PSINet Sketches Out Strategic Direction For Next Century

PSINet Inc. is unveiling its strategic direction for the next century. PSINet plans to expand its Internet services by adding 15 hosting centres in 15 countries on four continents connected by a 3.2 terabit network.

Last month, PSINet announced several projects and agreements with other companies that will turn PSINet into what company officials describe as the world’s first “Internet Super Carrier.”

However, one telecommunications analyst suggested the announcement by PSINet is just hype.

“It’s PSI marketing hype and that’s what it really amounts to. [Internet Super Carrier] isn’t a term, they’re doing something in their announcing and making a big splash with the same strategy that several other companies have,” said Eric Paulak, research director with Gartner Group Inc. in Stockholm, Sweden.

PSINet’s strategy is no different than telecommunication companies such as MCI, GTE, BT/AT&T and ISPs Exodus or Equant, said Paulak. He maintained that PSINet’s current strategy is a result of the fact that the company was behind in Web hosting centres and services.

“Their strategy is one of, ‘Not only are we catching up, but we plan to surpass the market,'” he said.

“The difference is that PSINet has spent a lot more money, recently, in acquiring other ISPs and really what this announcement is about is the fact that all those acquisitions are being tied together and this is their strategy to do it,” Paulak said.

Paulak suggested PSINet is trying to position itself as an alternative to traditional telephone companies and doesn’t see itself as a mere ISP.

Bryan Boyd, vice-president of sales and marketing for PSINet Ltd. Canada, said his company does not see either the telephone companies or the current ISPs as real competition.

“The competition is not even present and this is why we’ve coined this new phrase the ‘Internet Super Carrier.’ If you look to the worldwide providers, we are the only one running 100 per cent pure IP over our own facilities-based network with this e-commerce capability, as well. I think you’ll find that other people can speak to a story but when it actually comes to having the goods you know that they’re not always present,” said Boyd.

Boyd pointed out that PSINet not only owns its own fibre network, which Exodus doesn’t have, but also has its own facilities.

“They have their own network to tie them [hosting centres] all together, which, ultimately we think is an advantage,” Paulak agreed.

But Paulak questioned the need for so many Web hosting centres and suggested there is only a marginal performance advantage to having multiple data centres.

“For the most part you don’t need to have twenty-one data centres from a network performance perspective, but customers have demanded it. The idea is not so much that I know my data is fine whether it’s 1,000 miles from here or 20 miles from here, but companies want their data centre where they are hosting their Web sites and applications to be nearby,” he aid.

Boyd conceded the need for more data centres was to meet customer needs and expectations. “In terms of the customer benefit to regional data centres the network traffic is still to some extent regional. People may from time to time require a need to visit their server in the data centre, so the fact that we are deploying these around the world is of tremendous benefit in those two measures,” he said.