STRATEGIES

July 18, 2002

Eamus Halpin, CEO of iRevolution, is passionately convinced that the one-to-many model of online software delivery will eventually triumph — even though he's been waiting longer than most for that day to come.

It may still be a few years away, but technologies like .NET that are now under development will ensure that the online services model finally takes off, he believes. Once that happens, there will be a huge need for providers that, like iRevolution, understand how to deliver software services reliably to tens of thousands of users.

Read and React

"Yes, we deliver all these types of service still, but it's not an all-or-nothing solution. We just sell a solution. We didn't want to come to market as an ASP that wouldn't deliver internally if that was what the customer wanted." — Eamus Halpin, CEO, iRevolution. Give us your feedback on the role of Web site hosting companies in the ASPnews Discussion Forum

"Our overriding objective is to become Europe's leading managed services and managed applications organization," he told ASPnews last month. "That has not changed and, as long as I am here, that will not change."

A European Pioneer
London Stock Exchange-listed iRevolution has its roots as one of Europe's earliest ASP pioneers. Originally founded in the early 1990s as systems integrator Integration Limited, the company was an early user of Citrix technology to deliver hosted financials software to small and mid-sized businesses among its customer base. With a hosted user base that had grown to number almost 10,000 seats by the year 2000, the business felt ready for the next step, and relaunched as iFuel, an ASP aggregator, in November 2000.

In retrospect, that launch over-estimated the market potential, Halpin now admits. But at the time, it seemed as though the ASP industry was taking shape, and iFuel was one among several U.K. and European launches by equally optimistic ventures. "We had hoped there would have been 10 or 15 organizations out there that could have proven the market was viable," Halpin told ASPnews last month. But it wasn't to be. "We're still doing very well, but it doesn't make us an industry."

Still, the launch provided enough momentum for a reverse takeover to list on the London Stock Exchange (ticker:IREV) in July 2001. With a stable revenue base from its systems integration business and #7.54 million ($11 million) in fresh funding raised during the stock flotation, iRevolution can afford to wait until the tide turns in its favor again.

"Yes we deliver all these types of service still, but it's not an all-or-nothing solution," said Halpin. "We just sell a solution. We didn't want to come to market as an ASP that wouldn't deliver internally if that was what the customer wanted."

Ready to Ride
Halpin's strategy is to continue building up the company's capabilities in the meantime so that, when the tide does turn, iRevolution will be ready to ride the wave. Currently, that means concentrating on marketing a new portfolio of security and systems management services offerings rather than pushing hosted enterprise applications. It's an easier concept to sell to customers, yet still takes advantage of the company's experience and skills in deploying hosted services out of a one-to-many infrastructure.

"The whole point of the NOC [network operations center] is that it's a one-to-many operating environment," Halpin explained. The individual monitoring software for each customer is deployed to the customer premises as a remotely managed "black box" implementation, while the heavyweight analysis and management tools form part of the shared infrastructure at iRevolution's control center.

"We're taking the ISV's (independent software vendor) technology and delivering it back to market as a service," added Michael Frisby, vece president, Partners and Services. "So it's what we set out to do with iFuel a year before."

The managed services portfolio was launched in April this year, and comprises a set of security solutions and an enterprise infrastructure management offering. For the first few months, iRevolution has been concentrating on achieving direct sales in order to get proof of concept for the services. But its core strategy relies on achieving volume sales through resellers, and it is hoping that by demonstrating a few early successes, it will encourage its partners to follow suit in the coming months. Building a reseller channel is also part of its longer-term strategy to be ready to support the roll-out of Web services-based application offeriogs when the technology allows.

The security offerings include virtual private network (VPN) infrastructure, access authentication and anti-virus, based on products from Checkpoint, RSA, Trend Micro and other vendors. The target market includes two types of resellers, said Frisby. Existing authorized resellers who need to offer a managed service option to close certain sales, while those who aren't authorized to carry the products can add security capabilities to their portfolio by simply offering the iRevolution services instead.

The enterprise infrastructure management offering is based on Unicenter software from Computer Associates, which iRevolution already uses to manage its own ASP data center. It will take longer to build up sales of this more complex offering, but Frisby believes resellers will grow to like it. "It's a complementary option to solutions they're already delivering to their customer base, but also it gives you a very easy, low-cost entry route into the market," he said.

The relationship with CA is strategic for iRevolution, which also acts as the vendor's European data center for its ACCPAC Online hosted financials solution (see Virtual ASPs Get Real).

Taking the Direct Approach
Halpin was so determined to make Unicenter the centerpiece of iRevolution's managed services portfolio that he flew to Florida late last year to sell the concept directly to CA chairman Charles Wang and his wife Nancy Li, who is president of the vendor's iCan SP managed services software division. The trip was a success. "I've been very impressed with their business mentality," said Halpin. "People who are in business to do business make things happen. We were talking about their number one product set. They thought it was a good idea and they made it happen."

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 Strategies