SAN FRANCISCO (02/11/2000) - The slogan for startup Yipes Communications Inc. is "Yipes, that's fast!" Another choice might be: "Yipes, that's cheap!"
The service provider says it will connect two customer sites on its local fiber networks at 3M-bps for just $900 per month. That's twice the bandwidth for less than the typical price of connecting two sites using a T-1 connection.
The decision to go with IP network gear rather than SONET or ATM equipment gives Yipes a competitive edge, says CEO Jerry Parrick, who previously ran US West's Interprise group and spearheaded its launch of digital subscriber line services.
"I've been looking for someone to take advantage of this optical technology, and Yipes is the first," says Andrew Cray, an analyst with Aberdeen Group Inc. in Boston.
Calling its network architecture "IP over glass," Yipes runs Gigabit Ethernet on optical fiber from its points of presence (POP) to customer sites. Customers plug their Ethernet LANs directly into Ethernet ports on Extreme Networks routers owned by Yipes but located at customer sites. The company has networks running in Palo Alto and Riverside, Calif., and in Fort Collins, Colo. Yipes says it will expand services to 18 cities by year-end.
The network design lets Yipes serve customers within 43 miles of a Yipes POP, a distance well-suited to the company's plan to serve dense metropolitan areas, Parrick says.
Yipes is capitalizing on the plummeting prices of IP network gear, he adds.
The cost of SONET optical equipment and ATM switches typically used in fiber metropolitan networks has also dropped in recent years. But this cost reduction pales in comparison to that of IP gear, says Mike Speyer, an analyst with The Yankee Group in Boston.
Because the company uses Gigabit Ethernet to feed customer sites on fiber, it can sell services in 1M bit/sec increments without having to install new wires, Parrick says. Yipes just turns up more bandwidth over the same strand of fiber.
Bandwidth can be boosted within minutes of a customer's request, he says.
Today the alternative is buying extra T-1 lines in increments of 1.5M-bps and waiting weeks to get them installed. Plus, once customers buy five or six T-1s, it makes sense for them to switch to a 45M-bps T-3, which may be more than they need. And the wait for a T-3 could go on for months.