 percent less expensive to run a washer and dryer in the middle of the night? That’s not the kind of information people find on their monthly energy bills. But it is a way PAETEC can help its customers reduce energy costs.
 
Ultimately, this energy progress, though Chesonis says it might succeed, and it may not, makes sense. The growing connection between energy and communications certainly suggests his latest venture can be expected to succeed.
 
And if it does, Chesonis may well be on his way to his other stated goal, to become more like ShoreTel in the telecom space, and one day take on ShoreTel, “mano a mano.”
 
For more on the various ongoing initiatives at PAETEC, visit booth #407 in the ITEXPO (News - Alert) exhibit hall floor. for more on the connection between energy and communications, visit TMCnet’s Smart Grid site. And for more on Chesonis and the PAETEC model, read the September issue of INTERNET TELEPHONY.
 
 

Follow ITEXPO on Twitter: twitter.com/itexpo

Erik Linask (News - Alert) is Group Editorial Director of TMC, which brings news and compelling feature articles, podcasts, and videos to 2,000,000 visitors each month. To see more of his articles, please visit his columnist page.

Edited by Erik Linask


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