What's RPG to You or Me?

Telephony software supplier RingCentral has bundled a collection of value-added services into what the company calls the RPG Platform. It is no grenade, but may generate explosive revenue growth in the hands of the right service provider.

by Ted Stevenson ISP-Planet Executive Editor [October 21, 2002]

When ISP people with development or programming backgrounds hear the term "RPG," they may well think of IBM's "Report Program Generator" (while those in the military might think of rocket propelled grenades and computer gamers will imagine role playing games). RingCentral, Inc. is throwing its own RPG into the acronym ring.

Today, the telecom services vendor announced its new "Revenue, Profit, Growth Platform" (RPG Platform) consisting of a variety of value-added services the company believes will help ISPs and CLECs reduce churn in their customer bases and make more money.

This is nothing new, of course. Value-added services is a genre of technologies and business ideas on which ISP-Planet has been reporting since its launch in 1999. In theory, it makes perfect sense for service providers to offer enhancements to the basic product (Internet connections) and increase average revenue per customer. In practice, at least so far, we're not aware of any add-on programs that have caught on in a big way with ISPs.

Clearly, RingCentral believes that the moment is now ripe for success. So, what exactly is the company offering?

The sum of its parts
The RPG Platform comprises a collection of services that are related to each other in varying degrees.

At the top of the list is BuzMe, an Internet Call Waiting (ICW) application that, according to RingCentral, boasts a lower price and richer features than its high-profile competitor CallAlert, an add-on component for AOL 8. An enhanced version, BuzMe Plus, includes some fax-management functionality.

Obviously, BuzMe is aimed at dial-up users with one phone line, still a huge market. According to RingCentral president Jay Ward, it represents about 84 percent of all Internet subscribers.

BuzMe is available in a number of plans, including provider-branded mode, suitable for high-volume ISPs, as well as 'partner' or pass-through mode, suitable for smaller providers.

800-Works Unified Messaging is aimed at a very different audience, professionals and small to midsize businesses with broadband Internet connections. It is a bundle of telecom enhancements designed to streamline the day-to-day communications needs of business people. At the core (as the name suggests) is a private 800 number, bundled with rich fax, voice-mail, call routing, and message notification features.Ward pointed out that for certain types of businesses, which rely heavily on fax for moving data, such as real estate, loan processing, and certain medical applications, for example, the cost-free inbound faxing is a huge plus.

While 800-Works is also supported by some PC-based controls and notification functions (e.g., Caller ID), the service set is PSTN-based. With quite a number of options and service plans, pricing varies widely. As with the ICW, however, Ward maintains that the RingCentral service package has a substantial price advantage over comparable services from primary competitor I-Link (see discusion below for specific comparisons).

For customers interested in PC-based faxing, RingCentral offers Internet Fax and Fax-to-E-mail. Here, the primary competitor is eFax, and, again, Ward maintains that his product provides superior features at a lower price.

Internet voice mail, while included in 800-Works, is available separately as well. The product allows customers to retrieve messages from any phone or Internet connection.

The final component of RPG, v.92 consulting services, is only marginally related to those described above, but may be of interest to ISPs interested in implementing v.92 programs who lack the technical resources to go it alone.

The cost factor
RingCentral is clearly relying on a pricing advantage to ensure the success of the RPG Platform. In its public relations, the company has drawn a bead on specific competitors to validate the advantage.

As mentioned, for the BuzMe product, the company points to AOL and its Call Alert add-on (priced at $3.95 per month) as its touchstone of value. Basic BuzMe is priced so that end-users are looking at a $2.95 addition to their basic connectivity bill, with some margin left over for the provider.

The 800-Works product, depending on specific options chosen, ranges from an end-user cost of $9.95 to $25.95 per month. According to Ward, I-Link, which he characterizes as the program's main competitor, charges a minimum of $50 per month. Ward also maintains that, depending on specifics, providers will realize margins of 30 to 50 percent on these sales.

Finally, outbound faxing, available as an option with 800-Works or Internet Fax products, costs 5.9 cents per minute. Competitor eFax charges 10 cents per minute, according to Ward.

Ward also pointed out that RingCentral, built on a robust application service provider (ASP) model, provides quick, pain-free implementation, and stands ready to handle back-end services, such as billing, as needed.

Is this the time for your ISP or CLEC to give serious thought to value-added services? Check RingCentral's RPG Platform website for additional information.

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