'Going Against the Grain'
Proves a Winning Strategy

Taking some risks—like breaking the 'unlimited dial-up' habit and changing identites in mid-stream—helped turn a struggling national ISP into a thriving regional provider.

by Judy Mottl [June 22, 1999]

By all rights, Delaware.Net, Inc. should be failing miserably in the competitive ISP marketplace. After all, within the last two months it's changed its name (from EZ Online), pumped up its tech support operation, given clients free ads on its portal site (www.Delaware.com), and terminated its offering of the industry standard-unlimited online access.

Yet, business is booming. Why? Dial-up service simply isn't the primary focus any more, explains Rik Thomas, Chief Technology Officer.

"What sets us apart is that we're not just interested in being a dial-up ISP and matching prices. We had to reinvent ourselves. We realized we couldn't compete as an ISP on a national scale, and in order to survive we had to dedicate ourselves regionally," says Thomas, who came in as a networking consultant in late 1998 and took on the full-time CTO role this past April.

"Our business plan totally goes against the grain of what's going on in the industry," he adds with a grin. "We're doing it our way."

Blazing new trails
Delaware.Net can go "against the grain" because it's not going where most other small ISPs are headed-acquisition by a bigger market player. Thomas says his company has no intention of "selling out," and that the company's "roots" make it attractive to business clients.

"We're a brick and mortar establishment. Our clients can come into our building, see us and talk to us every day, instead of meeting in a hotel room somewhere across the country. We're here to stay," says the CTO.

Though many ISPs find it necessary to boost services in order to lure additional business, few go very far with this, and in most cases their aim is to increase the dial-up user population.

In contrast, Delaware.Net not only has substantially beefed up critical add-ons for clients wanting more than just an Internet connection, they cut-off their heaviest dial-up users by withdrawing the unlimited access plan. It was a scary decision to make, Thomas admits. While there were some angry customers, the strategy not only benefited the company, but the majority of users as well, he says.

"It was another 'against the grain' move, but it worked for us. We lost our 'worst' customers-people who were clogging the lines, reducing bandwidth for everyone, and who were often the slowest payers. In reality, we lost less than 1 percent of our users, and the bandwidth increased substantially to everyone's benefit," he says. The unlimited accounts were gobbling 600 to 700 hours a month, averaging 20 to 22 online hours daily.

New balance
Of Delaware.Net's current 2,000 dial-up accounts, 90 percent are residential and 10 percent are commercial. While many competitors are trying to grab more of that home market, Delaware.Net wants to flip-flop this ratio, and hopes to have 70 percent business and 30 percent residential as its benchmark.

Current monthly dial-up plans start with a 20-hour 'light' package ($9.95 a month) and increase to a maximum 300-hour deal ($24.95), and include free email, tech support, Web server use and varying amounts of Web storage space.

When it comes to services, the ISP offers banner ad creation, ways to improve Web site ranking within search engines and even traffic reporting tools. There's also site design and Web hosting services, and the nuts and bolts for setting up network infrastructures from scratch. An Internet Server co-location service lets businesses put network equipment inside Delaware.Net's Network Operation Center (NOC), providing quicker and economical connectivity since it eliminates telecom charges for loop and routing equipment from the client site. The ISP even sells servers for those who don't have any. In fact, the varied services offered incorporate everyone from the small and start-up enterprise worlds to large-scale corporations.

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