NEWS	Week's Top News | Alliances | Business/Finance Product Launches | Trends

March 16, 2000

Microsoft has invested $10m in ASP Interliant as part of a deal to develop application hosting services on its Exchange and Windows 2000 platforms. The announcement is a further boost for Interliant, which earlier this month added enterprise resource planning (ERP) to its application hosting portfolio with the acquisition of two Peoplesoft partners.

Microsoft and Interliant plan to work together to develop tools that will help independent software vendors (ISVs) and application solution providers to develop hosted, collaborative applications on the Exchange 2000 Server platform. Interliant will also develop services to support ISVs in their efforts.

Interliant brings substantial expertise in hosted collaboration to the deal, having pioneered the hosting of Lotus Notes-based applications from its foundation in 1993. Last year, the provider forged closer links with Microsoft, and in October was named alongside Interland and Intel to an elite group of providers who would offer outsourced Windows 2000-based hosting services to other Microsoft partners.

Earlier this month (Mar 2nd), Interliant became a Peoplesoft ASP with the acquisition of application outsourcer reSource Partner (rSP) and systems consultant Soft Link. rSP was among Peoplesoft's first batch of outsourcing partners when the software vendor first formulated an ASP strategy in late 1998, and brings a substantial existing customer base for hosted ERP applications. Interliant had not previously offered an ERP solution.

Columbus OH-based reSource Partner Inc was acquired from Borden Inc. Its assets include a state-of-the-art data center in Ohio. The combination with Maplewood MN-based Soft Link Inc is intended to bolster Interliant's skills base in this new application area.

According to Wall Street analyst Bill Dering of CE Unterberg, Towbin, the acquisitions will add more than $40m to Interliant's revenues in 2000.

In February, Interliant gained $27.5m backing from Dell Computer, BMC Software and Network Solutions, and won the contract to operate Dell's hosting service for small and medium business customers, announced Feb 22nd. It is also a partner with IBM and its subsidiary Lotus Development as well as with Microsoft.

The new deal with Microsoft gives Interliant further credibility as a leading player in the booming communication and collaboration segment of the application hosting market.

"The Microsoft investment highlights and confirms the direction the two vendors have been moving the past few months," Dering told ASP News Review. "It formally endorses Interliant as a premier choice to the Microsoft network of VARs. It gives a strong overall signal that Microsoft thinks Interliant is one of the best ASPs in the market today."

New York-based Interliant Inc (Nasdaq ticker: INIT) currently offers Web site hosting, messaging and knowledge management services, e-commerce applications, customer relationship management tools, enterprise resource planning and distributed learning systems. It also operates a Web-based application rental site dubbed AppsOnline.com.

[Report updated Mar 17th to add Bill Dering comments]

Report by Patricia Fusco, InternetNews.com

Tools:

Add aspnews.com to your favorites Add aspnews.com to your browser search box IE 7 | Firefox 2.0 | Firefox 1.5.x

Back to Business/Finance News