Private Networks Break New Ground

By | July 10, 2001 | Via Satellite

Innovation in action: that’s the best way to describe today’s private business networks. Whether wholly-owned, or leased from space

segment suppliers, these corporate-run systems are finding new ways not just to make satellites work, but to make them pay.

No-Gamble Network

When it comes to the gaming industry, Harrah’s Entertainment stands out from the crowd. While virtually every other casino has turned itself into a theme park, Harrah’s has retained its emphasis on a quality, classic gaming experience.

But that’s not all: Harrah’s has also quietly amassed a national chain of casinos and resorts. With its recent purchase of Harveys Casino Resorts, the company will have 25 sites nationwide, once it gets regulatory approval. The question is, how to build the business between them, so that Harrah’s gets a bigger share of consumers’ overall gaming budget?

For Richard Mirman, Harrah’s senior vice president of marketing, this is an extremely serious question. Harrah’s research has shown that “even those customers who claim to be loyal to us only spend a small share of their gaming budget here,” he says.

Harrah’s answer is its “Total Rewards” program. Put simply, Total Rewards provides discounts, premiums, and even special events for Total Rewards cardholders. This motivates regular players to form a “longlasting relationship” with Harrah’s, Mirman says.

Which brings us to private networks, and how a $4 million investment helped Harrah’s to bring in $20 million in additional revenues.

On December 17, 2001, Harrah’s employed Convergent Media Systems to create a two-way live video hookup nationwide. (At the time Harrah’s hadn’t acquired Harvey Casinos, so the linkup was for 16 sites, rather than 25.) Convergent was responsible for setting up and running 16 live satellite links, plus the talent, camera people, and production aspects of the broadcast. According to this satellite services company, the event was the largest corporate satellite simulcast ever.

Here’s what happened: During the “Total Rewards Giveaway,” as it was called, each uplink site hosted five previous Harrah’s grand prize winners. These were people who belong to the Total Rewards program, who had won cash and merchandise during earlier contests.

During the broadcast, five winners were chosen live: all shown on wide screen monitors installed at all 16 properties. The prizes ranged from $5,000 to $250,000, with the whole event being watched by casino guests nationwide.

To say the least, the extra traffic generated by the Total Rewards Giveaway was great for business. “In fact, we made $7 million on one day alone, during what has traditionally been the slowest weekend of the year,” says Mirman. This, for a total promotional price tag of about $4 million. Not a bad deal, indeed. Meanwhile, Convergent President Jeff Freemyer was equally thrilled. “Wow! What a very exciting event for us to work on,” he says.

“The satellite linkup really worked for us,” concludes Mirman. “In fact, we liked it so much, we’re doing the Second Annual Total Rewards Giveaway in the same time frame this year.”

Keep ‘Em Moving

Across the United States, Bob Evans is a restaurant associated with “home cooking” at affordable prices. It’s also a place where speed is essential, from seating customers to quickly cashing them out.

Unfortunately, this last process was a bottleneck at times in Bob Evans’ 469 locations. In fact, “it was taking anywhere from 13 to 18 seconds for credit card transactions to go through by phone,” recalls Larry Beckwith, Bob Evans’ vice president of information services.

Not surprisingly, Beckwith wanted to find a better, faster way to complete these transactions. However, that’s not all he was after. “We also wanted to do e-mail efficiently, and to be able to transmit data and training manuals to our restaurants.”

As it turned out, terrestrial solutions were out of the question. ISDN and DSL weren’t available for all 469 locations, while Frame Relay was just too expensive. That’s why Bob Evans decided to build its own private satellite network, using Gilat Spacenet’s Skystar Advantage VSAT solution.

The installation began in September, 2000. Within two months, Spacenet had more than 400 sites up and running. Today, each site has access to e-mail and other back office applications at speeds up to 256 kbps, while inbound traffic to Bob Evans headquarters (which is minimal) travels on one of eleven 38.4 kbps channels.

To say the least, Skystar Advantage has solved some major problems for Bob Evans.

First and foremost, there’s credit/debit authorizations: what used to take 13-18 seconds now takes three seconds at most. “People don’t even get a chance to put their cards back in their wallets before it’s gone through,” says Beckwith. “It’s that fast.”

Secondly, Bob Evans’ private network helps the chain transmit large files economically and quickly to all its outlets, and get confirmation of receipt to boot. Eventually, the Gilat Spacenet system will be used for chain-wide inventory monitoring and restocking.

Third, this network is both reliable and robust, says Beckwith. The occasional times when there have been problems, “Spacenet has been very good at resolving them.”

The bottom line: running its own private network has proven to be a wise move for Bob Evans Restaurants. “It runs pretty well,” comments Larry Beckwith. “We don’t have to monkey with it to get it to work.”

Offering Quick Credit

Bob Evans Restaurants isn’t the only U.S. business to speed up credit card authorizations through private satellite networks. Convenience store chain Cumberland Farms also has grasped this concept, and with equally impressive results.

“We’ve had back office systems since 1989,” explains John Carroll, Cumberland Farm’s vice president of MIS. “Over the years, we’ve added credit point-of-sale terminals, and now pay-at-the-pump. Trouble is, every time you add a new application, you have to add another landline to support it.” Or do you? Maybe not. Faced with ever-rising landline costs, and looking to add “a little bit more speed” to their interstore communications, Cumberland Farms decided to find a solution. Like Bob Evans, the company soon concluded that DSL, ISDN, and Frame Relay just weren’t cost-effective answers to the problem. That’s why Cumberland Farms opted for satellite, and, eventually, for Spacenet.

Why Spacenet? Simply because “it looked like the best solution for us,” replies Carroll.

Today, more than 620 Cumberland Farms stores use Spacenet VSAT terminals to handle credit card and ATM transactions, pay-at-the-pump, and a host of back office functions as well. These include “polling our instore systems for sales information, product ordering, and inventory monitoring,” Carroll says.

How does it work? Well, for pay-at-the-pump, the customer’s credit card data travels from the pump to the store’s point-of-sale system, and then to the indoor satellite transceiver. “From there, it goes to the satellite and then onto Spacenet’s Chicago hub,” says Carroll. “At that point, they’re consolidated and transmitted over a high-speed landline to the Bypass Credit Network in Atlanta.”

“This has proven to be very beneficial for our customers, because they get much faster responses at the pump,” he says. “It also helps our clerks move through inside sales faster, so that’s a bonus as well.”

Better yet, Cumberland Farms’ private network has headroom for more applications, “because we’ve negotiated a bandwidth with Spacenet that allows us to do some growth without additional expense,” he says. “We also support our stores remotely from our help desk at our corporate headquarters. Thanks to our network, our technicians can dial directly into any store system, to troubleshoot any problems.”

As for downsides? “As with any network, there’s always a weak link, and we found ours,” John Carroll says. “We had two fiber optic backbones to the Bypass Credit Network: one for primary use, and the other as a backup. The mistake we made was that we routed them through the same Central Office down in Atlanta. A few weeks ago they had a major problem down there with BellSouth, and we lost both of them.”

However, Cumberland Farms’ private network wasn’t affected by the failure. As for weather problems? Heavy rain occasionally slows down traffic from Florida, says Carroll, but beyond this, “we’re very happy with our private network.”

Internet Cattle Auctions Go Nationwide

The Internet and cattle auctions: they’re not two things that normally go together.

However, thanks to the CattleinfoNet (http://www.cattleinfonet.com), they now do. In fact, cattlemen from around the United States can now bid in live cattle auctions, thanks to the pioneering efforts of eMerge Interactive and Hughes Network Systems’ DirecPC.

Based in Sebastian, FL, eMerge provides technology and marketing solutions for the $40 billion U.S. beef industry. One of their recent challenges was to improve online auctions for American beef producers. Since most are located in rural areas with poor or no Internet service, it was eMerge’s job to get them onto the Web, so that they could bid on the best breeding stock money can buy.

“We needed an alternative to the 9,600 baud rate that was available to these breeders,” says Al Gapsch, eMerge’s vice president of research and development. “That’s why we decided to look at satellite.”

eMerge’s answer was to install DirecPC Turbo one-way earth stations at about 280 feed lots and breeding barns across the United States. Through these high-speed downlinks, breeders anywhere can log onto eMerge’s Sebastian, FL, auction barn central servers. They can see large-format, full-motion video of the actual cattle for sale, and increasingly find out the cattle’s weight, ancestry and vaccination history, how it was raised, and even what it’s been fed. Also online are the current highest bids for the livestock: to keep things fair, eMerge deliberately delays the submission time for bidders in the barns, to match the latency within the remote bidders’ telephone return paths.

As for payment? To take part in CattleinfoNet auctions, cattlemen first have to be credit-approved with the auction site. This gives them the clout to back their bids, even if they’re calling in from the back forty in Wichita, KS.

So how well has DirecPC performed on the Internet auction circuit? “It works very well,” says Gapsch. “There have been a few minor glitches, but we’ve been able to work through them.”

For eMerge Interactive, DirecPC has provided a high-speed, cost-effective solution to a serious technological problem. Meanwhile, for the U.S. cattle industry, eMerge has solved one of its most pressing problems: how to ensure that everyone has access to the best breeding stock, no matter where they’re located.

Helping To Open Kids’ Minds

Few people who have viewed underwater footage of the Titanic have come away unmoved. Among these people are Robert Ballard, who found the great shipwreck in 1985, and EDS, one of the world’s leading IT services companies.

Today this spirit is communicated annually to students throughout the world, thanks to Ballard’s Jason Foundation for Education and EDS. Named for the remotely controlled submersible that helped find the Titanic, the Jason Project connects students to actual explorations. Over the years, Jason has taken fourth through eighth grade students to Hawaii’s great reefs, inside two 1812 shipwrecks in the Great Lakes, and around the Galapagos Islands.

What makes the Jason Project so different is that the students are connected directly to the live expedition’s audio, video, and data feeds in real time. In fact, in some instances, they’ve even been allowed to operate the sub’s controls remotely, as well as question the expedition’s scientists on screen.

The feeds are brought directly from the Jason Project through fiber optic cables, which then connect the signals to a ground station. Using General Instrument’s Digicipher 2 technology, the digital signals are then sent up to multiple satellites, then downlinked to “Primary Interactive Networks Sites” (PINS). These are locations equipped with interactive video and audio equipment, including multi-screen auditoriums that connect the students to the scientists onsite. They also have online PCs, to let the students “drive” the Jason.

About a million students get to take part directly in the “Jason Experience” through these PINS. “This year there were more than 30 PINS,” says Jerry Baskett, EDS’ broadcast network operations manager. “They were located in universities, colleges, schools, and museums.” Other students take part through the Internet at http://www.Jasonproject.org and http://www.eds.com/Jason, or by watching over the Jason classroom network.

One way EDS supports the Jason Project is by loaning space on its 140 site private satellite network using Scientific-Atlanta’s PowerVu System. “We currently use 4.5 MHz of digital spectrum on a sublease,” says Baskett. “Normally we use the spectrum to supply technical training, corporate town halls, and announcements to our offices across North America.”

EDS uses its network to supply “one way video for training,” he says. The audio return path from its sites are brought by telephone, using the One Touch system. EDS also provides multiple Internet solutions to the project, as well as a volunteer support.

For Baskett, the biggest challenge of running a private network is “keeping the hardware up and rolling.” However, there’s no doubt that EDS brass value this service. That’s why they’re now looking at porting EDS’ digital video feeds directly to their staff’s desktop PCs.

So why does EDS lend its satellite network to the Jason Project? “We know that many of the students in school today may end up working for EDS in the future,” says Jerry Baskett. “That’s why we want to influence what they study, and help their minds grow.”

More Common And More Varied

This is the second article in Via Satellite magazine about private networks. Since the first article was published a few years ago, things have definitely changed.

What really stands out is the new and creative ways that business is using these networks. It’s not just a matter of pumping out one-way news conferences anymore. Today, private networks are becoming the backbone of faster customer service, smarter marketing, and even higher education.

Clearly, private network owners are grasping the potential of their properties, and brainstorming about the innovative things they can do with them. To say the least, this is good news for them, their customers, the overall satellite industry, and the general public as well.

James Careless is a contributing writer to Via Satellite.


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