Competition Can Kill

Blessed with a stable technical foundation - Internet standards are universally supported and no new technology is on the horizon - iPass has little fear that its service will become obsolete. It does need to watch out for competition, though. IPass has only one direct competitor using the same business model - signing up service providers to create a global network for Internet roaming. But it has to keep its eye on multinational companies in the telecommunications and satellite-service arenas that might decide to take a piece of the market.

GRIC Communications

Milpitas, Calif.

www.gric.com

GRIC's corporate-roaming product has the same capabilities as that of iPass: support for multiple virtual private networks, a wide coverage area and combined billing statements. It doesn't appear to have the same scope of partners, however, says analyst Steve Harris at IDC. "Most of the carriers we talk to use iPass," he says. Because the name of the game is signing up Internet service providers and telecommunications firms, this may be a problem for GRIC in the long run.

If a company like AT&T Corp. wanted to enter the market, it could employ the same strategy as iPass and create partnerships to expand its network's reach. A telecommunications firm would have a profit advantage in the global roaming business, says Harris, because it owns its own wires and can squeeze more profit out of that lower overhead. But the flip side is that to expand its facilities, it would either have to build more infrastructure in areas around the world where it may face business and regulatory roadblocks, or take the iPass path and sign up partners where its network doesn't reach. That would require a significant effort. No company seems so inclined.

Satellite networks don't have the same wiring problems or partnership needs that a telecommunications company would face in trying to achieve coverage worldwide. But satellites are a huge capital expense; the most likely potential competitor would be a system already in orbit. Harris cites Washington-based Iridium LLC as a potential rival.

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