"We're one-year-old and beginning to find our niche," says Steve Klock, managing director of The USOnline Network, an affiliation of more than 70 ISP shops nationwide.
What began a year ago as a fledgling attempt to build another confederation of ISPs has evolved into a uniquely positioned powerhouse in Internet communications.
A former software reseller, Klock says USOnline's niche is small to midsized businesses that are usually overlooked by larger, national ISPs but ill-suited for regional mom and pop Internet shops. To those customers, which comprise 30 percent of USOnline's customer base, the USOnline network offers premium service, strategic consulting and even product acquisitions support.
Like Verio Inc. and other ISP organizations, The USOnline Network, is growing through acquisition and affiliation, says Klock. But unlike Denver-based Verio, an ISP roll-up organization, The USOnline Network has not purchased any ISP without first working with it for an extended period of time.
Membership is by invitation only, mostly because Klock says he's looking for a particular type of company. In general, he's looking for ISPs that have between 500 and 10,000 individual customers, plus plenty of service skills.
"The business is changing. We're looking for ISPs that have recognized that customers want more VAR capabilities from their ISPs. They want more service, more advice and more applications-savvy partners. And that's what we're looking for in ISPs, too," Klock says.
The roll-up strategy kicked into high gear in May when the company began taking steps to acquire member organizations in the confederation. In recent weeks, the company has signed letters of intent to buy affiliates covering most of the top 30 markets nationwide. Overall, the company wants to acquire as many 25 companies.
Meantime, new members continue to be drawn to the network. In June, Psionyx of Orem, Utah, joined the group, following in the footsteps of Amouse.Net of Poulsbo, Wash., and several other companies.
The company has largely been self-funded, but now that it is moving quickly to begin acquisitions, the company is lining up financing. Rather than turn to the San Francisco Bay Area, a popular source for venture capital, The USOnline Network has tapped lenders in Portland, Ore.
"We tried the Sand Hill Road crowd," Klock says. "But they were turned off by the fact that we were located in Wenatchee, Wash."
After a year of solid growth, those financiers may regret their decision.
|
10 Challenges That HP Wants Partners To Tackle Right Now CRN speaks with HP's business unit chiefs to get a sense of where they'd like partners to focus in the coming year, as well as how CEO Meg Whitman is making a difference. |
|
VAR500: IBM Strikes Deal With Ukraine Bank; HP Bolsters Health-Care Practice CRN VAR500 solution providers win health-care contracts, work on European banking solution, create a platform for microlending, sharing info on cloud computing and more. |
|
Five Companies That Dropped The Ball This Week For the week ending Feb. 3, CRN looks at five companies that were either asleep at the wheel or just didn't make good decisions. |
 More
Slide Shows |
