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Pandesic Gives Up the Struggle By Phil Wainewright July 29, 2000
Intel and SAP's ASP joint venture announced Friday it will wind down operations.
Pandesic LLC, the joint venture set up by Intel Corp and SAP AG in 1997 to deliver outsourced backoffice solutions to dot-com ventures, announced yesterday (Jul 28th) that it is to end operations.
A statement issued by the company said the decision had been "because it does not see a timely road to profitability due to slower than anticipated market acceptance of business-to-consumer e-commerce solutions."
Chairman, CEO and co-founder Harry Hughes has resigned, together with president Pete Wolcott, who was responsible for day-to-day operations at the company. Catherine Yetts, executive vice president, has been named as interim CEO to oversee what is intended to be an orderly shutdown.
The company said it will help existing customers seek a transition to alternative solutions, and will offer a severance package and assistance in finding new positions to its approximately 400 employees. It has operations in the USA, UK and Japan.
Pandesic, with over 100 customers ranging from adidas to TransferMagic.com, has described itself as the largest application service provider for end-to-end e-commerce. Customers pay an upfront fee for setting up the ecommerce site, and then monthly hosting and service fees. Pandesic also negotiates a small percentage of revenues as part of its compensation.
Its core offering is a complete end-to-end infrastructure for e-business ventures. Built around SAP's R/3 ERP (enterprise resource planning) application suite, the solution includes physical backoffice systems such as warehousing, logistics and fulfilment as well as the e-commerce front end. Last year it turned to third-party vendors eGain, LinkShare, Netcentives and Net Perceptions to add more sophisticated online customer relationship capabilities to its solution.
Although SAP executives have sometimes expressed impatience with Pandesic's progress to profitability, there had been no prior signs of major problems at the venture. Last month, it named PricewaterhouseCoopers as its preferred systems integrator and consulting partner. The two companies claimed the alliance would generate $1bn in revenues over the next three years.
Phil Wainewright founded ASPnews.com in 1998 and is the publisher of Loosely Coupled. He can be contacted at
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