Posts Tagged‘value add’

iiNet Buys Internode, Australia’s Broadband Future Looks Brighter.

Ever since I’ve been able to get broadband Internet I’ve only had the one provider: Internode. Initially it was just because my house mate wanted to go with them, but having zero experience in the area I decided to go along with him. I think the choice was partially due to his home town being Adelaide, but Internode also had a reputation for being a great ISP for geeks and gamers like us. Fast forward 6 years and you can still find me on an Internode plan simply because the value add services they provide are simply second to none. Whilst others may be cheaper overall none can hold a candle to all the extra value that Internode provides, which I most heartily indulge in.

In Internode’s long history it’s made a point about being one of the largest privately owned Internet service providers (ISPs) in Australia. This is no small feat as the amount of capital required to become an ISP, even in Australia, is no small feat. Internode’s reputation however afforded it the luxury of many geeks like myself chomping at the bit to get their services in our area, guaranteeing them a decent subscriber base wherever there was even a slight concentration of people passionate about IT and related fields. In all honestly I thought Internode would continue to be privately owned for a long time to come with the only possible change being them becoming publicly traded when they wanted to pursue more aggressive growth strategies.

Today brings news however that they will be bought out by none other than iiNet:

In a conference call this afternoon discussing the $105 million takeover announcement, Hackett said that because of NBN Co’s connectivity virtual circuit charge, and the decision to have 121 points of interconnect (POI) for the network, only an ISP of around 250,000 customers would have the scale to survive in an NBN world. With 260,000 active services, Internode just makes the cut. He said the merger was a matter of survival.

“The size of Internode on its own is right on the bottom edge of what we’ve considered viable to be an NBN player. If you’re smaller than that, the economics don’t stack up. It would be a dangerous thing for us to enter the next era being only just quite big enough,” he said.

Honestly when I first heard the news I had some very mixed feelings about what it would entail. iiNet, whilst being a damn fine provider in their own right, isn’t Internode and their value add services still lag behind those offered by Internode. However if I was unable to get Internode in my chosen area they would be the second ISP that I would consider going for, having numerous friends who have done so. I figured that I’d reserve my judgement until I could do some more research on the issue and as it turns out I, and all of Internode’s customers, really have nothing to worry about.

Internode as it stands right now will continue on as it does but will be wholly owned by iiNet. This means that they can continue to leverage their brand identity (including their slightly premium priced value add business model) whilst gaining the benefit of the large infrastructure that iiNet has to offer. The deal then seems to be quite advantageous for both Internode and iiNet especially with them both looking towards a NBN future.

That leads onto another interesting point that’s come out of this announcement: Internode didn’t believe it couldn’t economically provide NBN services at their current level of scale. That’s a little scary when one of the largest independent ISPs (with about 3% market capture if I’m reading this right) doesn’t believe the NBN is a viable business model for them. Whilst they’ll now be able to provide such services thanks to the larger user base from iiNet it does signal that nearly all smaller ISPs are going to struggle to provide NBN services into the future. I don’t imagine we’ll end up in a price fixing oligopoly but it does seem to signal the beginning of the end for those who can’t provide a NBN connection.

Overall the acquisition looks like a decisive one for iiNet and the future is now looking quite bright for Internode and all its customers. Hopefully this will mean the same or better services delivered at a lower price thanks to iiNet’s economies of scale and will make Internode’s NBN plans look a lot more comepetitive than they currently are. Should iiNet want to make any fundamental changes to Internode they’re going to have to do that softly as there’s legions of keyboard warriors (including myself) that could unleash hell if they felt they’ve been wronged. I doubt it will come to that though but there are definitely going to be a lot of eyes on the new iiNet/Internode from now on.

The Lighter Side of Web 2.0.

Mention the words “Web 2.0” to me and you’ll usually be greeted with a slight snarl and maybe a comment or two about how the web doesn’t really have version numbers. Sure I can appreciate the idea that after the dot com bust companies shifted their focus from just having a web presence to truly leveraging the Internet but it still never sits right in my head. However with my recent foraying into rich web application development I’ve come to realise that if I try to describe what I’m doing using any other term I usually get blank stares from those supposedly “in the know”, so I’ve relegated myself to using the term. At least just in general terms to describe something that’s on the web but feels like a desktop application.

With all this angst that I had built up for Web 2.0 applications it was nice then to see an example of a something I would deem Web 2.0-ish that added value to my browsing experience rather than trying to do nothing but make money off it:

interesting

Basically there was a term I didn’t understand (it was Latin after all) in an article so I decided to highlight it and copy it into Google so I could find out what it was. Imagine my surprise when a little question mark popped up and upon clicking it, a definition of the word popped up. For me as a user of this site it’s quite handy, since I can just highlight and click. For the content provider it is doubly advantageous as I don’t leave their web page to go hunting around for a dictionary defintion, and I also give them another page view which helps with their revenue. Overall it’s a win-win situation for everyone and has helped to soften my harsh view on the whole Web 2.0 scene.

The problem I initially had with many Web 2.0 oriented companies was that their only selling point was that the application looked flashy and was driven to generate as much revenue as possible off the user’s experience. For most end users this was all transparent and I can’t deny that the business model has worked for a few of the current web giants. As an IT professional however the lack of value that could be derived from using this applications only served to make me look like an Internet Luddite, wishing for the good old times when pages rendered fast and I didn’t need to download flash to run 90% of sites on the web. With the Web 2.0 crowd now having to mature their business models in order to survive in an increasingly harsh and competitive environment we’re now starting to see some applications with true value enhancing experiences for the end user, something that I felt had been lacking up until now.

This idea is what has been driving force behind me developing Geon and hopefully with the way things are going I won’t be too far off providing some added value to the information its bringing in. Of course since this is a bit of a side project for me the plans to try and monetize it are a bit far off (and indeed, I have little experience in dealing with advertisers) so it’s not a grab for cash yet, so hopefully I won’t be alienating people like myself right off the bat.

As with all new technology there comes a time when the platform matures to the point where the fact that something is built on it or uses it is no longer novel, and that’s the point when the true innovation can begin. The next few years will bring out some truly amazing stuff which I, for one, can’t wait to see.

Tune in five years from now to see me ranting about Web 3.0 😉