From BBS to Security Service

ISP-Planet has been advising ISPs to offer more services to business customers as the regulatory climate continues to favor monopolies in residential service. We talk to one ISP that has done it.

by Alex Goldman ISP-Planet Managing Editor [July 17, 2006]

Founded in 1994 as a BBS, Eden Prairie, Minn.-based BHI offers a full suite of security services. We called a co-founder, Dave Perrill, to find out how the company had made the transition.

The skills you already have
The key, Perrill told us, was identifying skills the company already had that would be valuable to business customers. Over time, the company had acquired valuable skills.

It started offering hosting at the same time it started offering dialup. "We had three original services," Perrill told us. "We offered dialup (PPP and SLIP), webhosting (on a 50 MB Netscape Enterprise Server), and e-mail accounts."

In the early days, Perrill said growing the business was relatively easy. "We used a lot of local newspapers, including the Star Tribune in Minneapolis. We've never had as effective ads since."

But competition increased in their portfolio, the company moved on. "We have to stay a step ahead and not sell a product that's becoming a commodity," Perrill told us.

At that point, the company identified its own skill set. "We realized we have expertise in running a webhosting operation. We have expertise on delivering uptime, security, and reliability. Now we need to find out how to offer this and how to price it."

Just a few years ago, companies were reluctant to outsource IT functions. "It was difficult for people to comprehend somebody hosting their data and services. The paradigm of the day was, 'I buy a server and a put it in my wiring closet.' Thankfully, we were not the only ones making this sales pitch."

And outsourced IT delivers savings. "I'd say that's our core competence: we can do it better and cheaper than you can do it yourself."

So, what sells? "Candidly, security has been our largest growth area over the last two years. We provide managed firewalls, anti-spam, anti-virus, content filtering, VPNs, IDS."

The company even has a separate URL and brand name for its security bundle, SecureConnect.

Security is about partnerships
Offering security is not easy. It requires a good reputation, good customer service, and, in BHI's case, a good partner. The company sells Fortinet's small business security appliance.

It requires honesty. "You need to say up front to the customer, we can reduce risk, but we cannot eliminate. You need to be aware of the tradeoff between usability and security."

Starting young
The change from residential to business customers was big. It involved changing the company's name and also graduating from college. Did we mention that Perrill was 14 when he and his co-founder, Nate Hubert, founded the BBS in 1994?

The BBS was called the Black Hole, and the ISP was called Black Hole Internet. "Dialup customers loved the blackhole.com e-mail addresses," Perrill remembered. "The name was kind of Trekky, perfect for our customer base. But for business services, it sounded unprofessional, so we went to our initials and bought the URL BHI.com, and made that our brand name."

Having graduated from college, Perrill went on to get an MBA from the University of Minnesota at Carlson. He had to find a school close to work.

Early this year, a newspaper he advertised in during his dialup days wrote up the story of his business (now only available on google cache). The story highlights Perrill's father's role in the business, from donating a computer for the BBS to financing the business over time, an investment that has already paid off many times over.

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