Hawking data online – Industry Trend or Event
Databid.com enters complex market In a recent survey by Forrester Research, 53% of business telecom buyers said they expect to purchase Internet access and data services online by 2002. But large carriers haven’t exactly been storming the gates of the Web to reach those businesses – especially small and medium-sized enter-prises – fed up with the drawn-out, analog form of telecom purchasing.
So scores of online marketplaces have stepped into the gap, trying to become the facilitators of Webbased purchasing of telecom and data services – perhaps showing the way for the carriers, which are expected to make a full onslaught eventually. The latest telecom Web marketplace is Data-bid.com, a business-to-business exchange that links sellers and buyers of private-line, dedicated Internet access, business DSL and frame relay services.
Founded in 1999 by Steve Faigen, former president of SCIES, an Internet telephony and software development firm, Databid.com officially opened its online marketplace today, although the company has been operating under the radar for a few months.
The sweet spot Databid.com targets is the population of companies that need data access for between 50 and 5000 workstations, Faigen said. These outfits don’t have the time or the staff to manually obtain price quotes from carriers, entertain visits from uninformed sales representatives and negotiate complex contracts. “This end user considers the whole [telecom] procurement process to be a hassle,” Faigen said.
Databid.com is only after first-and second-tier carriers, Faigen said, because it recognizes that price is not the only determinant in the data services buying process. Name brands and quality of service still count in the bandwidth world. Service providers that already have signed up to participate in Databid.com’s data services auctions include Broadwing, Cable & Wireless, Exodus, Teligent, Verio and WorldCom.
“As data becomes more of a commodity, [large carriers] can’t afford to send out $125,000-a-year sales-people,” Faigen said.
The Databid.com process is designed to shrink the sales cycle from weeks to days: Using Data-bid.com’s RFQ wizard, a data communications manager posts a request for quote (RFQ); ranks priorities such as price, quick installation interval and service level agreements; and then posts the RFQ anonymously. Carriers respond with price availability and installation information and can send marketing materials and technical specs in digital format.
For now, the rest of the transaction – credit checks, contract signing and provi-sioning – occurs offline, but Databid.com already is working on a new version of the site that will enable electronic signatures, online credit authorization and a seamless link to the service provider’s order-entry system. It also plans to develop data mining tools so carriers can track won and lost deals and query the system to parse the information by sales territory and service type.
In theory, sites such as Databid.com represent a win-win for carriers and small enterprises. The carrier can sell bandwidth more efficiently, reducing its costs of sale and increasing its time to revenue, and the enterprise gets a competitively priced service without being bombarded by salespeople.
Sites such as Databid.com have trouble attracting the attention of large carriers because the sales model is unproven and the systems aren’t in place to link the carrier and the e-marketplace electronically, said Jeanne Schaff, senior telecom analyst for Forrester Research.
“You can’t be all things to all people any-more,” Schaff said.
The carriers that will be successful selling through online channels will be those that cater to customers’ diversity and sell online through multiple channels, direct and indirect, Schaff said. And both sales channels must be tied into the provider’s ordering, provisioning, management, customer care and billing processes. “The way for large carriers to go is to enable these existing dot-coms and not compete [with them],” Schaff said.
But even if that happens, start-ups such as Databid.com are not assured success. A host of companies, including Simplexity, Telstreet.com and TelecomSmart, are jockeying for position in this market.”Databid.com has both ends of the nut to crack. It’s pretty difficult to get eyeballs to buy,” Schaff said.
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