Provider Profile: Speakeasy

“We’re a company that’s grown sort of under the RADAR screen,” Bruce Chatterly, president and CEO of Seattle-based Speakeasy told in a recent briefing. “We’re very well known in the technical community, but we have never had the resources to become a mainstream brand.”

In fact, the business roots of Seattle-based hosted communications services provider Speakeasy are unique. According to Chatterly, the company originated as an Internet café back in 1994. “That café attracted a very technical, very alternative group of people,” Chatterly said.

Drawing on the nature of the crowd, the proprietors began selling consulting services out of café, and later, IP addresses and Internet services. “The technical side overtook the café side after a while,” Chatterly explained, and in 1998, the café was spun off and a broadband company started, which targeted power users and technical users in a residential environment.

To meet the requirements of their high-end users—teleworkers, technical professionals, and, most demanding of all, online gamers—the company made low latency and high reliability its hallmarks. “We’re known for having the lowest latency network in America—or one of the lowest,” Chatterly said. “If you’re a hard-core online gamer, low latency means your bullet goes faster than the other guy’s and you get killed less often.”

The road from ISP to ITSP
Speakeasy today has data centers in the eight largest U.S. markets, tied together by a private, all-fiber backbone running MPLS (def), and reaching the ‘last mile’ through a variety of partnerships. “So, we’re a wholesale customer in the last mile, and then we hop it onto our network as quickly as we can, and that allows us to maintain quality and reliability,” Chatterly said.

Now, the network also boasts a redundant VoIP softswitch architecture, with switch infrastructure in the Seattle, New York, and San Jose data centers.

When Chatterly joined Speakeasy in 2003, he quickly spotted a fly in the ointment. “Looking at industry I realized a price war was on the way,” he explained. “There was no way, as a wholesale buyer of last mile, we could compete with the cable providers and ILECs [incumbent telcos],” he said.

“We did a lot of research and settled on the small business market,” Chatterly told (In Speakeasy’s case this means a preponderance of companies with 25 or fewer employees.) “As we talked to small businesses and focus groups, we realized was that there are three things that every small business needs to set up their operations in terms of communications and IP infrastructure. We call it the Business Triple Play, and it’s what we focus on now.”

Succinctly put, the three components of Speakeasy’s Triple Play are:

  • Mission-critical data connections (Speakeasy sells, T-1s, bonded T-1s, and “naked DSL” connectivity)
  • Voice services (for which Speakeasy provides a hosted IP PBX offering on a national basis)
  • Managed services (which means Speakeasy will run, secure, and manage any server-based application in its data centers, providing amenities like automated backups)

The voice component of the Triple Play—Speakeasy Business VoIP—includes unlimited local and long distance calling in the U.S. It is available at a flat rate: $29.95 per user per month. (There is a one-time charge for whatever phones and customer premise equipment might be needed.)

The flat-rate pricing model, in turn, is a key component of the company’s overall value proposition, something Chatterly (who seems to have a penchant for catchy marketing phrases) refers to as the “Four Ss”: Single provider, Single bill, Single support person, and Simple, predictable pricing. Clearly, the overarching formula is ‘Remove as much unpredictability from the equation as possible.’

With the game plan in place, Speakeasy started, a year or so ago, to build a reseller channel that would begin to seriously pump up the user base. “When we talk to small businesses, we ask them How do you buy phone or data services?,” Chatterly told VoIPplanet. “And universally, they answer I call the ‘computer guy’ or the ‘phone guy.’ So we put a program together, and now have one of the largest programs in the United States.” That translates into a network of about 5,000 IT consultants who hawk Speakeasy’s wares.

Speakeasy currently has about 60,000 customers, nationwide.

Enter BestBuy
All of this brought Speakeasy to the attention of BestBuy, which was developing its BestBuy for Business division—a program for building stronger relationships with business customers. “It’s really about doing the same thing that we’re about doing: helping small businesses succeed through technology,” Chatterly said.

“BestBuy realized is that communications is at the core of every small business’s infrastructure, and they wanted to be a player in that space,” Chatterly went on. Further, the company was interested in creating a more persistent relationship with customers—as opposed to selling them some merchandise whereupon the relationship would pass to whatever company whose products they sold—and to profit margins more generous than those typical of the retail technology business.

“The relationship made a lot of sense,” Chatterly commented. And in March of this year, Speakeasy ‘joined the BestBuy family of companies.’ “Now, we’re working together to integrate our sales and marketing capabilities. They have about 100 outside sales people, nationally, that are all fully trained in selling Speakeasy services today.”

“Basically what we’ve done is taken any discussion of financial risk associated with Speakeasy out of the equation,” Chatterly observed. “We’ve also expanded our suite of capabilities. Over time you’ll see us launching new initiatives that leverage the BestBuy capabilities – broadening the suite of technology that we can offer, based on their supplier relationships.”

A recent fine-tuning of the Speakeasy offering is EasyVoice Office/Small Office, announced last month, which is an effort to add flexibility for customers who are concerned about getting full value out of their monthly per-user subscription fee. EasyVoice Office lets customers opt for a $19.95 monthly per user fee supplemented by an umbrella plan covering national and international long distance—a ‘minutes bucket,’ available in various configurations, to be shared by all the customer’s personnel

Chatterly offered the hypothetical example of a national law office with 20 to 30 users in its main location. “Suppose they also have five two-lawyer offices around the country. All these could be on this EasyVoice Small Office—and they could all share the same umbrella minute plan across the business and be connected through four-digit dialing and those kinds of things.

Clearly, Speakeasy is alert to finding new ways to make its services work better for its chosen customer base—very small businesses.

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