Internet Communications Service Provider



BUSINESS PLAN     APPIAN WAY COMMUNICATIONS NETWORK, LTD.


119 Melton Boulevard
Houston, Texas 77032


Appian Way Communications Network is a rapidly growing ISP and systems integrator which intends to become a leader in providing businesses, educational institutions, and governmental organizations with high-quality, cost-effective business solutions. Specifically, it helps customers take full advantage of the Internet without having to develop and maintain their own Internet technology, or hire and retain an extensive Internet staff. This business plan raised over $2 million for the company, and was successful for getting its sales up to $16 million in less than 2 years.


INTRODUCTION

Appian Way Communications Network is a rapidly growing ISP and systems integrator that targets middle-market businesses, educational institutions, the hospitality industry, and government organizations.

Our primary services include:

We believe our growth and success in serving our target customer base is the direct result of our competitive strengths, including:

INDUSTRY BACKGROUND & OPPORTUNITY

The Internet was originally conceived as a communications tool to be used by a limited number of researchers and academics. Today, it has escalated into a web of approximately 70 million interconnected users. The Internet has evolved from a static, text-based medium to a graphically rich communications infrastructure. The creation and rapid development of the desktop computer simplified access to the Internet, encouraging consumers to seek information through this new medium.

As the breadth of the information expanded, the Internet's applications and users grew as well. Businesses began investigating the potential of the Internet to reach the growing volume of customers on the Internet. To capture this emerging customer base, businesses needed a presence on the Internet and applications to facilitate electronic commerce.

The Internet Infrastructure

The Internet has emerged as a significant global business communications medium, enabling millions of people to communicate, publish and retrieve information, and conduct business electronically. A multi-tiered system of local, regional, and national ISPs has evolved to provide access to the Internet, transport data and, more recently, to provide value-added Internet services. ISPs exchange data in packets generated by their customers through direct or indirect connections with other ISPs. To meet the needs of ISPs to exchange data at centralized points, large ISPs have established a series of central Internet exchanges, which facilitate the transmission of data.

Despite the relatively centralized nature of these exchange points, data traveling across the Internet often makes multiple connections or "hops" through a variety of local, regional, and national ISPs, as it moves from the originating site, through a central exchange point, and to its final destination. While these centralized points have the advantage of having dozens of ISPs interconnected and exchanging Internet data, they increasingly face congestion problems that cause significantly longer response times for a user.

In addition, because data traveling across the Internet must often make connections through multiple ISPs, the failure of a single ISP's Internet connection can interrupt a user's Internet transmission. Many ISPs have sought to improve data transmission reliability and speed by establishing private "peering connections" and network access points. This permits the ISPs to directly exchange Internet traffic while reducing the number of hops in their Internet connection and avoiding the often congested major Internet exchanges.

The Growth of the Internet

The Internet has experienced tremendous growth and has become a global medium for communications and commerce. According to International Data Corporation (or IDC) the ISP market in the United States reached $10.7 billion in 1998, representing a 43 percent increase over 1997 revenues. Business-related Internet operations generated approximately $2.9 billion of the $10.7 billion aggregate 1998 ISP revenue. Moreover, IDC predicts revenues generated by business-related ISPs will increase by 75.9 percent to $5.1 billion in 1999 and reach $12 billion by 2003, growing at a compound annual growth rate of 32.5 percent from 1998 to 2003. In addition, IDC estimates that the total value of goods and services purchased over the Internet will increase from $50.5 billion in 1998 to approximately $734 billion by the end of 2002.

Trends contributing to the growth of the business-related Internet market include:

The demand generated by these new dynamics, combined with business customers' high quality service requirements, has fueled the growth of dedicated access connections and other Internet-related products and services for businesses.

Web Hosting and Co-Location

To realize the opportunities of the Internet, companies must develop an attractive Internet presence using a website that is easily accessible to potential customers. However, rapid Internet and technology growth have outpaced the ability of many businesses to develop the necessary internal information technology knowledge and tools.

A variety of companies, including web hosting companies and ISPs, have begun to focus on providing Internet co-location and other web-related services to their customers. Typically, companies offering these services build networks of numerous geographically dispersed data centers to be physically close to their customers. This reduces the cost of the services and the risk of transmission delay and data loss as data travels through multiple network connections. According to IDC, corporate Internet access and value-added services, such as web hosting and co-location, are the fastest-growing services offered by ISPs. Corporate access revenue and value-added services revenue were $5.9 billion in 1998 and are expected to grow to approximately $25 billion by 2003.

The Trend Toward Outsourcing of Internet Operations

Many businesses lack the resources and expertise to cost-effectively develop, maintain, and continually upgrade their network facilities and systems. Also, individuals with the expertise to establish and maintain sophisticated Internet technology are in great demand and their services are costly. Furthermore, businesses often find it difficult to keep up with new technologies and to integrate them into their infrastructure. Even if enterprises possess the necessary resources to accomplish these tasks, we believe that they often determine that this ongoing and significant investment in their own Internet technology and personnel is an inefficient use of their overall resources. Consequently, many enterprises are seeking outsourcing arrangements for their Internet needs. These arrangements allow enterprises to focus on their core operations, enhance the reliability and performance of their websites and reduce their Internet-related operating expenses.

The Convergence of Services in the Communications Industry

The traditional divisions within the communications industry are disappearing due to new regulations, customer demand, and technology evolution. Regulatory changes in the United States and around the world have opened the communications industry to increased competition. In particular, the Telecommunications Act of 1996 provides for comprehensive reform of telecommunications laws in the United States and is designed to foster competition in the local telecommunications marketplace.

With greater competition in the communications industry, customers have increasingly demanded that communications providers offer multiple services at lower prices. These services may include local and long-distance calling, wireless, Internet access, and high-speed dedicated lines. Also included are ancillary services such as single bill presentment, call forwarding, caller identification, voicemail, and similar services.

We believe that these integrated providers will increase efficiency in the deployment of communications services by selling multiple services in bundles over a single connection.

Enhancements in switching technologies are beginning to permit the delivery of numerous services over a single network, offering cost savings over traditional networks which were designed to deliver a limited number of services. We believe that as competition increases, providers who offer a range of services in a cost-effective manner will be best positioned to capitalize on the convergence of services within the communications industry. These providers will offer a well-designed package of services they can tailor to satisfy each customer's needs.

THE APPIAN WAY COMMUNICATIONS NETWORK STRATEGY

We intend to become a leader in providing businesses, educational institutions, and governmental organizations with high quality, cost-effective business solutions that will allow our customers to take advantage of the Internet without having to develop and maintain their own Internet technology and hire and retain an extensive Internet staff. To achieve this objective, we intend to continue to rely on the following core elements of our business strategy:

Providing Highly Reliable Internet Access

We intend to continue increasing the capacity, fault-tolerance, and geographic reach of our network to support customer growth. Our network is designed to respond quickly, be secure, and provide continuous availability to our clients. We can deliver our services to customers throughout the world from our Chicago data center. We connect our customers' Internet traffic to four very large ISPs who provide access to the central Internet exchanges. Our innovative network architecture often permits our customers' Internet traffic to bypass congested points on the Internet and avoid breakdowns at the Internet exchanges, which increases the speed and reliability of their Internet connection. We proactively manage and monitor traffic on the Internet and reroute traffic to provide high quality access.

Increasing the Percentage of Our Revenues from Value-Added Data Center Services

We intend to generate a higher percentage of our revenues from our value-added data center services, which typically provide higher margins than our Internet access services. We believe that value-added services are among the fastest-growing segments of the Internet marketplace. Our data center services provide a variety of options to our customers, and we work with their management and information technology teams to analyze their varied Internet service needs and choose the option that best addresses those needs.

We have offered our co-location services since September 1996, and as of December 1, 1999, we had 36 co-location customers. We have offered our managed application hosting services since September 1999, and, as of December 1, 1999, had six managed application hosting customers. We intend to emphasize our managed application hosting business in our marketing, and we have allocated greater resources to developing these services.

Targeting Middle Market Business, Educational, and Governmental Customers

The Internet service needs of middle market businesses, educational institutions, and governmental organizations differ significantly from those of the typical individual consumer because Internet access and related services are often critical to enterprise customers' businesses. They demand dedicated, high-speed Internet access and knowledgeable, prompt and responsive customer support. When marketing our services, we focus on creating the best solution to meet our customers' needs and not simply promoting our technology. Compared to individual consumers, enterprise customers are usually less price sensitive and more willing to pay a premium for custom solutions that meet their needs. As a result, we believe that providing services to enterprise customers generates greater revenues and higher margins per customer than servicing individual consumers.

Providing Superior Customer Support by Network Experts

Enterprise customers seeking broader access to the Internet increasingly face significant technological challenges, in part because the Internet is an evolving and rapidly growing medium. In addition, as new and more complex applications for the Internet are developed, we believe that even sophisticated users will increasingly encounter problems. Unlike many other ISPs who outsource their technical support to independent call centers, the Appian Way Communications Network, Ltd., professionals who implemented our network are among those who respond to and resolve customer inquiries and problems. We intend to continue providing superior customer support by hiring only customer support personnel who can demonstrate the ability to understand and manage our network. We believe that our strong emphasis on the superior customer support provided by our network experts has resulted in a high level of customer satisfaction and significant subscriber growth from customer referrals.

GROWTH STRATEGIES

We intend to further develop our business by focusing on the core elements of our business strategy discussed above and pursuing the following key growth strategies:

Expanding Our Network Nationally and Internationally

We intend to build more data centers and POPs in the United States and pursue international opportunities. We believe that having a number of widely distributed and networked data centers and POPs improves network performance and reliability. We intend to add data centers in the following metropolitan areas by the end of 2000: Washington, D.C., Houston, San Francisco, Cincinnati, New York, Seattle and Miami. We intend to establish data centers in Las Vegas and Paris by the end of the first quarter of 2001.

Before purchasing or leasing a new data center, we will evaluate the market opportunity in the proposed location by analyzing Internet usage statistics and specific economic criteria as well as pre-selling our services in that market. For any given location we expect to require at least six months to select the appropriate site, construct or acquire the necessary facilities, install equipment, and hire the operations and sales personnel needed to conduct business at the site. We have already identified suitable sites for some of our proposed data center locations. We also intend to supplement the data center expansion by establishing POPs throughout the United States and at various international sites to aggregate and transport traffic to and from our planned data centers.

Broadening Our Marketing Activities

We intend to expand our marketing efforts to increase our customer base. We also intend to increase market awareness of our name and our commitment to reliable service and superior customer support. Therefore, while continuing to encourage referrals from existing customers, we are increasing print publication, radio, outdoor, and direct mail advertising and telemarketing in targeted metropolitan areas.

Pursuing Strategic Sales and Distribution Alliances

We are pursuing strategic sales and distribution alliances in markets where there are substantial opportunities to attract new customers. We believe that establishing relationships with businesses that provide products and services which complement our service offerings will permit us to use their expertise and market access, while lowering our costs of entering new markets. These relationships will also give us additional customer referrals and new solutions to offer existing customers.

For example, we currently obtain customer referrals through our Valued Internet Partner, or VIP program, in which we pay our partners a fee for referring new customers who ultimately purchase our services. We will also pursue strategic alliances with value-added resellers or other authorized partners through our Appian Way Affiliate Partner (or AWAP) program, which permits others to resell our services directly to customers in specified markets. We intend to further expand our customer base by establishing additional distribution relationships with network integrators, value-added resellers, system vendors, consulting companies, and other ISPs.

Engaging in Strategic Acquisitions

We will continue to consider acquisitions of strategically located operations and customer lists and associated customer accounts. In addition, we may consider acquisitions of businesses, including other ISPs, with complementary products, services, or technologies. We may also consider acquisitions that can provide personnel who augment our team of network experts.

Eventually Becoming an Integrated Communications Provider, Offering Both Voice and Data Services

We plan to pursue a long-term strategy of providing a complete portfolio of voice and data communications services. To achieve our goal, we plan to become a competitive local exchange carrier, or CLEC, which would permit us to provide voice and other data services to complement our current services. We believe that technology advancements and customer preferences are driving the convergence of communications services toward service providers who can offer multiple communication services through a single network. We also believe that to remain competitive in the face of these changes, we must eventually become a single-source provider of voice and data communications services.

SERVICES

We create tailored solutions for our customers based on their business and technical requirements, modifying these solutions as our customers' needs evolve. Unlike many other ISPs that outsource their technical support to independent call centers, our highly reliable services are supported by our knowledgeable and responsive network experts, some of whom are the same professionals that implemented our network.

Our primary services include dedicated Internet access, co-location services, and managed application hosting. We also offer web hosting, e-mail services, and domain name services.

Our customer contracts require us to provide our services for a one-year, two-year, or three-year term and contain, among other things, a limited service level warranty related to the continuous availability of service on a 24-hours-per-day, seven-days-per-week basis, except for scheduled maintenance periods. This warranty provides a credit for free service for disruptions in our Internet access services. At the end of the term of a contract, a customer may elect to extend the contract's term on a month-to-month basis. Any change or upgrade in service, however, typically requires a new contract for a new term.

Internet Access

Our Internet access services are designed to deliver the ease of expansion, high availability, and performance required by moderate to high volume Internet operations that are central to a customer's business.

Co-location

Through our co-location services, we provide secure space to house customer-owned Internet equipment. Based upon their business and technical requirements, customers may select from shared cabinet facilities, exclusive cabinets, or custom-built rooms with additional security features. All co-location facilities include dedicated electrical power circuits to ensure that we meet each customer's power requirements. Because the Internet operations of our co-location customers frequently require hardware and software upgrades, we give customers unlimited but secure access to their leased co-location space. Additional space, electrical power, and Internet services can be tailored to meet our customers' needs.

Our Trenton, New Jersey, data center houses the computers that operate the core functions of our business, including communications equipment, data storage and retrieval systems, security software and hardware, and related customer support. Our data center provides customers with a secure, climate-controlled facility that they cannot readily or inexpensively create at their own place of business. The data center contains:

We offer the following co-location services:

We intend to open new data centers in Washington, D.C., Houston, San Francisco, Cincinnati, New York, Seattle and Miami before the end of 2000. We believe our data centers will be an important factor in attracting customers and marketing our data center services.

Managed Application Hosting

Our managed application hosting service, which we first introduced in September 1999, provides a server for the customer's exclusive use to install any software application the customer chooses. In addition, we will provide all required maintenance on the server hardware. This service, which is similar to the services being offered by computer service providers (CSPs) is targeted to businesses with high volumes of Internet traffic and with Internet-based applications and web services that are extremely important to their daily operations.

Unlike typical web hosting operations that host multiple customers' websites on a single server, we provide our managed application hosting services with only one customer per server. As a result, a customer need not be concerned about how its actions or applications might impact other customers' applications housed on the same server, or how its server might be affected by other customers' actions or applications.

Our managed application hosting services offer a suite of applications from leading software vendors that is designed to meet the Internet operations needs of middle market companies. We also offer proprietary e-commerce and web development software as additional options for our managed application customers. We presently offer these software products only in conjunction with our managed application hosting services. We implement the applications selected by the customer in our data center, configure them to meet the needs of the customer, and package them with a server, security, Internet access, back-up, and operational support. A customer may also use software applications it obtains from others on the server we provide to the customer in our data center.

Our managed application hosting services are compatible with the products of many leading hardware and software system vendors, including Cobalt Networks, VA Linux Systems, Hewlett-Packard Company, Sun Microsystems, Silicon Graphics, Microsoft Corporation, and Macromedia Corporation. This multi-vendor flexibility enables our customers to select their own technical solutions and to integrate their Internet operations with their existing information technology. We offer our customers four different levels of managed application hosting service that range from simple to comprehensive solutions, each of which can be tailored to meet the specific needs of a given customer. In addition, our customers can augment their services with hardware or software that we provide or software that they purchase directly from others.

The Portable, Instant Internet

Ever think about using the Internet "on the fly" to look up information or send a quick e-mail? How many times have you not gone online because of the inconvenience of sitting down at your PC, turning it on, waiting for it to boot, clicking on an ISP icon, and waiting again for your modem to dial in and connect?

But imagine simply picking up a device the size of a clipboard, switching it on, and being instantly online from the comfort of your couch, kitchen table, or backyard lounge chair. What if you could access the Internet when you wanted, where you wanted, without using a PC or an appliance that competes with your TV program?

A Powerful Concept for Portable Access

Using the National Semiconductor GEODE™, Appian Way Communications Network has developed AXCESS-NOW™, a working prototype for a powerful, convenient Internet access device that can make web browsing as easy as using the telephone. AXCESS-NOW™ will allow you to tap into the vast universe of information available on the Internet, wherever you are in and around the house.

For example, if you're in the kitchen, use AXCESS-NOW™ to find a great dinner recipe online in minutes. If you're working on your car and need to know the answer to a diagnostic problem, get online with AXCESS-NOW™ right in your garage. If you're watching baseball and want to compare stats or find out more about the team, AXCESS-NOW™ can connect you to the Internet quickly and conveniently.

AXCESS-NOW™ isn't designed to replace conventional PCs as a productivity tool. Rather, it complements the PC as a single-application device, making it more convenient for Internet users to send or receive e-mail, chat, or browse websites instantly. Its portability and ease of use delivers the ultimate Internet experience.

Design Features for Single Application Use

Appian Way Communications Network is providing AXCESS-NOW™ to its customers by designing specific applications and developing their own Internet access devices with a variety of features and connection options.

AXCESS-NOW™ employs sophisticated wireless (radio frequency) data transmission technology to make it a truly mobile device, providing convenience similar to that of a cordless telephone. As an example an AXCESS-NOW™ could be 1.3 pounds, 6" x 9" featuring an LCD touchscreen supporting high-resolution graphics. Additionally, it comes with a stylus, enabling users to navigate the web using AXCESS-NOW's touchscreen technology.

AXCESS-NOW™ is completely integrated and sealed: There are no internal parts that can be upgraded, added, or removed, and there is no software to load. It's designed with dual Universal System Bus (USB) ports to add peripheral options such as a keyboard, mouse, printer, or gaming input device. While there are no disk or floppy drives, and no PC Card slots, the design would support these items if a customer application needed to feature them.

The AXCESS-NOW™ design includes three components: The AXCESS-NOW™ mobile display tablet, the charging unit, and a base station transceiver that can be plugged into any power outlet near an RJ-11 telephone jack. Depending upon how clients choose a solution, it could use a coaxial cable Internet connection as well. The design can support DSL and ISDN as well as cable and legacy 56K interconnect protocols, and it is Ethernet network ready. Eventually, pending availability of such services, "persistent" or instant-on service similar to cable television will be available, enabling users to pick up AXCESS-NOW™ and turn it on with instant, no dial-up access.

The transceiver base station, which delivers the Internet data via RF signals to the hand-held AXCESS-NOW™ unit, can be tucked out of sight or placed among other home entertainment system components. The charging unit is an inconspicuous desktop cradle similar to those that come with cordless telephones.

AXCESS-NOW™ is designed to carry a charge for up to six hours, with 20 hours of standby (out of cradle) power. It has a range of up to 500 feet from the base station, allowing freedom of mobility throughout a house, office, or even the immediate neighborhood. It will provide the Internet access of a PC in a product as portable and easy to use as a cordless phone.

Making Information Access Available

There are still variables that will determine when such a device will find favor in a vast numbers of homes and offices around the U.S. For example, one factor in mass-market acceptance of AXCESS-NOW™ devices is the maturation of the telecom and datacom industry infrastructures to support persistent Internet connections.

But with the acceptance of devices such as the VCR, the cellular telephone, and compact disc/DVD players, the industry won't be far behind in providing the technology infrastructure necessary to make AXCESS-NOW™ a reality. And in time, these and other technological improvements will likely bring the cost of AXCESS-NOW™ devices into a comfortable price range for consumers. Similarly, Internet services are very likely to evolve into either cable- or telephone-based access standards that will make persistent Internet connections possible.

CUSTOMERS

Most of our customers are middle-market businesses, educational institutions, independent hotels or chains, and governmental organizations, but our customer base also includes other ISPs and several larger companies. The Internet service needs of our target customers differ significantly from those of typical individual consumers. Enterprises often view their Internet access and related services as critical to their business. They demand dedicated, high-speed Internet access and knowledgeable, prompt and often highly technical customer support.

When marketing our services, we focus on creating the best solutions to meet our customers' needs and not simply promoting our technology. We work with our customers' management and information technology teams to analyze their Internet needs and create solutions to specifically address those needs. Compared to individual consumers, enterprise customers are usually less price sensitive and more willing to pay a premium for creative solutions crafted to meet their needs. As a result, we believe that providing Internet services to enterprise customers generates greater revenues and higher margins per customer than servicing individual consumers.

As of September 1, 1999, we had 250 customers. We provide service to a number of enterprises, including:

SALES AND MARKETING

We sell our services through a consultative approach developed by our management team based on their cumulative business experience. We use local technology-oriented sales personnel to understand individual customer needs and make the proper recommendations regarding tailored Internet-based solutions. The local field sales staff is supported by our in-house tele-sales staff based at our corporate headquarters in Chicago.

We refer to our employees who use the telephone to directly market and sell our services as our tele-sales staff. We use our tele-sales staff or our CAP partners, discussed below, to complete sales to smaller customers and to target customers in markets where we do not have field sales staff. In addition, we hire independent telemarketing firms to generate business leads. To support our sales efforts, we have also begun a new advertising and media campaign to build awareness of our name and quality of service. We intend to expand our field sales force, further develop our indirect distribution channels, and use telemarketing firms to increase sales leads and grow our customer base.

Field Sales

Our field sales force consists of technically competent, locally based, and experienced Internet sales representatives. These individuals have strong Internet technical backgrounds and understand the local telecommunications tariffs as well as the needs of their local business communities. In general, members of our field sales staff pursue leads generated by our telemarketing campaign and our outdoor advertising efforts. Our field sales personnel also make "cold calls" on potential customers. Most larger sales are closed by a field salesperson who visits the customer. We believe that this localized approach allows us to provide better solutions for our customers' needs.

Tele-sales

We are looking to staff a phone room to contact smaller potential customers in the geographic areas we serve as well as potential customers in new markets. We expect our tele-sales staff to develop the interest of large customers and close sales to small customers without requiring a face-to-face meeting between the customer and a member of our field sales force.

Indirect Sales

We are developing relationships with partners, including value-added resellers, network integrators, and web design companies, to use the expertise of their established sales organizations to help increase our sales. As an example, our Valued Internet Partner (or VIP program) is an agency relationship that offers referral fees to VIP partners who bring us sales opportunities that ultimately result in sales of our services. We intend to expand the VIP program into each new market area we enter.

Also, our Appian Way Affiliate Partner program (AWAP program) allows authorized partners to resell our services and maintain a direct relationship with customers in their local markets. In markets we have not identified as a high priority for our network expansion, we forward leads directly to our AWAP partners so they can arrange a visit to the customer. We provide service and technical support 24 hours a day, every day of the year and invoice the partners at a reduced rate, allowing them to profit from the resale of our services.

Internet Sales

We use the Internet as another source to generate sales. Our tele-sales staff handles many inquiries regarding our services received via e-mail, either closing the sale or passing the leads to our field sales force. We are internally developing systems and applications that will allow us to receive, accept, and implement sales electronically via the Internet.

Telemarketing

We will begin a telemarketing campaign in March 2000 using an outside telemarketing firm that we pay on an hourly basis. We also compensate the firm with performance-based bonuses. We create a sales script used by the telemarketers and train all telemarketing personnel. Our telemarketing program seeks to generate leads from small to medium-sized businesses that are pre-qualified for our services in our market areas. We may establish an internal telemarketing department to ensure the quality of our sales efforts.

Strategic Marketing and Reseller Alliances

We enter into strategic marketing and reseller alliances with partners to bundle and sell our services with those of the partners. For example, our agreement allows us to resell Potter's unique national dial-up service—MIA—bundled with our Internet access service. In addition, MIA jointly funds our marketing efforts for national dial-up services in geographic areas where this service can be offered. MIA also promotes our services as one of a dedicated number of its Internet access referral partners.

Branding

As a component of our marketing efforts, we plan to invest aggressively in building the Appian Way Communications Network brand. We will begin an outdoor and radio advertising campaign in the markets we currently serve. We intend to increase customer awareness of us and our services through an integrated marketing plan, which combines online and traditional advertising in business and trade publications, trade show participation, direct mail, and public relations campaigns.

COMPETITION

In addition to other national, regional, and local ISPs, our current and prospective competitors include long distance and local exchange telecommunications carriers, cable television operators and their affiliates, satellite, and wireless communications companies and providers of co-location and other data center services. We also anticipate that if we offer services as a CLEC, we will face new competitors that already have established a market presence for local telecommunications access.

The principal competitive factors in our market include:

ISPs

Our primary competitors include other ISPs with a significant national presence that focus on business customers, such as GTE Internetworking, PSINet, Concentric Network, MindSpring Enterprises, Verio and Intermedia Internet. We also compete with smaller regional and local ISPs in our targeted geographic regions such as Knit-Wit and Glendale. Our customer base includes smaller ISPs, which may also compete with us for customers in their markets.

Value-Added Services Providers

As we increasingly generate revenues from our value-added data center services, competition from other value-added service providers will become more intense. Our competitors in this market include co-location providers like Oasis Communications, Western Earth Center, Digit 7, and ITJump. They also include application service providers such as I-Fleet and Market Networks.

Telecommunications Carriers

All of the major long distance companies—including AT&T, MCI Worldcom, and Sprint— offer Internet access services and compete with us. The relatively recent sweeping reforms in the federal regulation of the telecommunications industry brought about by the Telecommunications Act of 1996 have created greater opportunities for local exchange carriers, including the regional Bell operating companies, to enter the Internet access market.

We believe that many long-distance and local telecommunications carriers will seek to acquire ISPs, enter into joint ventures with them, and purchase Internet access wholesale from ISPs to address the Internet access requirements of those carriers' current enterprise customers. Worldcom's acquisition of UUNET, GTE's acquisition of BBN, and Cable & Wireless's acquisition of InternetMCI are indicative of this trend. Accordingly, we expect to experience increased competition from the traditional large telecommunications carriers.

Cable Operators, Direct Broadcast Satellite, and Wireless Communications Companies

Many of the major cable television operators, such as MediaOne, have begun to offer or have announced an intention to offer Internet access through their existing cable infrastructure. Seeking to take advantage of this installed cable infrastructure and the Internet access opportunities it affords, many telecommunications providers have acquired cable companies, such as AT&T's acquisition of TCI and @Home.

While many cable companies are faced with large-scale upgrades of their existing plant equipment and infrastructure to support connections to the Internet and become competitive, we believe that some smaller enterprise customers may be attracted by the combined services already being offered by cable operators. Other alternative service communications companies have also announced plans to enter the Internet access market with various wireless and satellite services and technologies.

BUSINESS PRINCIPALS

Appian Way Communications Network is the result of a joint marketing effort of two independent companies: Majestic Digital and GVC Communications, Inc.

Majestic Digital

Majestic Digital (MD) is an Internet management and services company which provides Internet strategy consulting and comprehensive technology solutions to Fortune companies and other corporate users of information technology. MD helps businesses identify how the Internet can be used to their competitive advantage and use our expertise in creative design and systems engineering to design, develop, and deploy advanced Internet applications and solutions.

Through its KOOR™ program, MD acts in the capacity for many high-tech and Internet based start-up and established businesses. In this capacity MD carries out the following mission:

Majestic Digital Project Responsibilities

MD's principal architect is David Stryker. From 1996 to March 1999, Mr. Stryker served as President and Chief Executive Officer of DigitJive Technologies, Inc., a computer telephony integration (CTI) based systems integration company that was sold to a publicly traded company named TKN. DigitJive created and developed a global systems architecture that allowed a user to access their e-mail text-to-speech via any touch-tone or cellular telephone. The company also developed an international data network that had an emphasis in telemedicine, which was accessible via telephone.

Prior to founding DigitJive, Mr. Stryker served as chief technology officer at LuftMark Corporation where he developed customer service plans following TQM protocols, and created and implemented the systems architecture for online systems. He was responsible for negotiating and developing strategic alliances and software site-licenses. He founded Diamond D Information Systems in 1991. This company provided consulting services in information technology and financial information systems, including LAN/WAN design online systems and the design and construction of Waterloo Computers. Diamond D was sold in early 1995.

Mr. Stryker brings significant experience in the areas of strategic planning, project management, systems architecture, and sales and marketing. Additionally, Mr. Stryker has written and published several white papers in the areas of e-commerce, knowledge management, and executive information management. Mr. Stryker received his Bachelor of Science degree in International Business from Texas A&M University.

GVC Communications

Products and Services Offered by the Company

GVC Communications Certifications

GVC Communications Principals

Hernando Browning —Hernando Browning has over 12 years sales, operations, and information management experience. From 1989 to 1991 Hernando held several different management positions with Berwett Computers, finishing his time there as Repair Depot Sales Director. After leaving Berwett Hernando started his own consulting group, and serviced the business community with a specialty in Point of Sales systems and LAN installations. GVC was founded by Hernando in 1997.

Hernando also has an outstanding record for public and military service. He served as a police officer for Hamilton County in Cincinnati, Ohio, and enjoyed a 13-year career in the United States Air Force. He is a decorated veteran of the Desert Storm conflict and is currently on active duty with the Ohio National Guard. Hernando's specialties include strategic planning, network design and installation, procurement, and network operations.

Ken Gillette —Ken Gillette has over 12 years of operations and information management experience. As a solutions integrator he designed and implemented a system for a major Fortune 100 firm that helped them settle over 35,000 bankruptcy claims between 1991 and 1993. Ken then developed and implemented various systems for the federal court system between 1993 and 1995.

In 1995 Ken went to work for the accounting firm of Slinger, Bastian & Klip, LLP where he managed the information systems for the Chicago office of this prestigious firm. Ken continued here until 1999 when he formed his own consulting group and joined GVC as its Chief Operating Officer.

Ken has a strong background in systems development, network planning, and installation of both hardware and cabling.

Tim Sullivan —Tim Sullivan has been an attorney in Wyoming since 1979, first practicing under the shingle of Yemen Hottsfer III. Since 1984 Tim has practiced law under his own name, specializing in real estate and corporate and commercial law (both transactional and litigation).

Tim graduated from Ohio State University with a B.A. in Marketing, and then obtained his J.D. in 1979 from the University of Cincinnati Law School.

GVC Communications Responsibilities

FINANCIAL PROJECTIONS

Internet Communications Service Provider

2000 2001 2002
Income
Small business $6,856,000 $32,280,000 $65,560,000
Consumer $2,224,000 $14,120,000 $28,240,000
Total Retail $9,080,000 $46,400,000 $93,800,000
Hospitality $2,101,680 $6,104,880 $10,008,000
Equipment Sales $3,600,000 $16,000,000 $33,000,000
Total Income $14,781,680 $68,504,880 $136,808,000
Expenses
Research and Development $1,978,168 $6,450,488 $12,680,800
Infrastructure $1,016,421 $6,606,527 $13,975,264
Sales and Marketing $3,445,420 $16,126,220 $32,702,000
Overhead $5,912,672 $25,801,952 $51,723,200
Total Expenses $12,352,681 $48,985,187 $111,081,264
Pre-tax Income $2,428,999 $19,519,693 $25,726,736
Subscriber Base 224,000 1,120,000 2,240,000
Wireless Installations 28 35 44


Other articles you might like:

Follow City-Data.com Founder
on our Forum or Twitter

User Contributions:

Comment about this article, ask questions, or add new information about this topic:

CAPTCHA