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.

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