Finding the right internet deal for your business is becoming ever more complex. Brad Howarth looks at what SMEs need to know about systems, packages, speed and mobility issues.
It was only a decade ago that many businesses started to consider whether they needed an internet service provider (ISP). Today, such services are all but mandatory.
But choosing a broadband ISP can be challenging, with the number of ISPs in the market matched only by the range of products and technologies they offer.
The big telecommunications companies are well represented, with both Telstra (through BigPond) and Optus offering business-oriented broadband services. Beyond them, there’s a plethora of new and established specialist broadband ISPs.
Some service providers offer low monthly rates or no upfront connection fees, but will penalise customers who download more than their allocated amount of data each month (called data cap). Others will lock customers into fixed contracts and then charge them through the nose should they wish to change their requirements over time.
According to managing director of business-focused ISP Pacific Internet, Dennis Muscat, it is important that companies don’t get locked into cheap deals that will penalise them if their requirements grow.
“There are some really low-ball offers out there where you can come in at fairly low prices, sign into a fairly lengthy contract and get your equipment up front for free,” Muscat says. “Then, after about three months, you realise that the speed you’ve signed up for can’t support the applications you want to run. So you upgrade the speed, but this leads to a contract variation which is at a much higher profit level for the ISP.”
General manager of business for iiNet, Andy McIntyre, agrees that flexibility is one of the main factors that a company should look for. “If you need to upgrade or downgrade your service you shouldn’t be penalised for that,” McIntyre says. “You need to look at the contract break fees because they can be quite heavy, and that’s always in the small print.”
Data Rules
One of the most important elements is the data cap, which is the maximum amount of data a user may upload or download, usually over a month. Some providers will simply slow down the speed of the service should the user exceed their cap (this is also called ‘shaping’ the service). But some providers will charge their customers excess usage fees based on the amount of additional data they download, and this can soon become costly.
So it is important to keep an eye on how your staff are using their internet connections. Sites such as MySpace and YouTube might make for a pleasant lunchtime distraction, but streaming or downloading audio and video files can quickly chew up a company’s data allocation.
Similarly, some websites constantly refresh the advertising that appears in the browser. While the amounts for each advertisement are small, they can soon add up if the page is left on screen for a long period.
McIntyre says iiNet shapes network speed rather than financially penalising the client, and will address requests on a case-by-case basis. “Customers call us when their service is just about to be shaped to see what we can do for them,” McIntyre says. “We are looking at trying to put a product together that will give the customer the option to buy more quota as required.”
Shaping can be especially painful if the company runs its website or hosts other important services from its own server. Some providers will only slow the speed of downstream performance (from the internet into the computer), leaving upstream performance untouched.
The download cap is also important when thinking about next-generation services such as voice-over-internet-protocol telephony (VoIP, or internet telephony), which allows users to make free or cheap phone calls across the internet. According to McIntyre, VoIP has become a primary driver for the adoption of broadband among SMEs.
”In the SME and SOHO sector huge savings can be made through VOIP,” McIntyre says. But these calls can also chew up the data allocation.
In the wide range of technologies available for connecting companies, each comes with its own peculiarities in terms of speed and convenience. Larger companies will opt for dedicated fibre links and ‘leased lines’, but these options are generally too costly for SMEs.
Most business services today are offered using DSL (digital subscriber line), which comes in various flavours. The most common is ADSL, where the ‘A’ stands for asynchronous, meaning that the downstream speed (from the internet to the user) is much faster than the upstream feed. Faster speeds can be achieved with ADSL 2+. Should any of the proposed next-generation networks be built, these will most likely use a faster technology again, called VDSL, to link to end users.
ADSL is common today but can cause issues if you plan on hosting information on your computer and then accessing it from a remote location, as the upstream to the internet will be much slower than the downstream speed.
Most DSL services require the user to also have a phone line, although McIntyre says an increasingly popular option is so-called naked DSL, where the customer purchases the broadband link only. He says this is perfect for businesses that will use VoIP or mobile phones as their primary means of communication.
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Wireless & Mobile
Mobile broadband technologies are also becoming increasingly popular. Numerous companies now offer citywide wireless broadband networks with speeds of greater than 1 Mbit/sec across metropolitan areas. First into the market were Personal Broadband Australia and Unwired Australia, but now the main telecommunications carriers have entered the market using their 3G networks and a technology called HSDPA (high speed downlink packet access).
These services differ from WiFi services in that they work similarly to mobile phone networks and are available over very wide areas. They are designed primarily for personal use, requiring either a special card or USB modem to be attached to the user’s computer. Some services use a more powerful modem that can be shared by several users.
There are also ‘fixed wireless’ solutions that work between two fixed points, essentially bypassing the existing fixed-line network used by ADSL. Fixed wireless systems are a speciality of Sydney-based BigAir, which uses a technology called WiMax (a significant upgrade to existing WiFi wireless technology in terms of distance and signal strength) to achieve wirelessly what would otherwise require a physical connection.
According to BigAir chief executive Jason Ashton, the technology can be installed in under a day as there are no fixed connections.
“If you are moving office, you’re beholden to a number of different service providers to get things done,” Ashton says. “One of the attractions of our service is, we are end-to-end. We just pick the box up off the roof and move it down the road.”
Choosing Services
Next, you need to look at the value-added services an ISP can provide, such as hosting of a website and email service, or providing off-site storage and back-up. Muscat says Pacific Internet is getting a strong response from small businesses to its managed services, which look after the client’s on-premises access equipment (known as a router) and handle aspects of their security, such as managing their firewall.
Muscat says support generally is a key consideration too, and advises potential clients to call around and test the time taken by would-be suppliers to answer technical support queries. He says it is also important that the service provider owns their own network, rather than just reselling someone else’s, as this ensures that the service can scale as the business grows.
Product manager at ISP Internet, Jim Kellet, says a static IP addre
ss (a fixed way of finding a computer on the internet) is also a desirable option for many businesses as it allows them to access their office computers from across the internet.
“It’s quite a characteristic of the sole trader that they are often out from the office but need to get remote access back to it, and the static IP address enables that,” Kellet says.
He says many small business operators are not necessarily tied to one location, so Internode offers additional features such as the iPass service for international roaming to help business owners connect with their office resources regardless of where they are.
Another question that businesses need to answer when selecting an ISP is whether to take a bundled package from a multi-service provider, such as a telecommunications company, or opt for a dedicated ISP. Telecommunications companies offer discounts when services, such as long-distance calling or mobile phones, are bundled together in a single package with a single bill.
“On the surface it is a fairly attractive deal, but if you drill down into what they are getting, they’re still paying too much,” Kellet says. “From a business perspective it’s worth spending a bit more time to deconstruct the bundle and see whether you couldn’t just cherry-pick better services individually.”
Ten Questions to ask your ISP
1. What is the service level agreement, and what mechanisms are there for compensation if that agreement is broken?
2. Can the service level be upgraded or downgraded to meet the changing needs of the business?
3. What penalties will apply for varying the contract once it is entered into, such as changing to a faster technology or relocating offices?
4. What value-added features (such as internet telephony, video conferencing and website hosting) can the ISP offer?
5. What is the upload speed of the connection (not just the download speed)?
6. What penalty will be incurred if you exceed your download limits? Are these penalties negotiable?
7. What is the real cost of the service once bundled add-ons such as telephone services are stripped out?
8. How long are the call centre queues for billing and technical support?
9. How much of the service does the ISP actually control, and what components are being purchased from third parties (and who gets the blame when things go wrong)?
10. Will the ISP take charge of managing on-premises equipment such as the internet router and firewall?
