[April 15, 2004]

Fixating on flexibility
Jim Dawson, co-founder, president, and CEO of Portland, Ore.-based wholesaler Flexpop is also able to watch the deployment of dialup acceleration at more than one ISP.

"We've been looking at accelerators for a year and a half, maybe even longer," he says, acknowledging that his was not the first wholesale network to deploy acceleration technology. "Some networks we aggregate were offering their own. We needed something that works on every network."

Ease of deployment was a key consideration. "We did not want it to be complicated for us, our ISP customers, or their end users. We needed a value add at a good price point."

As Flexpop examined accelerators, more and more ISPs began deploying acceleration. "We looked at some that weren't worth the time and effort. They weren't very fast. We started feeling the need to make a move a few months ago. We felt the software had matured across the industry, and our ISP customers were complaining that broadband competition was killing them, and Earthlink and NetZero and the nationals pushed out their accelerators."

He says that value-added services make it easier to sell wholesale services, because the combined buying power of Flexpop's customers gets each individual customer a better price.

The company tested several solutions based on speed, ease of install, ease of operation, whether it could easily be turned on and off. Proxyconn, he notes, also offered ad blocking and popup blocking.

Initially, Proxyconn will host the solution, but Dawson will roll out the product, own-branded, in time. "The whole thing will fit right into our look and feel. The customer will be able to promote it as 'powered by' our product, and we'll be able to pass on a really good price to our customer."

But the bottom line consideration for Dawson was that he felt Proxyconn was dealing honestly with him. "We can afford what it takes, but some accelerator vendors did not give us straight answers about how the software works or what the pricing would be. Proxyconn was straightforward, and answered our questions."

Vendor secrecy is problem in many tech areas, Dawson fumes. "It always flabbergasts me when a vendor of any kind makes it tough to buy their products. People want to tap dance around us like used car salesmen and not give prices. It's a problem in the whole industry, not just accelerators."

The price is right
It seems that ISPs that sell dialup acceleration (as opposed to giving it away for free) are able to do so because they charge a lower price, whether they are nationwide like United Online, or local, as is the case of Great Falls, Mont.-based Sofast Communications.

The company sells regular dialup for $13 per month, and accelerated dialup, which it calls Sofast Nitro, for $18 per month. The Sofast Nitro website has an interesting factual indictment of NetZero's privacy policy. For ISPs, offering acceleration is all about competing with the big ISPs.

"We were looking for a solution for some time, "says Michael Kazmier, CEO of Sofast Communications. "We wanted it to reduce churn more than generate revenue."

The company tested Propel and Proxyconn, both of which provided free trials (as we said before, ISPs should use these free trials to test accelerators themselves). "We brought in clients, loaded the software on machines, and did tests," says Kazmier.

But the tests were not what inspired Sofast to go with Proxyconn. "The performance of the two products was pretty comparable," he says. "But Proxyconn was very willing to answer our questions and Proxyconn's pricing was better. We're happy to be working with them on this."

As it worked out, Sofast launched its dialup accelerator just after Superbowl weekend, on February 5, 2004. The result was positive for Sofast. A single e-mail announcement to customers about the new product had a take rate of 10 percent. The e-mail offered a 7 day free trial, and fewer than 10 percent of those who tried the product cancelled it.

"We had been receiving a number of cancellations each day, from people going from dialup to accelerated dialup. It was very important to us to provide a competitive alternative. We took our bundle pricing from NetZero, charging an additional $5 for the accelerator."

Kazmier is particularly happy about the take rate among new customers, which he says is between 20 and 25 percent, much higher than he'd expected. "We now have 12 percent of our customers utilizing dialup acceleration." That's very good for a product that's been on the market for barely two months.

Everybody wins
Joe Laszlo, Senior Analyst at Jupiter Research, is bullish on the industry as a whole. This afternoon, Laszlo will moderate the ISPCON session Getting the Most from Dial-Up Acceleration. "With all the large ISPs on board this point, Web acceleration is fast becoming a competitive necessity for premium ISPs, and an important premium feature for value ISPs," he concludes.

Sounds like every dialup acceleration company can gain market share every quarter because the market itself is growing very fast. In fact, Proxyconn's biggest North American customer win may have happened this week. On April 13, 2004, the company announced that the Herdon, Va.-based National Rural Telecommunications Cooperative will be providing Proxyconn to its members, which number over 1,100 rural entities.

In a growing market like this, everybody wins: software innovators, ISP deployers, and the end users, who receive a better service.

—End

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