Danish Affiliate Group Sells Internet Company

Multimillion-Dollar Deal Signed with TeleDanmark

The Danish Unix-Systems User Group (DKUUG), based in Copenhagen, Denmark, has a problem that most associations would love to have: what do to with a very large amount of money. DKUUG recently announced the sale of DKnet, an Internet service provider (ISP) company which the group has developed over the past eight years. The buyer, TeleDanmark, is the country's main telecommunications company. With the proceeds from this transaction (described as "several million dollars"), DKUUG is now in a strong position to expand its presence in Denmark and further promote Unix and open systems through conferences, trade shows and publications.

"I am absolutely amazed by the success we've had with this project. It surpassed my wildest expectations," says Kim Biel-Nielsen, vice chairman of DKUUG. "We now have a huge pile of cash. The important thing is to use it wisely."

DKUUG was formed in 1982 and now has more than 1,100 members throughout Denmark. The user group was originally involved in providing Internet access to DKUUG members in the Danish academic community. In 1983, DKUUG began allowing nonmembers to use the service. Demand grew so quickly that a year later, DKUUG formed DKnet as a commercial company offering Internet access and other services such as e-mail to individuals and business customers. DKnet has now become Denmark's largest commercial ISP, prompting the sale to TeleDanmark. Says Biel-Nielsen, "Our activities have reached a dimension which lies beyond what we feel an association should deal with."

TeleDanmark has also recently acquired Diatel, a service provider similar to CompuServe, and expects to offer services that include a country-wide electronic payment system. With the acquisition of DKnet, TeleDanmark will now control 80 percent of Denmark's Internet user market, estimated at over 100,000.

The sale of DKnet puts DKUUG in an interesting and enviable position. "It gives us the total freedom to do new things," says Biel-Nielsen. "Being an association, we have many people with many different ideas, so the trick will be to identify the best ideas."

Some of these ideas involve an expanded range of seminars and conferences. "Previously we couldn't have a seminar and conference which ran at a loss in terms of revenues," says Biel-Nielsen. "Now we have the flexibility to provide more programs and have better speakers." He says that in April, Danish officials will meet with the UniForum Association at Santa Clara, CA, to discuss ways that DKUUG can sublicense the services offered by UniForum in the United States. "That way, we can bring the best of UniForum to Denmark," he remarks. Biel-Nielsen also mentions that the DKUUG will use funds to expand the association's newsletter.

The position of Unix in Denmark is similar to that in the United States, according to Biel-Nielsen. "Unix is increasing in popularity, but it is increasingly invisible since it is mainly a server platform," he says. "As a server, it's noticed only when it goes down. Now, Unix doesn't go down, which means that it isn't noticed." With DKUUG's new efforts, the visibility of Unix and open systems in Denmark may increase significantly.