Overview of Concentric

Principles of Budget and Finance

Overview of Concentric

Brief History

Concentric Network Corporation is an Internet service provider that began in
1991 under the name of Engineered Video Concepts, Inc., changed their name to
Concentric Research Corporation in 1992 and began network operations in 1994. In
1995, the company changed its name to Concentric Network Corporation and
reincorporated in 1997. The company offered public stocks on August 1, 1997.
Since that time they have grown considerably by strategically acquiring
partnerships in the industry. Concentric offers Internet and networking
services. Their customers consist of individuals dial up Internet access, small
to medium businesses Web hosting, remote access, Internet telephony and
videoconferencing, and virtual private networks. Virtual private networks
consist of enterprise networks with hardware leased from a third party which
would be Concentric. Concentric relies on a high-performance, ATM-based network
that covers all of North America. Through different partnerships Concentric
Network now reaches South America, Europe, and the Pacific Rim.

Industry

The data communications services offered by public carries had limited
security features, were expensive and did not offer reliable transmission. Many
corporations established and maintained their own private Wide Area Networks (WANs)
to provide network-based services. Today, the need for WANs has grown
considerably due to companies wanting to offer better customer service and
quicker, smoother data transactions.

To start a WAN, a company must invest much of their capital as well as
constantly maintain upgrading and supporting their own WAN. Many companies have
decided to look to vendors offering already existing WANs, hardware and support
instead of maintaining their own WAN. This is where companies such as Concentric
get their customers.

The inception of the internet has caused widespread usage of certain
applications by companies, however, security and reliable performance have been
a strong concern of companies. Industry analysts expect the market size for both
value-added IP data networking services and Internet access to grow rapidly as
businesses and consumers increase their use of the Internet, intranets and
privately managed IP networks. According to industry analyst Forrester Research,
Inc., the total market for these services is projected to grow from $6.2 billion
in 1997 to approximately $49.7 billion in the year 2002.

Concentric’s Business Strategy

Concentric’s objective is to become the leading supplier of value-added,
IP-based network services worldwide. The company has elected to implement this
strategy using the following key principles: rapidly provide cost-effective,
tailored network solutions, optimize network utilization, acquire complementary
assets, technologies and businesses, employ leveraged marketing through
strategic partners, and deploy network services internationally. Concentric
offers many services to attempt to adequately attack their business strategy.
One of its service that is offered to not only smaller businesses but larger
companies as well is their Virtual Private Network.

This network enables a business to deploy internal business applications
business-to-business or business-to-customer with high-speed access to the
internet. The network is secure and offers a way to access information and
communicate with offices in other geographical regions as well as retrieve
information from the Internet.

Concentric’s Concentric Server Solutions offers lines of web hosting for
businesses who require outsources maintenance, management, bandwidth, and
housing for their Internet Web servers. Concentric’s ConcentricHost product is
a suite of web-hosting products and services designed to provide solutions to
the Internet needs for small to medium-sized businesses in one account. Packages
range in price from $29.95 to $199.95 per month depending on the number of email
accounts and the amount of server space and bandwidth the customer desires.
Concentric also has Windows NT Hosting as well. This product is targeted to
small to medium-sized companies as well and offers a line of Windows NT-based
hosting.

Strategic Business Alliances

The company prides itself in aggressively pursuing alliance partnerships with
other companies to expand its enterprise and consumer customer base. The
following is a list of its current alliances. WebTV Networks, Inc., owned by
Microsoft accounts for one-third of Concentric’s sales. SBC Communications
Inc., will help Concentric add to their already existing Virtual Private Network
products.

Williams Communications Group, Inc. is a company that Concentric is partnered
with due to Williams’ wide range of communication services and
telecommunication equipment that will enable Concentric to meet its business
strategy. In January of 1999 Concentric entered into a partnership with Covad
which allows Concentric to resell Covad’s DSL local loop services to
Concentric’s customers. Teligent is a company that Concentric formed an
alliance with in order to allow Teligent to offer its high-bandwidth
communication services to Concentric’s customers. Concentric and Intuit, a
financial software company, partnered in October of 1995 allowing Intuit to use
concentric to launch integrated internet access to the Quicken Financial
Network. Nortel/Bay Networks and Concentric are partnered to allow Nortel’s
RemoteLink users to dial into