Interliant Upgrades ASP Portfolio

As a part of the deal, Microsoft (MSFT)
made a $10 million stock investment in Interliant (INIT).

The two companies plan to work together to develop tools for independent
software vendors (ISVs) and application solution providers (ASPs) to
develop collaborative applications on the Microsoft’s Exchange 2000 Server
platform.

This agreement builds on Microsoft and Interliant’s relationship
established last year in October. The deal puts Interliant in a great
position to capitalize on the success of Microsoft’s Exchange 2000. It also
cements Interliant’s relationship with Microsoft and validates its
collaborative application expertise in the ASP marketplace.

Bill Dering, C.E. Untberg, Towbin
analyst, said the Microsoft investment affirms Interliant’s leadership in
the ASP marketplace.

“The Microsoft investment in Interliant only highlights and confirms the
direction the two vendors have been moving the past few months,” Dering
said. “It formally endorses Interliant as a premiere choice to Microsoft
network of VARs. It gives a strong overall signal that Microsoft thinks
Interliant is one of the best ASPs in the market today.”

Once viewed as a Lotus Notes Web
caterer, Interliant steps to the forefront of the ASP hosting market
segment. In recent months, Interliant has expanded its application
offerings through key acquisitions, and negotiated strategic alliances with
an impressive group of partners.

Early in March Interliant extended its ASP market leadership with the
acquisitions of reSOURCE PARTNER,
Inc
and Soft Link, Inc. The strategic achievement landed Interliant at
the plateau of hosted PeopleSoft,
Inc.
PeopleSoft applications by expanding its portfolio to include
Enterprise Resource Planning (ERP) hosted solutions.

Dering said the PeopleSoft acquisition provides Interliant with an ERP
solution to add to its ASP portfolio, which it did not previously
have. Interestingly, rSP also has been doing some application hosting and,
is more than just a PSFT implementor, but also a PSFT ASP.

“Interliant should benefit tremendously from reSOURCE PARTNER’s
pre-configured rapid implementation methodologies and pre-configured PSFT
application templates, tables and codes which will enable Interliant to
reduce a customer’s time-to-market or time-to-benefit,” Dering said.

Dering added that reSOURCE PARTNER has been providing some payroll
outsourcing services, which makes the acquisition even more interesting
when you consider an ASP providing an end-to-end, outsourced Human Resource
solution. The acquisitions should add nearly $40 million in incremental
revenues to Interliant in 2000.

Columbus-based reSOURCE PARTNER was acquired from Borden, Inc. and included
a state-of-the-art data center in Ohio. By acquiring two established
companies, Interliant bought itself a broad base of potential news
customers and deep intellectual capital in the ERP space.

In February, Interliant won $27.5m backing from Dell Computer
Corporation
(DELL)
, BMC Software, Inc. (BMCS)
, and Network Solutions,
Inc.
(NSOL)
. Already partnered with International
Business Machine Corp.
(IBM)
Lotus Development Corp, and Microsoft, Interliant is in a great position to
step to the forefront of the booming communication and collaboration
application market segment.

New York-based Interliant currently offers Web site hosting, messaging and
knowledge management services, e-commerce applications, customer
relationship management tools, enterprise resource planning and distributed
learning systems through its Web-based rental site dubbed AppsOnline.com.

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