ISP Values

ISP Values

Andrew Cooper of Claranet

The Internet Service industry is undergoing massive change: new services and technologies, new applications, reduced margins and unprecedented mergers and acquisitions activity. At the same time, customer expectations are increasing. Today, consumers and businesses have a seemingly endless choice of broadband products that are becoming harder to differentiate. Service providers need to find ways to stand out from the competition so that they can acquire new customers and retain existing ones.

Take Point Topic’s latest survey (BroadBand User Consumer Survey 3) for example which has highlighted growing dissatisfaction amongst UK consumers with the internet service they receive from their ISPs.

‘The change since our last survey is striking. Within 10 months the satisfaction levels have declined significantly,’ says Dr Katja Mueller, Research Director at Point Topic.

‘From 92% of respondents saying they were ‘very’ or ‘fairly’ satisfied in February 2006 with the service they receive overall, it has dropped to 77% in December 2006.’

‘It suggests that many ISPs are focusing on the rush to gain market share in a rapidly consolidating market at the expense of customer service. In the long-run they may pay dearly for this neglect,’ continues Dr Mueller.

In January, a report by Epitiro listed the UK’s top five ISPs in term of Quality of

Service. (BT, Pipex, Orange, Demon and Virgin) This adds to a number of recent news stories that have once again put the subject of broadband quality in the spotlight. A recent survey by YouGov highlighted that the recent ‘free’ sales offensives by a number of major ISPs have resulted in a flood of new customers, but have done nothing to ensure these customers are receiving the levels of service they can reasonably expect. Slow connection times, service interruptions and delayed connections were all cited as common problems, and have done much to damage the reputation of these ISPs with their customers.

Now, more than ever, it is essential for ISPs to get service delivery right. The massive rise in demand for broadband services and new applications such as VoIP and IPTV are putting a heavier strain on broadband bandwidth, which subsequently puts pressure on the ISP. These bandwidth-hungry applications look set to become more common in the next year, as ISPs and telcos try to regain falling voice revenues through new wave services. In the rush to deliver these new services there is a danger quality will be overlooked. With so many competitors just a phone-call away, ISPs cannot afford to deliver broadband services if the quality cannot be assured. ISPs must make important investment decisions now, and ensure they have the right approach to Quality of Service in place.


Fighting Back

Recent and persistent consolidation in the UK B2B ISP market has led to the creation of an intensely competitive industry, with more than 600 providers all fighting for market share. Inevitably this means that small ISPs need to ‘up their game’ to be able to survive amongst fierce competition. B2B ISP Lumison believes that there are two main ways of doing this, namely partnering with best in class providers to offer value-add services and offering excellent customer service.

Aydin Kurt-Elli, the CEO of Lumison, “When Lumison began to look into value-add services, it identified that VoIP represented a very attractive prospect to customers. The company established that it would be most effective to work with an outside supplier so that it could concentrate on its core business as an ISP. When identifying a partner that could replace digital PBXs, it found only one company was able to offer a box-free solution – nPlusOne. nPlusOne has worked hard over the last three years on the deployment of one of the few truly UK-developed hosted IP centrex solutions.

The second way for smaller ISPs to compete with larger providers is to offer excellent quality of service. The benefits to ISP customers of opting for a smaller ISP in these terms include the provision of a tailored and personal service. With the larger ISPs in the market the risk of being unable to get through to anyone on the helpdesk in the event of a problem is much higher than with a small ISP. At Lumison, first line support when a customer calls with a problem is a qualified engineer, which in most other ISPs would be considered 3rd line support. In addition, the company prides itself on its engineers being able to answer calls in an average of seven seconds, and not the minutes or hours of a large ISP.”

To Lumison quality of service is a core value. Smaller ISPs for which customer service is a priority are also much less likely to put users in danger of long outages without contacting them, as they are easily able to contact every customer personally to alert them to the problem while working to resolve the issue. In addition, Lumison is able to evaluate what type of Service Level Agreement (SLA) would best suit each individual customer, as, for example, the level of guaranteed uptime required will vary between an ecommerce company and one that just has an online presence.


Channel Pedigree

Griffin has provided internet services to UK business since 1994. In 13 years Griffin has grown to become an industry leader through launching robust, innovative and customerfocused products and services exclusively through the channel. Griffin was the first ISP to launch un-metered dial up service and now supplies broadband, networking and storage solutions. Griffin owns and manages its own national MPLS IP network, used solely for business. In the last two years Griffin has featured in a number of top industry league tables including the Deloitte Technology Fast 50 and The Sunday Times Tech Track.

Sales Director Andrew Dickenson, “What makes Griffin stand out from the crowd? Griffin Internet is a specialist in the supply of voiceready managed broadband to channel partners focussing on the business market. Firstly Griffin is a channel only provider, therefore invests in products and services to help partners succeed in competitive markets and does not compete with partners directly.

Secondly Griffin has spent millions of pounds in the latest technology developing state of the art products and services to meet current market requirements. For example Griffin developed a Managed online Provisioning System (MOPS).

MOPS allows partners to be set up as an ISP (Internet Service Provider) within five days. Partners can set up their own branded broadband packages bundled with hardware, which is preconfigured. The system automatically updates end users on their order progress by sending messages branded by the partner.

MOPS also allows partners to analyse faults on the line and to raise issues with the service providers directly and integrates into existing systems. Average lead times are halved compared to industry standards.” Griffin has also invested in a storage, hosting and disaster recovery product SANServe.

Dickinson, “Thirdly as well as developing products to add value to partner

Andrew Dickenson of Griffin Internet

portfolios and reducing costs to enable them to make money from additional revenue streams, using the latest technology Griffin add value via their partner support programme.

Griffin offer voice-ready broadband products with contention ratios as low as 2.5:1, with preconfigured hardware, which arrives the day before the line goes live. Griffin develop provisioning tools to allow partners to ‘become an ISP in five days’ allowing partners to provision and manage faults instantly as well as keeping the customer in the loop at all times. Griffin is the ISP of choice for voice resellers with many voice specialists such as Hipcom, Teleware and Kingston Communications having interconnects to the Griffin network. Griffin offer added value services such as training and development.

Andrew Cooper, Claranet’s Sales Director, “Our key focus in providing services to our business customers has always been on providing excellent customer experience and service. This is borne out through the quality and approach of our sales, pre-sales and service management teams.

In terms of actual services, Claranet provide multi-vendor solutions which best fit our customers’ requirements. As we extend our footprint within the realm of managed services, we are increasingly required to provide consultancy to better define and shape the customers’ technical requirements with regard to their particular business needs.

The sheer volume of options out there is making it increasingly difficult for customers to know what best suits their needs. Claranet has an ongoing commitment to providing advice and assistance to them which we feel is key to customer satisfaction and confidence, and to our continued relevance in today’s marketplace.

As we expand into Artful-style managed and professional services, we are keen to retain this philosophy. Artful itself is not tied to any particular suite of applications and recommend the ‘most appropriate’ for the task in hand. This is the logical extension of our corporate philosophy as our skill sets expand.

The value to the customer is that our solutions are constructed according to what is required rather than what we’re able to sell them. If you ask BT for a network solution for instance they will only sell you a solution that comprises BT services; we are under no such constraints and are working towards making that a reality in managed services as well as connectivity.”


Real reseller opportunities

Andrew Dickenson at Griffin, “MAX broadband hit the market in February 2006 and after a tentative start now represents 60% of all new lines that we sell. With upstream speeds as fast as 832kbit/s now widely available applications like VOIP have started to take off.

VOIP and IPCentrex vendors have been quick to see the benefits of using broadband to deliver their products and have been interconnecting with quality business ISPs that can guarantee safe passage to latency-intolerant applications like voice and video.

In busy-hour around 8% of our broadband lines are carrying SIP sessions with average bandwidth usage at that time of approximately 10kbit/s. This indicates that around one in ten of businesses are experimenting with VOIP but the average usage suggests the majority are not relying on it yet.

21CN promises to bring even faster and more reliable access methods. Convergence will not only occur between applications like voice and data but between existing access methods. Leased circuits as we know them will eventually disappear as they meet and merge with DSL products coming the other way. SLAs on broadband will strengthen and broadband will become symmetrical and available everywhere.

Andrew Cooper, Claranet’s Sales Director, “The reseller channel has always provided a significant part of Claranet’s business sales. As the scope of Claranet’s service portfolio increases, the main opportunities centre on our flexibility in terms of making these services ‘resellable’. In recognition of the fact that there may be overlap in terms of our capabilities and those of the reseller, the approach is crucially one of allowing the reseller to pick and mix the services that dovetail most neatly with their own in-house skill sets. Conversely and due to the impossibility of Claranet being able to provide all services to all people, there are huge opportunities for resellers wishing to sell their own services through Claranet and providing expertise in certain areas. With this in mind we have developed a fast-track process whereby such relationships can be setup and managed relatively quickly.”


What are ISPs doing about voice?

Griffin’s Andrew Dickenson, “The main problem is that most ISPs (including BT) mix business and residential traffic on their networks and to get to lower and lower price points they have to oversell their network capacity in order to make money. For customers using broadband for email and web browsing this is not usually such a big deal (do you care if an email takes 50 ms or 500 ms to reach its destination?). However voice packets only have a limited time to reach their destination before they are discarded casing packet loss and incoherent conversations.

Some ISPs are investing in equipment to prioritise voice traffic over other traffic. Others, like Griffin, that already run uncongested business networks have gone a stage further and offered their customers the ability to prioritise applications on the same broadband line.

As ADSL becomes more ubiquitous and more reliable so corporate networks are looking to replace old kilostream, leased circuit networks with cheaper, faster ADSL alternatives. Similarly the rise in the adoption of VOIP, Terminal Server and Citrix-type applications has caused enterprises to beef-up their homeworker connections.

This has brought new challenges to ISPs. Enterprises expect to be able to run CoS and QoS over their networks as they have always done on leased circuits. There is also no appetite to go back to clumsy and expensive Internet-based VPNs.

Griffin’s solution is to offer private VPNs that do not touch the internet powered by a sophisticated core routing platform that offers the ability to prioritise (QoS) one application over another.

Critical to the deployment of these new applications are the tools offered by the ISP to provision and manage their QoS enabled private networks. Adding orders one-by-one onto a portal and then managing them by calling up the ISP is no use at all to IT departments that are used to having complete control over their corporate network. Griffin has developed a product called MOPS over the years that is used by partners like BTW, Kingston, Gamma Telecom and many others. Through these partners, multi-national corporations like Unilever, Johnson and Johnson and Glaxo Smithkline use MOPS to manage thousands of broadband lines for satellite offices and homeworkers.

Neil Levine, Claranet’s CTO, “Claranet currently offers VoIP solutions allowing people to interconnect their PBXs between multiple sites or allowing customers to connect with the public phone networks. Using our VPN:NG product, we can offer granular quality of service to help customers control bandwidth on their network to ensure call quality. Claranet can offer hosted voice by way of a hosted PBX system which is suitable for companies who do not want the management headache of looking after a PBX system or have multiple branch offices which make it impractical from a cost point of view to roll-out a PBX at each site. It is important to note that we are in discussions with third parties to explore the possibility of incorporating this into Claranet’s service portfolio.”


Facing up to change

With broadband all but ubiquitous, ISPs now find themselves operating in a mature market where they are clawing for market share through timebound sales promotions and undercutting the competition. The land-grab is nearly over so, all that remains now is for everyone to defend their own patch or attack someone else’s.

In this climate, ISP consolidation is the logical progression in order for these large, deeply invested players to maintain competitiveness and grow their customer base. However, many are increasingly using this process of consolidation to add to the straightforward ISP product offering, taking it beyond that of offering ‘wires-only’ to also provisioning the router, firewall and the like. This increases brand penetration and makes the service providers who pursue this path far ‘stickier’ to their customers.

Dave Everest, Sales Director at the ViNO division of Matrix Communications, “With all of the acquired product and service skills, ISPs are increasingly becoming ‘xSPs’, offering bundled products that enhance their competitiveness. Looking back to the acquisition of Omnetica by Kingston Communications in 2004, numerous subsequent marriages of systems integration expertise with Internet bandwidth horsepower reflect the popularity and importance of consolidation in growth strategies for ISPs. However, while beneficial for the service providers, this leaves resellers with less choice of suppliers and – in turn – suppliers who themselves are looking more and more like competitors.

Dave Everest, Sales Director at the ViNO division of Matrix Communications


It’s a bit of a catch 22; the consolidation leads to larger more dominant service providers that threaten to ‘eat the lunch’ of resellers, but these same service providers also produce a wider range of compelling products and services that the reseller can sell on the back of rising demand.

The choice for resellers is therefore to stay informed, but also to remain attractive. Clearly the value of partnering with the channel will not evaporate overnight, but if individual resellers want a piece of the action then they will need xSP partners to recognise that what they have to offer isn’t already covered by what the xSP has already acquired

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