& 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. 
Light Reading’s Upskill U is a FREE, interactive, online educational resource that delivers must-have education on themes that relate to the overall business transformation taking place in the communications industry.
NEXT COURSE
Wednesday, September 14, 1:00PM EDT
What Is Agile?
Kent J. McDonald, Product Owner, Agile Alliance
UPCOMING COURSE SCHEDULE
Friday, September 16, 1:00PM EDT
How to Implement Agile
,
Wednesday, September 21, 1:00PM EDT
What Is DevOps?
Colin Kincaid, CTO, Service Provider, Cisco
Friday, September 23, 1:00PM EDT
How to Implement DevOps
,
in association with:
From The Founder
Light Reading today starts a new voyage as part of a larger Enterprise.
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.
Between the CEOs
CEO Chat: Intel's Alexis Black Bjorlin

8|17|16   |   06:23   |   (0) comments


Join us for an in-depth interview between Steve Saunders of Light Reading and Alexis Black Bjorlin of Intel as they discuss the release of the company's Silicon Photonics platform, its performance, long-term prospects, customer expectations and much more.
Telecom Innovators Video Showcase
Accelerating Telecom Digital Transformation With Nominum DNS

8|1|16   |   12:04   |   (0) comments


Light Reading's Steve Saunders gets an update from Nominum CEO Gary Messiana on how his company is helping carriers on the digital transformation journey.
LRTV Custom TV
Reinventing Operations for a Virtual, Software-Defined World

7|28|16   |   5:23   |   (0) comments


Heavy Reading Senior Analyst Jim Hodges speaks with Accenture's Larry Socher and Matt Anderson about what service providers must do to transform their business to get the benefits of SDN and NFV including: leveraging DevOps, introducing real-time OSS and implementing analytics.
Women in Comms Introduction Videos
Fujitsu Sales Leader Shares Lessons Learned

7|27|16   |   5:12   |   (1) comment


As Fujitsu's only female sales leader, Annie Bogue knows the importance of asking for what you want, being flexible (she's been relocated five times), keeping a meticulous calendar, 'leaning in,' working harder than everyone else around you, being aware and more.
Telecom Innovators Video Showcase
VeEX Test & Measurement Solutions

7|25|16   |   08:57   |   (0) comments


Cyrille Morelle, president and CEO of VeEX Inc., talks test and measurement with Light Reading's Steve Saunders at BCE 2016. This includes innovative products such as VeSion Cloud-Based platform for network monitoring; MTTplus Modular Test platform for Access, Business, Carrier Ethernet, Transport and Core services; and OPX-BOX+ for Fiber Optics.
LRTV Custom TV
VeEX: Live From BCE 2016

7|25|16   |   03:20   |   (0) comments


VeEX's Senior Director of Business Development, Perry Romano, explains how VeEX provides tools to help install, maintain, monitor and manage network infrastructure efficiently and effectively. The portfolio of products on display include the RXT-6000, MTTplus and TX300s.
LRTV Custom TV
Real-Time Telemetry & Analytics for Intelligent SDN Orchestration

7|25|16   |   03:09   |   (0) comments


Packet Design CEO Scott Sherwood discusses how real-time network telemetry and analytics are enabling a new breed of SDN orchestration applications.
From the Founder
The Russo Report: Driving Disruption

7|25|16   |   07:44   |   (2) comments


In the first episode of a four-part series, Light Reading Founder and CEO Steve Saunders and Calix President and CEO Carl Russo drive around town discussing the disruptive mega-changes in the communications industry and where hope lies for service providers to meet the escalating demands of the cloud.
LRTV Custom TV
NetScout: Maximizing Enterprise Cloud for Digital Transformation

7|20|16   |   04:53   |   (0) comments


Light Reading Editor Mitch Wagner talks to NetScout CMO Jim McNiel about maximizing the benefits of enterprise cloud and digital transformation while minimizing potential pitfalls with a proper monitoring and instrumentation strategy.
Women in Comms Introduction Videos
Ciena's VP Offers a Career Crash Course

7|20|16   |   4:14   |   (2) comments


How did Ciena's Vice President of Sales, Angela Finn, carve out her career path? Simple, she tells WiC. She stayed true to her company, customers and principles. She shares her advice for women on how to be authentic and credible, as well as for companies that want to make a real change to their culture and practices.
LRTV Custom TV
NFV in 2016: Part 2 – Climbing the Virtualization Maturity Curve

7|19|16   |   06:56   |   (0) comments


Many of the initial use case implementations are single-vendor and self-contained. The industry is still climbing the virtualization maturity curve, needing further clarity and stability in the NFV infrastructure (NFVi) and greater availability and choice of virtualized network functions (VNFs). Interoperability between NFVis and VNFs from different vendors ...
Telecom Innovators Video Showcase
Versa Networks' Kumar Mehta on SD-WAN Managed Services

7|19|16   |     |   (0) comments


In Silicon Valley, Steve Saunders sits down with Versa's Kumar Mehta for an interview focused on why service providers are building SD-WAN managed services, and how Versa's telco customers are innovating.
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 1, 2016, The Westin Times Square, New York, NY
December 6-8, 2016, The Westin Excelsior, Rome
May 16-17, 2017, Austin Convention Center, Austin, TX
All Upcoming Live Events
Infographics
Five of the Top 10 most targeted countries in Check Point Software Technologies' global Malware & Threat Index for Q1 2016 are in Africa.
Hot Topics
Cisco Developing 'Monica' Digital Assistant
Mitch Wagner, West Coast Bureau Chief, Light Reading, 8/22/2016
Cisco Throws 5,500 Overboard on Cruise to Richer Waters
Mitch Wagner, West Coast Bureau Chief, Light Reading, 8/17/2016
VoLTE Can Drive 4G Small Cells Adoption
Ravi Narayanan, Senior Analyst – Cloud & Next Generation Mobile Networks, Heavy Reading, 8/18/2016
Slow Roll Builds for DOCSIS 3.1
Mari Silbey, Senior Editor, Cable/Video, 8/17/2016
Rocket Fiber Lights Up Detroit With Gigabit
Elizabeth Miller Coyne, Managing Editor, 8/22/2016
Like Us on Facebook
Twitter Feed
BETWEEN THE CEOs - Executive Interviews
Join us for an in-depth interview between Steve Saunders of Light Reading and Alexis Black Bjorlin of Intel as they discuss the release of the company's Silicon Photonics platform, its performance, long-term prospects, customer expectations and much more.
There's no question that, come 2020, 5G technology will turn the world's conception of what mobile networking is on its head. Within the world of 5G development, Dr. ...
Animals with Phones
Live Digital Audio

Bridging the tech skills gap is a major challenge for service providers and suppliers alike today – and the challenge is two-fold when it comes to increasing the number of women in the comms space. Level 3 Communications has made it a priority to overcome both challenges by implementing several unique programs focused on building the right candidates from within – in addition to filling the funnel by supporting STEM and other education programs. During this radio show, you’ll learn about these programs from Mary Beth McGrath, SVP of Global Talent Management at Level 3, and the best ways to bridge your own skills gap so that you are motivated and equipped for change. Plus you’ll have the chance to ask Mary Beth your questions live on the air.