NetEqualizer Sees New Opportunity

An aggressive move into a new channel comes along with cost cutting elsewhere in the business.

by Alex Goldman ISP-Planet Managing Editor [January 27, 2009]

When some ISP executives think "bandwidth shaper" they think of a device with a five digit price tag. If so, they're not thinking of Lafayette, Colo.-based APConnection's NetEqualizer product, which we last wrote about in 2007 (see Network Contention Specialist).

The NetEqualizer starts at under $2,000, and pricing is published online.

Art Reisman, company CEO and co-founder, says that the NetEqualizer can play a key role in the hospitality industry. "Hotels needs managed dynamic access. Their customer lists change regularly."

Given the low cost of his devices, Resiman can afford to give them away to hotels that sign a revenue-sharing deal. The hotel continues to offer free but slow internet access (say 200 Kbps), and charges for higher speeds. The NetEqualizer keeps track of which customers are on which plans.

People are as likely to pay to access gaming and NetFlix as they are to speed up their business communications, Reisman says.

So is there an opportunity here for ISPs? Only for those ISPs willing to do some legwork, Reisman says. The company is not spending money on a channel. It is not providing marketing materials and training. Companies that charge $50,000 per device can afford to do that, but the lowest cost niche provider cannot.

But if an ISP stepped up and presented an opportunity, Reisman says, "we would be happy to work with them. The issue we've always had with a channel program is that our prices are so low that there's little room for margins."

The company and the technology
"We make our living selling to people who decide to work with a $4,000 box instead of a $50,000 box. When they call us, they reach our engineers. We know our stuff. We're also good on returns."

Returns are a standard 30 day policy.

NetEqualizer has a new unit capable of handling up to 1 Gbps speeds. The product, he says, was tested by friends at Candela Technologies.

Besides ISPs, NetEqualizer has a number of university customers who were demanding a 1 Gbps product, Reisman says.

AirEqualizer update
The company has stopped marketing the AirEqualizer, Reisman says. Although there was demand for the product from WISPs, the demand was not covering the marketing costs, and demand was insufficient to tempt the wireless equipment distributors.

The product works, he says, and solves the hidden issue, making it quite useful.

Reisman says he's sometimes blunt to the detriment of business. "I just talked someone out of building a network for 25 neighborhood customers," he says.

It was good advice. The person was ready to buy equipment, but not ready to lose money and spend time on a loss-making WISP. WISPs can be good business, but too many people enter the business with unrealistic expectations, believing that sales will be easy and cash will flow in. It takes years of hard work.

Reisman says he has to focus on the NetEqualizer, the idea with the most potential. In these economic times, it's advice that many businesses should follow: focus on what is already making money, and cut back marketing in other areas. Most ISPs that have dialup customers have already stopped marketing dialup long ago.

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