BUSINESSWEEK ONLINE : JUNE 19, 2000 ISSUE
COVER STORY Yipes Communications: Bandwith on Demand For years, the lawyers at Fenwick & West limped along with slow Net access and an e-mail system that wasn't nearly up to handling the huge flow of documents in and out of its Palo Alto (Calif.) offices. But when Chief Information Officer Matthew P. Kesner began looking for higher-speed alternatives, the solution -- a big DS3 switch from a phone company -- was hardly optimal. Besides taking up two 8 1/2-ft. racks in the law firms' crowded computer room, this faster service would cost between $18,000 and $30,000 a month. Worse, he was told it would take eight months to get the new setup installed. That's when Yipes Communications came calling. If Kesner would let Yipes install six 1 1/2 in. devices, the company could deliver far faster Net access for around $6,000 a month -- and could have it up and running in six days. "It sounded way too good to be true," says Kesner. Well, it was true. Fenwick & West's Palo Alto lawyers have been using the service for 45 days, glitch-free. And in the near future, Yipes says customers like Fenwick & West will be able to easily dial up their bandwidth on a day's notice to meet some upcoming data-intensive need -- say if the firm had to download all the messages in a client's e-mail system. Think of this as bandwidth-on-demand. The result: By going with Yipes, Kesner would never have to suffer through upgrading to a more powerful telecom connection again. What's the magic? Yipes is leading the pack of companies with a new technology called gigabit Ethernet that bypasses the major chokepoint for Net traffic: the local phone switch. To understand it, consider the complex workings that occur every time you click on a Web-site link. First, your request passes through your PC to your office's Ethernet-based network. From there, it's converted into a new language the phone network can understand. When it gets to the Web site, it's converted back to Web-speak -- and the entire process is repeated to get you the answer or page you requested. With Yipes, digital stuff never leaves the Ethernet format. Instead, it travels directly onto Yipes's fiber-optic network to a hosting center, including those of Intel, Equinix, and Exodus Communications. That way, the application service providers who work out of those centers -- and who represent 80% of Yipes's sales -- can deliver their applications without messing with all those conversions. Yipes also is setting up "municipal area networks" in five cities. That way, companies with many offices in different locales can get speeds that make it feel like everyone is on the same floor. "We're extending the corporate computing environment to the network," says CEO Jerry Parrick. Clearly, obstacles lie ahead -- such as how to enable customers to move data not just across town but across the country. But Yipes has $90 million in funding, and it plans to spend more than $1 billion to set up shop in 50 U.S. cities. From there, Yipes would have to cut a deal with a provider of cross-country fiber-optic links to offer soup-to-nuts solutions to global companies. Plus, it will have to contend with traditional telecom giants who are intent on offering that full range of services themselves. "The telcos don't even see Yipes as competition yet. They can't believe any big company would trust its systems to some startup," marvels Kesner. "But [Yipes's] service is better, their product is better, and they're meeting their promises in a time frame you'd never [get] from a telco." As he tells Fenwick & West's lawyers: "We don't represent Yipes, but we should." By Peter Burrows in San Mateo _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ BACK TO TOP					RELATED ITEMS Technology on Tap COVER IMAGE: The Info Tech 100 TABLE: The Leading Public Info Tech Companies TABLE: The Leading Private Info Tech Companies TABLE: Who Wins When the Web Is On Tap TABLE: As PCs Take a Back Seat, New Technology Drivers Emerge TABLE: Three Who Are Tapping In ONLINE ORIGINAL: How Four Pioneers Are Turning on the Tech Tap ONLINE ORIGINAL: Yipes Communications: Bandwith on Demand ONLINE ORIGINAL: Equinix: The Mother of All Hosters ONLINE ORIGINAL: DiCarta: Providing "Apps on Tap" ONLINE ORIGINAL: Everdream: Turning on the Tap for Small Biz INTERACT E-Mail to Business Week Online

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