ISP Profile: Lore Internet Systems

In order to deliver 24x7 services, in order to cut costs while upgrading quality, in order to do better, this ISP has gone where many more will follow: ditching the office.

by Alex Goldman ISP-Planet Managing Editor [August 18, 2006]

Herndon, Va.-based Lore Internet Systems was founded in 1995. "We were funded by Microsoft," says Michael Velotta, the company's president. "We had worked in a division that was part of a grassroots campaign exposing NT to colleges. Microsoft also had a product called SQL Server that could compete with Oracle. I was part of a team handling the Mid Atlantic region. We did demos for Computer Science professors and students."

The company started out as a webhost and was profitable by 1998, when it completed its separation from Microsoft.

Six years ago, the company began to allow employees to work from home, completing the transition two or three years ago. Now all employees work from home. Lore rents space from an office services company called Metro Offices. Metro Offices is a customer of Lore.

Cutting costs
Velotta doesn't consider himself an ISP, and feels that ISPs are not viewed positively in the marketplace. "What's an ISP? Nobody wants to be an ISP. Now everybody wants to be an Internet Access Provider. When so many ISPs went out of business, suddenly 'ISP' did not equal 'reliable.'"

Of course, another problem with the ISP business is commoditization, a market where competition is based on price, not service. "We were selling T-1s, but now it's a commodity. I think your business has to change if you're just doing IP provision. Look at Covad. They're now selling a hybrid PBX voice product. Traditional ISPs need to be in the service business. Their customers will jump ship to the next cheap deal. ISPs need to cut costs."

There are many ways to cut costs.

Lore uses server virtualization provider VMware's product. "We used to need 2 RU per customer," says Velotta. "Now we can put 20 or 30 customers on a 2 RU server."

The company is also cutting costs with VoIP. It sells Cisco VoIP to large companies and AltiGen to smaller companies, those at or below 50 or 75 seats. Internally, Lore uses both systems. "Admittedly, they do duplicate each other," explains Velotta. "But each system does things a little differently. Our feeling is that if we can use both internally, we can support both for our customers."

Adding services
The company has a policy of deploying its products internally, something we think every ISP should do. "We're all engineers," says Velotta. "To us, 1+1 always equals 2. If you had to describe this company in one word, you'd call us technologists. We're always looking for the next big thing . We go to trade shows and bring back gear for the lab at the data center. Many of us have computer labs in our basements too!"

Besides VoIP, the company is touting its disaster recovery product. "We just started our DRCP group (Disaster Recovery Contingency Planning)."

In the event of an emergency, all Lore employees could continue to work from home, and could use any of Lore's four data centers (Washington DC, Boston, Brussels, and Zurich) if a disaster threatened any one of them.

Measuring tasks completed, not measuring time worked
As part of its work from home program, the company pays for home broadband for each employee and buys them a laptop and a PDA with Windows Mobile 5. Velotta says that his PDA uses Verizon EVDO (some Lore employees are also getting Sprint's product) which provides 2 Mbps to the PDA. It helps keep employees connected. The PDA also has GPS.

Velotta brings all the data together in a custom application that can tell him who's doing what and where they are. As long as the engineers are getting the work done, he doesn't care where they're doing it. This can perplex managers at other companies, he says.

"Someone asked me, 'how do you know they're not playing golf?' I said that you are thinking about business the wrong way. You're thinking about time management. Change that approach. Change your world to be task-based rather than time-based. You know how long a task should take. You know that a certain project should take weeks, not years. If your engineer is getting work done while on the beach, is that really a problem? Do they need to work the 9 AM to 6 PM shift? They can work in the middle of the night and sleep all day if they get the work done."

For Velotta, it was all about adapting his management style to the needs of a growing company. Although the company has data centers in four cities, he can only be in one place. "When you have everyone in the same office, you micromanage whether you want to or not. When your business is distributed, you manage people based on what they're doing, not on what you're seeing. You do more of what I call 'management by numbers.'"

Management by numbers relies on a robust application with a strong database. "It's gone through many, many permutations. It stores tasks, time sheets, trouble tickets, expense reports, e-mails, GPS positions. I can run reports and find out how many tickets one person has handled. I can do all the micromanagement without being there."

Allowing employees to work from home keeps them connected. Velotta says that many employees get a head start on Monday by checking their e-mail on Sunday night. Some go even further. August is vacation season. One salesperson, he says, is closing deals while on vacation in California. Four engineers, he adds, are also on vacation but are checking in regularly.

Velotta feels that organizations that encourage teleworking tend to recruit self-starters, highly motivated people. "If they've ever worked from home before, they were usually the self motivated and better qualified people at their previous company. The others aren't trusted to work from home. We find the better candidates already have telework experience (if not, they can experience culture shock when they come here)."

A goal for the future
Velotta's vision for Lore Internet Systems is one being preached to the ISP industry regularly: earn more money from existing customers. Velotta says that he wants to sell more than one service to each customer. "If a customer subscribes to just one type of service from us, we're just a vendor, and anyone can undercut us on price. However, if we're providing two or more services, we're now a strategic partner."

—End