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All of us would like to have faster access to the Internet: you can never be too rich, too thin, or have too little latency, as the saying goes. While cable and phone companies are tempting the residential user with faster access for less than $50/month, they ignore the real potential market, that of small businesses.
Small businesses have the greatest opportunity for high-speed access. Many of them are late to the networking party, playing the game of pass that floppy (once charmingly called sneakernet) rather than cable together their PCs with Ethernet. They have invested in modems and individual phone lines for Internet access, and the whole concept of shared resources is still somewhat foreign. There are plenty of them in this country, and many already spend lots on their communications. This is virgin territory, and what is motivating them is the Internet. Forget hooking everyone up on a network so that they could share a laser printer: that is 1980s thinking. Today, the hook is the ability to download web pages faster and get email quicker.
The sweet spot is the 5 to 35 person office that can share a 100 to 300k line. T-1 is too pricey for this group, and using individual dial-up modems ends up costing a bundle in separate phone line charges.
This group is just ripe for routers and high-speed Internet access. Marketed correctly, with the ability for simplified configuration and dynamic IP address assignment, this could explode in the coming year or two. But there are several obstacles that won't make it easy.
First off is the confusing range of vendors. While competition is helpful to keep prices down and motivate vendors to get your business, too much of a good thing only can hurt this new market. Cable vendors, local Bells, alternative carriers, ISPs, wireless vendors, and wireless cable vendors are all trying to get involved and offer service. Try finding out their prices, requirements for customer equipment, or the fine print on their service contracts. Chances are your average small business owner is too busy to deal with any of these guys, and isn't going to have the patience to wade through the morass of documents or make many calls to track down the information.
I work in a small office building that has a nice array of businesses. Having been there for over five years, I've gotten to know many of the other owners: the guys that run the Subway sandwich shop downstairs, the couple that run the music store, the interior decorator shop, the dry cleaners. Whenever I think of the hurdles facing any would-be purveyor of technology, I think about these folks and how hard it is for any of them to implement anything. I know, because they usually knock on my door when they have a computer problem. These guys are all smart: they all run successful businesses and make a decent living. But they don't have the time, the tools, or the techniques to configure their Internet access, set up an IP network, or set interrupts on their Ethernet cards. Nor should they. Technology, especially new technology, is just too daunting for my business neighbors.
Second is the numbing array of standards for high-speed access. No matter where you turn, you have lots of choices. Want a cable modem? Is that two-way symmetrical, two-way asymmetrical, or one-way with phone uplink? There are satellite, frame relay and ATM choices, not to mention your usual T-1. And Digital Subscriber Line technologies, just coming in service, already have an entire dictionary worth of acronyms, specialized terms, multiple conflicting standards, and pre-beta incompatible products. It is hard for me to figure any of this stuff out, and I spend my days looking at technology. Forget my pals down the hall dealing with any of this. They just want to get connected, and don't care who does it, just as long as it works and doesn't take time away from running their business.
Third is the people problem. Chances are, none of the potential access providers know how to get through to your average small business owner. Just because I get a monthly phone bill from Bell Atlantic doesn't mean they know my business. Indeed, for the most part, they don't. Worse yet is the scary situation of having the local phone companies put their best ISDN minds on their forthcoming DSL projects: this could promise that DSL will fail, at least in the hands of the Bells. The cable guys aren't any better: do they even know there are businesses along their cable routes?
[A side note: in the interest of fairness, I have joined the advisory board at Covad, and will continue to provide them with my expertise and advice. Covad is hopeful that the combination of the cable guys and the Bell's ineptness will continue to provide market opportunity for them to sell you DSL service. By the way, if you are interested in having me serve in this advisory capacity for your company, drop me a line.]
Look at the lessons learned from ISDN over the past decade: multiple standards, incompatible equipment, inscrutable prices, and spotty implementation and support. Each high-speed Internet access technology has the potential to repeat this history completely. Not a good sign.
Finally, you have to price these services for continuous access. It doesn't make sense to charge by the minute for these high-speed services, unless you want to make sure that no one will end up using them. A good case in point is Singapore, where the local phone company is charging 5 cents a minute for its high-speed service. What a surprise: no one is signing up.
All in all, we still are long way off before high-speed Internet access is ready for small businesses. But when someone figures this out and can overcome the above obstacles, watch out!
Speaking of eCommerce, I've put together a page of links that will take you to the PowerPoint presentations that form the basis of my day-long lectures on the subject, along with links to other eCommerce resources, online demos of products, reviews and exemplary eCommerce sites (both good and bad). Let me know if there are other links I can add here. My next class will be held at the Vegas Interop show in early May, and Stephanie Denny (who wrote the SET essay in WI#91) will add her banking expertise and share the teaching duties. This is the class that I have been teaching around the world: in addition to the US-based Interops in Vegas and Atlanta, I have gone to Sydney, Singapore and Tokyo (in June).
David Strom
david@strom.com
+1 (516) 944-3407
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