John Peters, Executive Vice President and General Manager of Network Services, Concentric Networks
We had an informative meeting on Monday night. Concentric Networks, a national Value Added Network Service Provider discussed their business model and approach to the Internet Business. Originating in Bay City Michigan as a network for BBS' the company took a major shift when it relocated its HQ in Cupertino and hired new top management with previous experience at Telnet. They focused their approach around being a value added Virtual Private Network to large companies that also needed Internet access. To be in their target market, a company should have some additional need like a special software product or specific network responsiveness that makes the traditional ISP not quite good enough. For example their first customer was Intuit where they were able to provide and manage a restricted access for quicken users over the interent with a specially modified version of Netscape.
Success there attacted investment from major sources like Goldman Sachs, Kleiner Perkins, Softbank and now Telecom Italia which they plan to use to become an Global NSP within a very short time. They have received $100 million in investments and size their market as:
ConCenterprise/Consumer market $12.4 Billion by 2000ad Enterprise (business to business) $10.4 Billion by 2000ad
Although they offer traditional consummer accounts $20/month ($1 first month and no setup) their market is the business enterprise. They offer businesses highly tailorable network solutions by assembling a series of building blocks. Some of these are inovative connection options like allowing companies to eleminate costly ($6/hour) 800 number dial in service for traveling employees with ubitquitous access to the VPN from Concentric Net anywhere on the continent and soon the world for lower cost, and increased security. Other options include special security or billing packages, contractual network latency and throughput targets and more. Target markets include the video and voice using IP transport, gaming networks.
In the future they see connectivity moving from 28.8/33.6 to 56K and then xDSL based technologies. They were not impressed with ISDN (too little too late) or Cable Modems (lack of two way network infrastructure)