StayOnline Outsources IT

By Adam Stone

June 30, 2006

The hospitality Wi-Fi provider doesn't just install service and leave. Important conference clients get something extra: full-time staff.

Anyone can rig up Wi-Fi in your conference facility these days. But can they give you a live body to make sure it runs smoothly before, during and after the meeting?

Chuck Vollmer can.

As director of conference services for StayOnline, he is building a business model around the idea that, with Wi-Fi being cheap and easy, it's the service that matters most these days. For StayOnline's biggest clients, that means stationing a permanent employee on site to watch over wireless conference needs.

For the client, "they know that the person we put there is going to be an expert. That person is going to have the answers to the tough questions that the client puts forth," says Vollmer, a former regional IT manager for Sonesta hotels. In exchange, StayOnline gets an exclusive contract to plan, implement and support Wi-Fi installation for meetings at the facility.

StayOnline has its first on-site professional stationed at the Westin Galleria in Dallas. The hotel has about half of its 40,000 square feet of meeting space in use on any given day.

Similar opportunities abound, Vollmer says, citing a 2004 prediction from In-Stat that foresees $1 billion in annual meeting room revenue for high-speed Internet access (HSIA) by 2008. With that kind of momentum building, Vollmer says he would like to place permanent staff at three properties in Washington, D.C. in the near future, along with two in Chicago and more in Dallas.

These on-site workers become integrated into the hotel team. They work closely with the sales team, receive regular reports on conference business, and attend pre-conference meetings with the hotel staff. They manage all response efforts should technical difficulties arise.

Analysts see merit in the idea. With Wi-Fi equipment standardized and ample industry experience available, "the installation is like one percent of it," says Eddie Hold, vice president and research director of wireless service at research firm Current Analysis in Sterling, Virginia.

Once a hotel has landed a piece of conference business, complete with Wi-Fi availability, "then the key is to make sure the thing works," Hold says. To that end, "having someone local is a great idea. Then it is basically: 'Forget Wi-Fi. What we are really talking about is outsourcing part of your IT team.'"

This tech support aspect is a key to success in the industry, Hold says, and "hotels aren't really geared for that."

For smaller installations where it wouldn't pay to put a permanent employee on site, StayOnline handles conference support from its own operations center, where half a dozen techs tackle incoming calls.

In addition to its onsite personnel, StayOnline brings to the table another unusual business tactic. Rather than seeking compensation through a revenue-sharing model -- a model that is all but universal today -- StayOnline offers its services on a time-and-materials basis.

Vollmer says there is an inherent flaw in the revenue-sharing plan. With income guaranteed, the provider's financial motivation is to keep costs down. Vollmer says this often leads to sub-par service, to the detriment of both end users and facilities operators.

StayOnline has instead established fixed rates for such elements as VLAN configuration, SSIDs, wireless networks and so on. By analyzing the needs of a particular job, the sales team can work up a price that accurately reflects the actual work that will be done. For custom configurations, the company charges a straight hourly rate.

Vollmer says the site operator will typically come out slightly ahead, compared to a 50/50 revenue share.

To make the system work, StayOnline needs a sophisticated sales team, one that understands the technical aspects of a given piece of business. Vollmer works closely with them, training and reviewing the networks they are selling.

"Once they have that understanding, then they have the confidence to go out there and sell their product to the customer… knowing they have a base for what they can and can't offer," he says.

Finally, Vollmer backs it all up with an ambitious service program, offering a no-escalation policy that promises to solve problems on the first try. He says that level of service is a crucial selling point in the increasingly competitive market for conference Wi-Fi.

"Increasingly, hotels are offering connectivity on the guest side for free. So when you come into the conference room and the hotel tells you that you have to pay $500 for your connection, the first question on everybody's lips is: 'Why do I have to pay that when I can get it for free in my room?'" Vollmer says.

In such an environment, he says, service is the key differentiator.

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