Business models

Wholesale model

The wholesale model works on the basis that we charge a single monthly charge for the provision of the line and bandwidth charges to the Park and the Park then marks that up and charges it back out to tenants. This puts the Park management in the contract line for the services, normally requires them to provide first line support and means that they have to take liability for the service level agreement and billing. This can make sense, especially for hot-desk type services (see below for an expanded view of this specific model) where the contract with the user is more casual but does create manpower overhead and liability for the Park management

Retail model

The retail model is the one we normally employ with the vast majority of our landlord clients and usually means that Bridge contracts directly with the tenant for the services provided under a blanket contract with the Park which defines the expectations of that service and the underlying commercial model between the parties. Bridge normally takes the liability for the external line contracts, delivers a range of services to the tenants against different tariffs and service levels and provides full billing and support. Any payment back to the landlord is normally calculated relative to the capital investment of each party and the required ROI cycle, and is usually a percentage of revenues or gross margin. This payment may be “stepped” over time to reflect differing financial objectives over the life of the contract

Per desk/per tenant charging

The per desk/per user model can be a variant of either wholesale or retail models but per user charging is more commonly employed by the landlord when recharging from the wholesale model and where there are a lot of tenants on very short contracts. We sometimes refer to this as the “Regus” model as it is much more common in business centres where the financial yield per tenant per month is the overriding priority. It is less common in Science Parks and incubators.

Some incubators bundle in a range of services including Broadband telephone into a single per desk charge (including rent, service charge etc.) and this can work well for single user and smaller companies, and less well for larger companies or those staying for longer periods where it becomes more difficult for the tenant to establish market equivalence. It can also be used as a hot desktop up for virtual tenants.

Co-investment and revenue shares

Bridge sometimes co-invests with its landlord partners in building the infrastructure to deliver services. This is most common where there is a mature tenancy base and we are refreshing the infrastructure when taking over from a previous service provider or from the landlord themselves who were previously providing an in-house managed service. We have completed two of these over the last year.

In any case, we work with the landlord to design the most cost-effective infrastructure from wiring closets and cabling through to switching, routing and firewall infrastructures. In many cases, we can engineer degrees of resilience into the network, either from day 1 or over time to match demand. This is somewhat dependent on the existing structure in the building or the state of completion of new builds.

Most of our revenues come from monthly recurring service invoices and we will often source equipment on a transparent cost basis with modest charges for the labour required to set up the building. Nowadays building a high-performance wireless network through the building is as important as the copper and fibre cabling and this can be not without its own specific challenges. In some cases we can phase the investment to match occupancy levels.

Once we have established the capital costs and the likely tenancy levels and service usage profiles over the life of the contract, we then project where the breakeven point is reached and therefore how the ROI profile should be set up. This is done by working through an open book, interactive process with the landlord. Rebates and revenue shares are normally paid quarterly in arrears and we normally set a target of the landlord getting a return on his investment in the network over 3-5 years, or less.

External Connectivity Options

Inter and Intra Campus connectivity

There are a range of options available to us with campuses and multi-sited Parks, not least of which is the opportunity to connect tenants on multiple sites to each other virtually over our network. This can have a significant impact in creating collaboration opportunities between sites, can reduce tenant’s costs and create a real marketing opportunity for the new site. We are seeing quite a rapid growth of this inter-site networking (and intra-site for clients with multiple offices on one campus) especially between our larger clients

JANET

JANET has an extensive network of its own which is now open to us for commercial use and offers significant advantages where a site is close to (or shares a campus with) a University, college or research site.  As the first service provider with a commercial contract with JANET this gives us access to both local capacity and also national “dark fibre-like” services for supporting and enhancing our core national network. This is especially useful for research based organisations wanting to create direct connections and peering to organisations outside the local area or where security concerns make generic Internet based connectivity less attractive

CityFibre

We have concluded a contract with CityFibre who have their local base in Cambridge at the Science Park. This connection is going live as we speak and offers other options for both local and national connectivity at high speeds and lower tariffs

Openreach

We often use Openreach local fibre connections (EADs) to connect sites together and connect more remote sites back into our core network or other service provider’s networks. In combination with other local services this gives us the opportunity to engineer improved resilience into our clients’ networks

Resilience/site limitations

The cost and feasibility of engineering resilient connectivity is dependent on the level of take-up and the type of services and tenants in any building or campus. Buildings with limited external ductwork may restrict the level of true level of resilience and divergence possible but we will normally seek to create as resilient a network as is technically and commercially feasible. We normally review the site plans and complete a survey to establish the feasibility and cost for a new building

Wireless connectivity

Another option with much lower cost (no line charges) is to construct a resilient link with a Point-To Point wireless link. We have a number of these in place between buildings as they often provide better true resilience than two fibres running in the same duct or via the same exchange.

Intra site services

Bridge is uniquely placed to deliver intra-site network connectivity at extremely low (or no) cost to the landlord. Depending on the overall model negotiated between the parties, we would normally expect to manage this connectivity within the overall network management envelope and to the same high standards as the external tenant connectivity

CCTV/Access Control/Security/BMS etc.

All of the Intra site services have slightly different service profiles and network demands. Managing this within an overall network management frame work makes more sense commercially and is a more efficient use of resources than managing them separately or even building two networks as some landlords do. We can advise on how this can be delivered as we develop the operating model.