Guided by services

The boilerplate Winstar Communications tacks on the end of company statements and press releases says nothing about broadband wireless. In fact, it doesn't mention technology at all, save one reference to a widely available, end-to-end broadband network.

What it does mention, multiple times, is services. That's because Winstar would rather be defined by the broadband services that its network makes possible than by the network itself.

But slicing such a clear line between network and services doesn't do justice to the almost parasitic connection between the two. One thing nourishes the other, and while in theory each could survive alone, that's not the Winstar way.

"We knew it wasn't enough just to build a broadband network," says William Rouhana, chairman and CEO of Winstar. "It doesn't make sense to build a broadband network if you can't do anything with it. We've been very careful to build a complete set of services for business that make that network useful."

That only hints at the complexity and variety of offerings that Winstar is attempting to package and deliver. To Rouhana, operating a network and putting services on it seems to be driven by an almost sociological motive.

"Underlying it all is the fact that what we're trying to do as a society is to take things from a physical world and put them into an e-world and add functionality and efficiency as a part of that," he says. "In the end, it's all about making people better at what they do. We call it `taking the friction out of business.'"

Realistically, the only way Winstar can be successful in that endeavor is to have a reliable and extensive infrastructure - hence the earlier mention of the widely available, end-to-end broadband network.

The fact is that Winstar was a broadband fixed wireless pioneer, being one of the first to deploy the radio-based technology in an access network, and it still relies on the network format as its primary means of providing access. But that's the insider's view and the technology industry's view, not the customer's view.

"To the customers, we've always been more focused on services and value and much less focused on technology and how we bring services to the customers," says Rick Calder, executive vice president and chief marketing officer for Winstar. "We've been a broadband services company all along."

Building recognition

Calder is one arm of a kind of executive triumvirate in place at Winstar that helps Rouhana realize the company's service intentions. As Rouhana puts it, Calder is responsible for "turning concepts into things the sales force can sell."

Like the synergistic relationship between network and services, however, Calder's success in realizing his objectives depends on several other factors - and several other people.

Another peg is Roger Pilc, the vice president in charge of the all-important application service provider (ASP) and Web hosting effort. The third is Jeff Cutler, general manager and chief operating officer of Office.com, Winstar's online business content service for small and medium-sized business.

For each of them, everything starts at the building level. Winstar's service development and sales approach hinges on developing an understanding of its business targets and convincing those targets that Winstar's services can make them more productive.

"Our addressable market is very understandable: It's the places in the buildings that are connected to our network," Rouhana says. "We try to create a different starting relationship with our customers. It helps us identify how we need to cut through the clutter and the noise."

The Winstar network is connected to 9700 buildings, and Winstar has made a point of creating a persona for itself within them while it compiles data on the customer targets dwelling there.

"We've been building a relationship with the businesses in Winstar buildings for years," Calder says. "We've built a huge repository of data about them, and what we've found is that they're much more interested right now than they were a year or two ago."

The effort to capture and hold their interest is the job of a sales force that now numbers more than 1000 and has taken six years to build and train, Rouhana says. For the sales force, gaining customers is as much about teaching as it is about selling.

"We want to work to educate customers on how to use this stuff," Rouhana says. "It's a process of helping people understand why they should change their processes."

That goes for large companies that have IT managers and know Winstar and its offerings very well as much as it does for smaller outfits that are less savvy about their options. In fact, Rouhana sees the latter group as even more in need of service guidance.

"They need to go someplace where the company is capable of delivering more than a service," he says. "The thing that gets them most excited about dealing with us is that we can make it easier for them to be a part of the new economy."

Covering its apps

With a network connected and customer targets in the process of being educated about their options, Winstar's focus has increasingly turned to service development, diversification and customization. Through acquisition and organic growth, Winstar has gone from a principally voice-oriented service provider to one that can deliver a cache of voice, high-speed data, Web hosting and ASP offerings.

"It's definitely more than just talk," Pilc says. "Being able to offer the total solution has been a good play for us."

Central to that effort is the ASP initiative, which came into sharper focus recently when Winstar forged a deal with Microsoft to become one of only a handful of companies licensed to offer Microsoft Office applications on an ASP basis.

Other partnerships with software developers will be forged based on Winstar's assessment of the market share, brand name, ability to draw business, level of "Webification" and overall maturity of the application in question, Pilc says. Of course, software partnerships also are evaluated based on customer demand.

"We're systematically looking at the needs of our customers and forging relationships application by application," Rouhana says.

Winstar is aiming its version of the ASP model at its entire range of customers, albeit for different reasons. For larger customers, the appeal of an ASP delivery method might be more relatedto location than cost, Rouhana says. "You not only have a large number of people to take care of, but they're usually geographically dispersed," he says.

For the small and medium-sized contingency, the decision might be based more on economic factors. "They've adopted this model slowly, but they're doing it because they understand the cost implications," Rouhana says.

Winstar's principals also credit several other factors with fueling the ASP fire, especially the increasing availability and decreasing cost of bandwidth and the need for all businesses to streamline their approaches.

"I do think that connectivity - the fact that more and more businesses have fatter pipes - is a factor," Pilc says. "We're really selling an absolute ton of fractional T-1 services to businesses that previously couldn't afford it. Another factor is that small and medium-sized businesses are realizing they don't have the skills and resources to manage the applications they would like to use."

Winstar's applications approach is another example of the self-fueling phenomenon created by a tight connection between networks and services. In other words, the more applications the company hosts and delivers, the more bandwidth consumption that takes place.

"We're confident that the more the price-to-performance ratio improves for bandwidth, the more applications will suck up the bandwidth," Pilc says.

Back in the office

Another example of how Winstar is trying to make its broadband network pipes more useful and relevant is Winstar's Office.com service. It's also a potential point of entry for customers that might ultimately generate more revenue on the Winstar network.

"Right now, Office.com is a mass-market service," Cutler says. "Anybody can come in, and if they're able to find value, they'll stay and use it."

That seeding strategy includes free applications such as an integrated, Web-based e-mail and calendar offering currently being developed, Cutler says. "We'll look to get users in to use it, then upgrade them," he says. "If they're a customer on the Winstar network, we'll eventually be able to migrate them to Winstar's ASP services."

Winstar's intention is to position Office.com as a comprehensive site for business users seeking content, tools, applications and products oriented toward whatever vertical business niche they happen to inhabit. The mission is not only to provide virtual office functions such as the e-mail and calendar combination but also to provide human resources functions such as payroll and to give merchants a place to establish an e-commerce presence.

Part of the commerce spoke of the strategy is plans for a business-to-business marketplace, which Cutler hopes will attract industry-specific merchants that may not have developed an e-commerce channel.

"If there's a business that's a supplier of some obscure industry equipment, [it will] be able to create a vertical storefront within Office.com," he says.

Revenue for Office.com comes from advertising and commerce and likely from brand association and loyalty that connects back to Winstar. In May, nearly 1.7 million unique visitors hit the Office.com site, according to figures from traffic measurement company Media Matrix.

Office.com's vertical strategy is crucial to the loyalty factor, Cutler says. "We recognized that we really had to get down and dirty with these sub-verticals," he says. "These folks felt like every other service out there was marketing to them as a similar business, and that really irked them."

To shore up that vertical focus, Office.com provides free, objective content specifically targeted at vertical niches.

"We do believe that people expect content to be free, and we're embracing that trend," Cutler says. "We see content really helping inform people on how to use or purchase goods and services."

The supporting base

Winstar's network is certainly no afterthought. In fact, the company has been building its network for years to get it to the point where the company felt that its network no longer needed to be the center of attention. Still, Winstar considers its facilities-based network to be the foundation that supports all the applications and content efforts above, and the distinguishing factor that allows it to maintain an intimate connection with customers.

"Everyone needs the base," Calder says. "When we can bundle services on our own network, it creates value our competitors can't."

Like many other telecom providers, Winstar's network is a mix of multiple switching, access and transport technologies. While the broadband wireless access portion is unique, it is not considered to be exclusive.

"Our job is to create a widely available commercial network and to do it in the most cost-efficient way," Rouhana says. "Today, fixed wireless is the right way to get broadband connections to more than half of the commercial market."

In the same technology-agnostic vein, very little of Winstar's service positioning or marketing is related to its network. Some customers might be aware of the kind of technology the company uses, but it is certainly no sales tool. In fact, the only place technology really enters the picture is on Wall Street. "That's where the technology is a much more important part of our business strategy," Calder says.

Again, however, the unavoidable, unbreakable connection between network and services actually makes Winstar's choice of network technology one of the most important elements of its strategy. The difference is that the technology issue is an internal one, and the services and applications that technology supports are what customers see and how they ultimately identify and make judgements about the company. That explains Winstar's almost maniacal focus on creating and delivering services that might alter the quality of existence for its customers.

Says Rouhana: "You have to be able to figure out how to help companies make their businesses better."