Chapter 2 Launches ASP Hosting Service

ASP infrastructure startup Chapter 2 e-services, Inc. yesterday launched its 24×7 ASP management and infrastructure services.

Why “Chapter 2”? Chapter one of the Internet was web site hosting. Chapter two is business application hosting.

Ritu Raj, CEO and founder of Chapter 2, told ASP-News: “We’ve built this company to take the pain out of operations for ASPs and small to medium-sized companies who have business applications.”

Chapter 2 announced it has already booked orders for over $4 million. It already supports financial software for Novell, Inc., and human resources management applications for Aspect Telecommunications. Other ASP clients include InAlysys, Inc. ; QB, Inc.; Southrock Software; and Alphasoft.

Founded in October 1999, Chapter 2 is based in San Francisco. On July 5th, it announced that it had secured $9.5 million in a Series A financing round led by the venture capital firm, Convergence Partners. Other investors included Sand Hill Capital and Hewlett-Packard Company. The company is still privately held. See related ASP News story on, Chapter 2 Raises $9.5 Million, Jul 6th 2000.

“Chapter 2 addresses a critical need to provide a ready-made infrastructure that incorporates high-level security, customization, and scalability to meet its clients’ current and future requirements,” said Russ Irwin, general partner of Convergence Partners, who has just joined Chapter 2’s board of directors.

Chapter 2 provides infrastructure through co-locations in Exodus data centers around the world and has partnership agreements with Hewlett-Packard (employing HP’s top-of-the-line HP Praesidium security package), Cisco, and Oracle.

“As part of our recent Oracle application project, Chapter 2 e-services provided fundamental experience in implementation at an enterprise level,” said Todd West, director of Information Systems & Technology, for Novell. “We continue to use their services to maintain and enhance our ERP system.”

When the company says its vision extends beyond ‘power, pipe, and ping’ it means that these four partnerships — Cisco, Oracle, Hewlett-Packard, and Exodus — enable Chapter 2 to provide a top-of-the-line service, from solid hardware and bandwidth to 24×7 monitoring and management down to the application level.

“To realize the ASP industry’s potential, service providers must address key customer issues, including flexible and scalable SLAs,” said Chris Christensen, program director of IDC’s Internet Security Infrastructure group. “In addition to offering a complete infrastructure that ASPs can immediately tap into, Chapter 2 is helping them offer higher, guaranteed performance levels that large corporations are demanding when outsourcing their business applications.”

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