Net2000 Group offers its commercial and government clients an assessment of their existing communications networks and designs more effective voice, data and multimedia solutions using products from Bell Atlantic, GTE and soon, Nynex.
Company executives said their assessment of the market proved to be right. Net2000 experienced rapid growth from the start. Revenues grew from $667,000 in 1994 to $1.2 million in 1995. In 1996, the company reported $1.8 million in revenues.
Net2000 executives plan to continue growing revenues, employees and their customer base. Peter Callowhill, vice president, expects revenues to reach $3.5 million by the end of 1997. The group also plans to double the staff of 25 employees by the end of 1997. The company's main objective is to expand, Callowhill said. Plans call for offices to open in Philadelphia, Pittsburgh, New York City and Boston.
The company was started by Bruce Bednarski, vice president of Net2000, who worked on the sales and engineering staff of Bell Atlantic; Callowhill served as a corporate account manager for Bell Atlantic; Corlyn Marsan, another vice president, served as a sales manager for Bell Atlantic; and Clayton Thomas, president, served as a corporate account manager for Bell Atlantic.
The four came together when Bell Atlantic announced it was expanding its distributor program to focus on small-business accounts, as well as network services, in 1993. According to Callowhill, Bell Atlantic's goal was to have 18,000 of its customers supported by the program. The group worked on a business plan from 1992 to 1993. Each of them secured individual lines of credit worth $50,000, and Callowhill is proud to say that the company is still individually owned. The four left their jobs in 1993 and started work on Net2000 full time.
According to a Bell Atlantic spokesman, Net2000 serves as its largest distributor. The company brings in the most revenue out of all of Bell Atlantic's third-party, face-to-face sales force distributors, according to Ells Edwards, a company spokesman. Bell Atlantic's distributor program works with 150 agents. Edwards refused to disclose how much in revenue Net2000 brings to Bell Atlantic. However, Callowhill said the company brought in $18 million for Bell Atlantic in 1996.
Callowhill said the company's success is due in large part to partnerships and agreements that have been formed with distributors and telecommunications companies throughout the United States. Currently, Net2000 serves Bell Atlantic's customer base in New Jersey, Pennsylvania, Delaware, Virginia, Maryland, West Virginia and Washington, D.C. However, the company formed partnerships with distributors outside of Bell Atlantic's region to serve customers across the United States. Net2000 also formed strategic relationships with companies such as LCI International, Cable & Wireless, Lucent Technologies and Nortel to provide other telecom products.
"Companies have always focused on one service or product," said Callowhill. "So we are forming an umbrella organization in order to work with our customers on a turnkey telecom requirement."
Net2000's current customer base covers 800 mid-size companies such as Marriott Corp., Manor Care, George Washington University Health Plan and the Bureau of National Affairs. The U.S. House of Representatives is its largest client. According to Callowhill, 95 percent of the company's revenues come from its commercial clients. The company's small government presence is due to Bell Atlantic's own sales force that deals with the government directly, according to Callowhill. However, he said the company plans to beef up its government customer base in 1997 by providing consulting services to its existing government customers.
Net2000's success may also be attributed to a focus on providing multiple services. Callowhill said the majority of distributors have another core business besides
"Our start has been [as] a full-service provider," said Callowhill. "Because of that there are no other companies competing with us."