Feeding Consumer Desire
Customer appetite fuels ISPs' broadband migration
By Evan Blackwell
from the March 19, 2001 issue of Broadband Week
Customers are king. That's not a sentiment any successful business would try to argue against. It's certainly true these days in the Internet world, where the voracious customer appetite for cutting edge services keeps pushing ISPs into broadband, and pushing broadband ISPs into a whole new business model.
It's not just about simple access these days. It's about bandwidth applications and the value-added services that come with them. ISPs are on the lookout for technology developments that tame the back office costs of provisioning and billing these high-speed services.
And while the ISPs are expanding their focus to include broadband services, they must remember another thing--keep in touch with the customer. But they're not alone in the battle, because a whole slew of software vendors are in the trenches with them.
The travails of provisioning and installation for broadband access technologies are no new story to those that have followed the industry over the last few years. In particular, the telcos and ISPs peddling DSL have faced the hottest firestorm.
"When you see companies like Verizon getting sued all the time, you know that something is wrong," says Dan Plashkes, CEO of California-based customer care company eAssist Global Solutions. "Right now, the demand for broadband services exceeds the industry's ability to get things done."
Hence a focus by some vendors on the crucial first step in broadband service, especially for DSL: qualifying and provisioning.
Atreus Systems, a software company based in Silicon Valley, sells broadband service creation software and it's one of a variety of companies focused on cleaning up the broadband installation process with ISPs and MTUs as its key targets. The Atreus xLINK product is a typical platform that sits at the operations center of an ISP or carrier and handles each step required in the process of registering for service. Through a user-friendly Internet interface, xLINK recognizes service orders through e-mail and other online outlets and monitors a provider's network equipment.
As a provisioning platform, the Atreus product automates the process and mediates all the different pieces of network equipment, thus allowing an ISP to interconnect provisioning, management and billing solutions through one interface.
"We take care of understanding all the underlying technology," says Andrea Baptiste, co-founder of Atreus Systems. "We remove all the technical hassle."
As Atreus strives to become the market leader in the MTU service provisioning space, ISP customers are starting to line up.
Other vendors that pioneered DSL provisioning solutions have include Teradyne and Turnstone Systems. Before the emergence of DSL, cable operators worked with vendors to shape the rollout of cable modem technology. Those that blazed the trail with cable provisioning and have now moved into the DSL market include BroadJump and AP Engines.
The solutions from the likes of Atreus help time-to-market concerns for service providers. Once service gets installed, there's got to be a way for ISPs to lasso revenue and efficiently process fees for the expanding menu of services and content that broadband enables.
"ISPs are making more spending decisions that are tied to revenue streams," says Baptiste. "A lot of them are really looking to provide a fully-funded business plan, and the way to do that is to forget about this land grab that's been going on."
One provider in this space has been Silicon Valley's Portal Software, a creator of business infrastructure products. Portal's Infranet platform enables service providers to rapidly deploy new services, define optimal business models and price plans, and bill their end users. Industry analysts lauded the Infranet product earlier this year when it won a contract with the nation's largest ISP, America Online.
The trick for billing providers has been to develop solutions that address all of an ISP's specific needs. That means handling transaction-based billing for applications, monthly billing for data service, or managing the costs of partnering with an ASP.
While Portal has become an industry darling, billing heavyweights Convergys, Geneva Technology and Amdocs all have secured high-profile contract wins for billing. Convergys may have solidified its position even further: on March 6 the company announced an all-stock deal valued at about $693 million to buy Geneva, pointing to Internet Protocol-based billing and broadband business as some of the motivating factors.
The accelerating pace of broadband service availability will continue to quicken, as will the revenue flow it generates. But the industry still has plenty of growing pains left. The paramount question for the future will be how to create positive margins, and the answer will come with value-added services such as applications.
"The current economic climate has exacerbated the situation," says Sanjay Castelino, a marketing manager at Texas-based CRM software vendor Motive Communications. "A year ago it was about growing a subscriber base. Over the last four months that view has shifted to start talking about profit."
The broadband pipe enables a bevy of potential services and applications, and service providers are plotting ways to deliver them faster. Because Internet access alone, or even high-speed Internet access, doesn't figure to be compelling enough anymore for many customers, the back office infrastructure must be prepared for the emergence of streaming audio/video, interactive online games and numerous other future possibilities. ISPs figure to become one-stop applications shops, utilizing their existing relationship with the consumer or enterprise subscriber.
Those companies building the back office solutions say they're prepared for ISPs to become ASPs. Unlike the developmental problems that arose from the access revolution, this time the industry is getting ready.
Motive, whose solution was recently bought by AT&T Broadband, preaches the same gospel that has become the sector's mantra. Only by using the solutions that lower deployment costs and prevent customer churn will the revenue be available to make the advanced services viable.
"We're learning from the present rollouts," Castelino says. "As we roll out new services--content, games, streaming video--we still need to understand that customer service at the core is still the key. If not, those services will flop."
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