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Free Business Consulting: NOT!

From Abdulsalam Ajetunmobi

Answered By Jim Dennis

Dear Sir,

I am a Computer Consultant based in London, United Kingdom. I am, in conjuction with two other partners, making enquiry on how to set up Internet Service as a busness outfit in line with the estbalished ones like AOL, Compuserve etc. Our operation will be based in Africa.

Could you kindly advise me of what it entails and the modality for such a business. I would like to know the required equipment, the expertise and possibly the cost.

Thanks for your co-operation.

Yours faithfully,
Abdulsalam Ajetunmobi

[JimD] The Linux Gazette Answer Gang is not a "Free Business Consulting" service. We volunteer our time and expertise to answer guestions that we feel are of interest to the Linux community.

It is true that Linux is ubiquitously used by ISPs as a major part of their network infrastructures. Actually FreeBSD might still have a bit of an edge over Linux. It's true that free UNIX implementations have grown to dominate the once mighty SunOS and Solaris foothold in that field.

Microsoft's NT gained some ground among ISP startups in the nineties; but lost most of that to their own instability, capacity limitations and pricing. NT at ISPs now exists primarily to support customers who demand access to Microsoft's proprietary FrontPage extensions or other proprietary protocol and service offerings.

So some might claim that your question is indirectly "about Linux." Of course that would be like saying that questions about setting up a new automotive dealership are "about automotive mechanics."

Here's my advice: if you don't know enough about the "modality" of the ISP business, if you have to ask us what setting up an Internet service entails, then you aren't qualified to start such a business.

First, the basic technical aspects of setting up an internet service should be obvious to anyone who as used the Internet. You need a persistent, reliable set of high speed and low latency connections to the Internet. (Duh!) You need some equipment (web servers, name servers, mail exchangers and hosts, routers, hubs, and some sort of administrative billing and customer management systems --- probably a database server). You need the technical expertise to manage this equipment and to deal with the vendors (mostly telcos; telephone service companies and other ISPs) that provide you with your Internet services.

Some elements that are non-obvious to casual Internet users are: ISPs are loosely arranged in tiers. Small, local ISPs connect to larger regions ISPs. Regional ISPs perform "peering" with one another and with larger, international ISPs. Some very large ISPs (like AOL/Compuserve and MSN, etc) get to charge hefty peering fees from smaller and intermediate ISPs. When you link up with "podunk.not" they often only have one connect to one "upstream" provider. A better "blueribbon.not" might have a couple of redundant POPs (points of presence) and a redundant links to a couple of upstream providers.

Now, the business requirements (for any business) depend on a detailed understanding of the business at hand. You have to know how to get the service or product on the "wholesale" side, possibly how to package and/or add value to that service or product, and how to re-sell it to your customers. If you don't know the difference between a third tier ISP and a backbone provider; you don't know enough to formulate a sensible business plan in that industry. If you don't have contacts in that industry and in your market segment within that industry then you should seriously ask what possible advantage you could have over your competitors.

(Don't start any business without an advantage. That makes no sense. If you don't truly believe in your advantage --- go work for someone who does have one).

Perhaps you think that you won't have any competitors in Africa; or that you have some business angle that none of them have. Great! Now go find and hire someone who knows that business in that market. Then you can do your own feasibility study to see if there are real opportunities there.

Keep in mind that you are likely to need professional contacts in the regional governments where you intend to operate. Throughout most of the "third world" there is quite a bit of overt corruption --- and outright graft is just a part of doing business in most places outside of the United States and western Europe. Don't get me wrong, I'm not saying that the governments and bureaucracies in Africa are more corrupt than those in the U.S. --- just that the corruption is more overt and the graft is more likely to be direct cash, rather than through the U.S. subtefuges of "campaign contributions" and various other subtleties.

Anyway, if you don't like my answer keep in mind that this question is basically not appropriate for this forum. Other readers will probably flame me and call me a racist for my comments about the customs in other countries. Oh well. I'll just drop those in /dev/null. (Rational refutations; pointing to credible comparisons or independent research would be interesting, though).

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Published in issue 67 of Linux Gazette June 2001

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