What a connection!Founded in 1991 as a dial-up service to computer bulletin boards, Concentric Network Corporation now specializes in providing high-speed DSL Internet access, web hosting, e-commerce, and Virtual Private Network services to both large corporations and smaller businesses. It was that customer base that enticed Nextlink Communications, a McLean, VA-based telephone carrier, to purchase Concentric in June 2000 for $2.9 billion.
A speedy connection
The San Jose, CA-based Concentric, which had also in the past focused on online gambling and entertainment services, now focuses on cost-effective e-business strategies and web solutions to companies worldwide. Virtual Private Networks enable Concentric customers to create private dial-up networks with greater flexibility and security than transmitting information over the Internet. In July 1998, the company introduced Virtual Development Environment (VDE), which provides continuous uninterrupted performances from commercial servers even if a company/client runs a particularly large application.
NEXTLINK and Concentric introduced "Generation Next," a new bundle of Internet services, in 2000. This first product of the union offers businesses Internet access, web site hosting with e-commerce service, and local and long distance phone service. NEXTLINK's fiber optic network is free of congestion, since the pipes running from the home or office is not shared, as they are for cable or other DSL connections to the Internet.
Among its many offerings, Concentric has a new Internet service platform. Concentric Metra is the company's first integrated platform for Internet services ordering and management. The company also sees Metra as its means for grabbing a larger piece of the ASP market.
Concentric has strategic partnerships with about 40 companies, including Microsoft, Nortel Networks, SBC Communications, and Telecom Italia to offer an array of Internet, VPN, and telecommunications services. Its current customer roster includes MasterCard, Bloomberg, and First Data Corporation.
Concentric recently expanded into Asia, becoming the supplier of global transit access services to a Korean ISP. This alliance provides Concentric with an inroad to the heart of the expanding Asian market.
Hungry Concentric
Before being acquired itself, Concentric had been acquiring companies over the past few years in order to expand its market share and menu of services. In 1998, the company acquired InterNex, DeltaNet, and AnaServe; in 1999, it purchased Internet host 9 Net Avenue and the U.K.-based Internet Technology Group. A lawsuit brought in 2000 against 9 Net Avenue and Concentric accused the company of illegally sending unsolicited faxes. This issue has yet to be resolved.
Despite rapid expansion and numerous acquisitions, Concentric has never seen a profit in its nine-year history. Still, company officials and market analysts see potential. In September 1999, Deloitte & Touche named Concentric No. 6 in its Fast 50 list, a ranking of the 50 fastest-growing tech companies in Silicon Valley.
