2014 Annual Report Company Overview

Transcription

1 2014 Annual Report Company Overview Headquartered in Southfield, Michigan, 123Net has been successfully providing premium voice, transport, colocation, and wireless services to Michigan businesses since Our team, technology, network and financial strength are the keys to our continued success. We value our high customer retention rate, and strive to provide industry-leading solutions. Transport 123Net offers high-quality, high-speed Internet connections that can easily be customized to meet the needs of businesses. 123Net s SONET-protected, 2,700+ mile, 14G IP fiber optic network connects to global transit carriers including Level 3, Savvis, Cogent, Global Crossing and others. The long haul optical network contains 50 nodes and uses Wavelength Division Multiplexing (DWDM) technology to maximize bandwidth capacity. Multiple Internet uplinks also provide stable connectivity throughout the network. 123Net s privately owned and managed fiber infrastructure with redundant, selfhealing architecture delivers guaranteed availability in keeping with our SLA. 123Net has the infrastructure to transport DS1, DS3, OC-n and Ethernet circuits. The optical ring configuration provides 50ms failover times in the event of a fiber cut. 123Net s switched Ethernet service uses both physical and virtual connections to extend the customer s LAN to our industrial-class data facilities over optical transport, providing fast, full-duplex, symmetrical access up to full Gigabit speeds. This service is well suited for hosting, video conferencing, data storage and many other data-intensive tasks. It eliminates the need for expensive termination equipment and is easily scaled. Colocation 123Net owns and operates four world-class, carrier-neutral data centers; three in Southfield, Michigan and one in Grand Rapids, Michigan. Dual fiber entrances, a climate controlled environment and generator backed-up facilities guarantee continuous Network uptime. Multiple power options include 120V, 208V, single and three phase AC and -48V DC. Dual Ethernet, power feeds and in-cabinet Fast Ethernet are available. Saleable options include a half cabinet, a full cabinet, or a customer private cage built to suit. The company s High Capacity IP network connects you to multiple global transit carriers: 10G Level (3), 2.5G Savvis Communications, and 1G Cogent.

2 Voice As a Competitive Local Exchange Carrier, or CLEC, 123Net provides traditional voice circuit interface with a variety of different PBX systems. The company s Primary Rate Interface (PRI) service delivers an all-digital signal. The service comes equipped with many popular features and is compatible with virtually all FAX and alarm systems on the market. It supports DID, or direct inward dialing, allowing for direct connections to employee s extensions. PRIs offer 23 Bidirectional B-Channels (Bearer) and one D-channel (Data). The D- channel handles signaling and call control requirements while the remaining 23 B-Channels remain free for concurrent voice calls. The PRI is a time tested method of delivering high quality voice to business callers. 123Net s SIP product is compatible with most digital PBX phone systems that support SIP Trunking. Customers enjoy all of the features and benefits of a PRI at a fraction of the cost. SIP is a 100% TCP/IP product. Wireless 123Net also offers its own fourth generation fixed wireless network, which delivers dedicated, symmetrical high-capacity bandwidth to businesses and institutions. The network circumvents terrestrial LEC telephone company infrastructure for optimal reliability, stability and security. It operates exclusively on interference-free FCC licensed frequencies with secure, encrypted paths. In addition to making high capacity bandwidth available to locations previously unserviceable, many of the company s customers utilize this wireless connection for redundant backup. Wireless Internet services from 123Net are available in many Metro Detroit areas including Wayne, Macomb, Oakland and Washtenaw County. The technology utilizes MIMO, OFDM, Packet Prioritization and other QoS features that until this point have never been commercially available in Metro Detroit. We never stand still; innovation and growth are at the center of our business model. Below are some of this year s achievements that support our company goals Annual Report 2014 Accomplishments Financial Strength The company is privately owned, and our focus is on the long-term. A prudent financial policy and a strong balance sheet have allowed us to invest in our business and the things that set us apart from our competitors.

3 Increased Revenue and Profits Following the company trends, revenue has increased in Net Income has also increased, and due to scalability and efficiency, at a higher percent of Net Sales than in the prior year. Customer Acquisition In 2014, we gained over 300 new customers. Our customer base is diverse and includes major social media hosts, Internet Service Providers (ISPs) and IT companies as well as a variety of business enterprises, school systems, universities, hospitals and municipalities. Company Acquisitions While most of our growth has been organic, we do strategically acquire companies that are the right fit. In 2014 we acquired Michigan Internet Communications Association, Ltd., and Michigan Network Services. Technology & Network Our networks and platforms are the foundations of the services we sell. We continue to invest in these to improve the services we offer our customers. Troy Expansion Significant investments have been made in Troy, including fiber swaps, site acquisitions and new construction. In total, this expansion has increased the 123Net network to 2,700+ route miles of fiber and 50 wireless points-ofpresence (PoPs) sites in the state. Wireless Network Expansion in Grand Rapids We continue to be the largest provider in Michigan of high speed fixed wireless, voice, and data, and in 2014 we expanded our high speed fixed wireless network to serve the Grand Rapids, Michigan area. The 9 Wireless PoP Sites we added in West Michigan allows for fixed wireless speeds of up to 1Gbps. This speed completely bypasses ILEC and cable company networks and has a guaranteed availability. IP-Enabled Switch We added an IP-enabled voice switch (VOIP) for additional capacity and network redundancy. Cobo Center Wireless Internet Services In 2014, we secured a contract to provide wireless Internet services to the Cobo Convention and Exhibition Center in Detroit, which is the largest expo center in Michigan, and the home of the North American International Auto Show.

4 NEC Corporation of America, a leading provider and integrator of advanced IT, communications, managed services and biometric solutions and 123Net completed an interoperability certification of 123Net's SIP trunking solution with NEC's IP business communication systems -- the UNIVERGE SV8100, SV8300 and SL1100. Our Team Our team s commitment and expertise is key to the success of our business. New Employees In 2014, 123Net expanded its workforce by hiring 20 new employees who support the growth of the company and ensure excellent customer service and seamless deployment of our services. Internship Programs As a Michigan business, we take pride in our community. We believe that creating an internship program is an excellent way to give back. In 2014, we started an internship program and hired our first interns, some of whom then became full-time employees upon graduation. Profit Sharing We stand behind our word. Since we believe that our team is key to the success of our business, in 2014 we implemented a profit sharing reward system for our employees. Agents The Company has achieved success by recruiting and retaining a strong base of wholesale and agent partners. In 2014, we partnered with 27 new agents. Sustainability Award 123Net and its employees have demonstrated best practices in business leadership and community service in the City of Southfield and were awarded the Southfield Area Chamber of Commerce Sustainability Award. Recognition 123Net was named to CRN s Managed Service Provider 500 List Annual Report What s next? Looking ahead, we are focused on: - Increasing our fiber footprint in Michigan - Vertical expansion into building our own fiber - Expanding our Premier Data Center facility in Southfield - Launching of Hosted PBX Telecom Solutions - Launching a Detroit Internet Exchange to generate faster data speeds at lower costs - Additional Wireless tower expansion - Investing in access to additional COs - Strategic Acquisitions

5