[ ASP news ] [ publications ] [ forum ] [ about us ] [ directory ]
[ ASP news ] [ publications ] [ forum ] [ about us ] [ directory ]
|
NEWS
Mar 31st 2000: Much-watched startup netASPx launched with $100m backing from venture capital firm GTCR Golder Rauner this week. Herdon VA-based netASPx is the venture set up by the former management of ServiceNet, an early ASP joint venture by Andersen Consulting and BBN, the predecessor of GTE's Internetworking division. Despite the impression given by this week's announcement, GTCR's $100m investment was agreed some time ago. netASPx, founded May 1999, has already built up a significant infrastructure, with sales offices in ten eastern and central US cities. Its decision to publicize the investment - by far the largest investment in a pureplay ASP by a single venture capital backer - signals a growing confidence at the hitherto secretive ASP. "The ASP market is in its infancy and netASPx is well positioned," said CEO John Whiteside. "No other ASP has approached the market as netASPx has." Whiteside told ASP News Review that netASPx has "hundreds of customers, the majority of which are active at any point in time," but declined to provide further detail. The ASP targets middle-market companies, offering a suite of business administration and collaborative applications based on products from Lawson Software and Lotus Development. It is committed to an integrated, shared-server architecture that provides economies of scale both across customers and between multiple applications at individual customers. netASPx builds on the experience gained at ServiceNet, which Whiteside and a number of fellow-executives left en masse just under a year ago. "We grew ServiceNet from start-up to revenues of $85 million and profits of $5 million in two years," he said. The core of the ServiceNet business had been the operation of Andersen's internal Notes messaging system, which created a conflict of interest when Whiteside's team started laying plans to aggressively expand application hosting for external customers. "When Andersen Consulting was unwilling to IPO ServiceNet or accept growth capital from a private equity firm, I left with this seasoned management team and joined forces with GTCR," he recounted. Chicago, IL-based GTCR told ASP News Review that it invests capital behind companies with exceptional management structure. "Our average investment is between $50 and $200 million in capital," said Philip Canfield, a GTCR principal. netASPx provides a mix of traditional systems integration alongside application hosting and application management services. It prices customer-site application implementation on a time and material basis, while charges for hosting and application management services vary from customer to customer, depending on complexity, volume and service levels. Whiteside pointed out that netASPx pursues business only if it is compatible with its overall structure. "This enables netASPx to avoid creating the silos which Web hosters and outsourcers have created, thereby enabling netASPx to leverage scale economics across customers on the service, not just within customers on a commodity infrastructure," he said. "The key to this business is selecting a target set of customers that are ready to adopt the ASP model and then to offer the right combination of applications," added Canfield. Report by Denise D'Onofrio
|
ANALYSIS
|
