From the July 1998 issue of Entrepreneur

For small companies, Internet access is no longer a luxury; it's a business necessity. A core part of small-business productivity, the Internet is now used to send high volumes of e-mail, conduct business research, store presentations for client viewing, and provide remote workers with access to key information back at the office. All this, however, has made additional demands on bandwidth, leaving many small businesses yearning for faster access options.

If you're dreaming of moving into the fast lane, now is the time to start considering your options. Recent advancements have made existing technologies like 56 Kbps modems and ISDN technology more attractive than ever. Moreover, faster technologies now being introduced, such as cable modems and Asymmetrical Digital Subscriber Lines (ADSL), make some of the existing choices seem downright poky.

Your options will depend heavily on the services available in your area, your business needs and your budget. However, with a wide range of choices hitting the market in the near future, there will soon be more ways than ever to zip down the Internet like a Ferrari on the open highway.

Revving Up

Analog technology is still the primary way small businesses connect to the Internet. One of the most significant advancements on the analog front was the development of the 56 Kbps standard, dubbed V.90, which settled the battle over competing modem technologies. Prior to the standard, you were forced to choose between 3Com's x2 and Rockwell International's K56Flex; you also had to find an ISP that supported your choice. The V.90 standard makes it easier to connect to the Internet since competing technologies now work together.

Modems based on this international standard have been available for several months; vendors offering V.90-compliant modems include 3Com (http://www.3com.com), Rockwell International (http://www.rockwell.com), Cardinal Technologies (http://www.cardtech.com) and Global Village Communication (http://www.globalvillage.com), to name just a few. If you purchased a 56K modem prior to the development of the standard, don't stress: Many vendors offer downloadable software on their Web sites that will get you up to speed (if your modem is upgradeable).

Industry experts expect the V.90 standard to spur sales of 56K modems, which have suffered from sluggish sales in the past. Consumers who opt for 56K technology will likely benefit from the increased speed: These modems perform at roughly twice the speed of 28.8 Kbps modems. However, this technology works best when connecting only a limited number of people to the Internet. Businesses with many employees who need Internet access or who make heavy demands on bandwidth by e-mailing large files may soon find themselves yearning for faster Internet access options.

Ramp Networks (http://www.rampnet.com) provides one solution. Its WebRamp M3t ($749) enables up to three analog modems (including the new 56K models) to work together to give network users faster Internet access. Using a technology called multiplexing, the WebRamp M3t spreads browser connections across multiple modems, giving users the increased bandwidth of ISDN over less-expensive analog lines. The WebRamp M3t serves as a router and four-port Ethernet hub. It also allows dial-in access so remote users can send and read e-mail, browse the Web or work on network files.

Fourth Gear

If you're looking for better performance than an analog modem can deliver, take a look at ISDN. While it has suffered from a bad reputation in the past, improvements have been made in recent months, which make it a more viable solution.

The fastest option with widespread availability, ISDN offers twice the speed of a V.90 modem connection. Unlike 56K modems, which are asymmetrical, an ISDN connection sends and receives at 128K, so users benefit from the same fast rate whether downloading or uploading. ISDN also has two "channels," or connections, that each perform at 64K. So if a user receives a phone call while online, a channel will be available to answer the call. For the price of a single ISDN line, you can have Internet access and a phone or fax connection.

ISDN offers a step up in performance for a relatively minimal increase in cost. But getting started requires more work than with an analog connection. You'll need to order an ISDN line from your phone company, connect a digital modem to your PC, and order ISDN service from your local phone company. Start-up fees typically cost several hundred dollars, but some monthly fees are less than $30. ISDN service is available to about 85 percent of the U.S. population. Phone companies are also more familiar with the technology, making it easier to install and maintain.

For small businesses in a LAN environment, technology vendors have rolled out new products that provide ISDN connections. 3Com's OfficeConnect ISDN LAN modem ($499), for instance, provides LAN and Internet access in one unit. This product integrates a four-port Ethernet hub, an Internet Protocol router, two analog voice/fax ports and an ISDN line. The OfficeConnect line also has a remote access product, the OfficeConnect Remote 521 ISDN Router ($995), for providing remote office workers with a connection to the LAN.

The Fast Lane

While analog and ISDN access make the most sense for now, new modem technologies offering even swifter service are starting to make a splash. Cable modems are one such technology. Although still only available on a limited basis, cable access is quickly gaining momentum. Check with your local cable provider to see if it offers cable modem access or plans to do so in the future.

Cable modems operate at an average speed of 30 Mbps, delivering high-speed performance at a substantially lower cost than anything you can currently get. Cable access is slightly less expensive than an ISDN connection. Time Warner Cable's Road Runner cable service, for example, which is available in more than 2 million homes in 17 cities nationwide, typically costs $39.95 per month, including cable modem rental; installation charges run around $99.

Experts believe a new cable standard will help cable modems avoid the incompatibility issues that have plagued other modem technologies. An industry specification known as Multimedia Cable Network Systems (MCNS) was recently adopted; at press time, some vendors had already released MCNS-compliant modems, with more expected to follow soon.

Despite the abundant benefits, cable modems only make sense for home users right now. Cable companies are working to provide access to more small-office environments, but they still have the highest penetration in residential areas. Richard L. Edson, senior vice president of new business initiatives at 3Com, says, "Because cable operators are more into home entertainment, SOHOs and consumers will probably be more easily captured by cable."

Checkered Flag

Of all the up-and-coming technologies, ADSL seems to be the most suitable for small-business environments, according to the experts. "Businesses will be the only ones able to afford ADSL initially, so it will make a lot of sense for small offices," says Abner Germanow, research analyst at International Data Corp., an information technology research firm based in Framingham, Massachusetts.

ADSL delivers data at slower speeds than cable does, but it still provides very rapid access, with speeds of up to 8 Mbps. Like ISDN, ADSL is a digital access technology, so it provides a more reliable connection than analog. Another benefit of ADSL is that it uses the traditional copper phone lines that phone companies already have in place, which means it's less expensive to provide. And consumers don't need to invest in a new line.

Unfortunately, ADSL availability is sporadic at best. In many cities, ADSL remains in trial stages among a small number of users. Some phone companies, however, have begun to launch full ADSL service in select cities. For instance, US West recently launched ADSL service with access speeds of up to 7 Mbps in 40 cities, including Minneapolis, Portland, Salt Lake City and Seattle; it should be available in all 40 cities by the time you read this. Other telecommunications companies, such as Bell Atlantic and SBC Communications, plan to offer ADSL service on a very limited basis by year-end.

In the meantime, telecommunications companies and technology vendors are working to release a variation of this modem technology called "ADSL lite" to demonstrate that the service is viable. With data transmission speeds of up to 1.5 Mbps, the technology is about 30 times faster than 56K modems, although significantly slower than full-speed ADSL. At press time, interoperability problems were still being worked on; ADSL lite should be widely available by summer 1999. 3Com says it will add ADSL lite to its product line this year. Other vendors plan to release ADSL lite products by year-end, as well.

When several of these modem technologies enter a market around the same time, tough competition is bound to follow. So far, the arrival of cable and ADSL has spurred better service as well as lower prices, and experts expect this trend to continue. Since all these modem technologies will most likely be available in your area eventually, the best approach is to be open to trying out new technologies--while carefully considering the best solution for your specific business needs.

Contact Source

International Data Corp., (508) 872-8200, http://www.idc.com