Cadillac of Web Services Girds for Competition
Electric Press of Reston, Va., prepares for the entrance of major Internet service providers into its increasingly lucrative niche
P> When Duffy Mazan started Electric Press in 1993, he wasn't sure if he would still be in business three years later. But he took the risk, and now he is president of the company. Based in Reston, Va., Electric Press is a full-service World Wide Web provider, which he said stands among a group of less than 12 competitors in the United States.
"They are the Cadillac service of Web hosting," said Doug Mohney, product manager of leased line services for Digital Express Group of Beltsville, Md.
Mazan's company offers a complete array of corporate Web page services. An Electric Press customer first gets an analysis of the business and what should be on the company's Web page. Then a graphic design team creates the site, another team does the HTML programming, and the whole site is hosted through Electric Press.
This is different from how Web services are often offered. In general, Web hosting is done through large Internet service providers who simply host the site and send clients to another company for marketing consultation and yet another for page design.
So Electric Press has quickly differentiated itself in a fast-growing market.
But it wasn't always apparent the company would survive. Mazan started the business with friends Ron Linehan, Robert Main and Peg Dawson in 1993 when the corporate world had just begun considering using the Web. "In 1994, there weren't Web provider companies out there," said Mazan. "And even now we are among less than a dozen competitors."
It was a classic entrepreneurial gamble. The four founders threw in $150,000 of their savings, lived without paychecks for six months and waited for the market to develop. The first year brought in revenue of $500,000 in 1994, and the second year's sales soared to $1.5 million. Mazan expects company revenues to reach $3.1 million in 1996.
"The typical Internet business starts on a shoestring," said Mazan. "The first six months were scary."
Privately owned Electric Press has hosted and designed Web sites for more than 100 clients including government resellers, government agencies and biotechnology companies. Its client list includes the U.S. Mint, the Department of Justice, Popular Mechanics, World Book and DNA Star.
Now the company has offices in San Francisco, Argentina and London.
The cost of a Web site can range from $30,000 per year to $75,000 per year, depending on the nature of the page's content. Many organizations will add sound and video to sites as programming tools become more sophisticated.
Electric Press helps companies evaluate and update content almost daily. For example, the World Book Web site provides a catalog of products that must be updated weekly. To keep up with the addition of new products, Electric Press has developed a software program that automatically removes the old products and adds new products straight from the World Book database. This kind of software is also ideal for Web sites such as the one from computer reseller Government Technology Services Inc., Chantilly, Va., which updates its site each night.
Lee Ewing, director of on-line content for Military City Online, an interactive service for Army Times Publishing Co. in Springfield, Va., recently chose Electric Press to produce and host several different Web sites for his company. "It is more desirable to have Web services integrated rather than go to various companies," said Ewing. "We talked to UUNET [Technologies Inc.] and America Online and they were not as responsive."
Mazan competes against Organic Computing and Inters? in San Francisco. Like Electric Press, both offer a full range of services. "Our biggest competitive worry is that PSINet and UUNET could start to play in our arena," said Mazan. "We've been doing it longer, but they have the resources."
Mazan's worries may or may not have validity. Herndon, Va.-based PSINet, one of the leading Internet service providers, does not consider Web hosting as its core business. According to Sally Wigley, PSINet's director of corporate services marketing, later this year the company will introduce a co-location host service. A business with an in-house server will host its Web page on PSINet's server to avoid taking up room on their own server. PSINet will also monitor the hosted site to ensure that the connection and server are operating properly.
While Electric Press claims it has few competitors, they cannot deny the giant Internet service providers. "ISPs are usually better able to provide host services than the private 'Web-only' businesses for the simple reason that the ISPs are connected to the Internet with bigger pipes," said Drew Janssen, director of Capitol.Net, a new division of CritiCom that offers Internet access in Lanham, Md.
"I find it difficult to believe that most single organizations can do all of the creative work for a Web site," said Scott Finer, a telecommunications consultant. "The best Web sites I have seen are usually not generated by a single company." But Mazan isn't projecting a decline in business. He predicts company revenues of $6.7 million in 1997. "The arena is changing rapidly," he said. "But I don't see many companies starting full-service Web hosting."