Jan 6th 2000: Top-tier enterprise software vendor JD Edwards (JDE) launched its own ASP division yesterday, breaking with its previous partner-only ASP strategy.

Called JDe.sourcing, the new division will deliver a full range of JDE enterprise and e-business applications to customers via Internet, frame relay or virtual private network connections. Leading international ISP Uunet will host the applications at its Internet data centres, under a new agreement between JDE and Uunet's telco parent, MCI Worldcom. JDE named Deloitte & Touche as its preferred integrator for the service.

The new division will target fast-changing companies ranging in size from global multi-nationals to dot-com startups, with a proposition that gets them up and running quickly with world-class e-business solutions and then continues to adapt to their changing needs.

"Every company out there is trying to figure out how they deal with e-business. We really focussed on how do we help those customers with speed," Gayle Sheppard, VP of the new division, told ASP News Review yesterday. "It's about having capability built in that customers can use and [allows them to] reflect changes in their business model in the software."

The new emphasis on speed of response prompted the move away from JDE's original partner-only model, established as early as 1997. "When we first designed the model, it was all designed on reducing cost and taking over the IT department of our customers. It was partner-centric and didn't have a flexible footprint. It didn't have the speed dimension," Sheppard explained.

The e.sourcing tag is intended to convey a more flexible hosting model than the traditional ASP model, she added. "Customers need customisation to their legacy systems, and they do want some custom configuration. That doesn't go away in the midmarket," she said. "I think the ASP model is seriously flawed if we believe customers can subscribe to a highly templated solution that locks them down."

The new offering, scheduled for commercial availability in the second quarter, will span customer relationship management (CRM), enterprise resource planning (ERP), supply chain, business-to-business electronic commerce and knowledge management. In the past year, JDE has added to its core ERP software by acquisitions, in-house development, and partnerships, most notably with CRM vendor Siebel and electronic commerce vendor Ariba.

JDE has worked with Sun to develop a shared-server hosting architecture for the e.sourcing service, and will standardise on Sun as its preferred server platform.

There will be two licensing options. One is a traditional perpetual licence plus a monthly usage charge for the application management and infrastructure. The other is a rental model, which JDE refined while working with partner ASPs.

Although JDe.sourcing believes a direct engagement with customers is essential to make sure it stays in touch with customer requirements, Sheppard said it will continue to work with partners who address markets and geographic areas that it does not reach. "We can't serve all markets, and we believe partners are very important to our strategy," she said.

There are nine companies in the vendor's ASP channel, including newly-announced partners EDS Taiwan and Singapore-based ASP startup etako.com, Silicon Valley-based startup Aristasoft, and long-standing partners Seattle WA-based World Technology Services (WTS) and IBM Global Services.

Sheppard said she does not expect JDe.sourcing to find itself in competition with partners, even when they operate in the same geography and industry, such as Aristasoft, which launched in November backed by $35m venture funding to target high-tech industry. While Aristasoft targets startups, Sheppard's unit deals with companies with annual revenues of $100m or more, she explained. Similarly, WTS is focussed on the construction and engineering industries, while IBM targets manufacturing. Deloitte & Touche will act as an ASP in the real estate and electronics industries.