Feb 3rd 2000: Interliant won $27.5m backing from Dell, BMC and Network Solutions, and recruited a new CEO from rival hosting company Verio, it announced this week. The pioneering ASP also pre-announced strong financial results for its fourth quarter.

PC manufacturer Dell and applications management vendor BMC Software made separate investments totalling $17.5m, while top Internet domain registrar Network Solutions Inc (NSI) weighed in with $10m, extending an existing alliance between NSI and Interliant to cross-promote their respective products and services.

Interliant will use the funds to build out its products and services. "There's a need to build the operational capability in advance of the customers [for hosted solutions]," company co-chairman Brad Feld told ASP News Review yesterday. Its range of hosted application offerings already includes messaging, knowledge management and distance learning based on software from Lotus, customer relationship management from Onyx Software and Pivotal, and e-commerce based on IBM, Microsoft and Mercantec platforms.

Both Dell and BMC are to work with Interliant to enhance its e-commerce portfolio, the companies said. How much of the $17.5m came from each investor was not revealed.

Herb Hribar, who has been president and chief operating officer of Verio since July 1998, officially takes up the reins as Interliant CEO on Feb 15th. The move is a coup for Interliant and something of a body blow for Verio, the world's largest web hosting provider by number of domains. In December, Verio announced a joint venture with up-and-coming IT services provider Ciber to target the ASP market.

"When I saw what Interliant had assembled, it looked like a great opportunity to come in and lead it. Interliant is better positioned than anyone I've seen," Hribar told ASP News Review. "I think Interliant will be the number one - and the number two - in the hosted applications market for small and midmarket businesses."

Interliant is the first ASP to benefit from an investment from BMC Software, which last week (Jan 26th) launched a certification and branding programme for providers who use its application and systems management software tools. Interliant was one of five charter members of the scheme, alongside ASPs Applicast and Corio, hosting provider Navisite, and business information provider The Motley Fool.

Interliant already has an established relationship with BMC, and uses its software to remotely manage servers located on customer sites under its eReach application service offering. "There's tremendous opportunity for us to build our ASP services around and on top of [BMC] products," said Feld.

Although Dell is a noted provider of servers and storage to ASPs and hosting providers - among them USinternetworking, eOnline and Navisite - the investment in Interliant confirms a new strategy by the manufacturer to invest in online providers of computing services. It follows hot on the heels of its backing last month for storage utility provider StorageNetworks, subscription computing startup CenterBeam and online recruitment business service provider Hire.com.

Interliant accompanied the announcements with early preliminary figures for its fiscal fourth quarter. It expects to report revenues of more than $18m, and losses of less than $8.8m (before interest, taxes, depreciation and amortisation) for the three months ended Dec 31st. This will bring total revenues for the year to more than $46m. The formal results are due Feb 17th.