QPass Ready to Serve Wi-Fi

The big mobile carriers are still having trouble making a commitment to Wi-Fi,
and that is creating uncertainty at all levels in the mobile and Wi-Fi markets.
Consider the case of QPass Inc. of Seattle,

QPass supplies "activity management business system software" to
mobile carriers. It stands ready to serve the Wi-Fi industry, it has a Wi-Fi-specific
product and a couple of high-profile reference customers — but it’s not sure
when or if the Wi-Fi market will be there.

The company’s founder, president and CEO is Chase Franklin, a Microsoft veteran
who helped develop the technologies that became .NET Passport. QPass, formed
in 1997, sells business systems to help mobile carriers manage value added services
and service providers, something their existing business systems could not easily

The architects of QPass’s current strategy and market position brought their
initial ideas from Microsoft, specifically from those projects that Franklin
and QPass vice president of solutions architecture Michael Cockrill were working

"The company was founded on a recognition of the need of content owners
to monetize and commoditize their assets," says vice president of products
Tom Trinneer. "That core intellectual property is with us today, though
it’s deployed in a different fashion now."

The company’s flagship Prosperity Series products typically help carriers manage
tens or even hundreds of third-party value-added service providers offering
content and other kinds of services. The software performs all business functions,
from authentication to customer care to reporting to billing reconciliation.

"These are all things that have to happen in real time," notes Trinneer.
"Those charges must occur at the time of purchase. There is a whole new
complexity [for carriers] around these third-party service providers."

Carriers might be able to add the needed functionality by customizing legacy
systems that manage their core business of providing dial tone to millions of
subscribers. "But our product is a more cost-effective way of getting to
market with [value added services] quickly," Trinneer says.

Once the QPass software has been integrated with legacy systems — a two or
three month integration effort, he says — adding each new service after that
is very easy to do.

The company has recently had a couple of successes with Wi-Fi operators —
AT&T Wireless and its fledgling hotspot operation
called GoPort,
starting with the Denver Airport, and Toshiba’s Computer Systems Group, which
earlier this year launched a hotspot aggregation

QPass developed a Wi-Fi module for Prosperity that extends the product’s functionality
to not only manage multiple third-party value-added services providers but also
multiple hotspot venue owners.

When AT&T Wireless, an existing customer, won the bidding to provide hotspots
in the Denver Airport, it approached QPass, which was already providing the
business systems for AT&T’s mMode mobile data services. It asked if
QPass could support the new venture.

"We added the Wi-Fi capability within a month," says Trinneer. It
was only slightly more complex than adding a new value-added service.

Toshiba, a pure-play Wi-Fi operator, came later, although it was also through
an existing customer, outsourcer Accenture.
In the case of AT&T, the QPass product is integrated with a legacy business
system from Convergys. It functions
as an overlay. With Toshiba, QPass is the business system.

So the company is ready to rock ‘n’ roll with Wi-Fi, but as Trinneer says,
"Quite frankly, we’re trying to figure out if this is a new line of business
for us, or just a series of deals."

Time, presumably, will tell. Meanwhile, QPass will go after mostly big, deep-pocketed
operators, both mobile and pure-play Wi-Fi, though with the emphasis on the
former, and hope the market comes to a head soon.

"We’ll opportunistically apply sales and business development resources
to generating additional deals," Trinneer says. "Suffice to say that
every one of our current customers in mobile is looking at how to do Wi-Fi and
we’re talking to everyone on that front."

"I’d say we’re cautiously optimistic that the two deals [AT&T and
Toshiba] are indicative of a trend. But we’ll probably sell the module more
to mobile carriers than pure-play Wi-Fi folks."

Where does the QPass product fit into the spectrum of business solutions out
there for Wi-Fi operators?

For starters, if you’re a little guy, a shoe-string start-up, QPass is almost
certainly not for you. The company sells initial licenses that cost in the "hundreds
of thousands" of dollars and then charges for blocks of end users served.

"A 50,000-user block of licenses is a small block," says Scott Blanksteen,
director of product marketing. "We [could] be persuaded to sell a smaller
block — but it would have to be for the right reasons."

QPass is probably not the best solution for pure-play Wi-Fi operators looking
for a quick way to get to market and that don’t have a great deal of complexity
in their operations or a need for rapid scaling, Trinneer and Blanksteen say.

For example, if they only ever need to do credit card billing for one card
brand and never need to integrate with an existing billing system, they probably
don’t need QPass. Ditto if they don’t expect to have to scale up to support
hundreds of service providers or hotspot locations and tens of thousands of
subscribers anytime soon.

Blanksteen claims the company has few real competitors. Some smaller suppliers
of core business systems for mobile carriers are offering some of the same functionality
or looking at doing so. There are also small suppliers with pure-play Wi-Fi

For providers of large-scale mobile billing systems — the kind QPass typically
integrates its products with — adding this kind of functionality is "on
their radar." They would do it if it could be done as a customization project
for a customer, Blanksteen suggests. "But it’s hard for them to go after
deals that don’t need 300 people to implement, just to feed their business model."

Even among the relatively small corps of providers of business systems specifically
designed to manage value added services, QPass is the only one so far that has
Wi-Fi functionality, he says.

The market, Blanksteen says, is still "frothy." He means that as
yet there is no recognized cadre of suppliers who compete against each other
on a regular basis. QPass rarely sees the same competitors twice and in the
Wi-Fi space it has yet to be involved in an open competition for business.

This is partly because the company is already clearly differentiated from what’s
out there, Blanksteen suggests. "It’s the end-to-end set of features —
we’re not just about how to bill a credit card, we’re about how to manage a
product portfolio," he says. "We’re also well proven in our ability
to scale up. And our good reputation [on quality and service] proceeds us."

For Wi-Fi operators, the QPass legacy of managing value added services could
be one other distinct advantage. While the first need for Wi-Fi companies is
to manage multiple hotspot venues — which the product does admirably, Trinneer
says — they will eventually need to think about also offering value-added services
beyond pure access, just as the mobile carriers did.

Some of the most forward-looking players already are thinking about
it. QPass is aware of this and hopes to exploit the advantage. Blanksteen notes
that AT&T is looking at on-site printing services. Business travelers working
on the go on a presentation could send it over the Wi-Fi network to an AT&T
printing kiosk in the airport while they wait for their flight.

There are other services, Trinneer adds — high-quality, exclusive video clips
and other premium content delivered through the hotspot gateway.

For now, though, the vast majority of the more than one million end subscribers
connected to QPass systems are mobile phone customers, Trinneer says. It’s unlikely
that will change soon, but QPass will do what it can in the emerging Wi-Fi market.

"We will try for more [Wi-Fi] deals, but it’s definitely not the sole
purpose of this company," he says.

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