BT, 3i to Form Software Company

BT announced Thursday it
is to form a new Internet performance management software company with
venture capitalist 3i.

The new company will develop a software suite codenamed Napoleon,
intended to help businesses improve their management and delivery
of e-services.

As a key strategic partner and one of the main sales and distribution
channels for the new software, BT is taking a 37.5 per cent equity
stake in the venture, while 3i is investing £1.7 million
($2.72 million) for a similar stake. The balance of the equity will
be held by management and employees.

Graham Davies, BT’s general manager for technology acquisition,
spoke of “the hidden value of BT’s substantial investments in
research and development” and said the new venture was part of
the company’s drive to unlock that value.

Robin Winning, investment executive with 3i in Scotland described
the venture as a pivotal deal for both BT and 3i.

“The new company has a world-beating technology and is well placed
to grow as the market for network performance software takes off,”
said Winning.

Currently estimated to be worth over $7 billion, the global market
for network systems management is expected to grow rapidly for
the next three years. BT and 3i say there is huge potential demand
for software to manage the performance and delivery of e-services,
including online training, desktop video conferencing and complex
knowledge management.

Napoleon has been devised by engineers at BT’s R&D
facility in Suffolk, where it has been 18 months
in development. It offers a full range of network performance
monitoring and testing tools, never before included in a single
product.