ISPs are currently in the midst of a period of self-reflection, considering whether owning their own network is a wise investment.
Providers are considering whether owning their own network is proving to be cost effective, whilst resellers, that may have more flexibility in their operations, have to consider the sacrifices required in order to take advantage of the simplicity that a virtual ISP model provides.
ISPs, by their nature, are resource hungry enterprises with high electricity bills thanks to servers that not only consume massive amounts of mains power and that also require extra juice for cooling to prevent damage and
sweltering staff. Servers also take up considerable floorspace and resources to install, manage and maintain; not to mention the CapEx required to purchase the hardware in the first place which, after only a couple of years of use with the introduction of new technology, will be worth a fraction of the original cost!
The responsibility and therefore, liability for the network ends with the provider too. This does present some benefits in terms of control and not having to rely on a partner’s network. However, when problems do occur,
(whether hardware fault, data breach or human error) the buck stops with you.
Finding IT admins that have the necessary skills to design and maintain your network can be a struggle. With salaries at a premium and those in the know setting up their own businesses to outsource their skills, quality staff can be hard to find. Add to this the need for customer service staff to keep customers sweet and facilitate the reporting of issues and the human resources required to be an ISP can alone be prohibitive for smaller
Virtual ISPs on the other hand, have a much nimbler business model, where efficiencies can be made thanks to the added flexibility and scale that partnering with an existing ISP provides.
Primarily, these operations increase the scalability of the organisation by leaving the technical operation of the network aside and focusing on the marketing and delivery of the network. As more businesses are attracted
by high-quality promotion, a vISP only has to contact their provider and request an increase in bandwidth allowance to provide space for their next wave of new customers. This lean mode of operation is ideal for smaller
resellers, given the simple repeatability of the sales model.
As mentioned previously, the resources required to source the necessary hardware to become an ISP can be prohibitive in itself but the lack of equipment does shorten the time it takes to set up a vISP, compared to a
traditional ISP. Without the need for the delivery and installation of expensive hardware and its provisioning, as well as far less paperwork to get the business off the ground, a vISPs shorter ‘time to market’ ensures that businesses start making money quickly.
The major drawback of operating as a virtual ISP is the lack of control of the network itself and the ability to resolve the issue in-house. If your supplier’s network suffers an outage, for instance, the knock-on effect to
your customers may prompt them to find another provider if the situation isn’t resolved in a timely manner. Depending on the severity of the issue, having no control over the fix could be lethal to smaller resellers and vISPs, therefore finding a provider than can guarantee an agreeable level of service and SLAs for the worst-case-scenario is vital to becoming a successful virtual ISP.
In the current climate, with changing technology and regulations, it is important that businesses remain agile; able to twist and turn depending on the behaviour of the market and the flexibility that a vISP provides frees
businesses to put efforts back into delivering solutions that your customers want, rather than fighting the established ‘big fish’ of the industry. Success seems far more likely for those smaller fish that can find niches by catering to specific customer needs and grow large enough not to be swallowed up.
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