Strategy Paper for Overcoming DTAG Market and Technology
Advantage
This paper was created for a venture capital company and
subsequently used to target cable accessible markets in
Germany. The paper has been parsed in this forum to
separately cover Digital TV, Broadband Data, Video on
Demand, Telephony, Interactive TV, Gaming and Colocation.
BROADBAND DATA
Broadband Data, otherwise known as ISP, is currently
dominated by DSL offered by DTAG. Substantial penetration
and marketing hurdles are inherent in offering this
service. Another consideration is that this service is
offered "across the board" by DTAG, i.e. to residential and
business consumers.
We suggest pursuing Broadband Data consumers because of the
competitive nature of the enterprise, and the constraints
inherent in DTAG's position. DTAG's upside – Customer
recognition, excellent DSL operations reputation, tie-in
capabilities for telephone, mobile phones, etc. DTAG's
downside – Size i.e. DTAG cannot make quick decisions or
quickly respond to challenges, governmental constraints,
high overhead, slow installation, price. DTAG's downsides
make them a very vulnerable target, while their upsides can
be overcome by establishing a great reputation by
performance, offering Broadband Data as a package within
the group of products the enterprise offers, and partnering
with stellar companies which offer Broadband Data services
as their core competency.
The consumer ISP portion of this enterprise should be
outsourced. Sourcing partners should be done by
establishing x considerations.
1. Market reputation – Rather than taking the time to
establish a reputation for excellence, quality and service,
it would be much more economical to use existing companies
which have already established brand recognition. This
offsets DTAG's advantage in this area.
2. Quality of Service – Working with a company with a
stellar "Quality of Service" lowers the probability of
alienating potential customers, garnering adverse
publicity, lowers the cost of doing business through the
low percentage of rework and high percentage of successful
implementation.
3. Scalability of Infrastructure – The company the
enterprise partners with will need to be able to
transparently (to the consumer and the enterprise) add
millions of customers while offering an excellent
experience. This will take an infrastructure design built
to scale well when additional resources, forecasted and
unforeseen, are needed.
4. Staying power – The companies selected must be
financially sound and able to operate under increased
workloads throughout the period of our contract. Having to
convert customers from one ISP to another is guaranteed to
adversely affect the reputation of the enterprise even
though the enterprise is not operating the ISP. The ISP
and the enterprise are considered one and the same in the
customers eyes. In addition to this, the enterprise would
face a financial hit, in some scenarios quite extreme.
Sourcing financially sound companies has no downside.
5. Competitive bidding - The enterprise has a potential
customer base of millions to offer ISPs. This is an
extremely strong negotiating position for awarding bids.
Competitive bids should be accepted for contracts of fixed
length extendable for fixed lengths indefinitely. Through
bidding the enterprise can realize some of the value of
it's customer base, be "pre-financed" for some upgrades and
help lower uncovered CAPEX expenditures.
6. Amount of control the enterprise will have with this
partner – Control of the quality of customer experience,
and technology interfaces is imperative to make this
strategy succeed. Hence, responsiveness to the concerns
and fiats of the enterprise is imperative. The customers
serviced by the ISPs are owned by the enterprise, as such,
the enterprise must be extremely proactive in projecting
the image it wants the world to see, and extremely
protective of it's reputation.
7. Geographic location – The ISPs selected must be easily
accessible physically and datawise to the enterprise and
it's customers, on a "best in market" level. This means
that latency must be the lowest in market, bandwidth must
not be a contraint, downtime cannot be allowed, the
enterprise must be able to easily connect into the ISP
infrastructure without occurring extraordinary costs.
Performance provided must be better than anyone else in the
applicable geographic area for the customer.
8. Amount of funds the partners are willing to invest in
ISP infrastructure within the enterprise – As this is a
partnership, the ISPs will be expected to assume some, if
not all, of the cost of "plugging into" the enterprise.
Also part of the costs entailed in making (upgrading) the
enterprise infrastructure to carry data should be amotized
and charged to the ISP partners.
9. SLA's and guarantees – This should be outlined in the
RFP or RFB (Request for Proposal or Request for Bid). The
ISPs must go into bidding knowing that the enterprise will
allow 0 maintenance downtime, expects 99.999% uptime,
latency from consumer computer to ISP external router of no
more than 15 ms, will be mandated to work with gaming
networks using common ldap, certain protocols (e.g. tcp/ip,
mpls, QOS, etc.) are a necessity. Quarantees entail strong
penalties for not meeting standards. Penalties run the
gamut from financial up to and through summary termination
of contract.
10. Technology (ability to interface with enterprise) –
Technologies used by the ISPs must "play nice" with the
systems deployed in the enterprise. Interfaces should be
common and non-proprietary. In short, the ISP needs to be
able to "plug-in" to the enterprise, and in the unfortunate
event of ISP insolvency, contract breach, etc, must be able
to "unplug" from the enterprise. This should be
transparent if possible.
With the proliferation of ISPs, the enterprise has no need
to invest in systems, manpower, training, skills,
infrastructure, marketing, installation, etc. to offer
Broadband Data services. Email addresses must be of the
enterprise domain, as opposed to the domain of the ISP.
The ISPs would individually market this service.
----------------------------------------------------
Sean DAniell is a internationally seasoned I.T. executive
with highly effective technology and organizational
management experience that increases profitability. Mr.
DAniell has extensive experience in creating, managing and
guiding thriving, successful startup and Fortune 500
technology departments.
http://www.abilenegroup.com