Strategic partnerships key to network dynamics

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Imagine this: You are the CEO of a company that generates hundreds of thousands of data files each year. Your back-up systems include standard servers and secured off-site storage. But September 11 happens or a wild fire threatens your facility. Suddenly greater security is an issue, but you can’t justify the cost or rely on sophisticated systems developed for military and defense application. So where does a company turn?
Over coffee on a warm Colorado Springs morning, Hill Branscomb, managing partner of Optimum Network Services (ONS) and Joe Crook, the company’s director of operations, stress that ONS is a company in the formative stages. A third member of the local management team, Bill Kirkland, a former Air Force combat pilot and electrical engineer, is out of town, but plays a large role in the company’s marketing efforts.
As Branscomb explains, Optimum Network Services, located in the telecommunications techno-hub at Alamo Corporate Center, grew out of a business split. In 2000, his company sold off the customer calling card business to Qwest. That left a very marketable multi-carrier broadband exchange switching operation in tact. “From February 2002 when we began operating independently, we’ve been profitable,” says Branscomb. “Joe Crook has managed day-to-day operations, and we’ve been taking care of the customers who transitioned with us.”
Crook, a thirteen-year resident of the Pikes Peak region and a former network coordinator for El Paso County, manages day-to-day operations. He works with local clients, including the company’s largest customers, Newsgrade and Vanion.
Branscomb, in contrast, is based on the West Coast, but spends weeks each month in Colorado Springs and Denver. His focus lies in business development, financial management and in creating strategic partnerships so important to advancing ONS to the next level. A third member of the team, Bill Kirkman, works primarily to develop military, DOD and other government contractor business, both for the company’s broad switching capability and for its newly-developing data transfer and secured storage division.
“We facilitate it all,” said Branscomb. “Our vendor neutral broadband capabilities allow us to connect a company’s Colorado Springs offices to their other facilities across America. We provide safety and server back-up for data files, network services and web hosting.
Fortunately, revenues generated by ONS’s core local ISP provider switching service and as a carrier between cities where other providers are restricted (The Federal Communications Commission’s anti-monopoly requirements dictate that a separate long distance provider must be used between local areas, LATAS, served by Qwest) have allowed the firm to remain profitable since its reorganization in February 2002. “Because we are vendor neutral (which means that ONS has fiber circuits from all but a few major broadband carriers coming into its office), we can offer our customers a choice of service providers rather than limit users to a single company,” says Branscomb. “We can also offer tremendous efficiencies and highly competitive pricing.” He points out that ONS, for example, provides its customer a choice of MCI, Sprint or AT & T. In contrast, most competitors purchase from their carriers and resell it at higher prices. That means fewer costs to pass on to the customer.
Broadband has become a hot commodity, and ONS does have competitors. So far, they are typically small outfits that not only have to purchase access from a large carrier, but sell in “multiples” of eight times or more. Branscomb explains that companies that offer suspiciously cheap prices sell phone/Internet/high speed data line sell that same T-1 or DSL line eight times or more and call it shared access, slowing downloading and transmission times.
“A lot of times, a small business owner wonders why his or her computer or data lines are so slow to respond,” Branscomb said. “They might think, ‘My equipment is getting old’ or ‘I need more memory’ when the real problem is that a broadband vendor has sold access to too many customers for his capacity. The result is customer frustration.” Optimum Network Services sticks to a multiple of four, and markets its flexibility as a carrier-neutral service provider. “If a customer wants to switch from Qwest or Adelphia to our Internet service or long distance, we make it easy and we provide plenty of choices because most of them come into our headquarters.”
Not ones to ignore an opportunity, Branscomb, Kirkland and the Colorado Springs team, are focused on a newly-emerging opportunity and are quickly developing strategic technology partners. Their goal: to create commercial data storage and high-level security services, currently unavailable to Colorado Springs-based companies. Bob Balink, Colorado Springs Chamber of Commerce vice president of governmental affairs and former head of the organization’s technology department, agrees with the ONS market assessment. “In the new Homeland Defense environment, we are all becoming more security conscious and understand the need for complete redundancy. It’s companies like Optimum Network Services that will get us there.”
Branscomb credits Balink and the Chamber with helping ONS open doors to local corporate partners. One of those introductions was to Raytheon, a defense contractor known for its highly sophisticated military data storage and communications networks. From talks with Securitas, Branscomb made key contacts with the management team at the company’s Data Center operation in Denver and learned about its strategic relationship with Raytheon’s E-center data services. “As far as I can see, this is a win-win relationship,” said Balink. “ONS can offer the switching and broadband delivery capability Securitas needs, and Securitas provides ONS the technology to market redundant data storage of an organization’s financial, membership or customer information. It’s expensive to build a data center that, short of a nuclear explosion, will protect stored data. To date that degree of service has not been available in our market.”
In the process of building the strategic alliance, Branscomb has also met Securitas founder, Tom Espy. The ONS-Securitas team has formed a strategic alliance to provide more applications for the combination of broadband delivery systems and increased data security.
In addition to building a broader array of ONS services, Branscomb also wants to make a contribution to the local business community by mentoring and incubating new businesses. Most of these fledgling telecommunications or IT operations, if supported with networking and combined R & D efforts, may someday become ONS customers as well. “I’m not a venture capitalist,” said Branscomb, “but I do want to help bring good businesses along that show market promise.” One of those companies, Digio Wireless, has already moved to Colorado Springs from Baton Rouge, Louisiana, and is working with ONS to deploy a carrier class redundant wireless network on the roof of the 102 S. Tejon building to compete in the local loop market which is controlled by Qwest.
Other companies currently under Branscomb’s tutelage include EyeSpring, a Sydney, Australia-based technology company that enables on-line printing press collaboration from remote locations; and Stock Diagnostics.com, a start-up developing diagnostic systems that focus on analyzing public company financials, a timely venture in view of ENRON and MCI’s recent scandals.
Through strategic vision, a sense of community (Branscomb’s team has participated as a sponsor of the Business Journal’s High Tech After Hours, is an active Chamber member, and supports the Colorado Veteran’s Resource Coalition, providing a 15-bed home and other important services to homeless or displaced vets), and Branscomb’s sheer personal energy, ONS will continue to make his mark on the local technology scene. And as it does, the Colorado Springs business community stands to be the biggest winner of all.