eCedar Fuels Shell’s Oil Industry Startup

Financials and time-tracking ASP eCedar has landed oil and gas industry giant Shell International Exploration and Production BV as its first customer win, it reported today.

The contract is for delivery of the provider’s flagship ASP product, Cedar Financials, as well as its enterprise time management application Cedar Track.

eCedar is the ASP arm of British financials software vendor Cedar Group plc (LSE ticker: CED). The division was launched last October with the aid of a £27.9m ($46m) rights issue, and is supported by partners Compaq Computer, which provides managed data centre facilities, and Worldcom, which provides secure connectivity.

Its customer is Twister, a new division within Shell set up to market a new technology for pumping large amounts of liquids and gases through pipelines. Shell believes the Twister technology will take the oil and gas industry by storm and wants the division to operate like a startup, said a source close to the company.

“Cedar was chosen ahead of local and global competition as the solution is quick to implement, and will scale immediately.” commented Twister division CEO Kees Tjeenk Willink. “The ‘eSourcing’ of this service directly to us reduces our risks considerably. We can now scale our needs quickly and efficiently whilst having full visibility of our financial position.”

With a go-live date of September 1st, Cedar is claiming the deal is the first major ASP contract in the oil and gas industry, although other ASPs, such as Futurelink and Houston-based startup Geonet Services.Com Inc, also target the industry.

Cedar believes the contract is significant because it represents a highly visible beach-head within one of the world’s leading oil companies. “Because they’ve taken the whole package and we’ve set the precedent within Shell of using ASP, we’re feeling pretty confident. It’s all about account exposure,” Matt O’Donnell, group development manager, told ASP-News today.

The deal validates the ASP business model for multinational organisations, where the strategy is to reduce the overhead on internal IT infrastructure by outsourcing, he said. “What [Twister] wants to do is start small and scale quick. They don’t want an internal IT capability,” he added.