ISP consolidation

> >There are other analysts (myself among them) who anticipate the number of
> >North Amercan ISP's to grow by a third this year from around 2,000 to
> >around 3,000. Yes, there is some consolidation, but this is very little
> >in relation to the entry of new ISP's into the market.

> Well, one study I came across talks about a major shake-out over
> the next few years resulting in about 200 ISPs by 2000. It projects
> a decline in the number of ISPs beginning early 1997.
>
> Of course,some might say, a five-year projection is just about
> meaningless in a field such as this.....

That's right. The Internet market and the Internet industry is still
growing by leaps and bounds. In order for a significant shakeout to
occur, that exponential growth curve has to level off. Even then there is
every possibility that there will be plenty of room for the small local ISP
especially when you understand how an ISP operation can be integrated
with a number of other computer/networking oriented businesses.

Agreed completely. At the Interop "show", about 1/3 of the visitors we
received at our booth were interested in starting up their own ISP. Funny
how most of them really knew very little about the industry. Most are
presuming that it is young, which is true, and that it will still be easy to
get into the industry... which is simply not true.

As long as Wall Street likes the Internet, the industry will continue to
grow by leaps and bounds. When they decide it is no longer trendy/profitable
then we'll notice most of the garage ISPs will disappear.

I am interested in a clarification of the 2000 ISPs that exist. What is the
definition of ISP as used in that calculation? Am I an ISP at home because
I share my ISDN with family and friends? Are web hosting service providers
ISPs? Dunno..

Rob

Robert Bowman
Sr. Hole Plugger
Exodus Communications Inc.
rob@exodus.net
(408) 522-8473

>

---- other forwarded messages deleted ---

As long as Wall Street likes the Internet, the industry will continue to
grow by leaps and bounds. When they decide it is no longer trendy/profitable
then we'll notice most of the garage ISPs will disappear.

...

Conventinal investment wisdom is you sink in the big $s, gain market share,
sit tight and let the cash cow bring in profits...sometimes for a decade
or more... and in some rare cases this was true for data communications
as well.

In the case of Internet however, you invest, build the network, you try for
market share, you UPGRADE (i.e. invest more), you try for more market
share, you UPGRADE again, etc.

T-1 to DS-3 to OC-3 and beyond... Bigger, Better, Faster...

The two to three year investment cycle seems inevitable.. One can only
wonder as to how long it will remain palatable to investors.

-Mulugu