Posted: 10/2002
Ramp Rate Puts Twist on Agency Model
By Khali Henderson
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RAMP RATE LLC RESISTS categorization. The two-year-old company is not a consulting firm, nor systems integrator nor reseller. It doesn't charge based on time, nor materials, nor is its revenue margin based. Its services to clients are free; vendors pay a fee. The closest company executives will come to placing a label on the model is "intermediary" or "technology adviser."
"We're like a travel agent," says Ed Agar, who joined Ramp^Rate in July as senior vice president of marketing and strategic partnerships. He explains the company gets fees from telecom and datacom service and CPE vendors in the same way travel agents are paid by hotels, airlines and car rental companies for creating an integrated trip. "We assemble the best-of-breed colocation, fiber, managed service providers, etc., to create a solution."
When the deal is inked, he says, the client pays the vendors, and Ramp^Rate is paid a preset fee by the vendors, which is disclosed to the client. Uniquely, within a service category, such as bandwidth, each vendor pays Ramp^Rate the same fee give or take a few points.
Currently, Ramp^Rate has relationships with about 100 vendors -- eight to 10 in each category, including bandwidth, collocation, managed service providers, streaming, content delivery networks, digital rights management, digital asset management, network security and QoS tools.
Agar notes some of the older, larger vendors have taken some time warming to the model, while younger firms are quick to recognize the value proposition in offloading a portion of their SG&A costs, which can be upwards of 50 percent of every dollar. "In that case, a 15 percent commission is OK," he says.
Agar says the value Ramp^Rate brings to client is helping them shorten the procurement process. Evaluating six to eight providers each for four or five product lines can take six months or more, he says. Ramp^Rate can narrow the process to the top vendors in a week or two, he notes.
The Ramp^Rate process includes co- development of the "needs analysis," RFP and RFQ; "apples-to-apples" comparison ranging from technical to financial variables; vendor/partner selection and introduction; the lowest pricing, often at savings up to 75 percent; negotiation of the best possible service level agreements (SLAs); ongoing dispute resolution and other vendor management services.
Ramp^Rate developed its Service Provider Intell-igence (SPY) Index to assist the process. It is a proprietary measurement tool that weighs 35 factors including financial, technical, performance, client testimonials, value, brand, reporting, contract flexibility and SLA issues.
The company's primary targets are entertainment and media companies, such as Sony, Miramax and Radio Free Virgin, and other high-volume, transaction-based Internet sites. Of late, it also has had success helping clients migrate away from failing vendors to new providers. For example, in the Web hosting market -- rocked by the sudden departure of some of the industry's biggest players -- Ramp^Rate pinpointed and partnered with vendors in domain management, content delivery network, disaster recovery and storage, among others to provide migration solutions that enable clients to make quick, smooth transitions, thus reducing or eliminating downtime and loss of revenue.
Agar says the privately held company is growing rapidly, claiming tenfold growth from 2001 to 2002. A similar increase is expected from 2002 to 2003, he adds.
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Source: Ramp Rate
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Ramp^Rate LLC www.ramprate.com |
