November 18, 1996
Choosing ISPs for your business
By Bob O'Donnell
Making comparisons between the worlds of telephone service and Internet access is an
easy, but still relevant way for IS managers to cope with confusing array of choices they
face as they hook their companies to the 'net. One of the most enlightening comparisons
came to me as a result of CNBC's "Steals and
Deals" show. In a recent quiz, the show which asked how many companies offered
long-distance service in the U.S. I thought (as did the several people I queried) about a
dozen.
I was shocked to hear that the real answer was more than 500!
The vast majority of long-distance business is handled by a mere handful of companies
-- the other slice is comprised of second-tier companies and a hoard third-tier
operations.
The Internet service provider (ISP) business seems to be headed towards a similar fate
(though from the exact opposite direction-many to few instead of few to many). Although
there are now thousands of companies that offer Internet access, the market seems to be
moving towards a few large providers servicing the vast majority of customers and the rest
of the pie served by a few second-tier players and then a few hundred tiny ISPs. In other
words, we may still have lots of choices for Internet access in a few years, but the vast
majority will be irrelevant.
And given the number of companies now jockeying for a position in the new lineup, I
also think we'll be seeing a major shakeup in the world of ISPs over the next two years,
with lots of small- and medium-sized companies either being bought and subsumed or simply
going out of business. America Online's (AOL) recent decision to close GNN, for example,
will be just one of many, many similar moves.
So, where does that leave you as you select from the current options? Well, given that
a number of the growing major players in Internet access are the same ones as in the world
of long distance, there are a few obvious choices. Going with one of the big telco
providers (AT&T, Sprint
Corp. , MCI Communications Corp., etc.), for example,
might allow you to work out combination long-distance/Internet access rates that save your
company lots of money. As more IS managers take on responsibility for, or at least get
involved with, their company's phone systems, this choice seems particularly apropos.
The problem, of course, is the classic dependence on a sole supplier. Many of the major
telcos are complaining of circuit overload on their regular phone lines and given that
breakdowns in Internet access are still a normal occurrence with all ISPs, the possibility
of a catastrophic loss of communications due to reliance on a single vendor doesn't seem
all that far-fetched.
Going with one of the second-tier players (Netcom
Online Communications Corp. , PSINet Inc., UUnet Technologies Inc., Earthlink Network Inc., etc.) though, let alone the
third-tier choices, may put your company's Internet access service in unstable hands,
particularly if (when?) more industry shakedowns occur. Plus, as first-tier providers such
as AOL and AT&T start matching the prices of the
smaller companies while still offering their own benefits (such as original content, more
secure infrastructure, etc.), it will become harder to justify choosing one of the smaller
companies, even though they've been big players in the Internet world.
As with most decisions, there aren't really any easy answers, but it seems clear that
consumers and businesses are starting to expect their ISPs to function like utilities and
just work. Companies that can provide that service reliably, at a good price, will survive
and the others will begin fading into oblivion.
©
Copyright 1996, by InfoWorld Publishing Corp., a
subsidiary of IDG Communications, Inc. Reprinted from InfoWorld,
155 Bovet Road, San Mateo, CA 94402. Further reproduction is prohibited.
