This talk is about two things.Why being an small to medium ISP is still viable in Australia today. This section will include some commentary about consolidation of the industry, diversification, market niche’s, the wholesale spaceAlso, I will be giving an overview of my forthcoming book ‘So, you want to be an ISP?’
BACKGROUND DISAPPEARINGBased on the numbers from a variety of sources (some information in following slides), most information is suggesting that smaller ISPs are disappearing.I am not sure about this as I just think that many of them are very invisible to the market.My thoughts on this are that for many years, that most pico to small ISPs are run by hobbyists… people with a niche interest whose skills didn’t necessary extend to business acumen. I’ve personally seen dozens of ISPs go under due to bad management.There are a lot of changes happening in the Service Provider space technology wise… 10Gb, IPv6 and the depletion of IPv4 have meant a lot of the network are worthless and non-upgradable. Faster services made networks designed for modem throughputs bear great strain.Customers are also very easily portable, so worth very little to most potential buyers. I’ve been involved in deals where the seller has ended up owing the buyer money.CHANGEInfrastructure and Technology such as NBN and 4G, governments and policy, the world – such as change being affected by social media. It is an exciting time to be in this sector and I believe the next couple of years is going to see massive change for Service ProvidersDIVERSIFYINGTo clarify, I do not consider selling ‘other’ ‘telecommunications products’ as diversification. Home/business phone, 1300, 1800, mobile, IPTV, etc.I don’t believe many ISPs have diversified much at all. Even Telstra doesn’t do too much beyond Telecommunications.Dodo is an interesting stand out in the marketplace with significant other offerings other than telecommunication products. We will look at them as an example in a momentBut what about the other way…. What is happening, and what COULD be happening. Diversification is happening significantly in some other markets. We will look at a couple of examples of that happening.Opportunities for Niche PlayersI believe there are significant opportunities for niche players to build solid business models.When you boil it down, Telstra’s target market is westernised 18-35 year olds. They go for the largest mass of the market body, which works well for someone of their size.But it does however mean they can’t easily and effectively tailor their offerings to particular market segments. This is where the niche player can make a difference.So. I have a lot of information in this presentation, much of which I won’t spend a lot of time on, but is there for background information. So let’s go.
Just6 providers mentioned here which have consumed over 50+ other Service Providers and I am sure there is more to come.
A good example – THE OEM king… Kogan. TV’s, etc… now Mobile (with data) via a wholesaler.Being able to meet more of your customers needs will win you market share.Selling something a lot cheaper than the big name brands certainly helps though.Now, in the following examples… I haven’t exhaustively covered every offering, so this is just an overview and poses some interesting scenarios.
Note.. This is apparently a 1Gb symmetrical service – up and down. Clearly the technology exists to deliver this sort of facility… Kinda makes the NBN look pale in comparison.
I’m going to predict that if Apple gets into the ISP space, that traditional ISPs are in serious trouble – even Optus and Telstra.They would be the only ISP that people have an emotional attachment to… unlike our current Service Providers where the only emotion experienced is anger when things don’t work… the rest of the time we don’t give them a thought.
Coles and Woolworths we all know are on a massive branding and OEM exercise. From Bread and Milk, to Petrol stations, banking and finance, insurance services.They took a run at wanting to open Pharmacies inside their stores, but the Pharmacy Guild convinced the government not to allow it.I was in a Coles the other day in Epping Sydney and saw several isles converted to a clothing section.So… they’ve re-branded all these other products…. What about Internet?Could ‘this’ happen? Why not? If Kogan can do Mobile (via ispONE), whats to stop Coles, Woolies, maybe others – JB HI-FI, Harris Technology, Harvey Norman and so on, becoming Virtual ISPs – even selling modems and accessories in-store.Woolworths – the Internet PeopleColes NBN
Small ISPs rarely expect to me making millions. They’re often happy if they break even or better.Don’t misunderstand me though… profit is good… It’s just that smaller ISPs aren't great at knowing how to make it.
So… why shouldn’t you be an ISP?
OK.. What about ‘Why SHOULD you be an ISP’ ?Some will argue that focusing on a niche will artificially limit your business opportunities… I personally don’t believe that.I firmly believe, and past and current examples back it up, that if you excel in a certain area… you CAN make a difference.Brand loyalty does exist – but don’t give the customer a reason to look elsewhere, or you will lose them forever.Being part of a community is a massive plus for any niche based business.
Talk about Pico and Micro ISPsPersonal touchExisting customer baseVery niche focused
Value add is everything.Community Portals, information databases, subscription services, exclusive content.
Industry examples.In Australia in 2011, 36% of people speak a language other than english at home. That is nearly 8 million people.Religions – Christian, Muslim, Jews, Bhuddists, etc. I was told yesterday about an ISP that serves Exclusive Brethren and has strict filtering and other requirements.Age – Pre-teen, Teen, Seniors, RetireesSex – Male, Female, Gay, even IndustryHobbies – Sports, etcOthers – Safety, Disability, Teleworking, Call centres, Specific Serviceshttp://profile.id.com.au/australia/language
3 Japanese ISPs
This is not an exhaustive list… just what I know about. There are also a significant number of subsidiaries of these listed that offer wholesale as well.Now, These are my definitions:Tier 1 – exclusively use their own infrastructure and don’t sell othersTier 2 – Use their own, and partners with othersTier 3 – Don’t use any of their own
Consultants… I know there are a few ex-ISP guys who help out some small ISPsCommunity… Conference like AusNOG, APNIC and others can help a lot with contacts and information…. Especially the AusNOG mailing list…. Its fantastic.BUT…. All the technical help in the world wont help you if you can’t run a sensible business.Gone are the days when jokers would build a business on the back of something like the Broadband Guarantee or Broadband Connect
Why?Well, primarily because of was sick of repeating myself over and over 2-4 times a week to those interested in wanting to be an ISP but didn’t know what it entailed.I complained about this to someone one day, they told me to write a book… and so I did.Also. A big part of what I do and who I am is about empowering others. In this case, smaller ISPs and them being able to compete against the big guys – head on.Who?Essentially, anyone who wants to get involved in the Small Service Provider space. This book hopes to save them a lot of time, money and mistakes by telling them at the least, what they need to be asking about.What’s in it?Mostly questions.This book isn’t a manual on how to be an ISP. What it does do is let the reader know everything they do need to know about becoming an ISP, and where to go next.Where?Almost done. I am going to be contacting some of the key people in the Service Provider industry for some words of wisdom to add to the book. So some of you, expect an email soon.When?I am expecting preview copies to be available around July/August. In writing a book I’ve learnt that the actual writing part seems to be only half the effort… I am also wondering whether should hold of releasing the book till after the election, so my information about the future of the NBN won’t be immediately out of date…. Any feedback on that would be welcome.So... what's in the book
WHY BEING A SMALL/MEDIUMISP IS STILL VIABLESKEEVE STEVENSCEO & Chief Architect, eintellego NetworksDirector of the Internet Society of Australia COMMSDAY SUMMIT SYDNEY 2013 Skeeve Stevens
Why being a small/medium ISP is still viable INTRODUCTION What’s this talk about?• Why being a small/medium ISP is still viable in Australia today• Details of the forthcoming book “So, You Want to be an ISP?” COMMSDAY SUMMIT SYDNEY 2013 Skeeve Stevens
Why being a small/medium ISP is still viable BACKGROUND Whats been happening• ISPs are disappearing – mostly due to mergers and acquisitions• The Industry is changing• ISPs are starting to diversify their offering to customers• A strong wholesale market is enabling non-ISPs to sell Internet services to their existing customer base• There is still a LOT of opportunity out there for vertically focused ISPs – which are mostly in the pico-small size COMMSDAY SUMMIT SYDNEY 2013 Skeeve Stevens
Why being a small/medium ISP is still viableMARKET CONSOLODATIONWhere did all the ISPs go? iiNet M2 Group iiNet Internode iPrimus EFTel Dodo AAPT Command Platform Club Planet TransACT Residenti er Networks Telco Netcom al West Australia OzEmail Netspace Froggy AOL|7 aaNET VivaNET n Networks Other WestNet iHug 10 Others Esclipse Datafast Hotkey small ISPs COMMSDAY SUMMIT SYDNEY 2013 Skeeve Stevens
Why being a small/medium ISP is still viableMARKET CONSOLODATION…continued TPG Telecom NZ BigAir Grop Optus Optus TPG AAPT BigAir Internet IntraPow Pipe Clever er/Truste Nextep Allegro Unwired Networks Networks d Cloud AccessPlu Vivid PPC-1 Soul Powertel Star-Tech s Wireless B Digital Comindico RequestDSL Wizz iBurst Uecomm (Customers) COMMSDAY SUMMIT SYDNEY 2013 Skeeve Stevens
Why being a small/medium ISP is still viableDIVERSIFYINGNew Markets• Traditionally ISPs have stayed within their field of expertise – or close to it• Few ISPs are known for their prowess in Customer Service – even our biggest ones• It is going to go both directions (I will explain in a moment)• It is easier than ever to sell you-branded products • OEM everything• Own the customers – everything they need/want! COMMSDAY SUMMIT SYDNEY 2013 Skeeve Stevens
Why being a small/medium ISP is still viableDIVERSIFYINGNew Markets Dodo Retail Stores Alarm Monitoring Internet Services Telephone Power & Gas Insurance Home / Business Home, Contents, Car Others to come? Health? VoIP Financial Services? Mobile COMMSDAY SUMMIT SYDNEY 2013 Skeeve Stevens
Why being a small/medium ISP is still viable DIVERSIFYING New Markets Google Search Software Earth ChromeOS Business Solutions Others to come Entertainment Google Apps Television - trying Maps/StreetView Music, Movies Hardware Adwords/SEO Wearable Accessories Android TV, Apps Mobile Phones Search Appliances Internet Access Google+ iGlassUp to 5Mbps download, 1Mbps upload speed • No data caps • Free serviceguaranteed for at least 7 years • Includes Network Box$300 construction fee (one time or 12 monthly payments of $25) + taxes and fees COMMSDAY SUMMIT SYDNEY 2013 Skeeve Stevens
Why being a small/medium ISP is still viableDIVERSIFYINGNew Markets Apple Computer Computers Portable Music Mobile Phones Entertainment Others to come Music Television? Movies Wearable Accessories TV Internet Access? Internet + TV + Music + Movies + Apps + Software + Hardware COMMSDAY SUMMIT SYDNEY 2013 Skeeve Stevens
Why being a small/medium ISP is still viableDIVERSIFYINGNew Markets Coles/Woolworths Supermarkets Fuel Credit Cards Insurance Others to come Groceries Mobile Services Credit & Prepaid Home, Contents, Car Internet Access? Clothing Health? Internet COMMSDAY SUMMIT SYDNEY 2013 Skeeve Stevens
Why being a small/medium ISP is still viableIMPORTANT TO UNDERSTANDAbout being a small ISP• You don’t have to make millions to be happy• Making a difference can be significant• Doing it right, can mean a payoff later• Customers prefer personal service and will often go away from the big guys on principle COMMSDAY SUMMIT SYDNEY 2013 Skeeve Stevens
Why being a small/medium ISP is still viableWHY – YOU SHOULDNTWhy No• You are not committed• You don’t have a niche or micro-niche• You’re not involved• You have no profile• You suck at partnerships• Your products aren’t competitive or interesting• You aren’t meeting a need COMMSDAY SUMMIT SYDNEY 2013 Skeeve Stevens
Why being a small/medium ISP is still viableWHY – YOU SHOULDWhy Yes• You have a comfortable niche that you own• You are known in your space• You are part of a community• You partner well with others• Be able to run a profitable business• Be multi-skilled (Management, Sales, Marketing….) COMMSDAY SUMMIT SYDNEY 2013 Skeeve Stevens
Why being a small/medium ISP is still viable ISP SIZES How big do you have to be? Pico ? 10 - 100 Micro ? 100 - 500 Small ? 500 – 1,000 Medium 49 1,000 – 10,000 Large 24 10,000 – 100,000 Very Large 8 100,000+• ACMA say there are over 800 ISPs in Australia• ABS say there are about 81 ISPs with over 1000 users in Australia (June 2012)• That means there are over 700 Pico to Small ISPs• Total ISPs – June 2011 = 97; Dec 2011 = 91; Jun 2012 = 81 (closing or merging?)• iiNet in 2011 said that number of ISP dropped from 450 to 250 in 2010• Medium-Very Large defined by the Australian Bureau of Statistics, the rest I defined• June 2012 ABS Data - http://www.abs.gov.au/ausstats/abs@.nsf/Lookup/8153.0Chapter6Jun%202012• ACMA Fact Sheet - http://www.acma.gov.au/WEB/STANDARD/pc=PC_1723• Lifehacker - http://www.lifehacker.com.au/2011/02/smaller-isps-are-a-dying-breed-in-australia/ COMMSDAY SUMMIT SYDNEY 2013 Skeeve Stevens
Why being a small/medium ISP is still viableNICHE/ MICRO NICHEExamples• What is a niche to an ISP?• What does it mean being niche focused?• Examples of niche ISPs COMMSDAY SUMMIT SYDNEY 2013 Skeeve Stevens
Why being a small/medium ISP is still viableNICHE/ MICRO NICHEFocus NGO Engineering Italian Age Ethnic Arabic Energy Construction Chinese GermaGovernment n Legal Greek KoreanFinance Hobbie Industry Aged Care sEducation Sports Religio n Mining Entertainmen t Sex Food Real Estate Others? Media COMMSDAY SUMMIT SYDNEY 2013 Skeeve Stevens
Why being a small/medium ISP is still viableNICHE/ MICRO NICHEExamples – Regional Focus - Community Telco and Ace COMMSDAY SUMMIT SYDNEY 2013 Skeeve Stevens
Why being a small/medium ISP is still viableNICHE/ MICRO NICHEExamples – Legal Industry - BarNet COMMSDAY SUMMIT SYDNEY 2013 Skeeve Stevens
Why being a small/medium ISP is still viableNICHE/ MICRO NICHEExamples – Age Vertical - Seniors COMMSDAY SUMMIT SYDNEY 2013 Skeeve Stevens
Why being a small/medium ISP is still viableNICHE/ MICRO NICHEExamples – Satety Vertical COMMSDAY SUMMIT SYDNEY 2013 Skeeve Stevens
Why being a small/medium ISP is still viableNICHE/ MICRO NICHEExamples – Ethnic Focus - Japanese COMMSDAY SUMMIT SYDNEY 2013 Skeeve Stevens
Why being a small/medium ISP is still viableWHOLESALE SERVICESWhere do I get it? Tier 1 Tier 1.5 Tier 2 Highway 1 Telstra Optus TPG/Pipe iSeek aka ZettaNet NBNCo Vocus Nextgen Exetel WIP TelcoInABo BigAir FirstPath AAPT M2 Group iiNet ispONE x COMMSDAY SUMMIT SYDNEY 2013 Skeeve Stevens
Why being a small/medium ISP is still viableHOW EASY IS IT TO BE AN ISPEasy as• Wholesale Providers• Outsourcing • Operations • Support • Marketing • Systems (Billing, DNS, Hosting, etc)• Vendors• Consultants • eintellego Networks / io Networks – probably others• Community COMMSDAY SUMMIT SYDNEY 2013 Skeeve Stevens
Why being a small/medium ISP is still viableTHE BOOKSo, You Want To Be an ISP? COMMSDAY SUMMIT SYDNEY 2013 Skeeve Stevens
Why being a small/medium ISP is still viableTHE BOOK • Why write it • Who is it for • What’s in it • Where am I up to • When will it be released COMMSDAY SUMMIT SYDNEY 2013 Skeeve Stevens
Why being a small/medium ISP is still viableTHE BOOKWhat’s in it?Thinking About It Technical Stuff Case StudiesShould you or shouldn’t you be even Detailed information about all aspects Case studies will be provided which will bethinking about doing this? Telling the of an ISPs network, including their core based on some ISPs that I’ve worked withreader the good and the bad. switching, routing, redundancy, over the last 15 years such as: Datacentres, scalability, security (DoS) & more. colocation/hosting providers, wholesaleBefore You Start ISPs, residential ISPs, virtual ISPs and Tail TechnologiesStaffing, Equipment, ISP types/models, others. xDSL, Fibre (Lit and Dark), CopperTarget markets, Legals, Customers, (EFM), Ethernet, Wireless, Satellite, ResourcesOutsourcing, Products, Marketing. 3G/4G wholesale, including some old Websites, Mailing-lists, Chat, Podcasts,Life as an ISP technologies such as Dialup/ATM/etc. Consultants, Certifications, etcThe Community, Conferences, ISP TechnologiesOrganisations, Business operations, Networking Vendors LNS/LAC, Routing, MPLS, CGN, Transitinnovation of technology, trends, A brief overview will be provided on providers, Peering and types of peering,strategy. networking vendors such as: Juniper, Cisco, Datacentre types. Brocade, IBM, HP, SDN Technologies,How Stuff Works OSS Virtualisation, Vyatta, Microtik, as well asInternet Governance, IANA/RIR and IP Operational Support Systems such as some wireless – all as it all pertains toAddressing especially APNIC, IETF and Authentication, Provisioning, Helpdesk, Service Provider equipment.ISOC, DNS, Routing, Wholesale Providers. Billing, Monitoring, Backup, etc. COMMSDAY SUMMIT SYDNEY 2013 Skeeve Stevens
Why being a small/medium ISP is still viable THANK YOU www.eintellegonetworks.com email@example.com @eintellego @skeevestevens @networkceoau /eintellegonetworksThanks to:- Shara Evans of Market Clarity – www.marketclarity.com.au- AusNOG Mailing-List Members TM The Experts Who The Experts Call™ COMMSDAY SUMMIT SYDNEY 2013 Skeeve Stevens
Why being a small/medium ISP is still viableCOMMSDAY SUMMIT SYDNEY 2013 Skeeve Stevens