Like many other service providers, iPass is trying to move up the stack, hopefully making a “transformation to a software and technology company.” It is not easy.
Though iPass began life as a supplier of enterprise Wi-Fi hotspot connections, largely for travelers, it now partners with mobile operators to manage customer data connections. The SmartConnect platform connects customers to the best network, at any given time, whether the mobile data network or a local Wi-Fi network.
Likewise, the iPass Verifi analytics service is a tool service providers can use to decide when and where to offload mobile network traffic.
Some revenue issues recently encountered by iPass illustrate one enduring problem for service specialists in the communications business, namely that “specialist” service opportunities can evaporate when tier-one service providers decide the former “specialist” capability must be part of their standard offers, or when tier-one service providers make changes in retail pricing or packaging that are functional substitutes for the specialist services.
Total revenue for the second quarter of 2017 was $13.5 million, down six percent from $14.3 million last quarter and down 18 percent from $16.5 million in the second quarter of 2016.
iPass SmartConnect, when coupled with the Veri-Fi big data product, helps iPass partners more efficiently use and deploy available bandwidth, both Wi-Fi and mobile networks. But that capability now is becoming part of 4G, and will definitely be part of 5G. The key implication is that those iPass business opportunities eventually will disappear.
Another key change is that a specialist feature--access to Wi-Fi hotspots--now is becoming so ubiquitous that “our legacy pay-per-use customers declined by 22 percent” in the second quarter of 2017.
“Two years ago iPass was solely a reseller of Wi-Fi, and we started the transformation to a software and technology company,” said Gary Griffiths, iPass CEO.
As with other service providers, the top line is something of a race between growth of new revenue sources and the decline of legacy revenues.
By the end of 2017, iPass expects that revenue from customers using iPass Unlimited with SmartConnect will be more than 40 percent of total revenue, the company says.
The success of the transformation plan will be powerfully affected by the moves tier one mobile providers take to create their own methods of combining Wi-Fi and mobile network bandwidth, including such techniques as License Assisted Access.
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