Dial Access with Depth

Like its wholesale dialup competitors, NaviNet sports some performance-enhancing, cost-cutting technology as part of its stock in trade. As a CMGI company, it can also offer handy access to a broad spectrum of related services.

by Alex Goldman & Ted Stevenson
Associate Editor, Managing Editor, ISP-Planet
[March 16, 2000]

NaviNet is one of a growing number of purveyors of wholesale—or, as the company terms it, "private label"—dialup Internet access. Among its better-known customers are national ISPs Prodigy and NetZero. NaviNet's goal, however, is to serve not just the behemoths, but the entire spectrum of traditional ISPs, providing quick entry into new markets. In addition, NaviNet has its sights set on a new market: non-ISP businesses wishing to offer Internet access as a service to their customers.

The latter group, which might include banks, insurance providers, and community organizations—virtual ISPs is the truest sense—is where NaviNet sees its greatest growth potential.

Solid backbone
NaviNet's business is built on a network presence that, the company says, covers "80 percent of the major market user population" in the U.S., as well as significant markets in Canada. Beyond the geographical reach of the network, NaviNet feels that its architecture and engineering give it an edge in the Net access market of the future.

The "NaviNet Technology Platform" consists of a group of eight regional "SuperPOPs," fully interconnected by a private, high-performance IP WAN. These are aggregated from multiple "edge" (local) POPs with the help of one or more of NaviNet's 15 CLEC partners. Each edge POP is redundantly homed to at least two SuperPOPs to ensure high availability. The core network is currently OC3-based, with capabilities in place to expand to OC12.

At the end user end, NaviNet's proprietary "switch bypass" technology speeds performance by diverting modem calls off the PSTN as quickly as possible after they've left the LEC's internal switching system, moving them onto its own transit backbone. This alleviates busy signals dues to congested public peering points and overloaded trunk circuits.

Performance guaranteed
The dial-up access product itself, GeoDial SP, currently in version 3.0, not only benefits from the overall speed and high availability of NaviNet's network, it is backed by service-level agreements, which the company characterizes as "unprecedented" in the wholesale access business.

NaviNet's SLAs are based on standards developed by Visual Networks' Internet Benchmark service and relate to four key performance measures:

• 24hr Call Failure Rate
• Initial Modem Connection Speed
• Average Time to Login
• Web Throughput

NaviNet also provides its ISP customers with a set of visual network monitoring tools that allow tech staff to monitor use of the network over time and to identify problems early. Brendan Howe, NaviNet's Vice President of Marketing, points out that the software's ability to distinguish between unique and current users, combined with its ability to measure network usage by region, could be used to judge the effectiveness of a regional marketing campaign.

The CMGI difference
NaviNet is a partially owned subsidiary of CMGI, a company that has a stake in at least 50 other Internet technology companies. This puts NaviNet in the enviable position of being able refer clients to other CMGI companies that offer related services, thus keeping the business in the family.

For example, Critical Path provides messaging and information, Engage can provide marketing strategies and run Web-based advertising campaigns, NaviSite can provide webhosting and other ASP-like services, MyWay.com can customize a portal for a client, and, of course, CMGI's free ISP, 1stUp, is a client of NaviNet.

These ancillary services could be an especially big selling point for the new customers NaviNet is looking to acquire down the road. While the company will continue to court big ISPs as clients, NaviNet now expects its growth to accelerate as its client list expands to include nontraditional service providers such as free ISPs and especially virtual ISPs.

New paradigm
As the cost of consumer dialup Internet services plummets, it becomes increasingly reasonable—and feasible—for marketers in many industries to offer ISP services as part of a package. For example, an online bank might wish to offer free ISP services to all customers as a customer bonding initiative (and, of course, to ensure that its customers could always access their accounts).

An online bank might benefit from the services of Engage, NaviSite, and MyWay.com because it would most likely lack basic ISP skills—from bread-and-butter tasks such as "authentication through a RADIUS solution" to service-related operations like user registration, billing, customer care, email, webhosting, or online advertising.

David Wetherell, Chairman and CEO of CMGI, says, "NaviNet is a crucial component of our expansion plans for the Free ISP market, along with 1stUp, AltaVista, and Engage. NaviNet also supports MyWay.com's increasing number of ISP partners." Red Herring (Feb. 2000, pp.96-108) sees CMGI as a business that will dominate the Internet, characterizing it as an "EcoNet" of companies bound together by ownership overlap.

Bright prospects
Of NaviNet specifically, Marketing VP Brendon Howe says that with recent connections to Canada, and planned connections to Europe and Asia in place "by this summer," growth predictions are rosy. Pressed for some round numbers, Howe told ISP-Planet that NaviNet is ahead of projections, now looking to have "2 million users by the end of 2000—and $200 million in revenue in 2001."

—End