Employease Takes The Hybrid Road

On-demand software and service company Employease expanded its partner program today by adding payroll giant ADP to its roster of vertically segmented companies.

The agreement not only moves the company further into the “hybrid” value-added reseller (VAR) and private-label, on-demand services market, but paves the way for a more Web-based, service-oriented architecture (SOA), the company said.

Under terms of the deal, ADP’s Major Accounts Services, part of ADP’s Employer Services Division, will offer private-label Employease on-demand services, including benefits administration, performance management, leave management and applicant tracking.

These services will be offered to companies with as few as 50 to more than 1,000 employees, expanding Employease’s exposure in this segment since many of its customers have fewer than 100 employees.

ADP will also become a “hybrid reseller,” repackaging and offering these third-party on-demand services to its customer base.

“We actually baked these solutions into their core business, allowing users and resellers to manage the data and processes,” said Jeff Beinke, Employease vice president of product strategy and development.

Employease also today announced plans to offer its own on-demand payroll services to companies with more than 1,000 employees. This service will combine many of the payroll features brought to the table through the company’s partner relationship with ADP, combining it with human resources and benefits solutions, said Beinke.

Like ADP, Employease takes a “multi-tenant” approach to on-demand software, allowing its customers to share a single database and source of applications software. This makes for easier upgrades and also provides the ability to distribute information to multiple vendors and applications, Beinke added.

Market researcher Gartner Group predicts that software as a service (SAS) vendors will become the dominant players in the human resources industry by 2008.

Not surprisingly, it all comes down to money when making a pay-as-you-go decision.

Factors driving this industry include a desire to pump up internal software services without adding startup costs, as well as the need to adopt changes in software without incurring significant service and support expenses, Gartner noted.

Employease’s shift to value added resellers (VARs) and co-partnering has actually been going on for some time, said Beinke. However, the 10-year-old company took a serious turn into private labeling when it launched a pilot program last year with ADP.

This latest deal with ADP also signals the company’s evolution into more Web-based subscription activities, similar to those services now offered by companies such as Salesforce.com.

Employease plans to deliver the first phases of its service-oriented architecture (SOA) next month as it alters its business model to make more use of the Web as a delivery platform, said Beinke. Plans are to shift the business over to more of a Web environment by 2007.

Beinke admits, though, that his company is monitoring the problems that have recently affected Salesforce.com and hopes to avoid similar situations as it makes the transition.

Employease has partnerships with two of the top three insurance brokers, and three of the top 10 health care providers, Beinke said. Partnerships have also brought in roughly 450 customers in 2005, and have added more than 2,000 people selling the Employease solution across various vertical areas, he noted.

Companies that subscribe to Employease services include Brass Ring, Puma and Covad, said Beinke. The company presently has more than 1,000 clients and its on-demand services manage about 700,000 employee records, the company said.

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