dcsimg
RealTime IT News

EarthLink Looks to Enterprise Market

EarthLink , the nationwide consumer dial and broadband Internet service provider, is making an indirect move into the enterprise sector with a strategic alliance struck with GoAmerica Thursday.

As part of the deal, future GoAmerica customers will get an EarthLink-branded service; the ISP will pay a percentage for every customer GoAmerica brings to the fold.

GoAmerica, a company that wants to be known more for the technology solutions and distribution relationships it provides, rather than being a service provider, also sold its cellular digital packet data (CDPD) customer base, as well as some Research in Motion (RIM) subscribers, to EarthLink.

EarthLink will take over billing and customer support for these users, leaving GoAmerica free to pursue its core business -- data compression technology for use on wireless devices, dubbed Go.Web, and finding more distributors to market.

Ilya Welfeld, a GoAmerica spokesperson, said her company has been looking for a buyer since June, to shed an area of its operations that just weren't profitable.

"The support that's involved -- the customer care, providing the network services -- a lot of those services have become commoditized over the years," she said. "Whereas a few years ago it was necessary to provide those services to get the technology in the right hands," it's not necessary to provide both functions anymore.

Officials wouldn't release a dollar amount on the sale or the number of customers involved in the deal, but did say the customers would be transitioned to EarthLink by the end of the year.

EarthLink has spent the past two years expanding on its successful dial-up Internet service -- the ISP is fourth in the nation with more than 4.7 million customers -- by embracing new Internet technologies and migrating its customer to the new, more lucrative, services. The ISP also provides digital subscriber line (DSL), satellite and cable broadband services.

The decision to buy up CDPD customers may seem to be a strange business move, given the technology is relatively old by Internet standards and overshadowed by its more popular cousin -- 3G. CDPD transmits data packets on unused cell phone channels at not-so-fast-these-days speeds of 19.2 Kbps. Today's 3G phones pull in data at speeds somewhere between 40-60 Kbps.

Brent Cobb, an EarthLink vice president of strategy and development, said many companies, GoAmerica included, have written off CDPD customers as "highly unprofitable." The roaming charges incurred by customers who call across networks are cutting into the bottom line, he said, and EarthLink has plans to transition those customers to other providers.

"EarthLink doesn't acquire unprofitable subscribers," he said. "There's a little give and take in the CDPD subscriber base that we've acquired and we're going to retain all the problem subscribers and work on a path to transition them."

For the core customer EarthLink was looking for in the CDPD deal, the ISP plans to effect a migration path used today with dial-up customers -- transferring them to next-generation services, though Cobb said EarthLink isn't ready to announce any particular migration path, presumably to a 2.5G or 3G wireless digital network.

GoAmerica's Welfeld surmises the deal with EarthLink was just as much about garnering some enterprise customers down the road.

"We have made a name for ourselves in both the enterprise, but more specifically in partnering with organizations that get into the enterprise, like IBM and Dell," she said. "For EarthLink, we represent a distribution for them into the enterprise, in addition to their already-prevalent role in the consumer market."

Cobb doesn't consider EarthLink a company suited to enterprise customers, though its branded services will surely find its way into some corporations through GoAmerica.

"Effectively, what EarthLink is going to do is add scale through GoAmerica's efforts with the enterprise," he said. "They have extensive distribution and have a lot of sales people at the company. EarthLink is not an enterprise-focused company; a lot of the major corporations have their own Internet connectivity, they run their own servers."

In related news, EarthLink announced Thursday a deal to sell its Internet services at Office Depot locations throughout the U.S. Starting today, 853 Office Depot stores will sport an EarthLink kiosk with information on its broadband services, targeting small-office/home office (SOHO) customers.

"Today, small businesses need the right tools to run their businesses and implementing the right broadband service helps them do just that," said Mike Dietrich, Office Depot vice president of technology, in a statement Thursday.

EarthLink's service will also be included in Office Depot catalogs, direct mailings and located on the company's Web site.