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ISP Market Research

An Overview of Value-Added Services

ISP-Planet and the folks at ISP Market agree on one thing: value-added services are the key to survival in an ISP marketplace that lies under the creeping shadow of commoditization.

by Alex Goldman
ISP-Planet Associate Editor
[December 22, 2003]
Email a Colleague

Walnut Creek, Calif-based ISP Market is a small research firm serving companies of all sizes in the ISP industry. Its latest report, "Consumer Value Added Services in the Internet Service Provider Industry: An analysis of the significance of consumer value added service offerings and associated vendors in the ISP industry," is currently available at the steeply discounted rate of $25 per copy.

The purpose of the report is to give ISPs the tools to research what services they can and should offer. As the report itself says:

Understanding the competitive landscape and actually implementing and marketing new services are very different things. This report details available solutions and their popularity among the largest providers in the US, and is designed to give the overall ISP industry a starting point for entering the world of selling value-added services. Not every service in this report applies to every consumer. ISPs should design a services mix that is inline with their business needs and the profile of their consumer access customers keeping in mind that their number one tool is communication with those customers. It is our hope that armed with this information ISPs will begin to evaluate new service offerings across all four categories. In doing so, they will be taking the first step in becoming THE sales channel, increasing the value of and to their subscriber base and benefiting their bottom line.

The report does not and cannot list every single vendor in the space, but it does provide a valuable overview of the services ISPs should consider offering. The vendor lists will help ISPs drill down on their own and discover which services are suitable to a company of their size and in their geographic location, taking into account both expected revenues and required investment.

The report also tells what the national competition is doing in a survey of the top 20 U.S. ISPs. The good news is that few of the top 20 offer any individual service. The bad news is that AOL, MSN, United Online, and Earthlink offer most of the services described in the report, and may have advantages in a particular area.

For example, all three have built their own unique portfolios of software. AOL has access to content from its Time Warner arm. MSN has, in theory, access to Microsoft's $50 billion cash hoard (of which $45.854 billion is in short term investments). United Online, with its $9.95 per month service, has a price advantage (but that price was recently matched by AOL).

Much of the information in the report is available elsewhere (for example, on ISP-Planet), but this 25-page report gathers the information together in one place. Written in simple, direct language, the guide should be invaluable to those ISPs that have decided they need to offer more services, but have not yet decided which service to offer.

— End

Online resources:
  Jupiter Research

Related articles:
  [Nov. 20, 2003] Finding the Value in Value-Added Services
  [Nov. 3, 2003] Accurate Billing is a Value-Added Service
  [Nov. 1, 2000] Making the Most of Value-Added Partnering

ISP-Planet guides:
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  Billing Service Directory
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  Outsourced Customer Support Directory

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