Week of July 30, 2001
Editor's Choice Web Pick
Many companies have gotten the cost-cutting religion again, a passion rekindled by a nagging downturn that keeps defying forecasts for a rapid rebound. Sitting quietly inside many real estate assets rests a cost-cutting tool that may be escaping some corporate radar screens: unused bandwidth.
Mind you, redeploying that underutilized asset may not be worth the bother to many companies. This writer, though, remembers the resoundingly simple strategy that a real estate executive employed in the early 1990s to save his Fortune 500 firm a cool US$1 million a year: He simply had all the company's PCs turned off each night.
That, of course, was before the Internet became such an ingrained, "always-on" part of the business fabric.
That always-on aspect, though, is where sites like Unusedbandwidth.com (www.Unusedbandwidth.com) offer cost-cutting potential. More than 50 percent of broadband Internet capacity in the United States goes unused, according to Unusedbandwidth.com President Nicholas Marino.
"Most broadband pipes are not used to their full capacity," Marino said. "For most businesses, bandwidth utilization drops significantly on nights and weekends. Also, many companies order lines with higher capacity than they actually need in anticipation of future growth."
What Narbeth, Pa.-based Unusedbandwidth.com does is buy and resell unused Internet capacity.
Works with Windows or LinuxHere's how the Unusedbandwidth.com model works: Users can sign up, free of charge, to sell unused bandwidth. To sign up as a "UB resource," however, companies must have:
Unusedbandwidth.com is compatible with Windows 95, Windows 98, Windows NT and Linux, according to Marino.
The system works through what Marino called "backroom software," which selling companies install on their systems. Sellers' computers still continue to operate normally, according to Marino. Bandwidth is sold in the background.
Participating firms determine what's sold and when it's sold. A company, for example, can specify that 80 percent of its bandwidth will be made available for sale during late-night hours and 15 percent during the day. The minimum amount that can be sold over an eight-hour period is 32 kilobits per second. And selling firms' computers must be on and connected to the Internet during their selected selling periods. Selling firms can opt out of their agreements at any point, according to Marino.
The Going Rate: $133/Mbps/MonthSo what's the payoff?
Right now, it's $133 a month for each megabit per second.
For smaller companies that burn little bandwidth, that doesn't add up to a lot. Some big bandwidth burners, though, are already pursuing an internal strategy similar to this site, allowing divisions to borrow bandwidth from other divisions.
A strong word of caution here: We don't recommend that any company try to get into the business of selling unused capacity without a strong in-place system that accurately measures exactly when its peaks and downtimes occur.
Similarly, companies looking to offload bandwidth would be best advised to shop around. Other sites like Band-X (www.band-x.com), for example, facilitate bandwidth exchanges through an auction format.
Finally, despite the telecom sector's current world of pain, sites like this probably aren't a fit for long-term savings strategies. Many industry observers are already contending that the North American bandwidth glut is a transitory phenomenon.
These days, any advantage, it seems, is only temporary.
©2001 Conway Data, Inc. All rights reserved. Data is from many sources and is not warranted to be accurate or current.