Two Petaluma telecom equipment makers are jumping into a $29 billion market for managed services, helping their customers handle a flood of traffic on their broadband networks.
Calix and Cyan Optics are hoping to win shares of a business that could reach $47 billion in 2015, according to a research group.
"It's going to help us grow jobs," said Frank Wiener, vice president of marketing at Cyan, a 5-year-old tech company headquartered in Petaluma.
"This has the capacity to affect our overall business model," Calix marketing director Geoff Burke said.
The two companies make broadband access platforms that let telephone and cable providers deliver voice, video and data over their wireless and wireline networks. They target regional telecom carriers, mostly in the U.S.
Until now, Calix and Cyan have focused on selling hardware to their customers. But the new initiative is more about software and round-the-clock service.
"We don't just sell a box," Wiener said. "We sell an ongoing service."
The demand for managed network services is growing as telecom carriers face new competition and their networks get more complex, according to Insight Research, a New Jersey consulting firm that tracks telecom trends.
Carriers have cut back on IT staff and are turning to equipment vendors such as Calix and Cyan to help them manage their systems. The market is growing 12 percent a year, according to Insight, which predicted $47 billion will be spent on such services in the U.S. within 5 years.
Large carriers have been using managed services for years, but now there's interest from smaller regional operators, said John Griffin, an analyst at Telecom Pragmatics, a Nashville-based consulting group.
"It gives them a lifeline," he said. "They don't have the resources for super-technical staff."
It's too soon to say how the new initiatives will add to staffing at Cyan and Calix, the companies said. Calix has about 479 employees, with most working at its main office in Petaluma. Cyan has about 100 employees at its Petaluma headquarters.
Last month, Cyan launched CyNOC, its advanced network operations center. Staffed by Cyan engineers, it analyzes network traffic, fixes transmission problems and helps carriers add new broadband services, the company said.
"Our clients can take advantage of new developments without having to go out and hire more people," Wiener said.
The work is done remotely, backing up customers' own operations staff.
"We provide people who are virtual extensions of their team," he said.
Calix last month launched Compass, a software service that closely monitors data flow on customer networks. It can tell what kind of applications subscribers are using, although it doesn't identify content, Burke said.
The pay-as-you-go service will let carriers control "phantom traffic," Internet phone calls that clog networks and don't generate revenue.
It can also spot malware and viruses, and find subscriber preferences that help carriers choose new products, Burke said.
"They're using it to identify problems, increase customer satisfaction and find new revenue streams," he said.
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