Case Study: VCOM.COM Leverages the Internet for Distribution of Service
Steven Dresner, Chairman and Chief Executive Officer of VCOM.COM Corporation, understands telecommunications. He also understands the Internet. After several years at VocalTec Communications, Inc. and later building Essl Technologies, Inc., a systems integration shop focused on Voice over IP (VoIP) technologies, Dresner set off on a new venture aimed at the distribution of communications services via the Internet.
In teaming up with the Company's other founders, including individuals from the telecommunications and Internet industries, Dresner has successfully built VCOM.COM into a global telecom company leveraging the Internet for the sale and management of services. Instead of relying solely upon cutting-edge technologies such as VoIP, VCOM.COM created a business based upon "traditional" services using the public telephone network.
While VCOM.COM offers its global customer base emerging services such as its patent-pending QuickCall™ product, the Company remains committed to providing services that people have come to rely on. Such services include Long Distance, Prepaid Calling, Internet, Cellular, and Paging.
The Telecommunications Industry
The telecommunications industry has experienced explosive growth in recent years due to advancements in technology and worldwide competition. Both of these forces have benefited from a transformed regulatory approach that opens markets and rewards the deployment of new services. Such policies, followed by investment, innovation, and competition have set the stage for tremendous growth in the coming years. Fiber optics in long distance networks, digital technology in wireless networks, and advanced features in the local network, have all followed from the deregulation of global markets. As a result, consumers benefit from less expensive and more reliable services.
According to Dataquest, the worldwide market for telecommunications services reached $761 billion in 1998, a number comprising nearly 58 percent of the total information technology market. Dataquest expects the largest single segment of the telecommunications market will continue to be public network services, growing to more than $1.12 trillion in 2002. Not surprisingly, Dataquest concludes that the bulk of the market opportunity in telecommunications will reside on the service side, growing from 81 percent in 1998 to 82.5 percent in 2002.
The Electronic Commerce Industry
A report issued by the Organization for Economic Cooperation and Development (OECD) has compiled over 150 pages of economic reasons why governments and businesses worldwide should pay attention to the ramifications of digital commerce. The report says e-commerce revenues will exceed $1 trillion in the 2003 to 2005 timeframe. Companies taking advantage of the economic efficiencies of e-commerce will benefit from low-cost distribution, improved productivity and tighter inventory control. The OECD concludes the Internet economy will result in lower prices for consumers, better information access, and increased competitiveness of small and midsize businesses. It will also pave the way for a true global trading community.
The total number of worldwide Internet users is expected to top 130.6 million this year, according to a study released by the research firm eMarketer. The study, which aggregated research from hundreds of different sources, including Forrester Research, Intelliquest, Jupiter Communications, and IDC, predicts that the number of active Internet users will jump to 350 million by 2003, a 267 percent increase from the 95.4 million people using the Internet at the end of 1998.
VCOM.COM: A Hybrid Provider
VCOM.COM is a hybrid telecommunications/Internet company. Like many companies conducting business on the Internet, it is difficult to place VCOM.COM into a particular industry category. In much the same way Amazon.com is considered an Internet company by some and a book retailer by others, VCOM.COM is a new breed of company leveraging the Internet to distribute its goods and services. Partial mix of both "Telecommunications Company" and "Internet Company," VCOM.COM is not about revolutionizing technology but rather, revolutionizing distribution.
VCOM.COM is harnessing the power of the Internet for use in distributing its services. The Company is not reliant upon the Internet for transmission of services (such as VoIP), but instead, VCOM.COM uses the Internet for sales and marketing. The Company operates The Communications Superstore™ located at http://www.vcom.com. This web site offers the first self-service approach to the sale and management of communication services online.
From the Communications Superstore, VCOM.COM offers long distance and international calling services, prepaid travel cards, Internet-initiated calling, dialup Internet, access to worldwide calling rates, nationwide directory services. free email, an online address book and calendar functions.
When discussing the Company's services, Dresner is quick to point out, "In addition to these features, VCOM.COM provides customers with the ability to view the status of their account in real-time. This means an end to deciphering telephone bills. These statistics, including usage and call details, are integrated into the VCOM.COM web site. All of these functions help build trust in the Company by allowing customers to audit their accounts whenever they wish."
VCOM.COM's web site is popular with customers who buy discounted services and view account activity online. Features such as online account management, a converged billing statement, and round-the-clock access to services have attracted a loyal customer base. As computer and telephony technologies unite, this integrated approach to communications management is growing and VCOM.COM's concept becomes even more important.
Global Services From U.S. Facilities
VCOM.COM's growing customer base uses services from worldwide locations with the assistance of the Company's patent-pending QuickCall™ technology. From the convenience of any personal computer (or telephone handset with computer-aided intelligence), customers access high-quality communications services generated by VCOM.COM's switching facilities in the United States. New services made possible with the QuickCall™ technology broaden the Company's worldwide client base and have made VCOM.COM a universal telecommunications company.
Robert Stark, VCOM.COM's President and co-founder said, "Prices for VCOM.COM's worldwide services are determined by the best wholesale rates available from top-tier telecommunications carriers. As a limited facilities-based operator, we remain supplier independent in order to negotiate the best rates at any given time." He went on to add, "Great prices and an emphasis on worldwide service make VCOM.COM unlike any telecom provider."
Technical Development
Much of VCOM.COM's competitive advantage rests in the Company's ability to integrate proprietary technology into the web site. The first iterations of VCOM.COM's web site incorporated sophisticated design and a complex database engineered to grow as the Company introduced new products. These core technologies have been developed in-house in order to ensure the unique mechanisms remain proprietary.
VCOM.COM continues technical development integrated with new web site releases. The Company is now including many functions that provide for a unified approach to managing communications services online. These include web-based applications that streamline the provisioning process and simplify the management of multiple services.
Such applications provide for an intuitive shopping process and ease of management. These include programs giving VCOM.COM users the ability to view accounts on a dynamic basis, amend payment methods or personal information, track call detail, submit support requests, sign up for new services, and view promotional opportunities.
VCOM.COM's technical achievements represent an important step towards integrating the online purchasing and management process. As development continues, the Company is increasing the number of offerings available to customers. Ultimately, these new offerings assist the Company in growing its distribution channel and loyal customer base.
Opportunities Abound
In drawing upon strengths from both the Internet and telecommunications industries, VCOM.COM has devised an unparalleled approach to the sale of communications services. Leveraging a first mover advantage, the Company has been quick to dominate a worldwide distribution channel. In doing so, VCOM.COM has developed core technologies, created strategic partnerships, acquired a loyal customer base, and built a global brand.
The evolution of online shopping and the growing demand for digital management capabilities are prime indicators that the sale of communications services will flourish. In a market as large as telecommunications, there will be many opportunities for companies with focus. VCOM.COM maintains such focus and is targeting a growing community of Internet users. With its unique value proposition, VCOM.COM continues to deploy services and move to the forefront of a new industry filled with promise and profit.
