They say Tiscali is focusing its initial efforts on the 'S' in SME, targeting the multitude of small businesses that currently use consumer broadband services with a business-grade service offering higher speeds, improved reliability and dedicated business support.
The company has launched a portfolio of SLA-based broadband access services, complete with 24x7 support centre. And it has backed this with a new business portal for small businesses under the Pipex brand, mixing market information and basic online financial management tools.
Trotter and Molony go on to say, “Tiscali, a former pan-European Internet service provider now considerably shrunk by asset sales to telcos like KPN and Freenet, has been a recent consolidator in the UK market, beefing up its proposition for multimedia services. In 2006 the company acquired Video Networks. In 2007 it acquired Pipex B2B broadband and voice services.
Pipex failed on its own to capture the small business user with a pioneering voice/broadband package. Tiscali, with 10 years of consumer broadband access and portal development under its belt, is saying it can do better. However, it is walking a tightrope of its own.
On one hand, it is shaking a fist at the dominant national operator BT- which (according to a report research from the Cranfield School of Management commissioned by Tiscali) holds 55% of the SME market. On the other hand it is falling back on a less defined, more fragmented part of the SME market: the smallest businesses and the sole traders - which are closer to the consumer market it knows best.
This is something of a retreat from the ambitious plans of altnets to challenge BT in its business territories. For all its faults, BT was ahead of the game with applications portal Openzone launched in 2002, and it is 12 months now since it launched Tradespace, arguably the best example of a vertically-organised, transactions-focused broadband package for SMEs anywhere in Europe.
Two years ago, Tiscali's own business division was readying online network provisioning for its business customers - admittedly a bigger proposition than today's SME targets. Not much is heard about that division nowadays. Have the altnets given up on 'real' enterprise users?
Tiscali will need to do more in transactions and vertically-directed applications and services if it is to catch up with Tradespace, although CEO Mary Turner says those things are on their way.
Yet Tiscali/Pipex may know something BT does not. BT's impressive SME service bundle caters for every user need - from basic broadband connection, through voice over broadband (value add), to IT support (managed service); all available with options for 24x7 care - just as a multinational would expect. That is a great package - and it takes the SME right across the ICT spectrum from network to applications management. But it also assumes the SME wants these things.
Tiscali/Pipex (backed up by the Cranfield research)/Cranfield suggests that anything more sophisticated than bundled access and competitive pricing is low down the list of priorities for the majority of SMEs. For example, just 20% of SMEs are interested in buying hosted email or other remotely-stored services.
Let's give credit to Tiscali/Pipex for being clever about market maturity. What's missing? Well, possibly an appreciation of the international requirement.
Ovum's survey work among 1,000+ SMEs shows they have greater needs of cross-border network services and LAN support than might be imagined, and the new research from Tiscali bears this out. According to Tiscali and Cranfield research, 56% of UK-based SMEs use the Internet to sell products and services overseas. But Ovum's research shows that there's a bit more to it: SMEs actually have offices and partner relationships abroad. In other words their needs extend to network service and customer support in other markets. Portals can pretend to reach them, but BT Global Services and local operators are there on the ground.”