Minnesota’s second-largest Internet service provider, VISI.com, is headquartered once again in Minnesota after a five-year hiatus. Several customers e-mailed their enthusiastic approval. But the person happiest about the news may be Mike Sowada, the ISP’s energetic new owner.
“I have a high regard for [VISI’s] organization from the top down,” says Sowada, a Minnesota native himself and founder of Digital North, a Minneapolis-based Web hosting business. “I had probably known about a third of [VISI’s employees] prior to the acquisition in dealings with our business.”
VISI’s history reflects the relentless pace of change that the ISP industry has undergone in the past decade. The company was founded as Vector Internet Services, Inc., in 1994, just as demand for Internet access was ramping up. Dozens of mom-and-pop ISPs appeared in Minnesota; as the decade progressed, many went under or were acquired. VISI itself was snapped up by Connecticut-based broadband company DSL.net (Amex: BIZ).
Meanwhile, VISI’s future acquirer was building his IT career at Music-land, Accenture, and his own Web development start-up, DKS Systems. In 2001, Sowada started Digital North, a Web-site hosting company that garnered a reputation for superb customer service, and which grew even during a sluggish period for tech spending. Last year, Sowada was named Emerging Entrepreneur of the Year by the TwinWest Chamber of Commerce in the west metro.
“I didn’t get into this to be the slumlord of hosting!” Sowada jokes. “A lot of hosting companies and ISPs are run by tech guys. I’d be the first to admit I’m a tech guy, but people who knew me way back when will tell you I got corrupted into business. I understand the customer. And I understand that at two in the morning, I’d rather be sleeping. But the customer needs you to be awake dealing with this. So no questions asked: I’m dealing with it.”
One of Digital North’s strategic partners was VISI, to which Digital North supplied Windows-based hosting services. Meanwhile, Sowada wanted to expand Digital North, and was seeking an ISP to acquire. “I had actually over a year ago joked to [VISI executives] that some day I’ll be buying it,” Sowada recalls. The joke turned serious last year, when he got wind that DSL.net, seeking to refocus on its core broadband communications businesses, was peddling VISI. Sowada jumped at the opportunity. He has since moved his office and most of his Digital North team to VISI’s headquarters in the Plymouth Building in downtown Minneapolis, replacing the Digital North name with VISI’s. (The “new” VISI will continue to offer Digital North’s hosting capabilities.)
Though VISI in 2005 was ranked Minnesota’s second-largest ISP in terms of total dedicated bandwidth sold, behind Time Warner’s Road Runner, many in the local tech community believe that the company wasn’t quite as innovative and nimble as it had been before it was purchased by DSL.net. Sowada has plans to keep VISI fresh. He says that the company will spend more than half a million dollars on capital improvements in the coming year, primarily in upgrades to its network and data-center equipment, and will introduce at least one new product a month. (In January, it added remote backup within its St. Paul data center.) VISI also has been hiring salespeople, support personnel, and techies, and will be expanding the data center. Sowada expects the company to post more than $8 million in revenues this year.
“I don’t want to say that VISI lost its luster, but it’s always been a diamond in the rough,” Sowada says. “I just want to polish it up and make it the best place it can possibly be.” Sounds like he’s feeling right at home.
