Leveraging ICT to improve the business model  for a Technology Innovation Centre or Science Park

Bob CushingHarwell

9th February 2011

“Revenue from ICT services should be the second largest source of income for operators of business centres after rents”

Experience based on years of operating ICT infrastructure on behalf of business centres and science parks

Focus on business models and fund raising

IntroductionIntroduction

Ability to offer a range of services What about quality and response (SLA)?

◦ Onsite support Think about local availability Consider including basic service in rent Scale leads to economies Critical facility for technology based tenants

◦ Often sophisticated requirements for smallest companies

DifferentiationDifferentiation

Cost of external connection◦ Install/rental◦ Resilience◦ Term

Infrastructure◦ Cabling/ducting/wireless◦ Wiring closets/comms room/Data Centre

Core network◦ Bandwidth/QOS management◦ Switching/routing/firewalls

Creating the business Creating the business modelmodel

Centralised Centralised architecturearchitecture

How many tenants?◦ How many users?

Over what period? What are they going to need? Basics are

◦ Broadband Internet Access at a range of speeds/prices

◦ Telephones – one per user? Additional services?

Understanding the revenue Understanding the revenue profileprofile

Broadband◦ Base per user price equivalent to “home” access◦ Range of services

Up to 5 users 5-10 users Dedicated bandwidth Symmetric services

Telephone◦ Per user per month including handset◦ Competitive rates (cf. BT standard business rates)

IT support

Which services do tenants most want?Which services do tenants most want?

Data Networking◦ Ability to connect to remote workers/other offices

Security◦ Firewalls◦ Spam and virus protection

Email and hosting Virtual tenants/reception Backup and business continuity

Additional services?Additional services?

New servicesNew services Online collaboration

◦ Hosted Exchange◦ SharePoint◦ Unified Communications (Open Communications Server)

Video conferencing◦ Desktop◦ Meeting Rooms◦ Telepresence◦ Available on a PAYG basis

DIY Pros◦ You get to keep all the money◦ Quality control?

DIY Cons◦ More investment◦ Staff◦ Billing and collections

Outsource Pros◦ Someone else’s problem◦ More scalable◦ Reduce investment?

Outsource Cons◦ Selecting a SP◦ Reduced revenues and margins◦ Control over quality

DIY or outsource?DIY or outsource?

Broadband Vantage Business Centre Managed Service Model - Sample

NB: This model is copyright Broadband Vantage Limited 2008©

Business Model Example Price List to end Users for Broadband & VOIP

Installation Costs Broadband Monthly Cost

100 Meg Main Telco Fibre to Main POP 3,000 ADSL single user 20

0 ADSL 1-5 user 25

No Of Buildings 8 ADSL 10-25 60

Cost of Primary POP Switches and Router & Bandwidth Box 10,000 SDSL 1meg 10:1 230Total Installation Costs 13,008 2Meg 10:1 345

4Meg 10:1 450Variable costs 8Meg 10:1 500Cabling per point per unit (see note at 23D) 60Customer Switching per 24 port switch (non POE) 500 Dedicated Lines 1Meg 1:1 500Customer Switching per 24 port switch (POE) 1,200 2Meg 1:1 650

10Meg 1:1 1,000

Voice

Line Subscription 10

Cost Model: Handset Rental 5

No Of Companies 50

No of Users per company 10 Average Call Spend Per user 10

Average Broadband Spend per company 75

End User Prices Cabling cost per user port £60Broadband Income 3,750 NB. Outside the model but assume two ports (1 X phone and 1 X computer) per userPhone Income 12,500Total Monthly Income 16,250

Managed Supplier Costs

Main Circuit Rental 500Bandwidth 500Staff 0Phone Costs 5,750Installation Cost spread over 5 years 293Managed Supplier Total Costs 7,043

NET INCOME per month 9,207

Net income per annum 110,488

Annual Commission 27,622

Running own services in house since opening◦ Telephone◦ Broadband◦ Hosted Exchange

Catalyst: Ageing infrastructure needed replacing◦ Telephone switch required £18k maintenance per annum◦ Exchange servers ageing

Task: identify outsource partner to run services Results

◦ Reduce cost/remove need to re-invest◦ Wider range of services◦ Resilient higher capacity external connections◦ Provide predictable revenue through revenue share mechanism

Case study – BioCity, NottinghamCase study – BioCity, Nottingham

Had external provider but wanted to re-evaluate options

Catalyst: new development requiring state-of-the-art infrastructure

Task:◦ Review specifications for new build◦ Identify supplier for new room booking system◦ Procure new outsourced provider

Results:◦ All tasks completed saving £25k in first year◦ Consultancy ROI in 6 months or less

Case study – Colworth Science ParkCase study – Colworth Science Park

Telecoms is a scale business◦ High cost of infrastructure◦ ROI based on small monthly amounts across many users

The biggest single cost is the external connection◦ The more remote the more difficult and costly

Is my infrastructure up to it?◦ The cost of retrofitting cf. “doing it right first time”

Pricing◦ Can I compete against the bigger providers?◦ Inclusive rents◦ Bundling/subsidising

The challenges for science The challenges for science parks/TICsparks/TICs

Consultancy service available from Broadband Vantage◦ Services Strategy for Multi Tenanted Buildings◦ Technical and specification support◦ Procurement◦ Business model development

Source a supplier◦ ICT services◦ Video Conferencing , AV and Unified Communications◦ Download brochure from www.broadbandvantage.co.uk◦ Contact bob@broadbandvantage.co.uk◦ 07776 302579

ContactsContacts