THS Articles

Super Size Me! Hosting Value-Added Services

By Paul Engels

For years we've been conditioned to avoid thinking about "dot-coms," due in no small part to the violent drop many retirement funds took around mid-2000 as a result of paying too much attention! The once legion numbers of "value added" Internet technology providers left a bad taste in many mouths. Yet recently there appears to be a resurgence in the number of small technology companies catering to ISPs and hosting providers, and their end-user customers. The service provider category has quietly yet inexorably built up new feature momentum that you can see in trade shows, magazines, the Web and most importantly of all, in the services offered by providers.

"What's the buzz? Tell me what's a happenin'!"

Could it be the return of the value-added service? Once again in seemingly unprecedented amounts, VA services seem to making a comeback from the heyday/mayday of the dot-com boom/bust. So what are we talking about and is it good news, bad news or no news?

A good working definition for a value-added service could be:

"Any complementary feature or application delivered as a service that enhances a core service such as ISP access or hosting. It can be billed incrementally or bundled."

The point is, it adds value, by providing a function that in some way increases end-user satisfaction, diminishing churn, adding competitive differentiation or an incremental revenue opportunity.

The automotive equivalent of the value-added service to hosting and access services may well be the auto performance enhancement shop, where your basic vehicle can be kicked up with aftermarket engine parts, rims and the like.

The categories abound. Examples include:

• Internet call waiting (supposedly big in the dial explosion days)
• Search Engine Optimization
• Spam filtration
• Virus protection
• Directory services
• eCommerce
• Email Marketing

...and too many more to mention.

The automotive equivalent of the value-added service to hosting and access services may well be the auto performance enhancement shop, where your basic vehicle can be kicked up with aftermarket engine parts, rims and the like. For providers seeking to tune up their hosting services however, the question may well be, will value- added features "pimp your ride?" Or, merely spend your money and frustrate your users.

The best answer as usual is a combination of know your customers and their needs, plan and execute well and sprinkle that with a generous dose of "caveat emptor." Value-added Internet services can be the IP-equivalent of snake oil to the unwary service provider and user.
Yet to the astute service provider who thinks as much about the sales, marketing, delivery and customer care facets of value-added services, there are indeed diamonds to be reaped in financial returns.