The Killer Services

ISPs, wake up! There is a market for Internet access out therebut it is not the only market you can tap! There are three hundred ISPs vyingfor the same access market. Why not be different from the pack by trying to makea mark on the applications’ front? And there is a large array of them toprovide. We present before you four applications that we think are going to behot in the coming fiscal. Why not gear up for the market before it is too late?

Virtual Private Network

The reason why Virtual Private Network (VPN) has not reallytaken off in India is due to some inevitable factors like absence of goodconnectivity, bandwidth crunch, poor telecom infrastructure, and high cost ofdeployment.

That was then. Now companies are eagerly looking towards VPN.There are two categories of companies. One is the large enterprise who haveinternal system to manage their own network. They buy network, router, firewall,and solutions from vendors and integrate into their existing network. Then thereare small and medium enterprises, which almost entirely outsource their networkmanagement to services providers–primarily ISPs. But the chances of largecorporations going in for outsourced VPN cannot be ruled out completely.

Increasingly companies in India are realizing the importanceof outsourcing the non-core competencies to the specialist service providers fortheir corporate network management needs. Specially, maintaining one’s owncorporate intranet requires expertise and cost which is not always forthcoming.By outsourcing VPN services to an ISP, corporate houses can cut down on the costinvolved in hiring, and training professionals for deploying and maintainingsuch services. Cahners In-Stat Group, a consultancy that tracks communicationsindustry, projects that by the end of 2000, 49 percent of large and mid-sizeenterprises will outsource some or all of their remote access. According toGartner, enterprises are increasingly turning towards service providers toconfigure, own, and manage their remote communications infrastructures. Gartneralso predicts that there will be 137 million telecommuters worldwide by 2003.This is good news again for ISPs providing VPN services. The saving also stemsfrom the cut in long distance calls.

Voice over IP

Voice over IP (VoIP), the technology used to transmit voiceover an IP network, is an application that is already a winner for ISPstargeting the corporates and could be the hot services to offer to consumerswhen Internet telephony gets more matured and accepted.

On the corporate side, VoIP can play a major role in bringingdown the total money spent on calling up between offices invariably situatedacross cities. It could become one of the hottest applications for SMEs, whichare always looking for ways to cut down operational costs. E-mail has beenpositioned by many as the application that will help companies to reduce thenumber of telephone calls made. However, it does not work out that way always.Speaking on the phone still gives us a comfort level that is not matched bye-mail. Sometimes e-mails get stuck in the mailbox, an unthinkable scenario inthe case of telephony.

Voice communications is a straightforward medium. You pick upthe phone and the dial tone is invariably heard. Ring a phone and it is eitherpicked up or not. There is no wait for confirmation unlike the e-mail, whereonly a reply confirms that your e-mail has reached.

The traditional STD/ISD medium is on the other hand a fairlysimple way of communications. But accessibility of the line and the high costsassociated with it are the main inhibitants. A hot line, which is a dedicatedvoice channel is even more costly.

By implementing VoIP technology, an ISP can provide a readilyavailable voice channel to customers. There can be a dedicated solution wheretwo offices of a company lease dedicated local lines upto the premises of theISP. This facilitates a long-distance call using the ISP’s shared backbone IPnetwork. It saves the company from investing on long distance city-to-citydedicated links. The leased-lines to the ISPs need not be used only for voicecommunications as a fraction of the bandwidth will be utilized by the packetizedvoice compared to 64 Kbps required by PSTN voice.

An even better scenario would be when Internet telephonywould be finally allowed in India. And there is reason to believe that this willhappen soon–the recent precedent being the government announcing the openingup of international telephony two years in advance.

This would allow ISPs to offer cheap telephone services tocorporates and consumers alike. Though there is a debate that the Internet willnot be able to support voice communication services on a large scale, companiesaround the world are going forward with their services. And why should India nottry it considering the benefits far outweigh other considerations. In the Westand countries in the far east, VoIP-based valued added services are fastemerging as an important source of income for the ISPs and they are givingtraditional telephone companies a run for their money.

Long distance carriers already route their voice traffic in apacketized form to save on the bandwidth that is available, thus enabling toprovide cheaper international call services to their customers.

VoIP is a very potential technology for a large country likeIndia. There is a large scope for long distance services in India and this newtechnology can actually make telephone services much more affordable toconsumers.

Fax over IP

Fax over IP (FoIP), as the name indicates is a mechanism ofsending fax through Internet (as opposed to the traditional faxing which is costprohibitive on account of high telephone costs, especially when the fax is to besent over a longer distance). The technology can be of two types–real-time orstore-and-forward type. The latter is allowed and hence there are already quitea few ISPs like Wipro and Satyam and other service providers like Grand Infotechoffering this service.

Despite being a cost-effective communication tool, it is pitythat this service has not taken off so far. This assumes greater importance asuse of Internet is becoming all-pervasive. There are customers, vendors,suppliers who prefer receiving fax over e-mail. The need for seeing thedocuments in the original format is another significant reason why faxes wouldnot go away so fast.

Physical signatures still matter much more to us than adigital signature of which very little is known so far.

FoIP services can range from fax-to-fax, fax broadcasting,PC-to-fax, e-mail-to-fax. If the large mass of fax users using STD lines can bepersuaded to use the much cheaper FoIP services, the market will assume verylarge proportions. This is one service for which the market is already cut out.

Co-location & Hosting

As the number of web sites targeting Indian Internet usersincreases, there will be more and more web sites hosting from India to enablefaster download times for its web pages. The cost of Internet access, which hasbeen the most prohibitive factor for companies locating their servers in the US,is slowly but steadily dropping. With larger availability of bandwidth in thenear future, the cost of high-speed Internet access will further drop thusenabling companies to locate their web servers in India. As the competition formore eyeballs and sticky hits gets even more intense there is likely to be a lotof synergies worked out among dotcoms and ISPs. Dotcoms will have to outsourcethe hosting part to ISPs or co-locate their servers in the ISPs premises to takeadvantage of the ISPs nearness to the Internet backbone.

Of late there are global dotcoms too setting up theiroperations in India. This means opportunities again in terms of mirroring andcaching services. ISPs with large number of Point of Presences (PoPs) can set upa network of servers which can take the content even nearer to the Indian mouseclicker, thus making the Internet an enjoyable experience. The visitor will nothave to go all out to the US or the bigger cities as the local server could havecached his most favourite web sites and pages already.

One major opportunity here is that of setting up data centres. The ISPs whoalready have the requisite experience with all the ups and downs of bandwidthprovision in India, is likely to be in a better situation to set up data centreswith reliable connections to the Internet. Also with the setting up of privateinternational gateways, their locations could be the most ideal ones to set up adata centre which will host the web sites and application service providersinfrastructure, especially those which have plans for targeting the overseascustomers. By hosting from right below the earth stations one can simply bypassthe poor local telecom networks which are generally the reasons for poorInternet access.