& cplSiteName &

EarthLink Finds Multi-Site Niche

Carol Wilson
5/16/2014
50%
50%

For most of us, the name "EarthLink" still conjures up the days of dial-up Internet access, but while today's EarthLink still serves a million consumer Internet access customers -- and even still sells dial-up access -- the company has evolved well beyond its origins to become a managed services provider firmly focused on a very different type of customer: large mass-location businesses with many small sites and very specific service needs.

Initially, EarthLink Inc. (Nasdaq: ELNK) focused specifically on the retail segment, and is finding success selling cloud-based data and hosted voice services along with specialized features such as PCI compliance validation and secured WiFi with customer data analytics, as part of a managed service that includes connectivity. The service is designed to specifically address the needs of retail outlets, which require rock-solid connectivity and high levels of security for credit card transactions, but rarely have on-site IT personnel, and often face rapid staff turnover.

Having proven this multi-location business model in the retail world, EarthLink is now preparing for expansion into other industry verticals, such as retail healthcare and banking, and professional services, where some players operate in a similar fashion to many retailers, with small offices spread around the US, says Mike Toplisek, executive vice president, sales and marketing.

This expansion of the multi-location business model is part of a transformation which EarthLink is undergoing under Joseph Eazor, who took over as president and CEO from long-time leader Rolla Huff in December of 2013. While Huff led EarthLink's move away from the consumer market to become a national provider of managed IT and communications services to businesses, Eazor comes to EarthLink having been an IT consultant for companies such as EMC, HP and EDS, and is expected to further refine that strategy.

On the early May earnings call, Eazor told analysts that EarthLink will move away from competing for single-location small businesses, a market in which its economics compare unfavorably to those of cable companies with whom it competes. He also promised to realign EarthLink's cloud portfolio, and its investment in IT and cloud technologies to fit the multi-location customer base, and also to complete internal company transformation to match this new opportunity.

Acquisitive EarthLink
This strategy casts a different light on EarthLink's recent spending spree, as the company spent much of the last few years acquiring CLECs and companies that delivered cloud and IT services, with no fewer than 10 acquisitions in total, Toplisek says. The CLEC assets helped build its 30,000 route miles of fiber networks, on which EarthLink now operates Gigabit Ethernet fiber rings and a national IP-MPLS network. In 2012, it added four new data centers, making a total of eight, and in 2013, a next-gen cloud hosting platform connected via fiber to its data centers. (See Adtran Wins EarthLink Deal and EarthLink Back in the Game, Buys ITC.)

Now those resources are being focused on the multi-location customer segment, where EarthLink is making strides but still has a lot of room for growth: Eazor told analysts that even with recent successes in the retail space, EarthLink has captured only 10% of the market.

Interestingly, EarthLink's focus on the retail space echoed the aspirations of one of its earliest acquisitions, made way back in 2006, when EarthLink acquired New Edge Networks, a CLEC that had targeted retailers but was unable to get to profitability. Greg Griffiths, former New Edge chief marketing officer, is still with EarthLink and heads up the retail channel team that Toplisek put together.

"We created a team of three people whose entire job has been to literally know and speak retail," Toplisek tells Light Reading. "I got a little resistance to targeting retail initially. It is a potentially troublesome market because the revenue per store on a monthly basis is low, and you have to be mindful to control expenses."

Where EarthLink has found success is in selling directly to major national chains and providing not just the managed data connections into all of their locations -- removing the need to negotiate those separately with multiple carriers -- but also layering on cloud-based computing and data storage, hosted voice, managed firewalls, and other advanced services.

These companies don't typically draw the attention of the big systems integrators such as IBM or Accenture, and aren't really in the wheelhouse of the cable MSOs, who are finding success serving the SMB market within their regional footprint. That leaves EarthLink to compete mostly against AT&T Inc. (NYSE: T), Verizon Communications Inc. (NYSE: VZ) and CenturyLink Inc. (NYSE: CTL) and, to a lesser extent according to Toplisek, with other national CLECs such as Level 3 Communications Inc. (NYSE: LVLT), XO Communications Inc. and MegaPath Inc. He singles out tw telecom inc. (Nasdaq: TWTC) as a formidable competitor on the transport services side as well.

Standing out in that crowd is where the retail targeting comes in.

Retail specific
"We've launched a product that was very well received where we give [retailers] an EarthLink PCI validation tool," Toplisek says. Basically, the retail location runs through a point and click checklist that asks the right questions to determine the level of security and then provides a read-out at the end that shows how compliant they are with PCI standards. EarthLink can then offer assistance on boosting that compliance, if the retailer chooses to do so, but no matter where they are on the compliancy range, EarthLink offers $100,000 of data protection insurance to every site it serves.

"We also offer managed firewalls that are either premises-based or cloud-based and we have enhancements on the roadmap to make the security offering more robust," Toplisek says.

Uptime is another major concern: If connections go down and a store can't accept credit cards for any extended period, the lost sales can be devastating, particularly in the busiest periods of the year such as the run-up to Christmas. And flexibility is important as stores can increase their workforce by as much as 300% during those busy periods.

Increasingly, retailers are using WiFi, both internally and for their customers. In April of this year, EarthLink launched its new Secure WiFi service featuring a Wireless Intrusion Protection System. The service lets a large retailer with multiple locations deploy and manage both public and private wireless networks so they can support mobile point-of-sale applications and give employees access to corporate training, applications, product, and inventory information and provide customers WiFi for their mobile devices and social media.

"Increasingly, retailers need WiFi for their customers for competitive reasons, but it's another overhead cost for them," Toplisek says. "By offering analytics on customer usage, we can help them pay for it."

He cites a large national tire chain that realized consumers would go elsewhere if they couldn't get wireless access while their tires were being installed. EarthLink gave them a way to keep the public and private WiFi networks separate and, by offering consumers the option of signing into the public WiFi via social media, the chance for the retailer to then gather and analyze data on those customers. Retailers can learn things such as how often consumers are checking out the competition and other prices while shopping.

"It gives them intelligence into what people are looking at so they can better target their offers," Toplisek says. "It's essentially a way they can pay for the WiFi network."

As EarthLink looks to expand the multi-location strategy to other verticals, the company will develop products specific to other industries' needs, and will once again look for companies that have many different smaller sites to serve.

"In healthcare, for example, we won't target the big hospitals but we will go for the doc-in-a-box type clinics," Toplisek says. "In finance, we'll go for the smaller retail banking or investment firms."

At this week's Metaswitch Forum 2014 in New Orleans, Toplisek highlighted EarthLink's value to one of its retail customers, the Ciao Bella gelato company. EarthLink moved that company's entire IT operations into the cloud, hosting its data and apps in its New Jersey data centers, to save the company money and headaches and to reduce outages. Three weeks after the cutover, Hurricane Sandy hit, and Ciao Bella's headquarters building lost power.

"If they hadn't moved to our cloud, they would have been out of business for two weeks," Toplisek says.

— Carol Wilson, Editor-at-Large, Light Reading

(5)  | 
Comment  | 
Print  | 
Newest First  |  Oldest First  |  Threaded View        ADD A COMMENT
jabailo
50%
50%
jabailo,
User Rank: Light Sabre
5/19/2014 | 11:55:37 AM
A shell of their former self
This is the second blast from the past company I've read about that used to sell and be known for a specific product and now is primarily "IT Services".   The other is Xerox.  I was reading about Xerox and kept wondering, are they still alive...what do they do?!   Answer: IT Services.   Now Earthlink.  Like you I remember them as high speed dial up.  I also briefly was a customer of theirs in a failed experiment to try and get DSL to my apartment (can't because I further than 14,000 ft from the CO).  So I guess if you're a corporation with a known name, and cash in the bank, but no product...you sell IT services!

 
Carol Wilson
50%
50%
Carol Wilson,
User Rank: Blogger
5/19/2014 | 8:42:12 AM
Re: Does focus equal success?
Karl,

Reading back over EarthLink stories we've written in the past does seem like a stroll down broadband's memory lane, especially the muni WiFi and Helio experiments. They've been on the managed services track for a bit now under Rolla Huff and with the new CEO, they're restructuing their entire company around this multi-location customer, evening planning to step away from the single-location SMB biz they acquired with all those CLEC purcchases. 

I'm seeing more CLECs focused on the idea of delivering hosted voice and cloud-based data to business customers, and these guys are taking it one step further by specializing their products. 
KBode
50%
50%
KBode,
User Rank: Light Sabre
5/18/2014 | 4:32:55 PM
Re: Does focus equal success?
They've certainly tried a little bit of everything over the years, and I admit I tend to forget they still exist. Seems like only yesterday they were experimenting with broadband over powerline, not to mention their former interest in citywide Wi-Fi initiatives.
mendyk
50%
50%
mendyk,
User Rank: Light Sabre
5/16/2014 | 4:56:00 PM
Re: Does focus equal success?
EarthLink has always scored high marks for customer satisfaction, in part because it does keep its focus -- even as that focus shifts over time. And Ciao Bella is really good stuff, made right here in the Gahden State.
Carol Wilson
50%
50%
Carol Wilson,
User Rank: Blogger
5/16/2014 | 4:03:39 PM
Does focus equal success?
EarthLink's strategy seems simple but also bold -- identify a group of customers you think you can serve better than anyone else and then organize your company to do just that. 

There are a lot of businesses that fall into the multi-location category, so it's not like they'll be lacking for potential business. 
From The Founder
The independent evaluation of Nokia's key virtual network functions (VNFs) was a defining moment for the Finnish giant.
Flash Poll
Live Streaming Video
Charting the CSP's Future
Six different communications service providers join to debate their visions of the future CSP, following a landmark presentation from AT&T on its massive virtualization efforts and a look back on where the telecom industry has been and where it's going from two industry veterans.
LRTV Custom TV
Energy 2020: Growing Services, Not Consumption

6|24|16   |   07:18   |   (0) comments


Management of power requirements needs to be a key consideration as cable operators deploy new services, says Dan Cooper, vice president of critical infrastructure for Charter Communications and chair of the SCTE/ISBE Standards Program's Energy Management Subcommittee. In this video, Cooper discusses the importance of cable operators and technology partners ...
LRTV Huawei Video Resource Center
Huawei & TDC First to Launch DOCSIS 3.1 Trial in Europe

6|24|16   |     |   (0) comments


To meet the rising demands for high-speed broadband and to tackle fierce competition for 1.5 million household, TDC wanted to upgrade its network to use the latest technology. Using Huawei's DOCSIS 3.1 solution, TDC is now able to offer gigabit speeds to its customers.
LRTV Documentaries
OPNFV Summit: Key Takeaways

6|22|16   |   03:28   |   (0) comments


MANO shortfalls, an increasingly bloated open source ecosystem and the cultural challenges for network operators were among the key takeaways from the OPNFV Summit in Berlin.
LRTV Huawei Video Resource Center
Bringing Ultra Broadband to the South Pacific

6|22|16   |   7:55   |   (0) comments


At Singapore's UBBS 2016 summit, Light Reading speaks to Lim Chee Siong, Huawei's CMO in the South Pacific Region.
LRTV Custom TV
Juniper's NFV Platform

6|22|16   |     |   (0) comments


A telco cloud is a key enabler for service providers to deliver virtualized services to their customers. Juniper has a differentiated approach with an open and comprehensive NFV platform to build the cloud of the future for multiple use cases.
Women in Comms Introduction Videos
Infinera: The Glass Ceiling's Been Broken

6|22|16   |   4:34   |   (0) comments


Shannon Williams, an engineer by trade and now the director of sales for Infinera's major accounts, draws confidence from being a female in a male-dominated industry and hopes other women will too as industry dynamics swing in our favor.
LRTV Custom TV
RAD Demonstrates SD-WAN Functionality at BCE 2016

6|22|16   |     |   (0) comments


In conjunction with Versa Networks, RAD demos a joint solution for SD-WAN implementation. The solution uses RAD's ETX-2i, a vCPE platform integrating a powerful IP and Carrier Ethernet NID/NTU with a field-pluggable x86 NFV module that runs Versa's FlexVNF for SD-WAN functionality. The demo implements SD-WAN over a simulated service provider footprint by deploying ...
LRTV Custom TV
Radware on Virtualizing Network Security

6|21|16   |     |   (0) comments


Radware's Michael O'Malley highlights the benefits for service providers of virtualizing network security.
LRTV Huawei Video Resource Center
Huawei 2016 UBBS World Tour: Singapore

6|21|16   |   02:39   |   (0) comments


Highlights from Huawei's UBBS World Tour event in Singapore.
LRTV Custom TV
The FlowBROKER Solution

6|21|16   |     |   (0) comments


During a demo at the Big Communications Event 2016, Accedian director of product line solutions Greg Spear demonstrates how the FlowBROKER distributed packet capture solution (part of Accedian's SkyLIGHT platform) can be used to troubleshoot and resolve QoE issues.

FlowBROKER is the industry's first lossless remote packet capture solution, which uses ...

LRTV Documentaries
BCE 2016: Dell & the New World Order

6|21|16   |   22:48   |   (0) comments


Dell's Jim Ganthier on how the very essence of enterprise is being affected by digital disruption – and how the cloud can help companies find a path forward.
LRTV Documentaries
BCE 2016: The CSP of the Future

6|20|16   |     |   (0) comments


Traditional telecom operators have been adopting new ways of doing business from the IT sector and emulating web-scale companies in their technology adoption. Are these strategies succeeding? A panel of experts at BCE considered the evidence...
Upcoming Live Events
September 13-14, 2016, The Curtis Hotel, Denver, CO
November 3, 2016, The Montcalm Marble Arch, London
November 30, 2016, The Westin Times Square, New York City
December 6-8, 2016,
May 16-17, 2017, Austin Convention Center, Austin, TX
All Upcoming Live Events
Infographics
A new survey conducted by Heavy Reading and TM Forum shows that CSPs around the world see the move to digital operations as a necessary part of their overall virtualization strategies.
Hot Topics
FCC to Vote on 5G Spectrum on July 14
Dan Jones, Mobile Editor, 6/20/2016
'Brexit' Vote Hits BT, Vodafone
Iain Morris, News Editor, 6/24/2016
Twitter Buys Magic Pony... Not That Kind
Mari Silbey, Senior Editor, Cable/Video, 6/20/2016
AT&T Settles on LTE for Cellular IoT
Dan Jones, Mobile Editor, 6/22/2016
Google Fiber Buys Webpass in Wireless Play
Iain Morris, News Editor, 6/23/2016
Like Us on Facebook
Twitter Feed
BETWEEN THE CEOs - Executive Interviews
At the BCE 2016 show in Austin, ECI Telecom CEO Darryl Edwards tells Light Reading founder and CEO about the Elastic Network concept and the company's NFV and cybersecurity developments.
Mark Dzuban, president and CEO of SCTE/ISBE, sits down with Steve Saunders in Light Reading's New York office to discuss the society's Energy 2020 campaign, including its mission to benefit the environment, enable economic benefits and the key challenges facing cable operators wanting to reduce energy consumption.
Animals with Phones
Live Digital Audio

Our world has evolved through innovation from the Industrial Revolution of the 1740s to the information age, and it is now entering the Fourth Industrial Revolution, driven by technology. Technology is driving a paradigm shift in the way digital solutions deliver a connected world, changing the way we live, communicate and provide solutions. It can have a powerful impact on how we tackle some of the world’s most pressing problems. In this radio show, Caroline Dowling, President of Communications Infrastructure & Enterprise Computing at Flex, will join Women in Comms Director Sarah Thomas to discuss the impact technology has on society and how it can be a game-changer across the globe; improving lives and creating a smarter world. Dowling, a Cork, Ireland, native and graduate of Harvard Business School's Advanced Management Program, will also discuss her experience managing an international team focused on innovation in an age of high-speed change.