Learn your lesson well

They say a wise person learns from his mistakes, but in the telecommunications industry-and especially the still-evolving Internet service provider market-it's the wiser person who learns from the mistakes of others. A case in point is the emergence of ISPs and Web-hosting services that target corporate customers and other high-value accounts by providing reliable networks, customer-managed bandwidth and guaranteed levels of service, like St. Louis-based Savvis Communications or Honolulu-based Digital Island.

Instead of trying to be all things to all customers, as mega-providers like UUNet, Netcom and America Online have done, these service providers have identified key high-margin customers with special needs and have developed networks specially tailored to meet their needs.

For Digital Island, that audience is multinational corporations, like Cisco, that use Digital Island's Hawaii-centered network to distribute software code and other data to sites worldwide.

Savvis' audience is corporate customers, on-line content creators and local and regional ISPs that depend on available high-performance bandwidth for their livelihoods.

For both companies, quality of service is a vital issue.

These companies built their network architectures from the ground up to provide high performance and are able to charge a higher rate for their services as a result.

It's something the more established ISPs would love to do. Weighed down by infrastructure and legacy systems, they aren't nimble enough to capitalize quickly on the opportunities that the emerging market presents. These ISPs are fast assuming the roles of the RHCs of the Internet, providing "residential" service while "boutique" service providers nibble away at the most profitable segments of their markets, like CLECs are doing in the telephony space.

For almost two years, the deregulated telecommunications industry has provided ISPs with a living laboratory in a parallel part of the greater communications industry. The lessons continue to be written, and the successful players in the ISP market will be the ones that take them to heart.