As far as BT is concerned these days, not only is it good to talk, it?s just as good to surf the Web, email your business partners and navigate your company?s intranet ? although Bob Hoskins and his animal friends may find that concept difficult to distil into a meaningful advertisement or catchphrase.
Of all the traditional telcos and cable companies in the UK, BT is proving to be the most aggressive when it comes to offering services aimed at expanding internet usage in the consumer and business markets. The company is, after all, primarily concerned with selling telecoms capacity, whether it is used for voice, data or audiovisual transmission.
A lot of internet service providers (ISPs) are now waking up to the threat posed by BT as the vast organisation starts to get a coherent message together on the internet market. With an increasingly aggressive demeanour, the company is aiming to establish its name as the top supplier with the best internet and intranet services for consumers or big business.
The question is whether BT intends to take computer resellers along with it in its drive to be number one in the internet access market, or whether dealers will find themselves in head-to-head competition with the giant, especially in the provision of internet-related services.
The message now coming out of the organisation is that BT wants to take both routes ? offer services direct to large organisations while also using resellers to get its lines into other companies. Whether it can sustain such a policy will depend entirely on whether or not it can overcome the inevitable clashes that would occur between direct and indirect sales forces.
Things look set for a messy baptism of fire for a telecoms giant that is traditionally used to selling direct. BT is a difficult organisation to come to terms with ? a multi-headed hydra, with new projects regularly coming to light. While BT Internet has been pursuing the dial-up consumer market for some time, taking on established leaders like Demon and Global, there?s also a growing number of co-operative initiatives, such as the Line One project with Rupert Murdoch?s News International. Line One aims to help consumer and business users make the first step on to the internet.
When it comes to big business internet access ? primarily leased line sales to corporates, alongside bandwidth supplies to smaller ISPs, or onsellers as they?re sometimes known ? BTnet is starting to make inroads into a territory where players such as Uunet, Psinet, INS and Xara currently provide aggressive competition. BTnet is making no bones about the fact that it is preparing to make an assault on the corporate internet access market this summer that will take it from an existing share of about 10 per cent to nearer 20 per cent within a year. It?s an ambitious ? some say incredible ? target, but not one that strikes fear into the hearts of rivals.
?That?s incredible growth, it sounds almost unbelievable,? says Demon representative, James Gardiner. ?But BT could probably achieve it. And we wouldn?t be concerned too much by it, because we?ve found that wherever BT gets into a market, it helps establish and expand it. The cachet of the BT Internet name brought a tremendous amount of credibility to the dial-up market, and actually helped grow our business in the end.?
Internet Network Services? (INS) managing director, industry veteran Tim Challenor, says BT?s target is easily achievable. ?I don?t see why they couldn?t do that. BT have traditionally had the largest share of the wide area data-networking market, I think something like 37 per cent worldwide, almost twice what AT&T have. It?s just a matter of switching that market into intranet and internet-related services.?
?Historically, we haven?t pushed the internet service for business that hard,? explains Neil Mellor, head of marketing for BT Business Internet Services. ?But there will be a big push from late May, early June.?
At a Windows show briefing in February, Mellor said the big push would come in April. So why the delay? ?There have been things like our corporate advertising policies holding it back, but also we want to be certain that we have enough network capacity to fulfil increased demand. Newnet, our new IP infrastructure, will be coming online in June, so we need to hold off till that?s ready.?
There?s also more capacity coming downstream for Concert Internet Plus, which is a privatised part of the merged BT and MCI international backbone aimed at giving global businesses a highly resilient service for their growing intranet requirements. That service will compete against the likes of AT&T and IBM Global Services, which are also in the process of transforming their existing relationships with global multinationals into internet-related business.
Unlike AT&T and IBM, the BT and Concert approaches involve a great deal of close co-operation with key hardware and software suppliers ? in this case, Digital and Microsoft respectively. In this respect, Mellor agrees, BT is actually preparing to act as a reseller itself. Its intranet services division is being jointly branded with Microsoft, and will offer two solutions, both based on Digital hardware.
The first offering, BT Intranet Builder, offers business customers everything they need to create their own intranet ? from secure connectivity and server platforms to applications software and support. The other package, BT Intranet Complete, is a fully managed service aimed at companies that have traditionally outsourced their IT infrastructure.
In both cases, big corporate resellers will find themselves competing head-to-head with BT?s sales teams, and they?ll find that a tough nut to crack. ?Our research shows that BT and Microsoft are top of the list when business customers are asked who they?d like to deal with,? says Mellor. ?It?s a good alliance, because people trust both companies.?
Both of these BT Intranet solutions will be based on Microsoft?s MCIS software ? widely known by its Normandy codename ? which will give secure access and basic collaboration and communications infrastructure for dispersed groups in an organisation, such as field sales teams.
Mellor is not concerned that its close alliance with Microsoft will tie it into the fortunes of a highly proprietary company, as it goes head-to-head with intranets built around the open standards Java platforms from IBM, Sun, Netscape and others. ?BT isn?t putting all its eggs in one basket,? he says. ?We have other services like our dedicated Lotus Notes service, and we?ll cover more than just one base. But this alliance gives us a great deal of focus that our customers will benefit from. Microsoft currently has the edge in the market.?
Other resellers, however, may benefit from BTnet?s growing use of the channel to sell its leased line connections as part of their own intranet offerings. Mellor says the company has not adopted an accreditation programme for resellers, and is very flexible about how it deals with resellers.
?We recognise that resellers can help us reach customers we might otherwise not reach and there?s added value activity that they can do, such as integration. We have dealt with them in all three ways ? referral fee, reseller margin and wholesale ? but we haven?t officially launched any specific channel programmes. That will come with the relaunch of BTnet in May.?
It appears that BT, like most major telcos that have had little experience of dealing with corporate customers through third parties, is feeling its way with regard to channel policy. How things will work out is anyone?s guess. But if it does decide to opt for a strong reseller base, then it?s going to come up against a great deal of channel conflict over its Intranet Services reseller operation.
Although Mellor is not keen to give away BT?s thinking on whether it will launch an accreditation programme for the computer reseller channel, he is more open about plans to enter into joint marketing promotions through the channel, particularly with Microsoft. ?We are involved in joint development work with Microsoft, extending and modifying MCIS to support closed user groups. Our intranet service will be jointly branded with Microsoft, and we will be selling the service through their channels.?
While resellers sit and wait for BT?s channel plans to emerge, its competitors for the business market point to a few deficiencies in its current sales policies. Gardiner suggests that ISPs need to be more clear about tariff policies.
?Like a lot of ISPs, they aren?t being very up front about the upper limits of their services, the points at which tariffs for bandwidth are imposed. Leased line customers are charged on a kind of three dimensional basis ? Web space, processing power and bandwidth ? and in some cases that?s not being spelled out.?
Challenor thinks BT will have problems convincing corporates about service levels. ?SLAs are important to companies with absolutely mission critical information being sent out. Take Reuters ? they don?t want 99.5 per cent SLAs, they have to have 100 per cent, because the information is their business. Because we?re 100 per cent business focused and not encumbered by end user sales slowing down the network at different times, offering variable levels of service, we can provide that assurance to people like Reuters. We have SLAs with teeth.?
Mellor hits back at any suggestion that BT cannot offer comparable service levels for mission-critical business, pointing out that a separate slice of the BT network is devoted to business customers only. ?They want SLAs that give them the level of service over the internet that they had with proprietary networks inhouse before. The only way to do that is with complete end-to-end management of all the infrastructure, and we offer that, not just in the UK but on a worldwide basis. Nobody else has a fully managed infrastructure worldwide.?
Mellor believes BT has one big ace up his sleeve ? its own internal intranet which was developed to offer publishing and directory services to everyone in the company. Mellor demos the intranet (part of the ?office automation inside BT? effort which was dubbed BoaT ? geddit?), showing how anyone with access privileges can find out who does what in the organisation using a Netscape browser.
You can also check out the online library, and, in some cases, engage in business-critical interaction with colleagues through groupware applications. ?We have real intranet expertise within the company, after all we?re developing one of the biggest intranets in Europe,? says Mellor. We need to make that expertise available, and to develop it. It?s a competitive advantage we have over all the others.?
There?s no doubt that many resellers recognise that BT has a lot to offer the channel, and they would dearly love to tap into BT?s expertise and market appeal. But they?ll have to wait and see what its true colours are when it comes to the channel. The big US corporate ISPs ? Uunet, Psinet and Netcom ? are all either 100 per cent committed to the channel, or moving that way.
?You have to decide whether you use the channel or do it all yourself,? says one competitor. ?It?s very competitive out there, and it?s going to be increasingly difficult trying to adopt both approaches side by side.?
Other corporate-oriented ISPs are also grappling with the problem of keeping both balls in the air. IBM manages it, albeit with a well-publicised intention to shift more of its sales into the channel.
Whether BT will succeed depends on how much the channel is prepared to overlook its dealings at the top to cash in on its brand-name and its corporate appeal. Something that dealers will see as a very good selling point.
?BT is a name that most resellers would like to do business with,? said one dealer. ?I think a lot of dealers would rather be inside their tent than outside it.?
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