Intranet Solutions Aims for Larger Rivals

Internet analysts love a company with a solid business model and a judicious
sense of when to spend money and what to spend it on. Those reasons alone
are enough to make people appreciate what IntraNet Solutions Inc. has done
over the last six months.


While e-commerce businesses are gasping for air in the once rich sea of
venture capital dollars, the content management companies who outfit them
with publishing capabilities, such as IntraNet Solutions , are collecting handsome fees for their services. What INRS
does is roll out B2B and B2E intranet and extranet applications.


If people were to examine INRS’ track record over the last two months, they
would see that the firm bought Inso’s Information Exchange Division for $55
million in cash, purchased software integrator InfoAgent Solutions BV and
inked deals with both Yahoo! Inc. to
provide file viewing technology for portal’s e-mail users and Netegrity Inc. to
bundle Netegrity’s security technology into its heralded content management
system.


Dan Ryan, vice president of business development and marketing for IntraNet
Solutions, said the deals were part of the company’s aggressive growth plans.


“Historically, we’ve done little sooner and a lot more later once we proved we could deliver the numbers,” Ryan told InternetNews.com this week.
“What we’ve done is gone through critical mass stage. We’re becoming more
aggressive. We’re up to almost 300 employees, we took in about $10 million
in revenue, we filed a $130 million secondary in March. Those acquisitions
we made are value-based, accretive business-to-business plays and are
an indication that we believe we have identified sweet spot in the market by
offering very unique business content as opposed to consumer content.”


INRS’ hallmark offering is the Xpedio Content Management System, of which
the fourth and latest version hit the market this week. Xpedio allows
clients to contribute content from desktop applications, from
computer-assisted design programs with great control. It then publishes the
content and frees Webmasters from routine coding and updating.


The Xpedio Content Server retails for about $150,000, which includes staging,
production, development and unlimited use. The Xpedio WorkGroup sells for
$30,000. INRS also offers a consulting services group and a program where
clients may receive technical training. Many of the company’s 1,500 customers opt for the higher-margin Xpedio Content Management package.


Andrew Warzecha, senior program director of electronic business strategies
at META Group, said INRS is doing a
lot right in the content management arena.


“They are a very smart and opportunistic vendor,” Warzecha said. “Their
niche is a broad range of functionality across a wide spectrum and they have
done that inexpensively in offering easy-to-deploy solutions.”


But despite the success of the content management firms, Warzecha doesn’t
see everything through rose-colored glasses.


“If IntraNet Solutions had a weakness I would say that it would have to
improve its workflow capability,” Warzecha said. “But none of the content management
companies have great workflow capability.”


Workflow encompasses the series of tasks within an organization to produce a
final outcome. For example, in a publishing setting, a
document might be automatically routed from writer to editor to proofreader
to production. At each stage in the workflow, one individual or group is
responsible for a specific task. Once the task is complete, the workflow
software ensures that the individuals responsible for the next task are
notified and receive the data they need to execute their stage of the
process.


But the real tale of the tape is in th

e numbers for INRS.


First quarter revenues for INRS were $9.46 million, an increase of 113
percent over the $4.45 million reported for the same period last year and 26
percent up from the $7.51 million reported in the prior quarter.
INRS’ net income was $3.15 million and license revenues, spearheaded by the
Xpedio Content Management System, represented approximately 79 percent and
service revenues 21 percent of the total gross revenue for the quarter.


INRS is not a solo success story in the market as its rivals are laughing
all the way to the bank, too. INRS’ competition includes Eprise Corp., Vignette Corp., BroadVision and Interwoven , all of
which posted significant revenues and were granted “buy” or “strong buy”
ratings by analysts.


Still, Warzecha is confident about INRS’ staying power.


“I would say IntraNet Solutions is different from its competitors in key
areas,” Warzecha said. “They now have graphical builders and have beefed up
their ease-of-use function; they have out-of-the-box capability for the
end-user. They have a broad scope of offerings, fast time-to-deployment,
and they increased vendors in the European market.”

Ryan said INRS’ philosophy is what sets it apart from others.


“We have always been an employee extranet and have focused on offering
business content as opposed to somebody is focusing on building a
high-impact Web site,” Ryan said. “That has been a key difference.”

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