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NEWS
Feb 17th 2000: Two ventures launched this week will host own-brand application portals for ISPs and other volume market providers. Each led by ASP industry veterans, the new services offer banks, telecoms providers and ISPs a rapid entry path into the ASP market without needing to set up their own application hosting operations. Biztro, backed by leading Internet investment group Softbank Ventures and led by former Microsoft executive Navin Chaddha, launched an integrated applications and commerce portal for small businesses. It will operate the service for partners free of charge, in return for a slice of third-party commerce and services revenues. Until recently, Chaddha was chief architect for Microsoft's network solutions group, responsible for defining the vendor's strategy for products and services to the telco, cable, ISP and ASP industries. Meanwhile, newly-launched CMeRun announced its consumer ASP service, an application portal offering online rental of popular products such as Microsoft Works, Money and the Corel Office suite, as well as games and educational titles. CMeRun is the first venture funded by Chell.com, an investment bank formed by Cameron Chell, the founder and former CEO of pioneering ASP Futurelink. The core of the Biztro offering is a business operations environment that automates a series of common small business administration processes. It includes backoffice applications covering financial and operational management functions, and also automates administration and authorisation processes for activities such as human resources, procurement and expenses management. The system provides single sign-on access to third-party services such as ADP payroll processing and PacifiCare healthcare benefits, as well as an integrated marketplace for purchasing business products from suppliers including Dell and Office Max. Biztro will host the service free of charge for its channel partners, branding the look and feel to partner requirements. It will act as an outsourced application portal provider, in the same way that providers such as Inktomi and Critical Path outsource search and email services for portals and ISPs, Chaddha told ASP News Review in a briefing this week. "We're an ASP's ASP," he said. Channel partners announced this week are telecoms and Internet network operators Bell Atlantic, Concentric Network, DSL.net, New Edge Networks and NorthPoint Communications; vertical portal operator VerticalNet; payroll services provider ADP; leading banking group FleetBoston Financial; and M&I; Data Services, which operates e-banking services for 18 of the top 20 US banks. Biztro will earn most of its revenues by taking a cut when users sign up for third-party products and services. "There are several hundred millions of dollars of commission available in this market," said Chaddha. CMeRun's mission is to deliver applications for the consumer market using the ASP model. "Our mantra is, 'Let everyone play'," company chairman Chell told press and analysts in a briefing on Monday (Feb 14th). Using Critical Path as an analogy, he said that ISPs and other portal operators will be able to seamlessly integrate the service into their online properties. CMeRun will use Citrix and Microsoft Windows terminal technology to deliver the applications, which it will host and manage using what it says is its own proprietary infrastructure. The new ASP is an obvious candidate to use Citrix nFuse technology, also launched this week, which allows providers to embed applications directly into dynamically-generated Web pages (see separate story, Citrix adds apps to HTML). It plans to go live with a production launch in July. Although CMeRun will charge for the service, Chell said he expects channel partners will be able to experiment with funding application rental out of advertising revenues, since users will be in front of their screens longer and more frequently than is the case with conventional content. "I think we'll see stickiness changing from minutes to hours," he said. Launched at a glitzy party in San Francisco on the opening night of the Windows 2000 conference and exhibition, CMeRun announced a management team drawn from the ranks of former Futurelink, Compaq and Microsoft executives, with a former Bell Canada executive as CEO. The CMeRun venture is currently the subject of a $54m legal action by Futurelink, which alleges that the new startup has misappropriated a business plan originally hatched at Futurelink. Sources close to both companies this week expected that Futurelink's suit and a countersuit from Chell will shortly be settled privately.
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ANALYSIS
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