Pipelines Or Pipe Dreams, ISP Promises

Choosing the right Internet service provider (ISP) is a little like jumping on a fast-moving train. It can get you where you want to go quickly, but you need be careful not to get run over in the process.

"When we first started out, we spent an entire year just chasing our tails because the technology was moving so rapidly," says Mark Ciapka, managing director of Web development at design firm Applied Dynamic Solutions. "Every time we learned something new, something else took its place that had to be learned all over again."

Only a small percentage of resellers have taken full advantage of the opportunities created by Internet work, primarily because they don't know how to start.

"There is a certain amount of fear," says Jill Kerr, vice president and COO of the ASCII Group independent reseller organization. "So a lot of resellers still haven't gotten involved in reselling Internet access. It's an entire market they are not taking advantage of."

Beyond providing Internet connectivity, today's ISPs can offer integrators a wealth of add-on services, which they can then pass on to their customers,such as Web hosting, application service providing and e-commerce solutions. It's simply a matter of choosing the right company for your needs, say experts.

Choose wisely. There are thousands of ISPs out there, and choosing the wrong one can set a VAR's business back significantly. The ISP you align yourself with today may be gone tomorrow. Almost half of last year's leading ISPs have already disappeared, most through mergers and acquisitions. Equally disappointing, an ISP may get you access to the Internet itself, but not access to the range of services that you want to offer your customers.

"We went though four or five ISPs in a matter of just two years, and we weren't happy with any of them," says Ciapka, whose Livingston, N.J., firm finally found a good partnership with Digex Inc. "I think in the early stages it was more of a choice of the lesser of two evils. Some of those ISPs were real disasters."

To provide a reference in this fast-changing landscape, we turned to a study released last month by the Gartner Group Inc., which classified ISPs under four different categories: "Leaders," "Challengers," "Niche Players" and "Visionaries," depending on how they are expected to meet enterprises' needs during the next five years.

"Leader" companies, according to the study, have generally ruled the corporate ISP space, and include some of the oldest and largest telecom providers, such as MCI WorldCom's Uunet Technologies Inc., AT&T and GTE Internetworking. In most cases, they have a strong backbone network of their own and offer customers high bandwidth and connectivity.

The "Challengers" comprise companies such as the rapidly expanding PSINet Inc., Cable & Wireless and Sprint (which is being acquired by MCI WorldCom), while "Niche" players include the likes of BellSouth and Ameritech.

Smaller companies, such as Digex, Qwest Communications International Inc. and Verio Inc., are designated "Visionary" ISPs, primarily because of their focus on Web hosting and other value-add services.

In this cover package, we profile an ISP in each category. They are: Uunet, PSINet, BellSouth and Digex. You may want to choose one of them for your ISP. If you already have an ISP, you should make comparisons to help you decide whether or not your Internet business could grow faster somewhere else.

Focus On Service

First, you need to know how to ask the right questions. VARs and integrators who have tapped the Internet opportunity successfully have learned,sometimes the hard way,to focus on the value-added services that suit their customers' needs.

"In this industry, value-added services are key, because everybody wants us to host them, and they want us to do everything for them," says Marilyn Simes, president of Digital Instincts, a Purchase, N.Y.-based Internet design and technology company. "The less they feel they are being threaded through different companies, the better."

For instance, a VAR with no Web development experience may want an ISP such as Concentric Network Corp. to provide dedicated hosting services, while integrators who have the Web goods but need a reliable platform for them may find better service in a backbone company like Uunet or GTE Internetworking.

Other companies,such as PSINet and Cable & Wireless,have marketed themselves as having the best of both worlds, with high-connectivity and specialized applications. The problem that may result, say some Web VARs, is that these specialized ISPs may be treading a little too far into Web development, becoming integrators themselves and competing with existing resellers.

An ISP that is a perfect match for one integrator's business may not be right for yours. Here are some questions you need to ask yourself and your ISP candidates: Do you want straight connectivity or do you want someone to manage your Web site? What kind of access do they provide? Can they host and manage applications? Do they guarantee network access at all times? Can they give international business customers roaming access around the world or are they better for regional access? Can they handle the transactions of a large e-commerce application?

Simes says Digital Instincts also considers factors such as customer support, tracking capabilities and technology solutions when choosing an ISP.

"What we look for is best-of-breed, because if we make a referral to a company like Exodus Communications or Digex, then it's a reflection on us how the results work out for our clients," she says.

Aside from services, does the ISP have a working relationship with the reseller channel? The ASCII Group, which has a membership of roughly 1,200 independent resellers, last month decided to enter into partnership with Qwest Communications, primarily because of the ISP's willingness to work with resellers. "We are looking for their reach in the United States and in terms of their Internet access, but we also saw in them the desire to go the extra mile in working with our VARs," says Kerr. "We found that a lot of the people in Qwest's Business Partner program have a background in the VAR channel, so they understand what resellers need."

What about specific reseller programs? Does the company have a "virtual" program in place where VARs can integrate services into their own brand solutions or can they only sell existing ones?

Digital Instincts, which has designed Web pages for The New York Times, Dow Jones Markets and Lillian Vernon, does much of its work with Exodus, which bases most of its business on providing partners with a reliable platform rather than applications. That focus suits Digital Instincts well, says Simes, because the Web design firm has the expertise to do the back-end Web development on its own.

"They are like a hotel for the servers, and they baby-sit the boxes in a very sophisticated manner," said Simes. "Usually, customers will come to us, and they may each have an e-commerce store and want to own their own boxes, so we just make the recommendation to put them in a reliable space like Exodus."

And, like in any partnership, VARs will be better served by a company that has a strong network of strategic alliances, says Simes.

"Exodus sends us a ton of business by recommending us to their clients," she says. "In the same way, a lot of times I'll get a specific client with a very particular need that I may not be able to address, so I will call someone at Exodus to see if they know someone who does. It's all about the network."