Sewing Up the Customer - Industry Trend or Event

Telecommunications, April, 2001 by Doug Morgan

By providing "tailored" solutions, first-mile service providers take the pain out of being small.

Rising demand for high-speed, broadband data services and applications by small and midsize businesses (SMBs) located in commercial office buildings has encouraged emergence of the "first-mile" service provider. By delivering reliable, innovative business-centric solutions and eliminating bandwidth bottlenecks, these new providers help create growth opportunities and level the technological playing field for SMBs.

First-mile providers have altered the traditional concepts and roles of ISPs within the communications industry. Gone are the days when major service providers concentrated on building nationwide networks with little regard to serving business users inside commercial office buildings. Today's first-mile providers make it a priority to understand the unique needs of SMBs and deliver data solutions that support everyday operations. They concentrate on offering high-speed connectivity and data bundles such as Web hosting, e-mail, network security, VPNs and professional services from the curb to the desktop, going beyond traditional last-mile providers that were often unconcerned about a customer's need for business applications.

First-mile service providers light a building by connecting a LAN to CPE, with an optional managed firewall (see Figure 1). The CPE feeds into the building's POP through a fiber-optic connection. Data moves from the building POP to the metropolitan POP over a high-capacity, fiber-optic or wireless connection, and then to the public network.

SMBs benefit by accessing affordable, broadband solutions that increase productivity and profitability. Fast connectivity eliminates bandwidth bottlenecks, while tailored, bundled data services, a reliable network, and professional consulting services run back office operations, create sales channels, develop applications, process orders and connect multiple locations. First-mile providers enable SMBs to focus on running and growing their businesses.

Commercial real estate owners and property managers realize that in-building data networks offering affordable, high-speed broadband network connectivity provide added value for current tenants and attract future tenants. In today's competitive real-estate market, offering no-hassle, speedy network services to businesses that traditionally have been cut out of the big bandwidth market can make the difference between empty office space or a building leased to full capacity.

A Closer Look

One of the largest hassles facing SMBs is the limited bandwidth available through traditional dial-up or shared broadband connections such as DSL and/or cable modems. These types of Internet connections provide adequate speed and capacity for small/start-up companies, but many SMBs find their networks do not grow with their businesses. CLECs cannot guarantee deployment time for DSL service because of potential CO delays while waiting for capacity. There is currently a backlog in most regions for DSL service deployment, and businesses cannot afford to wait. Cable modem technology is limited primarily to residences and is not typically available in central business districts with high-rise buildings.

When it comes to bandwidth access, SMBs often find themselves outspent and outmatched by larger organizations. With traditional dial-up connections, SMBs often get busy signals and are limited in the sizes and types of files they can send and receive. Preserving the integrity of important corporate data, ensuring delivery and quality, is another essential function traditional dial-up networks cannot accommodate compared to higher-speed, higher-capacity broadband networks.

First-mile service provider networks alleviate bottlenecks by delivering 192-kbps to 100-Mbps connections to the Internet and other high-speed data networks. A business can receive a faster connection during busy dines when it needs more network capacity, and less bandwidth when it does not. These providers also offer managed firewall and 24x7 monitoring services.

The Proof

Companies using in-building data networks to support everyday operations have gained significant benefits. For example, employees of San Francisco-based law firm Jacobs, Spotswood, Caspar & Murphy were spending many valuable billable hours traveling to and from public libraries to gather case research. The firm needed a high-speed, reliable Internet connection to access on-line research databases and download large files. With a l0-Mbps network in place, the law firm significantly reduced research-related expenses by finding information on alternative legal Web sites in as few as five minutes, without using expensive, legal-centric search sites. The law firm saved time and money in billable hours, and a flat-rate, monthly billing structure for internet costs delivered significant savings.

Companies can also use high-speed data networks to automate back office functions such as payroll and inventory maintenance. They can create additional sales channels-storefronts--using Web design and hosting services, while the IP-based data network provides the backbone for quickly processing orders over the internet.