Internet provision to a business centre - your opinions please

nashenden · 26th November 2008

Dear All,

A company we do some work for is considering moving to a new business centre - a beautifully converted building hosting 40 business units ranging from "1 or 2 person size" to maybe "10 person size", with most being at the 1-2 end. The centre is required to have 80% of its tenants in the "creative" field - although this is not defined anywhere (but I'm thinking web design, video edit, graphic design, photography, as well as the odd painter etc). Rents vary from £350 per month upwards (this is South East, but a relatively depressed area - not central London).

The real issue is that the management have placed a complete ban on any tenant arranging their own telecoms or Internet - you have to take theirs. The deal is £26 per month for a phone line (calls extra) plus £26 per month for 'basic Internet' which is a share of 2Mbit transit over a 10M (leased line, non contended) bearer. VOIP is banned at this price point, but you can have 'enhanced' Internet - a share of a 4Mbit service (which includes the 2M above) for £45 per month. There is a 40Gbyte per month traffic cap (traffic counts 24/7, no overnight amnesty).

I'd appreciate anyone's views (so as to perhaps qualify my own) not just on the pricing, but more importantly your view on how a 2M/ 4M service shared potentially 40 ways will cope with the 'reasonable' usage of upto 40 media based businesses.

My view is that both the headline speed and the traffic cap are entirely unrealistic for media based businesses making full use of the Internet in 2008. In fairness the management have a non specific promise to open up to 10M 'if required' but no details on when and how.

I'd like all and any views to pass to our client to qualify (or counter) our position, and possibly to forward to the centre management too. I'd be happy to share the details of the location with anyone interested by PM, but would prefer not to discuss openly here.

Many thanks in advance for anyones input.

wise · 26th November 2008

totally unrealistic I would say!

Seb · 26th November 2008

I agree on the inadequacy of the internet provision - that's ridiculous. However, business centres/serviced offices make a fair amount of their profit on the 'extras' - net, phones, etc. That's the reason the rates are so high (and partly why the rent, £350 pcm, is so cheap). Unfortunately, that also means I don't think your client will have much success installing their own telephony/internet.

However, I'd have thought you'd be much more likely to successfully push for 10M+

racksense · 26th November 2008

I'll drop you a mail about this as we have experience of quite a similar kind of set-up.

The price they are offering doesn't seem too bad, providing it delivers.

PeteK · 26th November 2008

So you are talking about 200 ish individuals in the premises sharing a 4Mb/s service or possibly even 300 heads. If you take that at base figures, they are going to have to carve off or QOS that connection for VoIP and depending on the take up that is 0.5 to 1meg of capabity "lost" to VOIP, so in base terms you are sharing 3Mb/s of LL between 250 punters, which ultimately is a 250:1 contention ratio.

While BT have scrapped their on paper contention ratios, that is 5 times poorer than what would have been a "home" adsl service with a decent ISP providing it.

We are also summising here that said "home" ADSL service only synced at 3Mb/s although of course the LL in place will be symmetrical.

What contines to surprise me is that in such a location we could provide a 10Meg LL for a shade over £400 per month. That is a full 10meg of transit too, which onward sold to each punter at (say) £10 per month the landlord could be pocketting circa 3k per month of revenue and providing a decent service to his tenants about which they would not grumble.

As it is, hes probably paying around £200 per month more than this figure (based on BT pricing) and getting a shade under a third of the bandwidth, ultimately providing a poorer service, but even on those figures, if hes paying £600 per month for the service and chargind it out at an average of £35 per person, he is pocketing around £10k per month.

I am pleased to say the business centres we provide to would typically take a 100meg bearer and with this number of heads in the site perhaps 20meg of transit on it and do actually buy some more if needed.

I feel slightly sorry for the occupants and at the end of the day the landlord is only buying adequate capacity to provide 2 Gig per person per month of transfer and I feel taking a quite stupid risk. (figures based roughly on 300 people at the site, all taking internet access)

On the flip side of this, he will also be making a pretty penny on the phone rental and probably only has 30 channels of service behind 300 handsets too. If it were my money I would have put an IP Pbx in and trunked the traffic over my leased line, but then I am not he...

Karl · 26th November 2008

IMHO it's a joke, especially as rents are never cheap in these kind of places - even more so considering as you say they are targeting people in the creative fields, which generally means large files etc. moving about if they need the Internet for business. I've never been a fan of business centres like this really, especially when I see prices like that. Sure, they have to make a profit, but they don't have to scalp you to do it. As Peter said, they can provision all of the services if it's thought about, for a fraction of the price they most likely are doing them for, and still make out with the same profit, but without charging their customers a fortune.

freethought · 26th November 2008

Sounds very similar to Regus; they offer shared connections in much the same manner then the option of a "dedicated" connection which is just QoSed on the same circuit. With them, you can often get your own circuit if you bitch enough or know the right people (providing you pay them enough elsewhere).

M8INTERNET · 26th November 2008

Quote:

Originally Posted by nashenden

The real issue is that the management have placed a complete ban on any tenant arranging their own telecoms or Internet - you have to take theirs

That's completely daft and unenforceable
In effect you would have to switch off your mobile phone as you entered the premises, equally you would not be permitted to operate any form of mobile broadband
Can you imagine one of your clients coming to those premises and then you have to say to them "sorry, read the notice of all the you are not permitted items, you're not permitted mobile phones, pagers, mobile internet, or mobile broadband, and we don't provide any for you either"

freethought · 26th November 2008

Quote:

Originally Posted by M8INTERNET

That's completely daft and unenforceable
In effect you would have to switch off your mobile phone as you entered the premises, equally you would not be permitted to operate any form of mobile broadband
Can you imagine one of your clients coming to those premises and then you have to say to them "sorry, read the notice of all the you are not permitted items, you're not permitted mobile phones, pagers, mobile internet, or mobile broadband, and we don't provide any for you either"

Not entirely, a simple faraday cage would screw up the cellular network signal, effectively preventing use of a mobile phone or broadband service inside the building.
A bit drastic and I'm not saying that anyone would go that far, but it's not impossible.
You also have to contend with the fact that you can do things with a desk phone and PBX that you can't with a mobile and that they can simply terminate your tenancy if they find you breaking the terms.

Latency on mobile broadband is awful anyway and the usage cap is well below 40GB

othellotech · 26th November 2008

Quote:

Originally Posted by nashenden

I'd appreciate anyone's views (so as to perhaps qualify my own) not just on the pricing, but more importantly your view on how a 2M/ 4M service shared potentially 40 ways will cope with the 'reasonable' usage of upto 40 media based businesses.

The costs are "reasonable" for the type of service business centres/managed offices charge - several charge ~50/month for a line +calls, ~500/mb for internet connections

As to its usuability, not it'll be cr@p