May 10th 2000: Futurelink geared up for a summer assault on the volume market as it relaunched its ASP portfolio yesterday. The pioneering ASP announced new branding for its ASP offerings and an alliance with Merisel to provide hosted MS Office and Exchange services through resellers.

Today it followed up with the release of its first-quarter financials, which showed a doubling of its existing ASP revenues and customer base compared to the previous quarter.

The alliance with leading technology distributor Merisel is the culmination of nearly a year's development and trials of rented Microsoft applications by the ASP (see related ASPnews.com story, MS begins app rental pilots, May 26th, 1999).

Futurelink has adopted a pricing model for its monthly subscription that will leave Merisel free to set its own price to resellers, and will allow resellers in turn to set their own price. And although company officials yesterday were quoting today's official $100 per user per month price tag, Futurelink CEO Glen Holmes hinted to ASPnews.com that the price may be significantly lower when the service goes live in mid-June.

"I believe it is breakthrough pricing. Merisel wouldn't be interested if it weren't," said Holmes.

"This is what we feel is going to be a high volume product," added VP marketing Solveig Whittle. "It's a way for us to get in the door with the resellers."

Once it has established a relationship, Futurelink will aim to interest resellers in its two other service offerings. All three have been packaged as standardised, subscription-based services, and are backed up by training and marketing programmes designed to help the channel close sales. (See related asp-news story on internetnews.com, FutureLink stays in the news, May 10th, 2000).

Futurelink's Q1 results showed steady progress in the development of its ASP business. It signed 26 new ASP customers, bringing the total to 49 by the end of the quarter, each committed to an average monthly subscription of $5,245. The value of outstanding contracts at Mar 31st was $4.1m.

ASP revenues for the quarter were $536,000, up 116 percent on the previous quarter. But the ASP sales were dwarfed by sales from the company's established Citrix systems integrator business, with overall revenues (after acquisitions) coming to $27.1m. The company made a net loss of $23.1m.

Nevertheless, Holmes reiterated that Futurelink is focussing on the ASP business as the main platform for future growth. "We feel SBC [server-based computing] is a very strong space for us to be in, but the big percentage of growth we see from our ASP revenues," he said.

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