StarHub's e-business gambit

StarHub’s announcement this week of its StarBiz initiative marks the telecom operator’s first foray into the competitive field of providing Internet-enabling services.

Can a telco make a business out of combining its voice, data, ISP, ASP and also data center business?

StarHub’s announcement this week of its StarBiz initiative marks the telecom operator’s first foray into the competitive field of providing Internet-enabling services.

YES

Generally speaking, the company has all the necessary pieces to Internet-enable its business which requires the combination of several layers of technology. At the most primary level, connectivity networks wire a business into the virtual world. Next comes the management and storage of information in data centers. Then, there are the managed service providers who deliver services around storage and security. And finally, the layer of applications that does things like office automation and online transactions.

The StarBiz initiative is to bring all these layers together and offer them as one single package to business customers. An advantage of the program, obviously, is that customers would not have to go to multiple sources to settle their technology needs. The StarBiz platform will serve as a services gateway for businesses to aggregate and manage their e-business initiatives.

For this program, StarHub Internet will be pairing its connectivity network and corresponding ASP services to deliver ready-to-go packages.

“It’s now a trend for a lot of ISP’s to start looking beyond core access services and try to add vale to customers,” said Kyong Yu, StarHub Internet’s general manager. “And since StarHub has the infrastructure and also network offering access services, why not use that to deliver e-business enabling services as well.”

StarBiz’s success will depend largely on how willing corporate customers are in adopting the ASP model for their technological needs. According to IDC, the market is set to grow aggressively, from US$986 million in 2000 to US$24 billion by 2005.

That is in direct contrast with the findings of a European think-tank, OTR, a 16-year-old consultancy which expects the ASP market to shrink by 60% to less than US$874.1 million by 2004.

Yu admits there is a degree of risk involved in the venture.

“It may be a hard sell,” Yu continues, “to ask corporations to outsource their business applications will not be an easy thing.”

As one of the smaller telecommunication operator and ISP in Singapore, StarHub is not known to take a cautious stance when it comes to its business plans. Its 1999 free surf plan was a first in the region. The plan redefined the level of service and challenged those provided by other local ISPs.

As of December last year, the company registered 265, 000 Internet dial-up subscribers and over 700 business accounts. Since then, the company has expanded its corporate client base to over 2,000 customers.

Businesses who sign up for the Starbiz program can subscribe to a base enterprise portal. The portal will be branded according to the corporation’s own look and feel and will include a number of rudimentary applications such as DNS hosting, basic file sharing, storage, task-list management, calendaring and scheduling.

StarHub Internet will be offering its corporate clients the new package as an alternative to the standard business connectivity services that the company already offers. The company will also attempt to convert existing customers to the new product offering.

“(With StarBiz), the Internet is going to be a single point of service gateway to access various kind of content, different applications and different exchanges,” said Yu. “Why not provide all of that together with back-end innovations, with access and aggregation services, and on top of that, personalize the information for the customers?”

StarBiz’s initial targets will be small to medium size enterprises and packages will be tailored according to the needs of vertical markets. While the company has not revealed the price of a base package, a typical price comparison reveals that an office suite would cost between S$10 to $30 (US$5 - $16) per user per month on the application alone.

By providing a single point of access and administration for an e-business package that is essentially ready to be deployed to end-users, StarHub hopes the value-proposition presented by StarBiz will be compelling enough for businesses to take up the offer and who knows, it will grow into a full-scale e-services provider. Watch out Satyam Infoway!

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