General

Triple Play for Business

A cutting edge service provider in San Francisco reports there's growing demand for voice, video, and data business services.

by Gerry Blackwell [May 24, 2005]

Most ISPs think of "triple play" as a business model for consumer service providers—offering residential subscribers high-speed Internet, IPTV pay television and voice over IP (VoIP) phone services over the same broadband connection. But ISPs focused on the enterprise and small business market, such as San Francisco-based Amernet, are also starting to offer triple-play services.

Amernet president Charles Kung launched his company in 1994 to offer T-1 and dial-up Internet access to companies mainly in the financial district in San Francisco. Five years ago when he landed the first of several building management company clients, Amernet started diversifying its offerings and broadening its reach. It now provides building connectivity and tenant services including VoIP, video conferencing, and video streaming.

"That's what we'd really like to be: an enterprise triple play provider," Kung says. But he admits it's early days for some of Amernet's value-added rich-media services, and his company remains small—only seven full-time employees and $2.2 million in annual revenues. Still, the groundwork has been laid, he says, and the market is beginning to respond.

From the core to the edge
The core business is offering data services to building owners, property management companies and their commercial tenants, mostly in California, where Amernet has network operating centers (NOCs) in San Francisco, San Jose and Los Angeles. It integrates and manages redundant broadband connections to each building, providing always-on service—vital for financial district clients. It functions as systems integrator, ISP and in some cases outsourcer, providing a range of traditional data and ISP services, including VPN, e-mail, hosting and domain name.

The NOC in Los Angeles is a colocation with XO Communications, which also provides T1 and T3 connections. XO is one in a portfolio of blue chip network services provider partners. Others include Covad Communications (DSL services), Cogent Communications (Fiber Ethernet transit) and Level 3 Communications (Voice transit).

Through carrier partners, Amernet can offer local service in 36 other major markets across the country. Outside California, it mainly serves management and tenants in buildings owned by its California-based clients, which include CB Richard Ellis (CBRE), Shorenstein Company LLC, KSK Property Management Inc., PM Realty Group, and The Presidio Trust.

"It works out pretty well with those buildings," Kung says. "Once we have the building management company, it's easier to get a referral from management to the tenant."

He estimates that 60 percent to 70 percent of the company's 300 commercial accounts are property management companies or their tenants. Most are small companies, but a few of the tenants are major law firms. "The majority of our customers have fewer than 20 employees," Kung says. "Usually we give them connectivity and whatever [value-added] services they want. But if they want us to manage their servers, we will do that as well."

The other 30 percent to 40 percent of the business is a mix of financial district and Silicon Valley tech firms.

Amernet has grown primarily by word of mouth. "We don't have any big advertising campaigns," Kung says. "Ninety-nine percent is referral." He is now developing seminars to present to building tenants so that the company can more systematically sell to this ready-made market.

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