Small and Regional ISP Growth is Flattening. Listening to the Customer Proves a Crucial Asset
[ASND references in bottom paragraph. I would like to see these predictions in numbers of installed ports. As we know, ASND has the biggest ISPs. I thought 3Com would do better in this small/regional ISP sector.]
May 26, 1998
ISP BUSINESS NEWS via NewsEdge Corporation
-- The small and regional ISP market is flattening at
4,500 providers, finds San Jose, Calif.-based
Infonetics Research, but it's not going away.
Merger and acquisition activity that swamped large
providers and involved other communications
services providers left a niche for smaller ISPs.
Smaller ISPs, according to Infonetics, are
companies that provide Internet access to the public
for profit, but don't provide national backbone
services and aren't registered as CLECs, telcos or
cable operators. Rapid response to customers'
needs is the niche that these companies occupy.
"Small and regional ISPs are able to listen carefully
to their customers and implement changes
instantly, whereas large providers take longer to
adapt, " says Greg Howard, director of service
provider programs at Infonetics and one of the
authors of "The Local/Regional Service Provider
Opportunity 1998," a study by the group that
forecasts market behavior in this segment for
1998-1999.
These ISPs face stiff competition for business
customers, who are lured away by bigger providers,
says Howard. Nevertheless, this is the market
segment where small and regional ISPs have the
greatest potential because they can customize
services for a particular geography and regional
specifics, and respond to customer feedback
almost instantly.
The smaller ISPs have been actively developing
Web design and systems integration arms, going
deeper and deeper into their customers' network,
with the ultimate goal to outsource all of it,
Infonetics found.
In the 1998-1999 period, Infonetics predicts
proliferation of managed VPN services, Internet
commerce, access design and consulting, and
customer performance traffic analysis. Some of
these services will be deployed as a reaction to
larger ISP strategies. Traffic analysis, for example,
in small and regional ISP configuration, will give
customers peace of mind rather than tangible
results. This service, however will enable smaller
providers to announce QoS agreements.
"Fifty percent of these ISPs will start rolling them
out by the end of this year," says Howard.
Ascend Gets Ahead of Bay
The vendor line-up with small and regional ISPs will
remain largely the same. On the access side,
Infonetics predicts, ISPs will buy (in this order of
preference) Cisco [CSCO], Ascend [ASND],
Lucent's Livingston [LU], 3Com [COMS] and Bay
[BAY] gear. On the router side, the picture will
change slightly in 1999. With Cisco leading the
market, this year it is followed by Bay and
Livingston. Next year, Cisco will be followed by
Ascend, and then Bay, with Livingston falling
behind, Infonetics predicts. (Greg Howard, Infonetics
Research, 408/298-7999)
[Copyright 1998, Phillips Publishing]
Copyright c 1998, NewsEdge Corporation No redistribution allowed. |
