Corrections or additions?
This article by Melinda Sherwood was published in U.S. 1 Newspaper on August 18, 1999. All rights reserved.
Ready for Pre-Fab Networks?
The computer network is a business’s backbone, but
the hardware can be expensive, particularly for small operations.
A basic server and Internet connection may cost no more than $5,000
initially, but with a firewall device, software, and hiked-up monthly
charges, you could be spending close to $20,000 or more a year. If
the system goes haywire, it’s not long before you’re cursing the machinery
and spending thousands for a network doctor.
Nex-i.com, a start-up at 7 Wall Street, is offering its customers
a simpler concept in networking: the wall jack (http://www.nex-i.com). You simply plug into
a fiber optic line next to the computer and all of your networking
worries are whisked away to Nex-i.com’s site. The file server itself
is stowed away somewhere in your building where it is shared with
other tenants, but a Nex-i.com network manager configures the system
personally, and backs up data remotely. Everything — state-of-the-art
equipment, a constant T1 Internet connection, E-mail, 24-hour customer
support — is covered in your monthly bill.
The invisible network, says Ira Baseman, a former real estate lawyer
and CEO of this two-person start-up, is the next big service for the
rapidly expanding market of small businesses. "Everyone we talked
to is very anxious to just leave everything behind and focus on their
business," he says. Not only do you save not having to buy the
equipment, but you save on the frustration and expense of network
error and recovery. "The biggest mythology is that once you buy
the equipment it doesn’t cost anything to run," says Baseman,
"but the fact is the biggest expense is repairs and patches. It’s
somewhere between three and seven times the cost of the hardware."
For a 10 person office, Nex-i.com plug-in costs $100 per computer
per month, plus a one-time $1,000 installation charge. That includes
everything — from Internet access to a local server network, E-Mail
to 24-hour support. You can also get services like E-mail and Internet
a la carte if you prefer. Run your own network, Baseman says, and
you could pay $85,000 in a year. With Nex-i.com the price is a predictable
Nex-i.com has the potential of making many property managers happy,
too. Since customers eat the cost of installing the fiber lines, they
enhance the building’s value on the market. If a business is interested
in the service, Baseman will court the property managers and show
them how it works. "The whole smart building concept is also a
very important component of ours because we are benefiting the older
buildings that have not been able to compete with newer buildings,"
he say. Four different properties have signed-on for Nex-i.com plug-ins,
including two at Research Park and one at the building under construction
at 731 Alexander Road. Baseman is also talking to Palmer Square management.
Of course, if you happen to move into a building already wired by
Nex-i.com, it becomes the obvious choice for network outsourcing,
but without obligation. Baseman feels the competitive prices and state-of-the
art technology (Cisco Systems provides the hardware, and AT&T provides
the lines) will speak for itself. "The idea is to create a network
to deliver new services that are just coming on the market," he
says. Services like Voice Over IP and video teleconferencing, for
example, that need the basic framework that the lines provide. Then,
if Nex-i.com moves into the arena of Application Service Providers
(ASPs), which Baseman hints is likely, businesses could lease its
software as well.
Baseman and Michael Markulec, founding members of Nex-i.com,
are both first time entrepreneurs with a wealth of experience in their
respective fields. They are still pulling together a team of salespeople
and looking for network managers and are entirely self-funded, for
the moment. Baseman is in negotiations with investors.
Knowledge of the real estate market was obviously not lost on Baseman,
who holds a BS in political science and philosophy from George Washington
University, Class of 1984, as well as a law degree. He most recently
worked for Toll Brothers in acquisitions and operations, but he spent
his youth at the knee of a tireless entrepreneur — his father
— who was in to everything from skateboard manufacturing to used
"I always had desire on my part to branch out beyond the corporate
world and try something myself," he says. "My father is a
businessman and he’s had problems with computers, and I know from
the experience I had at Toll Brothers, the networking was always problem,"
says Baseman. "The model of distribution — that each company
has to go out and buy their hardware — it struck me as unnecessary
considering where we are with bandwidth. I don’t think it took a technical
background to realize that model may not be the right model."
Representatives of both Cisco systems and AT&T, who Baseman approached
nine months ago, liked the idea. "When I first pitched this to
AT&T they said this is something that is so obvious why didn’t we
do it," he says. Baseman met Markulec, an AT&T data networking
sales manager, while in negotiations with the communications company.
Trenton-born Markulec has a mechanical engineering degree from Norwich
University, Class of 1987, and spent five years in the military before
working in sales for a German company, Niehoff, and later in LAN and
system administration for the RE/COM Group in South Jersey.
"Because the real estate market has been slow to adopt technology,"
says Baseman, "the opportunity to go out and distribute services
to the real estate community is a brand new concept. Nobody is delivering
the bundle of services directly to the desktop. This is a model I
spent a considerable amount of time researching and putting together
and realizing that there will only a handful of vendors we wanted
to do business with. Cisco is leading network hardware supplier, and
AT&T deliver services over frame-relay/ATM backbone."
Nex-i.com may take some of the financial burden off of business owners,
but it means relinquishing control as well, putting the most vital
organs of their company in the hands of an outsider. But for the network
unsavvy, Nex-i.com offers something that you sometimes can’t put a
price tag on simplicity. "We’re demystifying the whole concept
of delivering a network," says Baseman. In other words, it’s
networking for dummies.
— Melinda Sherwood
Baseman, president. 609-497-9400; fax, 609-497-9400. Home page:
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