When it comes to business continuity, everyone's attention naturally focuses on the servers in the datacentre. But the most vulnerable part of an IT organization is usually the networks that link it to the outside world. One company that is trying to provide a business-class infrastructure on top of the Internet that is secure, fast, and reliable is service provider Slam Dunk Networks Inc. In an interview with InfoWorld Editor in Chief Michael Vizard, company CEO Bob Miller explains why Slam Dunk's subscription model is superior to other approaches and why expensive leased lines from the phone company should be a thing of the past.
Q: What's the core value proposition of Slam Dunk?Our whole pitch to an IT organization is that they are spending a ton of money on leased lines and frame relay circuits that we could be saving you money on by using the Internet. The whole idea of leveraging the Internet to reduce cost for businesses is just beginning. People are beginning to feel confident running very important business transactions through the Internet because intuitively they know it's going to be less expensive and they are going to be able to connect more trading partners. We're a true alternative to leased lines and VPNs and other things. You talk to any large company and they'll tell you two things: We hate dealing with the telcos and we're spending too much money on their stuff. That's where we come into the picture. And in terms of performance, people are actually finding us better because there's so much traffic on their leased lines for their large settlement files that they actually are able to do their 500MB end-of-day files only by doing multiple retries. So we can actually get it there quicker [and] faster, because we don't use dumb pipes.
Q: What impact does your approach have on enhancing business continuity?If you have 100 leased lines, they all go off to 100 different establishments. With us and one line, you can get to the world. With the frame relay model, if I want to do business I have to run a leased line to everyone. And if you want to make it redundant you've got to do two lines. So now you've got eight lines to connect four people, which is the telco answer to business continuity. You can do it with half the number of lines with Slam Dunk. We had the problem in the Sept. 11 scenario. The guys at Solomon and Lehman and everybody else, their business continuity plan was go to New Jersey, go to Connecticut, go to Westchester County, boot up your systems, and then call your other systems. Well those other systems got wiped out and they couldn't call those numbers. With Slam Dunk all you need to do is get to the Internet. Slam Dunk has enough intelligence to connect everybody.
Q: So how do you make money providing this service?When you outsource to us, what you're outsourcing is a new technology approach for delivering your transaction messages that doesn't require routers on either end and doesn't require all of the capital infrastructure that some of the alternatives might have. We have built this multipath network as an overlay on the Internet that has exceptional security. In fact, our security is equal to or better than the best of the private networks. It has the ability to track and recover messages and we 100 percent guarantee delivery and we'll commit to that in a service-level agreement.
Q: What kind of commitment does it take to get started?We run these pilot programs ... and it only takes a couple of weeks to get a pilot up and running as opposed to taking six months to provision an international leased line.
Q: What impact has the overcapacity of telecommunications infrastructure had on Slam Dunk?The thing that you have to understand is we have an entirely different approach. Those guys had to build out these huge capital infrastructures. We get to leverage the fact that they have all this excess capacity with price wars and all of the things that are going on. We don't have to recover that huge capital investment.
Q: So how do you price this service?I'll give you two examples of how our pricing works. We just introduced a new service with VeriSign called Secure Express. In that case you buy credit the same way as you would buy postage stamps. Say [you] buy 50 credits or 100 credits, today they're $3 each and for each credit you can send a message up to a megabyte in size. You can send anything from a few kilobytes to a megabyte and you get all the features of the service -- guaranteed delivery notification and all of that. In our base core application-to-application delivery service, what we ask a customer is to figure out how many megabytes a month they intend to send and then we give them a 12-month subscription agreement based on that usage. Our pricing is the function of how big a subscription agreement you sign up for. If you sign up for $2 million a year, your price is a penny a kilobyte. If you sign up for $100,000 a year, it's 5 cents a kilobyte. And it's a use-it-or-lose-it pricing, so if your usage is below what you committed to, we still get the same fee. If you go above, we charge incrementally but we give you the opportunity to re-subscribe at the new higher rate. But the 12-month clock starts all over again. We're going to use the Internet for business transactions and we're going to make it secure and so forth. In our case, you can have whatever you have and you don't have to make any up-front capital investment. You just have to sign a subscription agreement. And you can sign that subscription agreement at any level you want and work your way up as you gain confidence.
Q: How do you track usage?
We have a portal called MySlamDunk.net where every customer [can get] current usage rates. You get to see all your messages, whether they've been delivered, and when they were delivered. You also get exception reports about any messages being held that can't be delivered.
Q: What kinds of service levels do you provide?One of the things our service does is that you can set up what file types you want treated with certain levels of encryption. You can set up what it is you'd like to have fully encrypted and what things can just be sent with SSL [Secure Sockets Layer]. Now that inherently winds up with different latencies, because there's less time in delivering a message with just SSL vs. encrypting it. The other thing you could set up is what kind of storage requirement you have. We have customers who say, "We just want you to store until the message is delivered." We have other customers who say, "We want it stored for 14 years." The good news is, after one month those customers are willing to allow up to one week for retrieval.
Q: As a layer of software that sits on top of the Internet, won't the functions you provide essentially get baked into the network at some future point?Obviously we're talking to Cisco and people like that about doing that. The more they incorporate as part of the standard layer, the better it is for us. We want people to take this technology and basically private label it. We're all for it.
Q: What impact will Web services have on your company?We like to say we are a Web service that is using the Internet to interconnect applications of different types around the world. One of the things we've developed is a number of different protocol conversions at the endpoints. If you talk to the pure Web services application guys, this is what the world's all going to be about. We provide a business-class infrastructure. What we're doing is sending a file -- any file, we don't care what it is -- [that] you want to go from [point] A to [point] B in a very deterministic way, and you want it to be 100 percent secure and you want a 100 percent guarantee that the computer at [point] B is going to receive it and you're going to know it [was] received. That's what we do.