It's Taking the Headaches out of Broadband Hookups
By Lori Hawkins
There's a reason they call it DS-Hell. The high-speed Internet connection known as DSL, or digital subscriber line, is famous for being a headache to install, both for the phone companies that sell it and for the consumers trying to use it. Getting DSL up and running usually requires two visits from technicians -- one to prepare the phone line and another to hook up the user's PC. Those visits, which often involve a few hours of tinkering with computer configurations, cost phone companies more than several hundred dollars per subscriber. The hassles have slowed the acceptance of DSL and spurred providers to make it easier.
Enter BroadJump Inc., a two-year-old Austin (Tex.) company that's helping to streamline the process. The company makes software for broadband-service suppliers that cuts setup costs in half by eliminating installation visits. Called Virtual Truck, the software allows homeowners to get their own PCs ready for broadband services, including DSL, cable, and fixed wireless.
How? When new subscribers call, say, SBC Communications for a DSL hookup, they'll receive a CD that walks them through installation steps with just a few mouse clicks. The software developed by BroadJump automates the scores of tests typically handled by a technician. Through a battery of tests, the software checks that the computer has enough disk space, that there's a network-interface card, and that the processor, operating system, and memory can support broadband. Time elapsed: about an hour for the customer, rather than two or three for a technician. "The whole process of installing this stuff is a big nightmare," moans Keith Kennebeck, an industry analyst with Strategis Group, a telecommunications-consulting firm in Washington, D.C. "BroadJump takes away the pain."
Virtual Truck has become vital to phone and cable companies. Today, the company has six major customers, including the No. 1 cable, DSL, and fixed-wireless providers: Time Warner, SBC, and Sprint, respectively, which cover more than 50% of the residential broadband-access market. In fact, the software is so vital that some broadband providers are developing and selling their own quick-hookup kits, posing a threat to BroadJump. For now, the company charges broadband providers $10 to $20 per subscriber for Virtual Truck, saving them hundreds of dollars a shot in manpower time.
No wonder BroadJump, now with 187 employees, is being hailed by providers and analysts as offering a critical technology as broadband services begin to proliferate. Companies are racing to sign up new customers for lucrative high-speed services, which typically cost from $30 to $50 a month, after installation charges of $60 to $80. The reason: Despite the hassles, broadband promises to deliver Internet access up to 50 times faster than a 56K modem. The combined number of DSL and cable Net subscribers is expected to hit 40 million in North America by 2004, up from 3.2 million in 2000, according to Forrester Research.
Virtual Truck is a practical -- if as-yet unprofitable -- solution dreamed up by someone who observed DSL troubles firsthand. Kip McClanahan, BroadJump's 33-year-old chief executive, was an engineer at NetSpeed, an Austin maker of DSL networking equipment, when he and colleague Kenny Van Zant witnessed the problems in installing DSL. The process was torturous for everyone involved, with technicians spending hours testing the high-speed lines, then dispatching more technicians to configure the customer's PC. "We knew there was an easier way, and the easier way was software," McClanahan says.
The duo jumped ship after Cisco Systems acquired NetSpeed in 1998 for $236 million. They teamed up with Jim Crow, NetSpeed's lead architect, and Adam Chibib, a controller at Tivoli Systems, an IBM subsidiary whose software manages large computer networks. They first scored $5 million from hometown venture-capital firms Austin Ventures and Techxas Ventures, and later raised an additional $20 million from Accel Partners and PCG Ventures, among others.
At the time, it was a questionable bet. All eyes were focused on equipment makers, and making installation easier wasn't a top priority. "They realized this would be an issue before anyone else did," says Strategis' Kennebeck. "And that's why they're the company that has the most contracts signed and the most business right now." In fact, few startups are going head-to-head with BroadJump. Small broadband-software companies such as AP Engines in Maynard, Mass., and Alopa Networks of Santa Clara, Calif., focus on customer-service and billing applications rather than installation.
BroadJump may be a pioneer, but it could wind up with an arrow in the back. The company also may be forced to move into customer services and billing areas, as more broadband providers create their own installation software. Analysts, though, think the company has time on its side: The current downturn in telecom spending may actually help BroadJump, because its customers won't want to invest in developing their own software if they're happy with what they're using. For BroadJump, at least, a slowdown may not crimp its pace.
Hawkins is a freelance writer in Austin who covers technology