Running one’s own network was once seen as a sign of success and influence in the telecoms market, but recently, businesses have started to reconsider the viability of long-term Internet Service Provision.
The ever increasing complexity of operating a network, as well the resources required to maintain it, are presenting a challenging question to ISPs both nationally and globally.
Government Red Tape
No one likes red tape and running a network from scratch is full of it.
Whether you’re registering realms for email and domain provisioning or struggling to hold all your customers’ data for 12 months thanks to the Investigatory Powers Act. The required paperwork and liaising with
Government can be a lengthy and complex process that takes too many hours away from staff that could be spent better serving customers, and some are questioning whether they need to deal with the hassle at all.
Handling the increasing complexity of GDPR compliance and bolstering your network to make it as secure as possible, is another headache that ISPs wish they didn’t have to contend with. Whether the resolution is
outsourcing to a Managed Security Service or installing the necessary hardware to secure the network, the cost is substantial and there’s no direct or clear way that this will create a tangible benefit to either the business or end users, other than following the law of the land.
ISPs are inherently resource hungry businesses. Hardware costs for servers and the electricity it takes to power and cool them are significant. When you own your own network, you’re automatically responsible for upgrades, maintenance and ensuring you and your team stay ahead of your competitors in terms of innovation and training. With the constant development of bigger and better tech, what was once cutting edge is considered ‘legacy hardware’ very quickly, loses value and doesn’t represent a good ROI.
With tight margins, more often than not any growth you do experience, the cost of upgrading tech and staff and increasing your capacity cancels out any profit – leading to the question “what is the point of being an ISP?”
This question is usually answered with another “Well, what’s the alternative?”
The answer is simple. Rather than being a physical ISP, become a virtual ISP.
Relieve the Pressure
Converting to a vISP model relieves the pressure you put yourself under when owning your own ISP network and allows you to flex your network as and when you need to, so that you only need to increase upscale services to match customer demand or when you have secured new business.
Massive investment in hardware is not necessary, which immediately reduces risk and therefore increases your peace of mind.
As well as reducing your stress and the requirement to maintain your own infrastructure, becoming a vISP brings new opportunities such as international internet feeds so you can access new geographic markets. You can bolt-on additional services easily too, such as DNS management and email and start to find new avenues of revenue.
Daily operations are simplified too. vISPs are usually provided with a web-based portal to run the network from, where clients and your own network can be customised. This single portal is much simpler than having to deal
with multiple product, billing and network portals, with varying interfaces that all require separate training and maintenance. You’ll also be able to answer customer queries far quicker, which is a plus for both your customers as well as yourself.
Information is Power
Some may wonder if giving up your ownership of the network means you lose some of the visibility it affords but information is power and vISPs need the same level of overview and analytics that a traditional ISP would have. If anything, analytics are simpler when a vISP, as you only have one UX to deal with, which means less time ho-humming and training staff and more time getting to grips with the facts.
vISPs have far more awareness around their costing and margins, as the complex and constantly changing management and upgrading of networks can lead to difficulties working out baseline costs. This is especially true when you’re trying to predict current and future usage, investing in future technology as it matures; all while running the network alongside managed services arrangements, for an extra revenue stream, which then makes the maths even more complicated.
In this day and age, when the price of connectivity in a nosedive, is it worth the massive capital expenditure to go toe to toe against the big players in the industry? Unless you have something truly game-changing up your
sleeve, probably not. Internet is quickly becoming a utility and much in the same way as water, the money is no longer in providing connectivity to a business, but in creating an ecosystem around it.
Finding a new way to market or deliver connectivity solutions is a far likelier road to success and with vISPs having far less capital expenditure, smaller running and staffing costs, less stress and liability as well as more time to spend finding out the true needs of their customers, it’s a no-brainer.
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