Apr 14th 1999: Peoplesoft today made Corio a preferred partner and revealed it is making an equity investment in the ASP, with a seat on its board. The investment comes as part of Corio's second round of venture capital funding, details of which are to be announced next week.

Corio also confirmed that Ron Clarke, a former executive VP with leading payroll services provider Automated Data Processing (ADP), has joined the company as CEO.

Preferred partner status gives Corio the freedom to price offerings based on Peoplesoft applications according to prearranged guidelines, without having to check back with the vendor. Previously, all outsourcing partners have had to refer each individual deal back to Peoplesoft's sales force to agree pricing.

Corio will assist the vendor in development work to optimise its enterprise resource planning (ERP) applications for online rental. The two companies will also participate in joint sales and marketing activities. Corio will operate a training programme to educate Peoplesoft's sales force about the value of the ASP model to emerging companies. Incentives for the vendor's sales team for selling ASP solutions will be on a par with direct sales, Corio's founder Jonathan Lee told ASP News Review earlier today.

Another feature of the deal is that it effectively guarantees Corio's relationship with Peoplesoft "longer than any customer contract," he said. Some analysts have noted that the ASP model is vulnerable to changes in the relationship between a provider and its partner vendors during the course of a service contract. Lee said it was a major advantage for Corio to have removed this objection.

Corio is the first of Peoplesoft's nine outsourcing partners to be granted preferred status. Lee admitted the arrangement is not exclusive, but said, "We are the only preferred partner at this time and we expect to be the only preferred partner for some time."

The other partners include rival ASP USinternetworking (USi), which last week listed on the Nasdaq stock market in an IPO that valued it close to $3bn. USi has an equity investment from front-office software vendor Siebel and, although Peoplesoft is currently its only ERP vendor, it is expected to add relationships with others shortly.

Corio's new CEO was previously president of ADP's electronic services division. He was responsible for extending ADP's service offerings beyond payroll into business process outsourcing of human resources and financials.

Lee, who was previously CEO, now becomes executive VP of consulting. Clarke's background and experience is very complementary to his own, said Lee. "He's a very world class, strong executive that complements our team," he said.

Peoplesoft, which is based in Pleasanton CA, was not able to make a spokesperson available for this story today. Corio is based in Redwood City CA.