While widely recognized as a pioneering consumer online service, CompuServe also operated a significant business-to-business segment, particularly through its CompuServe Network Services (CNS) division. Established in 1982, CNS was designed to monetize the extensive packet network that CompuServe had built to support its time-sharing and consumer services. This strategic move allowed the company to generate substantial revenue by selling connectivity
to its nationwide network, demonstrating a dual business model that leveraged its technological infrastructure for both public and corporate clients. This approach highlighted CompuServe's understanding of the value of its network assets beyond just its own information services.
Building and Selling a Global Network
CompuServe's network was a marvel of its time, featuring proprietary network processors based on DEC PDP-11 minicomputers and custom-developed software. This infrastructure, often mistakenly termed an X.25 network, actually implemented a mixture of standardized and proprietary layers, including an advanced Adaptive Routing system. This system allowed the network to automatically discover and integrate new switches and reconfigure itself, ensuring resilience and efficiency. More impressively, Adaptive Routing established connection paths based on real-time performance measurements, diverting traffic to prevent overloading and maintain optimal service quality. By presenting a standard X.25 interface to customers, CNS formed alliances with other private networks like Tymnet and Telenet, giving CompuServe the largest selection of local dial-up telephone connections in the world. This was a critical advantage in an era where network usage charges were expensive, but still more economical than long-distance calls.
This robust network became a vital component for many businesses. For over 20 years, CNS was the primary supplier of dial-up communications for credit-card authorizations, a competence developed through its long-standing relationship with Visa International. At its peak, CompuServe transmitted millions of authorization transactions each month, representing billions of dollars in consumer purchases. For many businesses, an always-on connection was an extravagance, making CompuServe's dial-up option a practical and cost-effective solution. This service continues to operate today as part of Verizon, underscoring the enduring value and foresight of CompuServe's network infrastructure.
Specialized Financial Services
Beyond general network connectivity, CompuServe also served as a vendor of other commercial services, notably through its Financial Services group. This group specialized in collecting and consolidating financial data from a myriad of data feeds, including prominent sources like CompuStat, Disclosure, and I/B/E/S, as well as real-time price and quote feeds from major exchanges. CompuServe developed extensive screening and reporting programs that were widely utilized by many investment banks on Wall Street. This specialized offering demonstrated CompuServe's ability to cater to niche, high-value markets, providing critical information and tools to the financial industry.
International Expansion and Joint Ventures
CompuServe's business operations extended significantly outside the United States, showcasing its ambition to become a global player. Its international expansion began in Japan in 1986 through a joint venture with Fujitsu and Nissho Iwai, which led to the creation of NIFTY-Serve, a Japanese-language version of CompuServe, in 1989. In 1993, CompuServe Hong Kong was launched as a joint venture with Hutchison Telecom, successfully acquiring 50,000 customers before the widespread emergence of dial-up Internet Service Providers (ISPs). The company also co-developed WorldsAway, an interactive virtual environment, with Fujitsu between 1994 and 1995. By gradually introducing its own direct dial-up access network in many countries and establishing commercial branches in cities like London and Munich, CompuServe solidified its international presence, offering its commercial services and connectivity solutions on a global scale.
