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2. What the User Wants: Competition
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Big Guns: the Online Services
While online services do supply Internet access, a critical selling point is the content and features exclusively on their networks. These additional features usually come at little cost because massive customer bases give these services an economy of scale that makes Internet access less expensive to provide. |
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Local ISP Providers
Internet service providers, which number over 3,000 in the United States alone, do not offer the proprietary features of the online services, but attempt to excel in cheap, high-quality access and service, including niche services such as site hosting and electronic commerce. The huge number of ISPs makes it difficult to generalize on their quality, prices and features. Some, however, are excelling by finding a niche and serving it well. Earthlink, for example, is a national ISP that focuses on Internet newcomers. It focuses on customer support and the tools necessary to get a newcomer up and running. |
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Pricing: For the Home
While Internet access is an part of every ISP, the quality of the connection and customer service provided can vary greatly. Prices have strayed from the traditional $19.95-a-month Internet access package. Several larger ISPs are building customer bases by luring newcomers with lower rates of $12.95 or $9.95. America Online began offering flat-rate plans in 1996. Previously, they offered only fee-per-hour pricing. With a number of competing access providers proffering unlimited access at month, AOL also began offering flat-rate, unlimited usage per month. |
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Service: For the Business
Not only do locals do well, but they do even better with the larger firms. You might expect that the large companies providing access would be competitive. In fact, the reverse is true. The share for small, local ISPs actually increases with these larger firms. They look to the ISP for more than connectivity -- they want an Internet partner. The smaller ISPs provide whatever services they can to them happy. They buy for the most part from small, local providers. There is no shortage of ISPs with "big" names. There are MCI, AT&T, Sprint, and Microsoft, but they are just not getting it done. AOL, CompuServe, and the other giants are doing better in smaller firms than they do in large ones. The local ISP has a greater share presence in sites with more than 500 employees than they do in firms with fever than 100 workers. Service is the reason that the smaller ISP firms are winning. Businesses need internet applications, development services, and web design. However, most firms can't afford to hire web developers because of their scarcity and their commanding salaries. Therefore they look to outside partners; these smaller firms fit the bill. Some customers want the such services such as
Web hosting, VPNs (virtual private networks) and even intranet outsourcing
but most customers want reliable, high-bandwidth access to the Internet.
Many ISPs easily collect customers, but lose them quickly for lack of service.
Often ISPs simply grow too fast to keep their modem and router capacity
up to speed. Smaller businesses that may not have the wherewithal
to create and manage their own Web sites might look for Web hosting services
for electronic commerce sites, or VPN services for running their intranet.
Some ISPs provide co-location services, allowing a company to keep its
servers at an ISP facility.
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