STRATEGIES

July 3, 2001

Just because ASPs deliver applications in a new way doesn't mean that some old methods used by traditional software vendors don't work — at least that's what Bedford, N.H.-based ASP ManagedOps.com is betting on by selling Microsoft Great Plains and Siebel apps exclusively through a network of over 200 VARs (value-added resellers) and system integrators.

ManagedOps At a Glance

Headquarters: Bedford, N.H. Founded: 1987 (as The Taylor Group) 2000 (Changed name to ManagedOps) Clients: Over 1700 users Employees: 180 Partners: Software: Microsoft Great Plains, Siebel, Microsoft Infrastructure: Citrix, Cisco Funding: $50 million, March 2000 Great Hill Partners LLC

"We're 100-percent channel-focused. This isn't a thing we do on the side," ManagedOps' vice president marketing Tom Brennan told ASPnews. "You didn't see us spending money on BusinessWeek ads last year. We spent our marketing dollars on getting the channel established."

ManagedOps' partner network has grown to include more than 3,000 business consulting and solution integrator professionals at more than 200 locations in North America who now market and implement the Managed Operations service for Microsoft Great Plains, Siebel Systems and Microsoft integrated e-business applications, hosted at its Bedford, N.H. data center.

The channel partners sell the service, do on-site consulting and play the role of trusted advisor, Brennan said. "When you're selling to the mid-market, you need a cost-effective way to sell, and to service customers on-site. The way to do it is through the channel."

Solutions, Not Commodities
The focus is on Great Plains and Siebel, with some third-party plug-ins and Microsoft Office "along for the ride," mainly as an integrated offering with Siebel, Brennan said. "We help people with business software solve business problems. We're not into commoditized software."

While it's still not easy to convince a mid-sized business to implement its Managed Operations, it is getting easier now that some of the "bandwagon" ASPs have gone by the wayside, Brennan said. "There's less noise in the market. It was very confusing for the customer to know what the value proposition was."

To help make the value clear, the company recently launched a cost-analysis tool to help SMBs quantify their IT costs, and began offering three levels of service — Entry-Level, Standard, and Select. The three services vary by the number of applications supported, range of services and price.

"The big mental leap here is not so much that we can calculate ROI (return on investment). The critical piece is that most mid-sized companies don't know how to quantify their IT costs," Brennan said.

The cost difference between running the applications in-house and outsourcing them to an ASP like ManagedOps can be staggering, according to Brennan. "We generally see a minimum of 30-percent difference, but we've seen up to 1000-percent returns, depending on the customer's environment."

The recent economic slowdown has had an effect on ManagedOps' buyer profile. In addition to the strategic buyers, who are typically high-growth, technology-oriented companies that quickly understand the value proposition, ManagedOps is now seeing more "Main Street buyers," Brennan said.

"In this economic climate, any IT decision is under incredible scrutiny by the CFO," he said. "These buyers are looking for predictable costs and a lower cost of ownership."

Reaching the Gold Standard
ManagedOps is well-regarded in the industry, winning several awards and recognitions. In May 2001, Microsoft Great Plains named ManagedOps to its ASP certification program, as one of 10 companies uniquely qualified to host Microsoft Great Plains solutions. ManagedOps also received the Great Plains ASP Excellence award in 2000, and was Great Plains Global Partner of the Year three out of the last five years.

In March 2001, it was one of only three ASPs in the U.S., alongside Qwest Communications and USinternetworking, to be named to the Microsoft Gold Certified Partner Program for Hosting and Application Services.

"There's both a perceived and a real benefit to the customer. All brochures sound the same on the surface. Microsoft evaluated us using a very thorough process. Their team looked at all our business processes, and they approved of what they saw," Brennan said.

ManagedOps.com is also a Siebel Systems Strategic Platform Partner, a Great Plains Strategic ASP Partner, a Microsoft Gold Certified E-Commerce Partner, a Citrix iBusiness Partner, and a Cisco Powered Network member.

ManagedOps was founded in 1987 as The Taylor Group, and changed its name in March 2000 to reflect the broader vision and capabilities of helping customers implement and manage their financial, manufacturing and customer relationship management systems. The Taylor Group remains as the solutions integration unit of ManagedOps.com, operating in New England and upstate New York.

ManagedOps is a privately held company, with employees holding majority control. In March 2000, Boston-based VC firm Great Hill Partners LLC invested $50 million in first-round financing.

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