Traditionally, landlords for commercial properties and multifamily developments would bring in a third-party internet service provider to ensure tenants were connected to the digital world. However, a Norwalk-headquartered company called Aditum is shaking things up by enabling the landlord or property manager to provide tenants with different tiers of internet service while monetizing the connection previously serviced by the third-party providers.
In this edition of Suite Talk, Business Journal Senior Enterprise Editor Phil Hall meets with Aditum founder and CEO Brian Higgins to discuss this distinctive approach to commercial property internet service.
When did Aditum begin and why did it begin?
“I helped found and launch a company called Four Point Networks, which was a regional internet service provider started around 2004. By the time we sold the company by the beginning of 2009, we were covering about 2,500 square miles of the state of Indiana with high-speed broadband. We were the first broadband provider to reach a lot of those communities that we got into. We were switching a lot of households and small businesses off dial-up, even as late as 2009, which is hard to believe.
“After moving to Connecticut, I started running into office buildings with really bad internet options. As a consultant, I would come in and help those buildings deploy small-building ISPs. We”™d bring in bulk fiber and split the costs between all of the companies in the building. This helped them afford good internet because a small business cannot afford $1,000 or $2,000 a month on internet connections.
“After doing that for various projects, I kind of got a reputation for that and people started coming to me and asking if they could do this. One thing led to another, and in 2014 I decided to launch Aditum as a national product.”
Where are your installations?
“The majority of the installations are all west of the Mississippi.”
Why is that?
“I really don”™t have a good answer on that. If I could pinpoint the answer, I”™d probably have a lot more installations on this side of the country. My best theory is that central U.S. margins are tighter, people need to be more inventive with finding revenue. In the western U.S., people are more innovative and forward thinking and open to change.
“We have resellers in about 25 states and several dozen deployments. Some of that is complicated to put a hard number on, because it is not unusual for one of our resellers to oversize service to one building and then connect to other buildings off that service, offering it as a separate service to that property. Thus, in our system, we see one building but, in reality, it could be five buildings using that service.”
How do you differ from other internet service providers?
“It is quite different. Frontier, Comcast, Optimum, and all of the standard consumer providers are doing a widescale best-effort service, so you have low-quality connections coming into your house or business. That connection is not guaranteed in any way, shape or form. There is no assurance it is even going to work marginally and you hope if something goes down that they respond to it in a nonpainful amount of time.
“What we”™re doing is enabling buildings to bring in dedicated fiber that can have 99.99% or better uptime guarantees, four-hour resolutions for problems and proactive monitoring on the connections. So, if a fiber cut happens or a pole gets taken down, they”™re going to have an engineer working on and fixing the problem and not some guy in a call center somewhere in the world telling you to please reboot it.
“Once the connectivity to the building is established, that”™s where we come in. We take that bulk connection and use the same methods and principles that we used with Four Point, covering thousands of square miles and thousands of people and distribute that bandwidth over very reliable infrastructure in the building. Then it is ethernet switches. All of the magic happens between the core router that sits between the infrastructure and the fiber, and all of that is controlled through our web interface that automates the entire network”™s engineering side of things.
“So, you can have a very low-level help desk tech who is trained in doing everything and not need high-salaried network engineers to do this. They just go in there and click a few buttons and say, ”˜Alright, Unit 13 gets 20 megabits per second and Unit 15 gets 100 megabits a second.”™ ”
It seems very effective from a high-tech viewpoint, but is it cost-effective?
“There are three main costs that go into the system and the biggest by far is the fiber or bulk internet to the property. You bring in that bulk connection to the building and we take that cost and divide it by the number of units in the building. If you have a connection that is $1,000 a month and you have 20 units in the building, you take that $1,000 and divide it by 20 and that is your base cost that you have to recoup.
“The two other costs involved are our service fee, which goes to our reseller, and whatever the reseller is charging for the installation and support of our system, which the building owner will see as a combined fee. The building owner can offer internet at a discount relative to what the tenant was going to pay, while making a profit and offering a higher quality service.”
Who is your competition?
“There are two types of competition for us. The first is the building owner that does nothing and says, Comcast, Verizon, AT&T, etc., come in and offer my residents service. If that building owner is lucky, they get a tiny commission.
“The second competition is hiring an engineer and figuring out how to do it yourself. More often than not, companies that try to do it themselves don”™t have either the budget or the expertise to do it the right way. And it is very easy to do it wrong and not notice it.
“A lot of people think their internet works because they can open their email. But there are so many other things going on, from bandwidth management to tenant segregation and isolation. And there are the federal requirements. If you are providing internet service, you must have the ability to comply with a federal wiretap warrant. And most people who can cobble together something that sort of works do not have a way of addressing that requirement, but we have that built into the back end.”
What type of commercial properties can use your service? Would it range from a small strip mall to the Empire State Building?
“The driving factor is the cost and availability of the bandwidth. Technically, any building that has more than two tenants would be a potential fit. In practical terms, the cost of the bandwidth typically has a minimum cost for delivery for any kind of connection that makes deployments under 15 units very difficult to do properly.
“There are some of our partners that will deploy a different type of internet service into a building, such as a cable modem, and from a technical standpoint there isn”™t anything wrong with that. And on the higher end, the Empire State Building would be an ideal deployment ”” and we actually had a reseller pitch to them. We”™re waiting to hear back.”
