ISPs Move Forward

While some ISPs may be shrinking, others are growing, and to those we asked the question: what are you doing that helps you grow?

by Brock Henderson Principal, Henderson & Associates [August 6, 2007]

ISPs are growing. As always, there is a need for not only the basic technical support specialist, but also programmers, web developers, engineers, and salespeople.

While many are hiring salespeople, not all of the salespeople are hired to sell connectivity. Many ISPs are branching out into related businesses, and need salespeople to educate potential customers about these new offerings.

Some ISPs have expanded into network consulting. It's not just for businesses, but for the residential market as well. Utilizing existing tech support, these ISPs come to the customer's home and do whatever is needed, including computer repair.

An ISP in Michigan is attempting to enter the confusing world of government contracts. Essentially, they are going for any network consulting jobs the government may be contracting out. Though this ISP is initially targeting the Federal Government, I suspect they will also be seeing what needs their state might have.

Out west, one individual has gotten some interest in CD replication from a number of businesses on the West Coast. The company placed ads in major publications on the east and west coasts, but only received interest from the West Coast. (I assume this was because of their relative proximity.) At my suggestion, he will also be testing a target market he hadn't thought of.

This same ISP offers e-Bay selling services too. When a customer brings their item in, the ISP takes care of listing and shipping the item, and then they split the bid proceeds. This venture was fairly solid until some competition opened up nearby, and sales fell off (but not enough to close the project).

Some ISPs are moving into data storage for customers, and it looks to be a lucrative market. One advantage is that this service can be sold to non-customers as well as customers, and like webhosting, the client can be anywhere in the world. Data storage is relatively inexpensive for the ISP, and the marketplace is charging a healthy amount for these services.

Change yourself
One ISP in Oregon even looked at becoming a telco.

Obviously, VoIP is an area ISPs are entering, but not quite as fast as I would have thought. Even residential customers are increasingly interested in this service. The myriad new features of VoIP appeal to residential customers as much as they appeal to business customers.

Also, at least one U.S. ISP has entered the IPTV market; this is an area I expect to see a lot of growth in, and encourage all in the industry to take a hard look at. (IPTV seems to be stronger overseas than it is here.) The potential for on-demand downloadable programming is huge, and will impact the television, movie, and DVD rental industries significantly.

All of this diversification is good for the industry as well as the individual ISPs. There is an old marketing saying: "Innovate or die", and the moves these and others in the industry are doing are very healthy steps.

Frankly, I believe the individuals in this industry adapt to new ideas and opportunities way too slowly. Odd isn't it, that an industry dominated by techno-savvy individuals who are quick to adapt the newest electronic gadget, is slow to accept technology opportunities for their business.

For example, ISPs with a number of circuits should strongly consider being a CLEC. The number of circuits you have obviously impacts your savings, but ISPs with only a few circuits, (3 to 5), would not experience any ROI for some time—possibly never. ISPs with a large number of circuits, (20+), would definitely be pleased with the change in revenue.

I realize there are money concerns, but you need to take a deep breath and take the step forward. If you aren't innovating and growing then you are stagnating and dying.

— End