Adoption Leadership and Early Planners: Comcast’s IP Upgrade Strategy

Diffusion of innovation literature categorizes new technology adopters into five groups.⁹ Leaders and early adopters are typified by low aversion to risk while laggards and late adopters are characterized by cautiousness. Occasionally self-described laggards behave as early adopters. In this article, we examine the early implementation by a late adopter in a semi-crisis position, using the case of Comcast IPv6 adoption as an example. Comcast faced an unexpected resource crisis by exhausting the private IP address space they use for their networking infrastructure management. Without ambitions of an early adopter, Comcast considered IPv6 when analyzing the best solutions to their problem. This decision positioned Comcast in an adoption leadership role while enabling the company to overcome the risks associated with early adoption. Consequently, Comcast is leveraging its adoption leadership to gain competitive advantage in the cable industry and global brand-name recognition. Comcast’s adoption case also introduces a new phenomenon in the adoption of complex technology – the early planner. Early planners begin their adoption plans in tandem with adoption leaders, but often wait for implementation until the technology is more mature.

IPv6 was first introduced in 1995 by the Internet Engineering Task Force with the main objective of overcoming the address size limitations of IPv4. Until recently IPv6 has not been widely adopted partially due to the deployment of supplemental technologies that temporarily slowed down the IPv4 address space depletion. These band-aid solutions led to loss of interest and lack of compelling business value in the implementation of the new standard.

IPv6 has several intrinsically unique characteristics that moderate its adoption prospects. IPv6 is an infrastructure technology, hidden from the end-user. Companies in non-IT related industries (such as, services, finance) are unlikely to see its immediate benefits. In addition, managers are often reluctant to adopt new infrastructure technologies fearing interference with the quality of the services they provide customers. In a survey conducted by Cisco, 64% of the respondents stated they fear that implementing IPv6 will impact the continuity of their daily operations.^a Often, companies that define themselves as early adopters of new services lag in the adoption of new infrastructure technologies.⁷

Unlike most new technologies, IPv6 was not developed by a commercial entity. Rather, it was developed by a non-profit, distributed organization.^b Despite active support from the IPv6 Forum, the new standard lacks a strong champion, compared with other technologies, resulting in limited available information to potential adopters.⁷ Since no one entity “owns” IPv6, organizations can only profit from the introduction of related products or services, or from the development of a killer application.⁷ Considering these characteristics one might wonder, why should managers be concerned with this new technology? And why should they be studying its adoption pattern now?

In 2003, the U.S. government’s stated aggressive interest in IPv6 created an environment conducive to its adoption. Nevertheless, in addition to environmental conditions, companies must evaluate their business position, advantages and risks involved in adopting a new standard. An analysis of these factors can lead a company to pursue a partial adoption.⁶ Here, we describe the partial adoption decision of Comcast, and the unique circumstances that impelled them to adopt IPv6 earlier than its competitors in the access provider industry.

Comcast Corporation is the leading cable provider in the U.S. with 23.3 million customers from 36 states. This infrastructure provides high bandwidth access for its subscribers, a resource that can be leveraged to deliver a wide range of services such as video, internet access and voice over IP.^c The increasing demand for these services is apparent throughout the cable industry and is evident by Comcast’s growth in Revenue Generating Units (RGU) which was 64% in the last quarter of 2006. Comcast shares the cable market with several other providers (Figure 1).

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Cable Network Infrastructure

To support its customer base over a wide geographical area, Comcast must manage a very large internal infrastructure. Presently, cable infrastructures are managed utilizing Internet Protocol (IP) as an overlay that supports operations. All devices are identified by one or more IP addresses that enable them to communicate with network management resources, servers or monitoring stations.^d This type of communication is essential to the operation of the network and it is independent of the services offered to the subscribers. Thus the infrastructure of a cable provider consumes a critical and depleting resource, IP addresses. Until recently, similar to all the other cable providers, Comcast used private IP addresses⁸ to support its internal infrastructure. An organization can self-allocate approximately 17 million private addresses. However, typical utilization efficiency normally reduces the number of useable addresses to approximately 10 million. Private IP addresses have two main advantages: They do not have to be requested from the Regional Internet Registries (RIR), a process that requires detailed justification for the request, and they are free.

Comcast’s rapid growth has led to an impending problem that was not foreseen in the past: the exhaustion of the private IP address pool in environments with numerous devices. Despite careful planning and reuse of addresses, in early 2000 it became clear to Comcast that the current pool of private IP addresses will not meet its growth needs. The basic cable service requires a Cable Modem (CM) and on average two to three Set-Top Boxes (STB) per subscriber, each STB uses 2 IP addresses. For 23.3 million subscribers, Comcast needs 116.5 million unique IP addresses. This requirement only takes into consideration the internal management of the devices currently used. For additional managed services (VoIP) and devices (IP Phones) additional IP addresses are needed.

By 2005, Comcast exhausted their entire pool of private IPv4 addresses. This depletion of IP addresses could hinder Comcast’s market growth. Comcast investigated four feasible solutions⁴ summarized in Table 1.

None of the described options would provide Comcast with a long term, sustainable and manageable solution. In order to deal with the crisis generated by the exhaustion of the private address pool, Comcast requested additional public IP addresses and is currently using them as an interim solution. Meanwhile, Comcast was looking for a long-term, manageable solution.

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The Long-Term Solution

The proposed solution was the migration to the next generation of IP. IPv6 has a vastly larger address space and has capabilities that could prove very useful for the future of Comcast’s networks and services. Presently, Comcast’s primary interest in IPv6 is for internal management purposes and not for service delivery. IP based services will continue to be offered over IPv4. This strategy led to a unique approach to IPv6 deployment.

By implementing IPv6 for internal management and using a progressive roll-out, Comcast is able to overcome some of the risks involved in the adoption of new technologies:⁷

1. Economic risk. One of the most commonly cited adoption inhibitors is the direct cost involved in the implementation itself. In addition, there are training costs and sunk costs. In the case of Comcast, the direct cost to implement is moderated by the need to increase the number of IP addresses. As shown in Table 1, none of the proposed alternatives provide a more cost-effective solution. Comcast also has relatively low sunk costs and reduced conversion costs. This is due to their advanced planning and the use of a well designed refresh cycle.^e However, Comcast is investing heavily in training and re-skilling its staff.^f
2. Lack of network externalities. Since Comcast is deploying IPv6 internally, they do not face compatibility issues and are not relying on the “size of the network” for added value. Comcast also owns a nation wide backbone to interconnect their regional networks, limiting their reliance on other Internet Service Providers for connectivity. Thus, the need for network externalities is diminished. In addition, Comcast, in partnership with standardization organizations, networking companies and other cable providers, took a leadership role in creating a set of standards for the deployment of IPv6 in its industry.^{1, 3} For example Comcast as a member of “Cablelabs” drove the development of DOCSIS3.0 which supports IPv6, Comcast is actively involved in the IETF, and it organized several DHCP-IPv6 bakeoffs in Europe.^g By creating these new standards, COMCAST is establishing its own network of IPv6 users and a base of related technologies.
3. Service interruption. By initially using IPv6 for device management only, one expects a small amount of IPv6 traffic through the network. Therefore, the impact on the existent, revenue generating IPv4 services should be small. This strategy enables Comcast to remain a service conscious firm while acting as an adoption leader of infrastructure technology.
4. Lack of sponsorship. As mentioned in Hovav and Schuff,⁷ sponsorship can mitigate some of the financial risks involved in early adoption. Although the US Government is encouraging the adoption of IPv6 through its internal conversion mandate, it does not provide financial incentives hence its sponsorship can be deemed immaterial.

In addition to financial inhibitors to early adoption, the literature also cites the lack of a killer application or relative advantage, lack of information and knowledge regarding the new technology, and technical risks.

Although a killer application is often cited as a strong driver of early adoption, the Comcast case indicates that other relative advantages are possible. Comcast early adoption is driven by the company’s need to align its IT infrastructure with its business needs. The early adoption of IPv6 is driven by the need to have an effective internal management (operational requirement) rather than by the introduction of a new service or a new market segment (strategic opportunity).

Traditional IPv6 integration strategies suggest that IPv6 will be initially deployed at the edge of the network, close to the users. IPv6 islands of one or multiple users would then be interconnected with the help of various transition mechanisms. Conversely, Comcast deployment began at the core of its network. Expansion to the edge will occur when the terminal devices can support the new protocol, enabling Comcast to gain knowledge and experience (triability and observability) with the protocol and implement management tools and policies with minimal impact on their quality of service. This approach enables Comcast to increase its knowledge regarding IPv6 while minimizing its technical risk. Comcast also reduced its learning curve, position itself as an “opinion leader,” and is well-positioned to develop additional applications that will exploit its IPv6 enabled infrastructure.

The use of IPv6 in the context of internal management enables Comcast to isolate its IPv6 network from the outside world thus reducing the number of potential security threats. This is a significant benefit since the deployment of IPv6 in an existing network could undermine a network’s security, due to limited availability of IPv6 security tools (related technologies), lack of updated security policies and, lack of experience with all possible attacks specific to IPv6.

In summary, while solving an operational problem, the management of numerous internal devices using IPv6, Comcast is gaining knowledge in the deployment of IPv6, which it can exploit in the future to delivering new products and services to users.

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Lessons Learned

Recent trends in globalization and organizational utilization of IT resulted in massive, integrative networks, which may connect shop-floor control devices in China to Computer-Aided Design systems in the US and sales, marketing and distribution centers in Europe. Network managers need any-time-any-place access to various segments of these networks, while central management is essential to ensure interoperability and seamless communication. IPv6 with its larger address space becomes essential in ensuring the resource and tool scalability that supports integration, ease of maintenance, and increased network efficiencies.

In adapting to existing market constraints, Comcast diverged from the traditional IPv6 deployment strategies by responding to internal, operational needs rather than by developing a “killer application” and by deploying IPv6 at the core of its network rather than at the edge.

Comcast early adoption strategy resulted in two indirect and unexpected benefits, competitive advantage and global brand-name recognition. Comcast is evaluating effective alternate designs for its IPv6 enabled network and is developing related technologies such as IPv6 operational and network management tools. As an early adopter, Comcast is well positioned to expand the IPv6 coverage toward the edges (that is, user services) as soon as IPv6 capable devices become available giving it a substantial competitive advantage. Comcast’s early adoption strategy has been heavily publicized both in the U.S. networking and cable industries and globally resulting in increased global brand recognition as is evident by the growing number of news articles featuring the company. Comcast case is often used within the industry as an example of a leader in the adoption of IPv6.^{2, 5}

Adoption literature often regards the adoption of a new technology as a dichotomous decision. Organizations either adopt the technology or not. IT is more complex and its adoption more intricate. Comcast case study highlights the need for extensive and long-term adoption planning. It is conceivable that late IPv6 adopters may benefit from early adoption planning. Early planners could lower their deployment costs by updating their infrastructure to support new protocols through regular refresh cycle, and setting equipment standards and product requirements that align with the (ultimate) adoption strategy. Although, early planners may experience some risk if the new technology is not fully adopted, the risks are lower than for early adopters. Early planners do not invest in the actual implementation and they are less likely to face service interruptions. Early planners’ financial risks are also mitigated by avoiding unplanned adoptions often typical with late adopters. Therefore, an organization may not assume a leadership implementation position but an early planner position. Another example of an early planner is the Social Security Administration (SSA), which detailed its IPv6 adoption plans in 2005, while investigating IPv6 since 2001. The notion of an early planner versus an early implementer should be investigated further.

Early adoption presents well-known risks. Followers benefit from the lessons learned by adoption leaders and from the development of related technologies, standards and skilled staff. However, a crisis can turn a self-proclaimed middle adopter into an adoption leader. Such an endeavor can be successful if the adoption is well-planned and can potentially facilitate additional unexpected benefits. Comcast’s strategy created a new business case for IPv6 deployment. The networking community was concerned with the exhaustion of the public address space and developed strategies to circumvent such depletion. However, the possible depletion of the private address space was not considered. Without ambitions of an early adopter, Comcast adopted IPv6 out of necessity and the best solution to an operational problem.

In conclusion, Comcast’s leadership in the creation of industry standards for the deployment of IPv6 was supplementary to its adoption strategy. It also provided Comcast with an unexpected competitive advantage. Assuming a first mover advantage, Comcast is well positioned to exploit its early adoption by providing new services to its customers, thus turning an operational necessity into a strategic competitive advantage.

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