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  1. #1
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    starting an internap

    What is your opinion of starting a company with a biz model similar to internap? Something like starting at the big datacenters (equinix, SD, etc.) then expanding. It seems like internap is making a killing, figuring they probably pay $20-$30/mbps between the providers. The other costs are equipment / engineering and noc? What are your opinions, I believe this has been talked about, but I wanted to address it.
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  2. #2
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    Their biggest expense is the routing equipment itself, which has been discussed recently in other threads. Its not the cost of bandwidth that they're particularly concerned about.

  3. #3
    blake,

    the capex for something like this is incredibly high. they've paid for it back when they actually were making a killing, but i don't think it is viable with the margins we are seeing now.

    paul
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  4. #4
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    It would be difficult to achieve the level of brand recognition possessed by Internap, especially with their patented route optimization process. While you could develop similar technology or simply license it from *vmg, routescience, and friends, it's a pretty big capital investment. Add to that the remarks made by others regarding the cost of network infrastructure, and you have a huge capital outlay for a $40/Mb bandwidth market.
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  5. #5
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    I've seen customers with 200mbps paying $140\mbps. I was just imagining starting at all the equinix locations with lets say 7 different providers (att, L3, MCI, qwest, global, abovenet, HE). There would be huge start up costs with equipment unfortunately. But what am I thinking, I'm sure many companies have tried this (or datacenters).
    Best Wishes,

    Blake L. Smith - [email protected]
    XtremeBandwidth.com, Inc. - Wholesale Tier1 Bandwidth!

  6. #6
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    just curious how much does bandwidth pipes cost?
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  7. #7
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    gilbert:

    I am assuming you're talking about the transport between facilities? You would be looking at anywhere from $1000 - 10,000+ /mo depending on the size of the transport, the markets, and what type of infrastructure may/may not already exist on those buildings.

  8. #8
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    Clients paying out the yingyang are all on Internap already. Building up a name to rival theirs would be a problem in itself I think. Not to mention the costs for the equipment/engineers/noc. Someone like nlayer could add more pipes(glbx + peers right now...correct me if wrong) to rival Internap being their footprint has grown so much over the past year.

  9. #9
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    Ya, it would be smart for a reputatble company like nlayer to start, rather than joe smoe starting one. Although I know I would be able to get the bw from the carriers for dirt cheap.
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    Blake L. Smith - [email protected]
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  10. #10
    but do you have $200,000 for network equipment per location?

  11. #11
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    funding isnt the main problem. The main problem is setting it up correctly like internap has, being reputable and cash flow positive.

    fyi, lowest i have seen internap is around $60\mbps. Anyone seen much lower?
    Best Wishes,

    Blake L. Smith - [email protected]
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  12. #12
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    Even to these days, Internap still have clients happily paying them what, $3-400/mbps? That's how they can still sustain their business. Their clients such as NasDaq won't argue saving $10-$20/mbps.

    It might makes more sense trying to do what Peer1 is doing instead.
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  13. #13
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    its not $10-20\mbps its more like 20-40k a month
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  14. #14
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    Originally posted by XtremeBandwidth
    funding isnt the main problem. The main problem is setting it up correctly like internap has, being reputable and cash flow positive.

    fyi, lowest i have seen internap is around $60\mbps. Anyone seen much lower?
    Where do you get that from? Even on a 100 megabit commit they're still over $100.

  15. #15
    jeff,

    you are talking to the wrong people, then. their telemaketing monkeys offered me $70 off the bat.

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  16. #16
    blake,

    food for thought. internap has two selling points - reliability and supposedly improved performance. the same amount of reliability can be attained with enough capex/opex and proper engineering, you do not need their fancy route optimization gear for that. improved performance, while definitely a nice thing to have, is not a constant and not always worth the much higher price to most users.

    the folks that pay internap $300/meg are the same folks that pay c&w (now savvis) $300/meg. those are folks who are looking for a complete solution. savvis' network performs better than internap across the board by the way, no fancy routing gear required.

    dave has a point - peer1's business model looks like a winner. they emphasize reliability and performance remains very good. although internap will perform a bit better on long haul routes than them currently, they have internap beat in certain geographical areas on short haul and provide the same complete solution at a more attractive pricepoint.

    paul
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  17. #17
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    Originally posted by rusko
    jeff,

    you are talking to the wrong people, then. their telemaketing monkeys offered me $70 off the bat.

    paul
    Which Internap? On select locations, they have two products, the PerformancePatch and SurePath. Which one were you quoted? At 100 mbps for $70/mbps, it will most likely be the SurePath on. cmiiw.
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  18. #18
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    "proper engineering, you do not need their fancy route optimization gear for that."

    Actually to get the performace they offer, you do. I am not saying Internap is the end-all-be-all, but they can do some pretty amazing things.
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  19. #19
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    Ya I agree, Internap has a couple patient products.

    FHdave- You can find internap 100mbps for $70\mbps for the 9 carriers or whatever. I have contracts from them.
    Best Wishes,

    Blake L. Smith - [email protected]
    XtremeBandwidth.com, Inc. - Wholesale Tier1 Bandwidth!

  20. #20
    Ya I agree, Internap has a couple patient products.

    FHdave- You can find internap 100mbps for $70\mbps for the 9 carriers or whatever. I have contracts from them.
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    Blake L. Smith - [email protected]
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    Really Blake? Are you sure you know what you are talking about?
    I don't think you DO KNOW, and although it's fun to lie and make up stories, you probably signed an NDA which you are now breaking. Plus, that price is waaaay off. Waaaaay off.

    Try again sometime, you are entertaining us all.

  21. #21
    Originally posted by RackMy.com
    "proper engineering, you do not need their fancy route optimization gear for that."

    Actually to get the performace they offer, you do. I am not saying Internap is the end-all-be-all, but they can do some pretty amazing things.
    mike,

    to be more precise, if you are a tier1, you can be faster than internap across the board with proper engineering with no fancy route optimization hardware. see c&w (now savvis).

    paul
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  22. #22
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    Blake:

    If funding isn't a problem, you and I need to hang out more often

  23. #23
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    Originally posted by ackerman
    Really Blake? Are you sure you know what you are talking about?
    I don't think you DO KNOW, and although it's fun to lie and make up stories, you probably signed an NDA which you are now breaking. Plus, that price is waaaay off. Waaaaay off.
    Blake is a respected poster with a legitimate question, and I believe every post on this thread has been constructive with the exception of yours. I'm told you were previously banned from posting on WHT.
    I suggest you represent Internap in a more positive light by following up on technical questions and making yourself a resource to WHT readers, rather than bash good people like Blake.
    There are plenty of folks with questions about your company's products, and I'm sure everyone would be pleased to have your input on those matters. It'd be a shame if this childish name-calling resulted in your posting priviledges being suspended.

    Apologies to the readers for this off-topic post. :-(
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  24. #24
    Originally posted by XtremeBandwidth
    funding isnt the main problem. The main problem is setting it up correctly like internap has, being reputable and cash flow positive.

    fyi, lowest i have seen internap is around $60\mbps. Anyone seen much lower?
    I've seen 70-80 lowest

  25. #25
    That's funny, I just got off the phone with him and he said his prices were wrong. But of course, since you are not him, and you don't have a price sheet to work off, you wouldn't really know what to believe?

    But I am glad you know my personal life. Keeping tabs on me?

  26. #26
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    Originally posted by ackerman
    But I am glad you know my personal life. Keeping tabs on me?
    Well, my guess is you've been banned from posting longer than I've been a WHT reader. No, I had no idea who you were until I received several AIM messages from other readers pointing out your recent posts.
    I enjoyed your voicemail, by the way. If you scroll up you'll notice that I've remarked regarding your actions, not your person. I don't know whether or not you are a successful Internap rep, your level of technical expertise, or the basis of your dislike for Blake; but the content of your recent posts reflects poorly upon you. I certainly don't get angry when I read or post on WHT, nor when I speak with other readers off-forum. I don't believe I can do my job without projecting a professional image, and I'm surprised by your rash reaction to Blake's post(s).

    If anyone would care to listen to the voicemail Mr Ackerman left for me, it is available for HTTP. http://jsw.louisville.ky.us/art_ackerman_vm.wav
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  27. #27
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    Mr. Ackerman has been banned from WHT sometime in the last 20 minutes. Congratulations to him, he got what was coming for him.

  28. #28
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    This is great.

  29. #29
    That's funny, I just got off the phone with him and he said his prices were wrong. But of course, since you are not him, and you don't have a price sheet to work off, you wouldn't really know what to believe?
    Someone ought to call up his boss.

    If I hadnt known anything about Internap, I would have assumed that the entire company is just like Mr. Ackerman - a bunch of sodding jerks.

    If management knew of his attitude on a large public forum I dont think they would be extending their employment offer in the future.
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  30. #30
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    to be more precise, if you are a tier1, you can be faster than internap across the board with proper engineering with no fancy route optimization hardware. see c&w (now savvis).
    Anyone can be faster than anyone in certain instances. I do wonder why others don't offer the same SLA?
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  31. #31
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    WOW, I'm not sure where in my post that I mentioned "someone from internap call me", but he.

    Here is what I told him, please note I never said I lied, why would I lie about pricing I posted on a forum, anyways... I said I have a customer with 100mbps commit (using 160) paying $70\mbps, right now he is on month-to-month because his contract term expired. I never said I see $70\mbps all the time, I have also seen someone with 200mbps paying $140\mbps. (i think i posted earlier about it). I said many people in this industry lie about lower pricing to get there pricing lowered, but I have contracts with internap that low (i told you that). PS.. I never signed NDA although I do have a client privilege.

    You calling me and emailing me (spam) offering me Internap services then trying to go publicly and bash me doesn't set well. I am currently working with an Internap rep (the reason I blew you off on the phone when you tried offering me $70\mbps), I will be sure to mention this as it does not set well with me and the company who employs you.

    That VM is hilarious, He is pretty intent about calling everyone about Internap services, and mentioning that I lied about $70\mbps. Art - I bet you I could offer Internap for $70\mbps on a 1mbps commit and still make $10\mbps on it.

    Cheers!
    Best Wishes,

    Blake L. Smith - [email protected]
    XtremeBandwidth.com, Inc. - Wholesale Tier1 Bandwidth!

  32. #32
    Originally posted by RackMy.com
    Anyone can be faster than anyone in certain instances. I do wonder why others don't offer the same SLA?
    are you referring to their on-net max latency SLA? i've seen it broken consistently and internet health report proves it.

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  33. #33
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    ah come on ... is the banning really necessary? What about warning first? Which moderator is doing the banning, I wonder .... The banning thing is rather childish, IMO. Not even sure if that's objective. Can we even have a civilized discussion here. There might be some biting here and there, but that's normal. That's what makes discussions interesting ...

    and what name calling?

    And Blake .. sell me your $70/mbps Internap at 1 Mbps commit. I am signing right away! Sure you won't do it
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  34. #34
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    Originally posted by rusko
    are you referring to their on-net max latency SLA? i've seen it broken consistently and internet health report proves it.

    paul
    Yet they are the only one offering such SLA. If somebody else can do it better, why can't they offer similar/better SLA. I always wonder about this.
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  35. #35
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    I had been looking at buying the InterNAP intelligent routing appliance instead of their own bandwidth mix, as they were asking $120+ per mbit/sec for it.and I could make the money back from their intelligent routing appliance in about 4 months at that pricing. I know there aren't quite as many providers, but they were good enough for me. I said this on another thread here and Art sent me an email basically calling me an idiot with no business sense for picking their intelligent routing device instead of there bandwidth. Well, I probably don't need to tell you this, but that lost them a customer...
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  36. #36
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    savvis' network performs better than internap across the board by the way,
    Please tell me you're not using Internet Health Report to come to that conclusion. Internet Health Report is pretty useless for comparing providers. Keynote even acknowledges this on their "About the Internet Health Report" page:

    "A Note on Comparison
    Please note that using the top-level grid to compare the internal performance of different backbones is problematic. Because we use existing Keynote Perspective agents to take these measurements, there is not necessarily an equal number of measurement points on each measured backbone. In addition, the absolute physical distance between agents varies widely between backbones. For example, consider comparing a backbone that has two agent locations on opposite coasts to one that has two agent locations on the east coast. The latter backbone will report shorter latencies simply because there is less distance between the agents."

    For Internap, Keynote only has agents at two locations--Seattle and Philadelphia, which is why Internap shows high intranetwork latency as the physical distance between their agents is far. Looking at Savvis, you'll notice they have agents that are geographically much closer (NYC, DC & Chicago), and they have no cross country routes. The distribution of the agents also works against Internap in the internetwork measurements. Seattle has no other agents, while the cities that Savvis has agents in all have agents from several other providers, and when you're computing a geometic mean using only a handful of numbers, having one of those agents located in the same town (and hence very low latency) is going to skew the results in your favor.

    We did a pretty fair amount of testing before choosing Internap for a recent hosted application project, including using Keynote to monitor the same reference page hosted at several different providers for about a month, and in my opinion they do deliver the goods. And yes, Savvis was in that mix.

  37. #37
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    I'm personally picking Savvis as I noticed the performance to basically be the same, the difference is, Savvis was a good deal cheaper. It wasn't cheap, but cheaper than InterNAP :-)
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  38. #38
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    Oops, at least when I was quoted, CW/Savvis was much higher priced than Internap, making me think it's quite useless to buy direct from CW.

    Karl, let me know if you have your "Internap-wanna-be" setup done. You might convince me to use your "Internap-wanna-be" solution and just toss away Internap for good.
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  39. #39
    Originally posted by FHDave
    ah come on ... is the banning really necessary? What about warning first? Which moderator is doing the banning, I wonder .... The banning thing is rather childish, IMO. Not even sure if that's objective. Can we even have a civilized discussion here. There might be some biting here and there, but that's normal. That's what makes discussions interesting ...

    and what name calling?

    And Blake .. sell me your $70/mbps Internap at 1 Mbps commit. I am signing right away! Sure you won't do it
    dave,

    you apparently missed the part where mr ackerman spammed each single thread in the colo forum trying to sell internap a month or so ago. he then got banned. recently, he decided to reregister and proceeded to do the same thing while also posting in this thread. his posts have been removed by the moderators, but he *was* violating rules against self-promotion, was doing so blatantly and across the board.

    paul
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  40. #40
    Originally posted by lockbull
    Please tell me you're not using Internet Health Report to come to that conclusion. Internet Health Report is pretty useless for comparing providers. Keynote even acknowledges this on their "About the Internet Health Report" page:
    thanks for the lecture. we do business with keynote, so i am familiar with how this works.


    "A Note on Comparison
    Please note that using the top-level grid to compare the internal performance of different backbones is problematic.
    keyword 'internal' and 'compare'.

    i was saying that internap was showing higher onnet latency than their SLA proscribes. no matter where the agents are, their SLA was broken.

    ie, right now ihr shows 66ms internap to internap. that is above the 65ms, afaik, that they promise for onnet.


    having one of those agents located in the same town (and hence very low latency) is going to skew the results in your favor.
    we are a direct savvis customer. i have personal experience with their performance that i can use to back up everything i said.


    We did a pretty fair amount of testing before choosing Internap for a recent hosted application project, including using Keynote to monitor the same reference page hosted at several different providers for about a month, and in my opinion they do deliver the goods. And yes, Savvis was in that mix.
    noone claimed intenap was bad. you made a perfectly good choice. i am more impressed with savvis, but ymmv.

    paul
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