Editorial: Know Your Local VARs

Business services are being touted as the biggest opportunity for ISPs in 2007. You should do this, but you don't have to go it alone, although you may choose to do so.

by Alex Goldman ISP-Planet Managing Editor [January 22, 2007]

Value Added Resellers (VARs) are also known as integrators. The business they conduct will determine whether your ISP business lives or dies over the next few years (unless you are in a rural area and have no competitors).

Just two weeks ago, in our Editorial: Anticipating 2007, we talked about how the data center boom is bringing rapid growth to hosts, especially those that provide business services.

It won't be easy, but it will be profitable
You could, if you have the resources, hire new personnel and rent or buy data center space to provide high touch managed services to a new kind customer, a high ARPU business. Even some small businesses, such as realtors, law firms, and accounting firms, pay top dollar for good service. As tax time approaches, some accountants may need more bandwidth or storage.

If you do not have the resources to do it yourself, you'll want to learn who your local VARs and integrators are. If you are working regularly with your Chamber of Commerce, which is another best practice advocated by ISP-Planet, you could simply ask around. Otherwise, you might need to consult a phone book or talk to a local computer guru.

Once you find your local VARs and integrators, learn whether you can work with them. You have much to offer them and they have much to offer you. Be prepared do document your work processes for a VAR that has medical, financial, or educational customers. If you can prove that you conduct business in a professional manner, and you're satisfied with the way the VAR manages its business, then you can offer the connectivity (and, if you're a CLEC or VoIP provider, offer voice service as well). In return, the VAR will connect you with established local business customers.

Partnerships can be profitable
Many people seem to feel that business is a zero sum game, where nobody makes a profit except at someone else's expense. This is simply not true of the ISP business. Any service provider has the opportunity to enter into lucrative partnerships with other businesses. However, each partnership opportunity should be examined carefully. You need to know, in the worst case, what would happen if you could no longer work with your partner. Never depend on any one other business, if it is at all possible (this is why many wireline ISPs are going into the WISP business—in order to be free of the phone company).

Business services present a real opportunity, but not one to be taken lightly. There are customers available, revenue to be earned, but there is also risk. Enter this market, but only after assessing the risks and planning your expenses (expenses in terms of personnel, time, and, of course, money).

With careful planning, your experience could be as positive as that of Portland, Ore.-based EasyStreet (which had an advantage because it was designed from the start as a business ISP) in our article EasyStreet Grows, Part 1: Today's ISP Growth is in the Data Center.

For a detailed description of what is involved in careful planning, see our article on the management philosophy of Dover, De.-based Delaware.net founder John McKown. The article is creatively titled John McKown, President and Founder, Delaware.Net.

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