Students of company transformations should pay close attention to ICOA. In business for some 20 years, the Warwick-based company has gone from being an operator of public fax machines to purveyor of Internet kiosks to being in the vanguard of the Wi-Fi industry.
Through a number of strategic acquisitions starting in the middle of 2003, the company has built itself into a prominent provider of wireless “hot spots” to places like airports and marinas (including Newport harbor) and retailers like Starbucks, American Airlines and McDonald’s.
ICOA President and soon-to-be CEO Rick Schiffmann recently spoke with the Providence Business News about ICOA and the Wi-Fi marketplace.
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PBN: How did ICOA go from an operator of public fax machines to a leader in Wi-Fi-managed services?
Schiffmann: ICOA is definitely a different company today than it was a year and a half ago, but the core genesis of what we were doing is still the same to a certain degree. When you think of Internet kiosks, they provide broadband connectivity in public venues. When you look at Wi-Fi, it is another way of providing broadband connectivity in public venues. When you look at the technology to deliver those services, they’re very similar. You need to have a network operations center. You need to have a call center. You need a billing system. You have to have high-speed connectivity that goes to the location. You need to have engineers that do your network installation. So whether it’s a Wi-Fi network or an Internet kiosk, the network behind the two is very similar.
PBN: ICOA has built its Wi-Fi business largely from acquisitions. What have been the goals of your acquisition strategy?
Schiffmann: ICOA believes that there are certain markets that you want to be in in the Wi-Fi marketplace and that there are certain acquisitions that are desirable. So if you look at the acquisitions that we conducted in 2004, they were to build the foundation of our future business. Our goals have been to look for highly complementary vertically focused Wi-Fi businesses that are highly synergistic with our core business.
PBN: What has been your management policy toward the companies you acquire? Do they remain relatively autonomous?
Schiffmann: Actually, no. What we do is consolidate like services. Everything that’s considered “back office” – customer care, network engineering, network monitoring, that sort of thing – we consolidate here to Rhode Island. What we leave alone and in place is sales, marketing and business development.
PBN: You’re located in Rhode Island, but most of your marina business is on the other coast.
Schiffmann: It is primarily on the West Coast and in Southern California. The reason for that, unfortunately, is that we have winter and they don’t. They have a longer addressable business market. For 12 months a year, people can be on their boats in their marinas there and so it’s a good place for us to be in the marina Wi-Fi business.
PBN: Will Wi-Max be a Wi-Fi killer?
Schiffmann: No, we look at it this way: They are complementary products and technologies. Wi-Max is very high right now on the hype curve. We believe that eventually that hype will settle down. ICOA has built a business that can deploy Wi-Max as well as Wi-Fi, but we see them coexisting together. It’s not a zero-sum game. It’s not Wi-Max will kill off Wi-Fi. Wi-Max will be successful in its niche and Wi-Fi will be successful where it’s best used. Wi-Max is still a few years off from being a mass-market technology. It is more of a backhaul replacement technology at this time. It’s more of a threat now to a DSL provider than it would be to the Wi-Fi hot spot.
PBN: What do you think about municipalities, such as Philadelphia, getting into the Wi-Fi business?
Schiffmann: For us, it’s a good thing, in the sense that these municipalities, as they look to build out networks, need a company like ICOA that can help them. We can design their networks. We can sell them the equipment. We can install the network. We can maintain that network over time. However, there are issues about some of the municipal strategies for getting into Wi-Fi. In some cases, they have really thought about it and there’s a business case that says we’re going to spend this much money, we’re going to charge this much for the network and this is how we’re going to pay for it. In other cases, they really haven’t thought it through far enough. n
John P. Mello Jr. is a freelance business and technology writer who works from his home in Woonsocket. He can be reached at jpmello@cox.net.
