Capitalizing on the idea of back-up Internet service in case a company’s main connection goes down, drawing on a sales and marketing background and developing a plan similar to an insurance company’s, Alan Lange hit a bull’s eye with his new start-up company that’s gaining national attention.
Dubbed “Redundant,” a business name that perfectly reflects the services provided, Lange will launch service in Dallas in May and Atlanta in June. Lange, who grew up in Jackson, is finishing up the first round of $1 million in funding. He already has a stellar group of managers lined up, including John Buckley, former president of publicly-traded ProsoftTraining.com, and Kim Johnston, ProsoftTraining’s former CFO, both of whom signed on early and are co-founders in the venture.
“We’re very fortunate to have that sort of quality management coming on board this early,” said Lange, who has not yet turned 30. “We anticipate other high-profile management locally coming on board soon.”
And UUNet, the Internet division of MCI WorldCom, has given Redundant its blessing, opting to grant the company bandwidth to make the back-up service work.
“They see long-term benefits for their clients, and technical and sales support,” said Lange, who worked with MCI WorldCom in 1996 as an Internet product manager, helped build the mega communication giant’s Web site and roll out its first Internet access product. Soon after, Lange went to work with ProsoftTraining, where he trained approximately 2,000 BellSouth salespeople on the Internet.
Lange, founder, CEO and chairman of Redundant Networks, is in the process of recruiting directors and other management personnel around the country. With an initial team of six, another 15 or so employees could be added later this year, he said.
“Major sites like Schwab, e-Bay and other name brand sites that go down for a variety of reasons, primarily loss of communication services, deal with the back-up problem by buying extra circuits from multiple providers, such as AT&T, Sprint and MCI WorldCom,” Lange said. “But smaller businesses that gross $2 to $200 million – they’re the ones we’re targeting – cannot find a company that addresses the concept of providing only back-up services for businesses. AT&T, for example, has no incentive to sell circuits for less money. If they did, it would make their competition stronger.”
What makes Redundant’s model unique in the bandwidth industry is that customers are charged deeply discounted prices based on the premise that the bandwidth is rarely used, he said.
“For instance, an ISP might charge between $1,000 and $1,200 a month for a T-1, a standard segment of bandwidth,” he said. “In addition, the company has to pay either a local Bell operating company or a competitive CLEC an additional $200 to $500 a month. Last year, MCI WorldCom had an outage that lasted five days across much of the nation — a very quantifiable loss. We establish a connection for roughly a third of what you would pay retail. Customers will very rarely demand that bandwidth, but when they do, it’s there — in real time. It’s so seamless, the customer never knows it is down.”
Lange, who said Redundant has “a very symbiotic relationship with ISPs because we depend on them,” has filed a process patent on the architecture of the product, which is still in development, he said.
“We believe our network process is a patentable process,” he said. “That provides value and uniqueness of the network.”
Redundant’s back-up access is monitored 24 hours a day, seven days a week. Its Web site can be accessed at www.redundant.net, he said.
“The cost for a T-1 line is $399 (a month) plus the cost of local services, which varies depending on a company’s needs,” he said.
Strong interest already gleaned from the marketplace and investment bankers might result in the company going public in the next few years, Lange said.
“We certainly wouldn’t rule it out,” he said. “Our focus is on creating value for our current investors, and we’re not precluding any possible strategies to achieve liquidity for further funds of development.”
Contact MBJ contributing writer Lynne Wilbanks Jeter at firstname.lastname@example.org, email@example.com or (601) 364-1018.