Let Their Fingers Do the Walking

The business proposition of iPass Alliance Inc. - supplying global network access services - can be summed up in one simple math problem: What's the difference between the cost of a local phone call and the cost of a long-distance call to New York from, say, Ouagadougou, the capital of Burkina Faso?

Ask this question of the typical information technology manager charged with providing remote access to the corporate network for a far-ranging workforce and, without even consulting a phone bill, he's likely to groan and tell you it's a lot. And the cost of maintaining modem banks, toll-free numbers and other dial-in technology adds a whole lot more.

These days, the typical IT manager relies on remote access over the Internet to reduce communication costs. That works well, as long as the corporate Internet service provider has points-of-presence in all the places remote users need to be. If it doesn't, the manager will soon find himself developing and maintaining relationships with multiple service providers.

Enter Mountain View, Calif.-based iPass, which presents itself as a supplier of global roaming services. The company has a worldwide network of Internet service partners that provide local access services to iPass customers without requiring users to sign up for accounts. IPass handles the billing chores.

Convenience, reliability and access attracted Detroit-based law firm Dickinson Wright PLLC to iPass. "With one phone call, we can come in and replicate all our Notes databases, pick up and send e-mail [and] check documents in and out of our library," says CIO Michael Harnish. "And we can do all that on a secured, authenticated basis plus access the Web with a single local phone call."

Harnish says he also likes iPass' stripped-down, pure-access approach and its ability to work with the company's existing security infrastructure. "We don't need another e-mail box or storage; we just need raw bandwidth," he says.

A company has to have a certain level of remote access to make contracting for iPass services worthwhile, says iPass CEO Michael Mansouri. But it doesn't matter where the dial-up sessions occur, he says; even a company with strictly local remote access needs can see cost savings.

The key piece of technology that powers the iPass service is a settlement engine that balances the payments owed to the partner Internet providers with the usage charges billed to the clients, says Steve Harris, an analyst at International Data Corp.'s telecommunications practice in New York. Not only does the clearinghouse simplify things for corporate clients, but it also makes it easy for the Internet providers to serve any customer who come through iPass.

Mansouri intends to leverage those settlement services into new lines of business for iPass, such as using the same business model to extend into voice over Internet protocol services. The settlement engine could be used to reconcile charges among providers who want to borrow capacity from one another for limited periods of time. For example, during a popular Internet event that might swamp existing connection capabilities, it would be better to rent bandwidth than build for a one-time peak.

Mansouri also says content providers are interested in adapting the company's settlement engine so that sites can sell content to nonsubscribers. Right now, billing considerations make such transactions unwieldy, but with a settlement engine in place such charges could be automatically added to a person's Internet service bill.

The danger in this growth strategy is that iPass could become unfocused and lose its momentum in the global roaming market. The company has few rivals - only GRIC Communications Inc. in Milpitas, Calif., is a direct competitor - and is ahead of anyone else, like a telecommunications or satellite-service company, that wants to enter the market.

But as long as iPass keeps its eye on its core business, it should be a winner.

"They have a very strong business model, and they're clearly serving an important market," says IDC's Harris. "Not only is it a big one, but it's also a lucrative one."

Johnson, a Computerworld contributor, is based in Seattle.

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