They got the hook-up: eSpoke.com gives resale and e-commerce an OSS spin

For the majority of telecom service providers, the service ordering and activation process still is bogged down primarily by faxes and other similarly archaic methods. Despite the advanced services that service providers are creating and launching, their procedures for getting them geared up still are decidedly low-tech.

A new entity that plans to launch this week is hoping to be the vehicle that changes all that. The company, eSpoke.com, is a hybrid between a reseller agent and an e-commerce site - a place where end customers can go to research their service options, compare prices and activate service on the spot. In short, eSpoke.com aims to do for telecom what Travelocity has done for airline ticketing.

"It's really a portal that allows small businesses and consumers to come onto our site and place an order for services that we forward directly to the carriers," said Bobby Martyna, CEO of eSpoke.com. "We do everything a human agent would do, except we do it on the Web."

The secret of eSpoke. com is in the software. The executive ranks of the San Francisco-based start-up are thick with veterans of operations support system (OSS) development houses and other high-tech backgrounds. Martyna, for one, honed his OSS development and interconnection skills as founder and executive vice president of Vertel and later as founder and CEO of Quintessent Communications. The board of directors of eSpoke.com includes Beechwood-turned-Cap Gemini Telecommunications executives Jason Donahue and Ron Ponder. Other principals hail from ADC Telecommunications and Digital Equipment.

It's eSpoke.com's background and knowledge of OSS entanglements that the company believes will set it apart from other service agents and ultimately allow it to evolve into something more complex than a straight reseller. Whereas other sites may only provide service details and availability information, eSpoke.com will close the deal on the spot by connecting directly to affiliated service providers' ordering, activation and provisioning systems.

"We're doing everything from fax to a simple electronic interface," Martyna said. "It all depends on the sophistication of the carrier."

The maturity of the company's relationships with given carrier partners is what will determine how much is invested in the OSS interconnection, Martyna said. Ultimately, eSpoke.com hopes to drive the creation and acceptance of an industry standard for Web site-to-order management systems that currently does not exist.

"As we start flowing more orders, we'll work with them to put in a more substantial, easier-to-use interface. It's not going to be valuable to either one of us if we're flowing one order a month," Martyna said. "Our goal is to create a standard that we will promote with our business partners."

The company foresees its primary competition coming from the service providers themselves and from other telecom-oriented portals that are pursuing similar strategies. Again, the company is relying on the OSS angle to set it apart from the latter.

"They definitely do not have the OSS integration or the OSS back-office experience that we have," Martyna said. "That creates the right partnership level between us and the phone companies. We can go back to these guys at a [vice president] of marketing level as well as a [chief information officer] level and say, `We have a value proposition for both of you.' The combination of that really puts us in strong stead with the executive team at the telcos."

The company's unique approach to the resale game, along with the company principals' experience with navigating complex OSS interconnection paths, should definitely contribute to the success of the venture, said Jeff Cotrupe, senior analyst for RHK.

"Many aspects of OSS remain a mystery to much of the market," he said. "eSpoke.com brings this full circle for OSS interconnection by making it more accessible to more of the market than ever before. No one else in e-commerce is doing OSS interconnection, and no one else in OSS interconnection is attacking the problem via e-commerce.

"Any venture headed by top guns like Jason Donahue and Bobby Martyna has the potential to succeed in the telecom and IT markets," Cotrupe added. "The challenge will be for them to translate their proven business-to-business technology expertise into something that retains business-to-business aspects but has a major retail and consumer component."

The strategy for eSpoke.com's planned Nov. 1 launch is to begin by offering long-distance service, then add another class of service every two months, Martyna said. For the long-distance play, the company already has forged partnerships with AT&T, Cable & Wireless, MCI WorldCom, Net2Phone and Qwest Communications. Future service offerings planned include Internet access, wireless and eventually, local dial-tone.

But why would service providers that already have established themselves as recognizable entities turn to a semi-competitor as a sales outlet?

"It's an inexpensive channel, and they always welcome a channel that can bring them more business," Martyna said. For smaller carrier operations, adding eSpoke.com to their strategy could be viewed as a way to boost volume, he added.

"It's of even higher value for them because they're looking at the number of orders we can turn over to them as a major factor to growing their revenue," Martyna said. "These guys don't know how to take advantage of the Internet. We don't think they really understand how to use the Internet to do target marketing, so there's a lot of value we can bring them."

Another unique factor for eSpoke.com is its focus on small business and small office/home office customers and its targeted approach to vertical communities. The company is aiming at groups such as real estate brokers, high-tech consultants, the importer/exporter community and even certain ethnic groups, using Internet sites targeted toward each of those market niches as points of impact.

"We're going after them where they live," Martyna said. "Instead of doing a $20 million deal with Yahoo! or AOL, we're looking at some of the other vertical portals that have already amassed a subscriber base. They have a much more targeted and focused approach."

Once it identifies the Web sites such groups frequent, e.Spoke.com will draw potential customers to its own site via advertising and link agreements. There, customers will have the option to examine vertically focused content that provides basic educational information on services. They can then use eSpoke.com's rating engine to compare rates and availability by entering factors such as their typical calling patterns, regions called and time used. The engine processes affiliate company plans and presents options, then gives the customer a chance to place orders directly with a given carrier.

"They come to our site, but they're still doing business with the carrier. We try to expose the aspects of a carrier's plan that they believe to be their strategic advantage," Martyna said.

While being an "honest broker" for service providers has helped break down some of the competitive hurdles, Martyna said one of eSpoke.com's challenges has been to convince service providers of its unconventional approach to the reseller model.

"They're used to dealing with human agents, so we've had to break down their preconceptions about working with a Web site," he said.