Monday, December 31. 2007Valete/ValeJohn Linton 2007 is a few hours away from being over and I won't be sorry to see it go. Despite having a 4 week holiday in the middle of the year I feel more mentally and physically exhausted than I can ever remember feeling at the end of a business calendar year. Undoubtedly this is partly due to the passing of the years causing even greater wear and tear on my unfit and rapidly aging body and mind and it's partly due to the stress and srain of moving a start up company from the imminent demise phase of its 'life' to the no less stressful retain all that has been accomplished but still keep growing at an equivalent or better rate stage. It's been an extremely demanding year and one in which we began the transformation of Exetel into the first stge of what we had originally planned it to be - assuming that we managed to survive the first three years when 90% of all start up companies cease to exist. During 2007 we made a huge number of changes to Exetel and how it operates - the major ones being: A) Engineering 1. We added a Queensland PoP 2. We added a Victorian PoP 3. We began the build out of a second Sydney PoP 4. We added a second GigE for Telstra ADSL1 users in NSW 5. We pioneered the use of P2P filtering with Allot 6. We pioneered the use of P2P caching with PeerApp 7. We doubled our customer connectivity bandwidth 8. We doubled the number of routers we deployed B) Services 1. We provided 'equipmentless VoIP' for those users who didn't want to buy VoIP equipment 2. We added spam/virus filtering using the IronPort solution 3. We added SMS via email 4. We added FAX via email 5. We began to offer calling card services via retail outlets in 5 capital cities 6. We increased the 'free time period' to 12 hours each day 7. We increased the 'free time allowance' to 48 gb each month 8. We added 'naked' ADSL2 with 100 free VoIP calls to begin the move away from dependence on Telstra C) Financial 1. We increased our revenue for each of the twelve months continuing the record of doing that for 46 consecutive months 2. We saw the first signs of Exetel making better than 'break even' monthly profits 3. Exetel now makes a profit on recurrent revenue without the need of a contribution from 'once only' sales contributions 4. Our revenue per employee increased by 16% 5. Our customers to employee ratio increased by 15% 6. We continued to fund all new asset and other purchases from retained profits 7. Exetel continues to have no debt and no leasing obligations other than premises 8. All growth was achieved with no expenditure on advertising or marketing (or 'acquisition') A brief summary such as the one I've attempted above can't convey what all of those changes plus dealing with the running of a small communications company day by day in the incredibly competitive year that was CY2007 demand of the people responsible but perhaps it gives some idea of the amount of changes that had to be put in place each month just to keep Exetel operationally and financially viable. I am relieved that nothing as 'life threatening' as has occurred in each of the previous three years occurred but nevertheless the stresses of so many aspects of running Exetel were always omnipresent and there was no period, with the exception of the 4 weeks Annette and I took off in the middle of the year, when each day didn't seem to go on for far too long and end with still so many things left undone. I'd like to think that 2008 will not be as demanding but, based on what I see today, I doubt that will be the case. Hopefully it looks equally as difficult to everyone else in this industry. Sunday, December 30. 2007"Working From Home" - To Date, Mainly, Just A BludgeJohn Linton When I first heard the statement "I'll be working from home today" I think I laughed derisively and thought how moronic the management of that company (Swiftel) must be - they were - to fall for that BS. Working from home? Right! Just meant the person could sleep off their hangover and mooch around the house until it was time to go out on their personal business/entertainent. "Working from home", to me, was just a more bare faced lie than the one it replaced - "I won't be in today I've got a dose of food poisoning". Both completely unbelievable and totally ethically demeaning to the person uttering those words. The simple fact is that, for most people, there is nothing that can be done better 'at home' than at the working premises expressly designed to optimise the work to be done by any individual. Until now, perhaps. Today, for most companies that have implemented 'modern' database and VPN systems and use VoIP 'PBXs' there is little difference between the working conditions 'at home' and the working conditions at the 'office'. Exetel certainly has three people who 'work from home' on a full time basis and two others who work around 50% of their time 'at home'...and, of course they have fully spec'd computers, fast ADSL connections with Cisco router/modems and VoIP telephone handsets (identical to the office handsets) linked to the Exetel VoIP PBX.Of course they can also be expected to actually work as effectively at home as they would do if they were in the Exetel office at North Sydney because, in part, their jobs are specifically designed to be location independent. The other issue, not specificaly related to the work done by a commercial organisation, is the realisation of the impact of 'travel' on the environment and the new, currently voluntary, cost of ameliorating the carbon emissions acssociated with employees travelling to and from a 'place of work' which to date haven't figured in many/any cost of operating equations. I, personaly, dismiss the "better quality of life" cant of those parasites of commerce, human relsources personnel, as I do every other purveyor of that crass nonsense - it's just 'code' for giving untrustworthy employees the opportunity of working less hours as there is not the same level of supervision. However that particular issue has never concerned me as I believe that if you hire 'untrustworthy' personnel then you have far more problems than whether they also cheat you out of a few hours working time - simple solution to that problem is take more care hiring and then motivating from that point onwards. Most of the first 30 years of my working life was in sales at various levels of seniority from the most junior to the most senior. In sales the amount of time I was 'in the office' was very very small - even in the 1960s when you were totally dependent on office facilities (quotes, proposals, general correspondence etc) for many aspects of the job. If you were actually 'in the office' for much more than 20% of your time you probably weren't going to last in a sales job. So I'm 'pre-programmed' to understand that the only real motivation for any employee to actually do work that isn't supervised is to ensure the work is self monitoring and the employee has a continuing interest and motivation to carry out the tasks (making enough sales to keep your job solves that issue for sales personnel). There is, for many people, of whatever age group or personal circumstances, a true social need provided by an office environment and there is, for a smaller number of people who work, a very real need to get away from their 'home environment' for a large part of the day for a huge variety of reasons. These reasons range from the very obvious and very desirable opportunities of social intercourse over coffee or lunch, a drink after work or just across the desk to getting away from some infelicitous home 'circumstance'. So, working from home can provide very sensible benefits for quite possibly a large part of any company's work force but maybe not as high a percentage as may be first considered.....and that's just looking at the 'social interaction' aspects of the issue and ignoring the teaching on the job and other major benefits of people working together in the same physical location. I'm only referencing this scenario as I've been trying to work out the carbon impact of Exetel employees travelling to and from work so we can finalise the commitments we need to make in terms of the carbon neutral funding we need to incorporate in to our operating plans from Feb 1st 2008 onwards. I actually can't find any sensible guide on how to calculate this so I don't know whether this cost will actually be a financial factor. What is a factor, depending on just what our final plans might turn out to be from July 1st 2008 onwards, is our need for office space and how that might be affected by a higher percentage of Exetel employees either working in Sri Lanka (or Eastern Europe) or working from their own homes anywhere in Australia. This is a very real financial consideration and must be seriously considered in what might turn out to be a very financially challenging 2 - 3 years. So, it appears to me, that Exetel would be better off financially to pursue a 'work from home' employment policy moving forward as the physical operating facilities are 'location neutral'. What is far from clear is what the impact of removing the social interactions embodied in the 'work from the office' concept on which most people's working lives, however short to date, have been based. I guess we'll have to add it to the list of considerations - I think that's now up to page 143. Saturday, December 29. 2007Defeating The Inefficiencies Of "Size"John Linton I sometimes read about the inefficiencies inherent in small companies and the efficiencies of 'economy of scale'. I suppose that some of the issues cited by the proponents of 'size being more economical' could pass the initial scrutiny of a third class mind but the concept of 'bigger is more efficient' is pure nonsense. Over a 40 year plus working lifetime I've worked for one of the largest companies in the world (IBM) and I've started the smallest possible company in the world (one person part time and unpaid), I still admire the incredible efficiencies of IBM and the ten years I spent there were still the most enjoyable working times of my life to date. (I still wonder how a combination of a totally insensitive manager and my own stupidity ended in me leaving a company I really loved working at). However among all of IBM's incredible efficiencies and 'self balancing' controls were huge inefficiencies that allowed good people to achieve whatever targets were set for them by spending, in my case and many others, as little as 20% of their working days achieving/significantly over achieving those targets in most years. There was also the incredible waste of time of even those high performing people spent on (to them ) pointless and wasteful 'training courses' and the endless branch and team meetings that were a total waste of manpower time and other resources. And that was the most efficient company that I ever worked for. Those past experiences have burned in to my thinking and actions in being totally or largely responsible for running organisations the need to reduce such wastefulness to an absolute minimum when I had the 'power' to do so. I have never succeeded, to date, in actually achieving the operating efficiencies that I know are possible - partly due to my limited experience in managing operations other than sales and partly because of the intrinsic difficulties of working out a really usable 'management' structure that will get the best from all people involved in such a 'structure'. I learned the incredible management advantages of job goal setting and reviewing at IBM (though I have to say it was done very badly in Australia generally and was largely rendered useless by setting annual job goals and annual reviews - however I soon improved that by using fortnightly reviews and quarterly resetting after I left IBM). I learned about the removal of management 'layers' from the, only partially successful, "Volvo Revolution" in Sweden. I learned about Zero Defect standards and processes from Fujitsu factory management in Japan and marvelled at how they produced faster main frames than IBM which had, literally, zero downtime in a five year period. I learned about dispensing with management offices, receptionists, personal assistants and car park spaces from a book called 'Maverick" and watched a botched attempt at implementing that at OneTel but noted how easy that would have been to implement properly. I had learned at IBM, and then had reinforced at Univac, Fujitsu and One.Tel the pointlessness of Marketing personnel, Human Resources personnel, advertising and low level sales management and sales personnel. Over the past four years I've used all of this learned and observed knowledge to help build a company that can grow month on month (every month) and only build to a personnel level of 30 people generating $A3,000,000 of revenue a month and supporting 65,000 customers (no human resources, no marketing, no sales management, no low level sales personnel, no receptionist, no PAs, no management offices, no car parking, no advertising). All this was/is possible because of the efficiencies inherent in a small company where the knowledge and experience of a few people who start up and run the business is so comprehensive it isn't necessary to employ other people with narrow fields of expertise to 'plug the knowledge gaps'. ...and now Exetel has to grow a little larger and that means/will shortly mean that the efficiencies of 'renaissance man' style company direction is about to become no longer possible. So yesterday we started the process of implementing the 'post renaissance man' company management processes that, as far as I know, have never been implemented anywhere in the world - but maybe that's just my lack of knowledge. We will scrap the job goal, job goal review, zero defect program processes that I have refined year after year ever since I left IBM and replace them with the, as yet unbuilt, GURUS management system that is due to be in place, in a simple form, on January 15th 2008. We hope to add a new set of efficiencies that also dispense with 'manual' job goal and ZD setting, re-setting reviewing and the 'face to face' meeting preparation and meeting times inherent in those, to date, excellent management systems with the GURUS computer based management system that advises each person within Exetel every second of every 24 hour period of how they are performing against their agreed job tasks and what needs their attention at any second of the day. We have put in a lot of work over the past four years ensuring that the systems we have developed will allow this to be put in place and it will be very interesting to see how successful the first iterations of this process will be over the first six months of 2008. If it works even half as well as its done for me 'manually' over the past four years then it will introduce a level of performance direction and personnel 'management' in to Exetel that is more precise and more efficient than exists in any commercial company anywhere. It will be a very exciting time and, if it's successful, it will ensure that Exetel maintains and grows and operating efficiency advantage over all its competitors - something essential for commercial survival in the very tough times I think 2008 will bring to Australia's communications industry. Friday, December 28. 2007Second Phase Of A Very Difficult Project CompletedJohn Linton Exetel has completed the activation of a 4 terabyte caching service aimed at quadrupling the speed at which an end user can download a P2P sourced file while at the same time halving the cost to Exetel of providing the file. This is achieved by using equipment and software sourced from a company called PeerApp. It has taken some two months of gradual implementation, with the expected amount of ‘teething problems’ to put this function in to production but this service is expected to be of significant advantage to Exetel users who use P2P applications to source popular files. This is the second stage of an 18 month to 24 month implementation program to speed the delivery of P2P traffic while reducing the cost of providing that traffic that started a year ago with the introduction of a P2P bandwidth control system from Allot and will culminate in mid 2008 to late 2008 with the full implementation of an Akamai server ‘farm’ and a 12 terabyte mirror service for those files not provided via the Akamai or PeerApp servers. This has been a very ambitious (not to mention vey expensive) project and a fair bit still remains to be done but I'm really pleased at how we have been able to foresee a major problem some two years ago and then methodiclly go about finding the very best soution to it when, at that time, there weren't any and, as US ISPs didn't have the same degree of this problem, there were no quick 'find and copy' solutions. Our initial first step of deploying the Allot Net Enforcer caused us a fair degree of pain in lost business and 'angry' P2P customers but without it Exetel wouldn't have survived and it would not have been possible to so effectively then deploy the PeerApp solution (which didn't exist when we first went looking for it). That was an excellent, and very encouraging, start to the long and difficult process of dealing with the continually escalating use of P2P software to 'max out' delivery bandwidth. We realised that a some future time (still not here thank goodness) streaming video would totally transform the use of delivery bandwidth and we would need an effective way of doing that as the 'old delivery models' simply wouldn't be financially feasible. We would expect to activate the Akamai servers within the next 4 - 8 weeks and then we will 'mop up' the remaining heavy downloads via a 12 terabyte mirror service. By mid 2008 we should have reduced the cost of our international IP to less than $A200 per mbps and should be delivering close to a gigabit per second of end user files from the combined P2P and mirror caching solutions. If we do in fact accomplish all of those objectives we will have achieved something really significant for Exetel's customers (much faster file deivery) and for Exetel (much lower cost of file delivery) and will have allowed Exetel to continue to offer the lowest cost broadband services with, by far, the highest download allowances. To quote George Peppard from that antedeluvian TV show - "I just love it when a plan comes together". The amount of bandwidth used by an 'average' ADSL user has almost quadrupled over the past three years - partly due to the use of P2P but more, and more increasingly, due to the use of video both 'live' from sites (like utube/myspace) and for future use from a myriad of legal and ilegal sites. These steps taken by Exetel have only barely managed to keep the costs of providing broadband services under control and every indication is that the amount of bandwidth used per 'average' user wil continue to climb more rapidly than over the past three years. It makes me wonder how the current bandwidth models in place at Telstra, Optus, aapt and iPrimus are going to cope as an increasing number of their customers use ADSL2 type speeds. Thursday, December 27. 2007Selling 20,000 WiFi/4G Connections A Month.....John Linton ...is impossible for a company that Exetel, at the wildest stretch of remote possibility, could become in 18 months time....and that should have been obvious without wasting so many hours trying to find ways and means whereby it could be remotely possible. Very frustrating and very annoying and, in some ways, very depressing. However there was an upside - it made me look at what could be done over the next 18 months by focussing on something other than the services we offer today and had planned to offer in the next 6 - 12 months. From my, obviously limited pespective and knowledge, the thought of working the company to death trying to sell residential WiFi services in a marketplace that will be dominated by four carriers and their sidekicks spending tens of milions of dollars to 'give away' a brand new technology for the next 18 months has no appeal at all. What could a company like Exetel possibly add to that sh** fight? Absolutely nothing - when thought through as the large breasted, short skirted marketing 'experts' (and that's just the males) of the four major carriers dream up ever more extravagant ways of obtaining 'market presence'. After ten years of giving away mobile handsets and mobile minutes it is impossible to imagine what they will dream up to give away over the next 12 months to beat each other for 5 or 6 percentage points of market share for the new technology. I toyed with some figures on what, collectively, those companies were likey to lose in cash terms promoting their services versus their competitors services over the next 18 months and came up with something between $A100 and $A200 million - but I acknowledge I have no real idea. What I did do was construct the more obvious 'service offerings' that were likely to be put in place in each of the next six quarters by each of the four mobie carriers and use my best guesses as to what might be offered to a 'co-operative' wholesale 'partner' to see if there was any way of Exetel making a WiFi/3G service available. It's difficult enough trying to work out a marketing plan when you have some firm buy price figures and some empirical knowedge of the pricing and features being offered in the marketplaces currently. It's a lot more difficult when you have to make assumptions in place of knowing the facts. Nevertheless, using common sense (assuming that commodity will exist in this scenario) I tracked forward over the next six quarters using the previous two years of mobile marketing methods, tactics (there were no strategies that I could discern) used by the four mobile carriers and 'guessed' at what might be available to an Exetel like company - and I assumed precious little positive. I used current scenarios in terms of what a company like Exetel could offer and quickly realised that nothing that had been used to sell ADSL services was going to be of any use at all. 1) Lowest cost was not going to be a remote possibility -- the four carriers have already signalled that they are prepared to sell below their cost for a sustained period. 2) Similarly, larger download alowances would not be possible as the networks couldn't sustain any sort of ADSL like data allowances and the pricing, as above, would already be below cost from the carrier's retail operations. Tough to even get your head round on even the most optimistic of possibly offered Exetel buy prices. But then.....as always.....if you turn your thinking '180 degrees' ........some glimmers of light appear. I tried to picture what an end user was going to be confronted with and what might be possible to use against the carriers thinking in those terms. I began to make a list of what an end user might find 'unlikeable' about the four carriers and their likely marketing/promotion scenarios not what I might dislike but what someone who really wanted to buy the service might dislike and not just "it's Telstra and I hate Telstra" type thinking. I got nowhere for a while but after a time I managed to write down three major turn offs that I could see woud probably exist and I figure if I keep working on it I may well find more possibilities. Anyway it was enough to make a start on a plan that I have some faith in but it will not produce anything like 20,000 new sign ups a month - maybe 5,000 after 12 months but everything is so 'up in the air' it will need some hard pricing and operating scenario facts before I would be prepared to make any sort of statement on what could be possible. I have the rest of today to finish the basics and have something reasonable to discuss tomorrow so it will be an interesting day. Wednesday, December 26. 2007Just How Hard Can It Be?John Linton ....so hard that I'm having difficulty finding a place to even start planning.......... I've been thinking about how to obtain 20,000 new 3G broadband users a month by July 2009. While it may well be possible for a carrier to put in place pricing and features that make that possible and while some 'favoured son' third arty company with a great deal of money and very preferential pricing might be able to do that I don't think that a small company like Exetel can develop that sort of volume business. I suppose the mobile carriers are used to finding people like 'Crazy Johns' who build a mobie phone retail store chain in a few years and sell that sort of volume of mobile telephone connections a month - but if memory serves me correctly Crazy Johns took 7 or so years to get to that sort of volume and they did it with a great deal of support in pricing and trading terms. With the exception of Telstra I don't think ANY company, carriers included, have ever sold 20,000 ADSL new connections in a month let alone every month - though perhaps Optus has achieved that from time to time. Selling 20,000 broadbad via GSM conections a month is a very, very big ask from my, clearly limited, viewpoint, experience and understanding. The most new ADSL connections that Exetel has ever done in one month was a little over 3,000 and we've never repeated that achievement in the 18 months since we did that - once only - in four years. So nothing in our current or past experience gives any indications on how to sell and activate and then suport 20,000 new users a month which means, should we attempt to do that, we will need to do something, many things, very differently and whatever needs to be done will have no 'grounding' in anything we have done in the past. The major issue that has to be faced is that there will be four carrier's retail operations attempting to establish a dominant/very strong position in the data via 3/4G marketplace and they will have tens of millions of advertising/promotion dollars to spend each month - and they have a long track record of giving away mobile handsets and everything else associated with mobile phone services and have been doing that for more than ten years. Then there will be their 'favoured son/arms length' "associated" companies who they will use to do even more in terms of discounting than their own retail divisions will do. All very daunting. No problem - I have another two days to come up with a business plan that will be sensible enough to show how Exetel will get to 6,000 new Data over 3/4G connections a month by October/November 2009 which only represents doubling Exetel's current $A3,000,000 a month current revenues and we need to do that while also continuing to grow the current services revenue streams. I don't know what the total marketplace is for these new services either at the moment or in 12 and then 24 months time and when I asked for some guidelines no assistance was forthcoming. So I've looked at the meagre information that I can get access to and come up with some figures that look like this for new Data over 3/4G activations in Australia by all carriers by the following months: Mar 2008 - 20,000 - Exetel - 1,000 Jun 2008 - 60,000 - Exetel - 2,000 Sep 2008 - 90,000 - Exetel - 4,000 Dec 2008 - 120,000 - Exetel - 6,000 Mar 2009 - 160,000 - Exetel - 9,000 Jun 2009 - 200,000 - Exetel 12,000 ...and that assumes there is network capacity to handle the traffic volumes which I have absolutely no idea about. So for a small company like Exetel to reach 20,000 new activation a month in June 2009 we would need to be achieving a new marketchare of 10% of the total which is, just a teeny bit, ambitious and beyond anything that I can even make any sort of sense of. What ever idea it is that makes such ambition even vaguely believable will need to be truly inspirational. Any ideas anyone? Tuesday, December 25. 2007WiFi/3G Broadband 'Almost There"?John Linton Surprisingly, a few sensible people were actually tending to their commercial intrests yesterday and I had a very pleasant chat with one of the mobile carriers with whom Exetel has been trying to build a relationship to allow us to connect to their network via a gateway. He called me to say that our previous discussions were proceeding positively and to make a time later this week to get together with the other party(ies) to see if there was a sensible way forward in providing access to us both/all parties on a shared service for a trial period of twelve months so that we could have the time to build the volumes that would allow each of us seperately to invest in our own dedicated solution. Sounded very promising and hopefully next Friday we will be in a position to determine the willingness of all parties to proceed and a ball park time frame. I can't see how we can reach the numbers currently being talked about but we can make a contribution in some sort of properly structured joint venture and I haven't made any promises other than to disclose Exetel's current ADSL sign up and retention rates and provided some realistic, in my view, estimates of what we could achieve on a month by month basis using a WiFi/3G service. The end number, as stated at the moment, of 20,000 new connections a month to make it worthwhile for the carrier to 'allow' a dedicated gateway connection is really going to take an incredibe amount of effort and some, as yet unknown, set of 'out of left field' ideas and marketing approaches to get remotely close to. If Exetel could do a third of that by mid 2009 it would be very surprising based on what we know today - but then, who knows how things will now begin to change? I suppose I'm flattered that Exetel is considered by at least one major carrier as a company that could make such a target and I'm grateful, if it all turns out, to be given the chance of achieving that incredibly, to me, huge amount of month on month business. I don't know what has to even begin to be done to begin to plan to achieve such numbers in an immature marketplace that will be unbelievably competitive (and that's just based on the 'opening salvoes' we've seen over the past three months - who could possibly hazard a guess at what will be put in place over the coming twelve months). Twice before in my seemingly endless career in the IT/Communications business I've been able to come up with methods of completely dominating a marketpace in a relatively short space of time and as the person with whom I was talking yesterday cheerfully said; "this will be a piece of cake compared to last time you took on a monopoly and had their MD go to the PM of the day and threaten to close down if the PM didn't "do something about 'them'". That was a long time ago in a marketplace far, far away and at a time when I thought I was immortal - as I quickly reminded him. first things first - we need to ensure that whatever we commit to will be realistic and will fit with what the other two parties that may be involved in this 'venture' have in mind; and I don't even know the name of the third company that may be involved let alone what their 'go to market' strategies and logistics might be. I've never planned a marketing strategy that could be constrained by the needs of 'partners' and I think that will be, at the very least, a 'challenge' almost as great as the challenge of whatever the monthly new sign on targets might turn out to be. Sufficient unto the day......and to anyone silly enough to be reading my meanderings on this Christmas morning..may the rest of this day be merry and peaceful and I hope Santa has brought you your heart's desire on this special day of the year. Monday, December 24. 2007Better News On IP Pricing In 2008John Linton A major expense in providing an internet service is the connectivity between the ISP and the 'rest of the world' generally referred to as IP or ingress/egress traffic. Back at the dawn of providing internet services in Australia, or at least the time I first became involved in the early 1990s, there were very few options. As I recall you could either rent a 1 mbps line to a US carrier on the West Coast of the USA for around $US800,000 a year or, sometime after 1995 you could buy bandwidth services from Telstra for around 33 cents per megabyte (and, no, that isn't a typo). Prices started to 'dramatically' fall from that time to now but only five years ago a 'reasonably good' price for IP bandwidth from a reputable carrier was still above $A400 per mbps and it only fell below $300 mbps (at least at the sub 1 gbps quantity) some two plus years ago. Earlier this year reputable carrier IP bandwidth fell again to around $250 mbps with SX excess capacity coming on line in the recent past allowing the price per mbps to fall to or below $A200 per mbps from more than one carrier. PIPE's initiative of 'laying their own cable' and thus breaking the SX and AJC 'monopolies' appears to be becoming a reality with deliverable services perhaps becoming available early in 2009 with pricing well below that of the carriers who use the SX and AJC cables. It's a very bold move by PIPE and Exetel, as a small ISP, would be delighted to see it become both a reality and a way of reducing Pacific Ocean transit to a more comfortable pricing level. I think there's little doubt that Pipe's initiative, although it's a long way away in terms of commercial impact, has been at least one of the 'triggers' in making IP pricing on the established cables more 'flexible' than I have ever seen them in the time I've been involved in buying IP capabilities. P2P filtering from Allot, Akamai caching for many software distributions titles and, if we ever get it working, PeerApp caching for P2P generally has greatly reduced Exetel's reliance on 'raw' bandwidth but, today, we still spend over $400,000 a month on IP bandwidth and plan to increase that 'raw' capacity in the future at a similar rate to that which we have done in the past. (we have gone from 10 mbps to 1.6 gbps in 46 months - an average a little less than an additional 40 mbps per month for every month we've been in existence. We have been talking to our current and possible IP bandwidth providers for some months now as all our IP bandwidth contracts end in the first half of 2008 and you don't make changes to IP providers casually nor do you do it, should you ever decide that you must do that, without a lot of thought and very careful planning. We have seen a reluctance on the part of our current providers to change their pricing downwards because they don't want to lose the 'captive' revenue they've enjoyed to date while making life very, very hard for Exetel. So, with a few days to go before 2007 becomes a 'commercial memory' we have got at least two viable options in acceptable contractual form that would, if we decided to go with one or other of these alternate providers reduce our current IP costs by an average of $A80.00 per mbps per month - which equates to a monthly saving of well over $A100,000 a month which is a very substantial reduction in our monthly variable expenses. Such a saving would more than double our monthly profit, assuming all other things remained as they are today, and would dramatically change the options available to Exetel going forward in most areas of our business and how we operate our business. It will be interesting to see what 'final' offers for IP bandwidth become over the next 6 months or so and even more interesting to see what they become should Pipe make its cable connectivity freely available at whatever pricing gives them a good return on their 'risk'. Sunday, December 23. 2007Does Exetel Have any Future?.....John Linton ......or is it just me that has no future? I was mulling over what had happened over the last, almost, twelve months wondering why a year that I started with so much optimism turned out to be such a dreary slog with almost none of the 'easier times' I had looked forward to actually materialising. The few people I share such thoughts with outside Exetel feel about 2007 pretty much the same as I do. What went wrong? While I could take comfort in the increase in monthly revenues for another 12 successive months I don't see that as being either why we are in business or something that was particularly hard to accomplish in a growing market place(s). It appears to me that we somehow faied to build on what had been achieved in the previous three years almost to the point, but not actually to the point, of becoming one of the 'drifters' - those companies in any field that do enough to stay in business but not enough to actually make any difference to the overall market or to their employees, customers or themselves. I doubt that I'm suffering from 'depression' or even the tiredness endemic at the end of a hard year - but perhaps there are some infuences of that. I really began to notice these feelings when I tried to re-write the 2008 calendar year business plan overview which I always do between Christmas and the new year every year for more years than I can remember. I think I started doing this just before my second year as a rep at IBM (a few years just after the dawn of time) when I set down the targets I intended to achieve in my business, financial and personal life and wrote myself a narrative of how I should go about achieving them. At the start of each year I've been either responsible for a significant part of a business or a whole business I've, of course, had to do this with a lot more thought and planning and a great deal more care than I put in to my personal planning. I can remember the years I didn't exercise enough care/caution very clearly and never wish to go through such times again. Probably for the first time I can recall in more than 10 -15 years I have no good feelings about what Exetel , in this case, will be doing month by month in 2008. I don't mean to imply by those words that I expect that Exetel will progress in any lesser degree than it has done in the past four sets of 12 month periods but that as I write the 'narrative' for the year, and I'm currently up to May, I get no sense of excitement or even any 'frisson' of anticipation. This is unusual because there is never any more optimistic or pleasurable time in a business year than when you plan and write the detais of what you intend to accomplish over the coming 12 months without the impediment of any actual results to stunt your optimism. Maybe I'm becoming bored or 'stale'(it's been a very long time of working with no real break) or maybe I just look at the daily workloads and the sheer grind of making so much happen for so little real progress with dismay. Maybe its just old age finally demanding consideration and a realisation that the demands of running a start up bsiness into a fifth year are beyond, or are shortly to become beyond, my physical capabilities. There is something about working seven day weeks that eventually becomes too much for even the strongest and fittest person and I'm far from having either of those characteristics/qualities. Probably all of those things are true. Having thought about it for a while I have come to the conclusion that, at least for me, the real reason behind my lack of enthusiasm is that providing ADSL services presents no real personal challenges and also no financial or other rewards. It's not that "anyone can do it" (that clearly isn't the case based on the huge number of failures by people who've tried) it's just that it really isn't that difficult to do and there certainly is very little reward, financial or anything else, in putting in the enormous personnel and financial efforts that are required in to doing it. So this morning I 'mentally' tore up my personal 2008 business plan and decided that I wasn't going to waste another year of my life putting in so much time and effort for so little personal and family reward. I don't know what this decision will translate into for me as an individual, I see very little impact on Exetel as a cmmercial entity, but Im going to give it a lot of thought over the next few days. Saturday, December 22. 2007Is ACMA Going To Be Telstra's New Best Friend?John Linton I read this brief article on the latest ACMA 'findings over a cup of coffee this morning: http://www.itwire.com/content/view/15878/1095/1/1/ Perhaps the various figures quoed are correct - they seem way off the mark to me, but I have very limited knowlwdge. So I found some parts of the actual report on line and read over the detail - not easy to undestand but it didn't seem very enthusiastic about IP voice services. What I picked up from the article and then the actual report is that ACMA has found something new to 'regulate' and its slavering at the thought of how it can make an even bigger dog's breakfast of this 'new' technology and its speed of take up than it has already done. Firstly, it should be obvious even to a bunch of brain dead bureaucrats that VoIP is the single most beneficial aspect of IP technology for business users that has happened in 20 years now that it's finally mature enough to be widely used. Personally, I think that any management in any commercial (or government) enterprise that isn't already using VoIP should be dismissed as being completely incompetent. Call cost savings apart (and those savings are considerable) - the features and functions that IP telephony provide, at a fraction of the cost of 'conventional' PBX technologies, are so useful and now becoming essential that 'conventional' telephony means that every organisation still using it is not only wasting money but is costing itself the efficiencies the new capabilities of VoIP provide. Exetel couldn't operate today without VoIP - and that scenario is becoming increasingly true for many other companies across almost every industry sector. VoIP has made it possible for Exetel personnel in Sri Lanka, Perth, Mosman and Randwick to have voice contact with each other and Exetel's customers and suppliers as if they were located in the same office. VoIP has allowed Exetel's customers to log faults via their telephone handsets and then receive 'voice' updates on the progress of their fault or their change of service at one twentieth of the cost per call of using conventional telephony and one hundredth of the cost of the quipment required to do that - and the list of cost savings and operational advantages of VoIP just goes on and on. The porting of 'conventional numbers' from PSTN/ISDN services to VoIP services is now much more easily possible which means one of the biggest deterrents to commercial organisations moving to VoIP (the loss of their inbound telephone number ranges) is almost gone - together with the cost of renting standard 'business lines' at their exhorbitant prices. The other issues of sending and receiving faxes over IP (FoIP) have also been resolved VoIP is now easily the better solution for outbound calls of all types even incurring the costs of leaving a company's current PSTN/ISDN lines in place (thus incurring their rental) for 'emergencies'. So, my concern on reading that article and then reading some of the actual report earlier today, is that ACMA will start to impose conditions on the supply of VoIP that will slow down the minor surge in 'popularity' it's now beginning to enjoy. For once Telstra and the regulator will become bosom buddies. Friday, December 21. 2007....tis the season to be cynical......fa,la,la,la,la - fa,la,la,laJohn Linton Over the past week or so Exetel has been making some relatively minor changes to its web site to include information on the 'green' processes the company has decided to put in place starting in 2008. Basically there are two things Exetel advised its customers it was intending to do: 1) Pay a little more for 'green' electricity and make monthly donations to plant trees to 'neutralise' Exetel's carbon emissions. 2) Set aside approximately one third of Exetel's monthly profits to help save Australian fauna from extinction. This has included advising our customers via email of what these proposed changes may mean to them as individual customers as well as opening discussion topics on the Exetel Forums. It was really nice to see that, of those people who chose to respond, the vast majority considered the proposed donations by Exetel to be a positive thing and that many of those who responded would take the opportunity of making additional donations to the projects that Exetel was proposing to support themselves. (warm glow begins to spread) Then there were the other responses, admittedly not anything like as numerous as the supportive ones, that made me wonder what sort of society I was now living in. Apart from the idiotic (who cares if a bird no longer exists?) and (if you're so !@#$%^& rich why not cut your prices?) there were a bewildering array of other negative communications on the forums and via PMs to the forum administrators and emails to Exetel managers impugning Exetels motives and motivations and suggesting everything proposed was some sort of tax scam or 'marketing' scheme. In, relatively gently, attempting to rebut some of the more sensible, but nevertheless devastatingly negatively phrased communications it became apparent that no matter what was said, how logically it was explained and how cogent the examples given were, nothing could dissuade these correspondents from their view that Exetel was scamming them. The fact that Exetel was using its own paper thin profits to pay for more expensive electricity, tree planting schemes and charitable donations couldn't convince any of those critics that it wasn't somehow financially beneficial to Exetel and/or Exetel's owners. There were constant claims of "tax advantages". It seemed those people making such assertions failed to understand that: 1) You have to make a profit and donate it before you get a portion of your donation back. 2) At the current company tax rate of 33% the other 66% is not somehow "coming back to you". It wasn't until I was sent this URL that I began to understand how all this "tax scam" criticism was coming about: http://www.primus.com.au/PrimusWeb/HomeSolutions/Green+Broadband/ together with the "mathematics" from the correspondent which, minus the invective embedded in to every phrase, could be summed up as: a) the company charges the customer 98 cents a month for 'green broadband' b) the company plants 5 trees a year per customer c) the company makes this possible by making donations to a tax registered organisation (LandCare Australia) d) checking the LandCare site the cost per tree is $3.00 (probably less) giving a total cost to the company of $15.00 e) the customer contributes $11.76 f) 0f the $15.00 donated by the company the ATO refunds 30% = $4.50 g) the company therefore gets an extra $1.26 (nett) from each customer and "promotes" itself as ecologically responsible. I don't know whether the numbers quoted are accurate or not but I can, at a stretch, see why some people might be very suspicious about of what Exetel proposes doing if their knowledge of tax law and basic arithmetic is on par with this particular correspondent. And there I was thinking this was the season of the year in this country when people were in a happier frame of mind. Thursday, December 20. 2007"Sometimes You Just Need To Cull The Herd"John Linton Some time in the early 1990s that line, which has stayed in my mind ever since, was spoken in a Las Vegas 'show room' by a comedian I'd never heard of at the time called Dennis Miller. He was the back up act to a much better known, at that time, female comedian called Rita Rudner whom Annette had wanted to see. www.quotationspage.com/quotes/Rita_Rudner/ www.brainyquote.com/quotes/authors/d/dennis_miller.html
I wonder if by 'losing' 600 customers life would be more pleasant in 2008 - both for the customers who express their unhappiness in such inappropriate ways and for the support and other staff who are on the receiving end of their abusive tirades? It would in fact be a true kindness to ensure that these, very few, people who are so unhappy with such a trivial aspect of their lives (an internet service) are helped to put an end to their misery by forcing them to take the one action that will solve all their problems - moving to another ISP of their choice and getting the perfect service that they have been at such pains to point out to Exetel isn't being delivered to them by Exetel and endangering their health by working themselves up in to a wild frenzy of anger and bitter vituperation. A bit like a vet being forced to put down an animal who has so badly been injured no vet can fix the problem. Meanwhile the other tens of thousands of Exetel users who apparently don't find the exact same service so unusable and anger producing will be able to continue to use the service without being made to pay the additional costs caused by such people. WIN - WIN - WIN for everyone concerned....and a sensible way of 'protecting' nice support people from being subjected to the total cr** that some unhappy customers seem to believe it is their "right" to subject people they've never met to. Surely someone so unhappy that they become incredibly abusive would see the simple solution of moving to another provider? ....now where did I hide that Ruger? Wednesday, December 19. 2007Protecting The EnvironmentJohn Linton We had an interesting board meeting yesterday which apart from the usual agenda items was mainly concerned with the two 'final' recommendations on committing Exetel to pro-active involvement in addressing the company's impact on the global and local (Australian) environment. With our very small 'board' which has the advantage/disadvantage of including the owners of Exetel discussions don't wander off track in the pursuit of some director's personal agenda so our meetings are usually comprehensive in covering the legal, financial and operating issues of the company but don't take inordinate amounts of time. We dealt with the 'making Exetel carbon neutral' relatively quickly despite its complexity - largely due to the quite comprehensive but lucidly explained requirements, calculations and rationales. It seemed a relatively simple decision to me - it costs $4.00 to plant a tree and you need x trees to absorb the carbon emissions for which the company has been responsible in its four years of existence to date and y trees a month going forward. Just how 'x' and 'y' are reached needs more work and discussion but the implementation was agreed and we will execute the required agreements with the selected company over the next week or so for the tree planting and change our office use power to 'green power' by the end of January 2008. Calculating the exact values of 'x' and 'y' needs to be discussed further and understood in terms of just what, reasonably and realistically could be regarded as Exetel's responsibilities. Its relatively simple to do the calculations on the carbon outputs of our own power and heat usage but the questions raised were: 1) Do we take in to consideration the carbon emissions involved in our personnel traveling to and from Exetel. 2) Do we take in to consideration the carbon emissions of the PCs, modems and routers used by our customers. We will make decisions on those two, and any other subsequently raised issues before the end of January. The second proposal for donating, to us, significant amounts of money on an ongoing basis to fauna and flora protection within Australia took a lot longer and was far less clear cut. While I think Exetel's owners and directors are 'above average' in terms of caring and compassion as individuals and also as employers we were being asked to make decisions that were beyond the scope of anything we had considered in the past and on behalf of a 'commercial' entity. We discussed whether we should support charities that were aimed at relieving aspects of human deprivation or suffering rather than those that assisted inferior species. The prevailing view was that technology was a massive positive in assisting humanity and that the last thing you could say about homo sapiens would be that it's an endangered species. We formally ratified the discussions we had held over the previous three months to create a 'pool' of money by allocating 50 cents per broadband customer each month and then using the money from this pool to support projects that we could see were directly aimed at protecting unique Australian fauna and flora from extinction by actions of humans intruding into their habitats. Our final rationale was that the expansion of the human race in to so many areas around the globe and in Australia was only made possible by technology and that as we earned our living from providing technology to our (human) co-inhabitors of Australia we had an obligation to provide assistance to the other Australian (non human species) co-inhabitors who were adversely affected by human actions. All a bit 'tree hugging ' and generally 'vomit inducing'? It could quite possibly be seen that way by some people. However we didn't see it that way at all and will do our best, in the very, very limited ways available to us, to make one or more species more able to withstand the negative effects of our actions while ever we can. So - a bit of a different board meeting to the previous 45. Tuesday, December 18. 2007Am I Being A Disloyal 'Australian'?John Linton Exetel has almost totally pursued a policy of employing computer science/MIS graduates as its support desk personnel and then allowing them to progressively move towards their desired career objectives in relatively short periods of time via increasing responsibilities in data base programming, systems administration, network engineering or one of the many technical projects and implementations we are continually involved in and replacing them with a new graduate (who invariably has the same aspirations). Because of Exetel's month on month growth it's been possible to accommodate the career development needs of almost all of the people we've employed over the past four years - but not all - and we have lost some people because we couldn't make suitable career development positions available to them quickly enough. That is a great pity and it's becoming more obvious that, if we keep employing new graduates in Australia on the same basis we will always have to contend with this issue. While engineering graduates with good transcripts and a 'heavy personal involvement' in ADSL/routers/PCs/etc make very fast learners and are 'experts' as opposed to 'script jockeys' in terms of most help desk personnel their desire to move on to other responsibilities after 6 - 12 months makes for an unwelcome continual learning curve in managing an adequate support function. Almost two years ago we hired two Sri Lankan nationals to work for Exetel based in their homes in Colombo. we did this partly because of the time difference between Australia and Sri Lanka (5 hours) which allowed us to extend our 'support hours' and partly because the same calibre of person (in terms of degree/transcript) welcomed the opportunity of a career working in the communications industry and was, we understood, prepared to be more patient than 'Australian' graduates in the speed at which their career developed. To hire people in another country is not an easy task and we probably took longer in doing it than we should have - in the event it was almost a year before we actually made the two job offers having gone down a few 'blind alleys' during that time and receiving a lot of, what proved to be, very bad advice. We brought the two selected personnel to Australia for a month for familiarisation with our systems and the requirements of the positions and they then returned to Sri Lanka and began the process of becoming adept and confident in handling the tasks assigned to them which gradually increased in complexity as time passed. We purchased computers and ADSL connections for them in Colombo and they had the same access to all of Exetel's data base systems as every other employee - including all of the help desk tickets. Twice in the past two years the Support manager has gone to Sri Lanka to sit with each of them to familiarise them with ever more demanding aspects of supporting Exetel's customers and multi-daily telephone and email and 'sms' contact is a standard part of the operation. Some 12 months ago we sent Mitel handsets to each of the Sri Lankan engineers which operated as 'office extensions' to the Mitel VoIP PBX we have in North Sydney and allowing them to become part of various support queues taking customer calls 'live' instead of only dealing with customers and carriers via email. Both of the Sri Lankan engineers will return to Australia in early January 2008 for familiarisation with the most advanced processes and procedures we have implemented and we will hire a third Colombo based (work from home) engineer in the next month or so. Annette and I will also visit Colombo in February to meet with the Australian High Commission and various commercial entities to better understand what is involved in setting up additional facilities in Colombo - and to determine whether or not that is in fact practical. At the Exetel Christmas party I advised our Australian personnel that we were going to change the ways we operated in terms of entry level hiring in to Exetel by only hiring new support engineers in Sri Lanka and possibly establishing an office in Colombo to ensure that all of our current Australian staff could continue to progress from customer support to other functions within Exetel within their desired, and reasonable time frames. I've been questioned over the past two years, and several times since last Friday's "announcement", about my "loyalty to Australia" in "moving jobs that should be offered to Australians overseas." There is no simple answer to such questions but my rationale is simple: 1) Exetel, and more importantly, Exetel's customers need support personnel who are prepared to spend more time in providing support (and therefore becoming better able to do that) than most young Australian engineers are happy to spend - and no - I don't believe hiring less qualified and intelligent personnel is a sensible approach to solving that problem. 2) Exetel can ameliorate the same desires of too rapid career progression in Sri Lanka by paying something like three times more than an engineer would earn in more senior positions in that country as a legitimate 'quid pro quo' for doing customer support for a year to eighteen months longer than a young Australian engineer is happy to spend. 3) By paying more and by providing the opportunity of working from home (with full facilities paid by Exetel) we make a sensible contribution to another country's economy that directly benefits both that country and Australia and directly benefits Exetel's customers by providing much higher skilled support personnel with much more knowledge than we can do any other way. 4) By keeping highly intelligent and highly skilled people in customer support longer we increase the level of customer satisfaction we provide to end users and we do that at a lower cost which also directly benefits the end customer because it contributes to allowing Exetel to provide services at a lower operational cost. To date, and it's still very early in the implementation of this program, there is every indication that this approach to directly employing personnel in other countries (as opposed to using some sort of 'managed service' in another country) will benefit everyone concerned. So, as an 'immigrant Australian' I don't feel at all 'disloyal to Australia' and as a father of five children I see no problem in an Australian company employing people in other countries if that provides benefits to everyone concerned. Monday, December 17. 2007Will There Be A Fibre Data Network In My Lifetime?John Linton One of the nice things about this time of year is that you can look back over the previous, almost, 12 months with, hopefully, some degree of satisfaction in what you've achieved personally and what, working with others, you've helped to achieve. If you're involved in running your own small business one of the great satisfactions is always to have successfully negotiated the various possible and actual disasters encountered throughout the year and to have limited the number of really bad decisions you've inflicted on yourself and others to a survivable amount. As it's been a 'good' year for me and for Exetel in most respects I'm looking forward to putting the final touches on the CY08 operating plan over the next two weeks with a little more optimism than I felt at this time last year - except - I still don't have a clue as to what's going to happen to the current copper structures. Perhaps because I'm a masochist at heart I re-read some of the prognostications and discussions and 'white papers' that pertained to the eventual sale of the Federal Government's stakes in Telstra and the devastation that has caused over the past 15 years immediately prior and subsequent to "T1". Probably any sensible person reading this will not have ever bothered to read through the pros and cons and wild assumptions that preceded the eventual decision to sell off all of Telstra and few people would remember the instigators of the actual sale mechanics and the nay-sayers who took all the other positions. (John Hewson?). Quite rightly so - what a totally stupid decision making process and what a dogs breakfast of a cobbled together final result and its inevitable consequences it turned out to be. I can understand the constraints that were imposed on the sale process and the reasoning behind the decisions of the time: 1) Not allowing 'foreign ownership' restricted the value of the business 2) The inability of the Australian equity market to fund a full sale 3) The need to keep arms lengths government controls of a public company 4) A hostile Senate 5) A less than committed coalition partner and so many others that required compromise after compromise (Thank God for the Democrats eh? - Meg Lees where are you now?) I doubt anyone would be as stupid as I am to bother to read through the thoughts and public statements of the people involved at the various times (and I only did so to get an idea of where the people currently likely to be influential in making the new decisions on Telstra stood then and where they might now be going - and none of them are still around in positions of influence or decision making). For anyone who actually would like a relatively unbiased synopsis of how we have reached the current sorry mess this report, written in 2003, gives some realistic facts: http://wopared.parl.net/library/pubs/chron/2003-04/04chr03.htm Now that there is a Labour government which, irrespective of its ulltimate longevity, will certainly have to make a decision (after all it was a major election promise) on how it will implement its decision to fund a new fibre network with at least $A4.7 billion of tax payer's money by the end of 2008. It will also have to decide on whether it will also, as it has so often claimed over the past 11 years of Coalition Federal Government is so necessary, whether it uses that money as part of splitting the current Telstra in to the three components that it (while in government last time and for almost twenty years and counting) insisted was the only way a sensible telecommunications regime could exist in Australia. As Telstra's current short term thinking senior management will do everything possible to prevent that happening the next 12 - 24 months will probably be wracked with even more uncertainty than now exists. Perhaps one of the good things, if "good" is the correct word, is that nothing will change in the next two years and copper services will not be 'challenged' by a new generation of government funded fibre. So the impact on 'deliverable services' over the next two years will be minimal. With one major, major qualification. What is to be done about investing in enhancements to the delivery of current ADSL services over copper in terms of what is the expected 'life time' of such investments? Too hard to look at that very optimistically so the answer for a small company like Exetel is almost certainly going to be negative - we'll have to look to bringing 'the future' closer for 3G/wifi and wait and see what time frame actually becomes possible for fibre. Easy decision to make and now is a good time to work on justifying doing nothing - such views always have much readier acceptance than doing something of unknown likelihood of success. |
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