VON Innovators: tw telecom’s Larissa Herda

tw telecom inc. (TWTC) stands out as one of the (very) few CLECs to report a fourth-quarter profit.

VON’s Kelly Teal spoke with tw telecom chairman and CEO Larissa Herda – who is delivering a keynote speech this week at the Spring 2009 COMPTEL PLUS Conference & Expo in Dallas – about what’s next for tw telecom, and for the industry.

VON: You’ve mentioned the “new telecom economy” a couple of times. Explain what that means and why it’s important.

tw telecom's Herda: The cloud is not for everyone.

Herda: If you look at the world today, it’s a bit different than it was 10 years ago in that business customers view the network as the lifeblood of their businesses. Whether it’s Web 2.0 applications or whatever, they’re trying to make their businesses more efficient. We’ve become much more dependent upon our internal enterprise network than we were 10 years ago — we’ve saved money, gotten greater productivity, “Webified” payroll and order processing. The network is more important than ever.

We see that evolution with customers as they’re thinking of new and different ways [to operate.] There’s cloud computing, for instance, where companies are able to buy SaaS as opposed to pay these big license fees up front. That means more smaller businesses are able to participate. And since they’re using the Internet to access a lot of those applications, as time goes on, that’s more evolution of broadband services. And they’re going to need Ethernet connectivity for higher bandwidth. So, to us, the new telecom economy requires greater scale and more quality of service to business customers.

VON: Speaking of evolution, where does cloud computing fit into tw telecom’s strategy?

Herda: I was just talking about this subject to my board not too long ago. One of my board members runs a sales organization for software and he got very animated over this. Cloud computing is really taking off and enterprises are adopting it and he had a whole litany of reasons why this is exciting. And I think this is absolutely happening since it’s also about economics, right? At the end of day, businesses are all about economics. If they can buy on a pay-as-you-go basis, then I think what’s going to happen is you’ll see more companies get into the game faster because cloud computing is easier to use and less expensive. I also think it’s going to require more secure networking and not just public IT infrastructure.