RealTime IT News

PSINet Expands Relationship with Great Plains

The application service arm of PSINet, Inc. Monday made a second date with Great Plains Software, Inc., taking the pair from dance partners, to going steady as an official strategic alliance.

As part of its expanding application service provider offering, PSINet Consulting Solutions, Inc. will provide clients with access to Great Plains' software solutions through its ASP product line-up.

In November 1999, PSINet Consulting Solutions became a Great Plains Global Partner, authorized to implement the complete suite of Great Plains products in the U.S., as well as other global markets.

Less than a year ago PSINet completed its aggressive Internet service provider-buying spree, having gobbled up some 18 international firms along the way. It remains to be seen whether PSINet is on a comparable path of acquiring application service providers.

In May PSINet acquired Metamor Worldwide, an ASP supporting enterprise software and systems environments for a cadre of Fortune 1000 and middle market business clients.

Along with the Metamor deal, PSINet also gained approximately 80 percent of Xpedior Inc., a web page design and Internet implementation consulting service for e-businesses. The purchase also bought PSINet two seats on Xpedior's board of directors.

Effective with the completed acquisition of Metamor, PSINet changed the name of the firm to PSINet Consulting Solutions. The remonikered firm debuted its end-to-end ASP package in July, which includes customized enterprise applications, outsourcing services, implementation programs, and back office integration functions in tandem with managed Web hosting services by PSINet.

David Rice, PSINet Consulting Solutions vice president and general manager of ASP services said today's deal with Great Plains is a natural expansion of the company's original agreement, but that the two have no intent to marry in a merger.

"Great Plains will be an asset in tailoring the ASP offering to companies in the financial, distribution, e-commerce, and manufacturing markets," Rice said. "This partnership is an outstanding addition to our ASP package and will allow us to give clients more options for complete end-to-end services."

Rice added that while electing to resell Great Plains' software, PSINet Consulting Solutions would not take on the responsibility of managing the software or providing technical support.

Great Plains software line-up includes a number of e-business solutions that automate the processing, financial reporting, distribution, and back office functions of a client company.

Jim Traynor, Great Plains director of ASP business development at Great Plains, said the combination of its e-business offering and PSINet Consulting Solutions' scalable IT services creates a compelling ASP solution for customers.

PSINet may be responding to WorldCom Corp. entering the Web hosting marketplace through its $3 billion acquisition of Intermedia Communications Inc. announced last week.

Intermedia was an attractive target for WorldCom because of its controlling interest in Digex Inc. , a top-tier provider of managed Web and application hosting services.

While WorldCom is a few months behind PSINet in pursuing its ASP aspirations, the two deals mark a major industry shift away from acquiring similar firms to expand their networks, toward filling their big pipes with the delivery of outsourced applications.