Doing Business with Atlantic.Net

Conventional wisdom dictates that independent ISP operators should do one thing and do it well. Atlantic.net says phooey to convention—we can do it all and we can do it well—if we just do it right.

by Patricia Fusco ISP-Planet Managing Editor [September 25, 2002]

Atlantic.Net is not your average service provider, even though it has very humble beginnings similar to many independent ISP operators. The fact is Atlantic.Net would never settle for being average at anything.

The company was founded in 1994 in Gainesville, Fla. Originally known as ICC Computers, a retail computer store, a pair of University of Florida students setup shop with the dream of someday financing their entry into the emerging Internet access market.

That dream came true and in 1995 when ICC Computers launched one of North Florida's first commercial Internet services. It provided connectivity for business, residents and students in the Gainesville area. The company quickly developed a reputation for quality and service that remains its core business philosophy today. At the time, its business mix was about 90 percent residential and 10 percent commercial, but this would change over time.

The dialup business was good, which means the company was cash flow positive, so ICC computers ceased retail operations in the spring of 1996 to focus on Internet access services. Later that year, ICC Computers made its first acquisition of a smaller competitor and began expanding its network across north Florida. Thirteen similar acquisitions have followed over the past eight years.

Evolving journey
In 1997 ICC Computers officially changed its name to Atlantic.Net and expanded its dialup services to Jacksonville and eight other Florida cities. Business was good and Atlantic.Net doubled its revenues two years in a row. In 1999 Atlantic.Net completed its tenth acquisition, which served as the basis for its new web design division, Atlantic.Net Studios. It also launched dialup services to 14 new cities in Florida, Mississippi, and Louisiana. Additionally, Atlantic.Net picked up its competitive local exchange carrier (CLEC) certification from the Florida Public Service Commission.

In 2000, Atlantic.Net launched services in Georgia and Alabama and became certified as a Cisco Powered Network—a watershed attained by only one percent of U.S. ISPs The company also made its first out of state acquisition, purchasing the assets of Duesouth Networks in Aiken, S.C. Atlantic.Net opened up a new call center and extended its customer service hours to 24/7 while it also added digital subscribe line (DSL) access to its service portfolio.

Besting adverse market conditions in 2001, Atlantic.Net added more than 40 individuals to its staff and continued to show a profit at year-end. The company also began offering its DSL services to multi-tenant units (MTUs) and consequently signed up with one of the nation's largest property management companies, Jones Lang LaSalle, to tap into the Orlando business market.

Awards and accolades
Atlantic.Net's focus shifted to expand its e-business services. The company launched a new corporate site and started bundling long distance services with its Internet service offerings. In addition, Atlantic.Net began offering nationwide dialup services. nationwide. In October 2001, Atlantic.Net was named to the Inc. 500 list of the nation's fastest-growing private companies for the second year in a row—moving up on the roster from number 350 to number 223.

Early in 2002 Atlantic.Net started offering nationwide long distance services. It also opened up a new office in Orlando. From 1998 through 2000, the company expanded its network across the southeastern U.S., filling up a trophy case full of entrepreneurial accolades along the way—Atlantic.Net was named to the Florida 100 for the fourth year in a row this year.

Today, Atlantic.Net is a national competitor in both the telecom and Internet services industries serving a 50-50 mix of residential and business clientele. The company's product line includes long distance DSL, ISDN, and dial-up services, as well as fractional T-1 through DS-3 leased line connectivity. It provides true private networks (as opposed to virtual private networks), along with secure e-commerce hosting and design services. Atlantic.Net, whose staff has grown to more than 100 employees, remains under the leadership of President and Chief Executive Officer Marty Puranik, one of ICC Computer's founders.

Core mission
In the heyday of ISP startups, it was common for ISPs operators to embrace an "IPO mentality." That is—open up an ISP business, build up a customer base quickly, and either sell it off or take the company public to turn a profit. Puranik said the company never embraced this type of get-rich-quick scheme, for Atlantic.Net he said it's always been about creating a value.

"Our core mission is really to create value for our customers," Puranik said. "We've always been technology agnostic and have adapted our business to meet changing market conditions. Basically, we've changed our services to provide what the market is buying."

A lot of ISP operators have mouthed the same philosophy over the years, but few have actually executed a simple, value-oriented business plan. Puranik provided an example of how Atlantic.Net flexed its service plan to create value out of daytime ISDN access.

"We sold dedicated ISDN access, but discovered that the traffic was light during the daytime and heavy during the evening hours," Puranik explained. "In order to encourage daytime use, we offered users a discounted daytime service bundle and created value in the service for a different type of user, as well as increasing our margins on ISDN service."

New efficiencies
Puranik is always working on making Atlantic.Net more efficient. As the company competes with Bell South, Sprint, and Verizon in its territory, efficiency is essential to its profitability. But for Puranik, competition is just another opportunity to create greater value in Atlantic.Net's services.

"Our competitors are very aggressive in our market," Puranik said. "We've found that if we show potential customers our value proposition they understand what they're getting from us is a way to get things done quickly and efficiently—not just paying so many dollars for so many services."

Having swung with the pendulum of market conditions—from rampant, double-digit growth to business closures and consolidation—Puranik's enthusiasm for the ISP business is refreshing.

"We were there before it was cool, there during for the bubble, and there post bubble," Puranik said. "All we've ever done is stick to our business plan and create value in our services for end users. Right now, we're doing it right and opportunities are great. We'd never consider getting out of the business right now."

Staying focused
Certainly the ISP market has changed, but for Puranik, change is just part another opportunity to adapt Atlantic.Net's business.

"Forget about regulatory issues and the high-speed versus dialup debates. There is greater opportunity to grow our business today than there was in 1999 because all of the irrational businesses with crazy business plans have left the market and things have stabilized," Puranik said.

"We're adapting how we deliver our services to the end user because the market has changed," Puranik continued. "Customers don't want to deal with the big guys because they're too slow. Customers don't want to deal with the little guys because they might not be around tomorrow. Customers want someone they can trust, someone that's been around, and someone that will be there tomorrow, and that's us—that's Atlantic.Net."

The fact that Puranik finds current market conditions an opportunity is just part of what Atlantic.Net is all about. While Atlantic.Net has always been a technology company, contrary to conventional wisdom the ISP never sold the technology behind its business. Atlantic.Net sold the value that the technology brings to its users. Puranik and Atlantic.Net should be doing the same for many years to come.

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