ViryaNet: Managing the Service Community

Founded in Israel,
ViryaNet began as a
general software services company in 1988. However, in 1995, the company
had the foresight to refocus its energies on the emerging market for chain
management applications and service communities.

Now, the company is prepping to go public. The company intends to issue 4.5
million shares at the price range of $10-$12. The lead underwriter is Chase
H&Q and the proposed ticker symbol is VRYA.

Revenues have been strong. They increased 61 percent to $11.4 million for
the first six months of 2000. But the company has been losing money. In
1997, losses were $4.7 million. In 1998, losses reached $13.1 million and
$20.4 million in 1999. For the first six months of 2000, losses have been
$6.1 million.

A substantial amount of revenues have come from the Service Suite. This is
a suite of enterprise applications to manage a company’s delivery of
services, dealing with fulfillment, workforce management and so on.
Customers include Sun, GE Medical Systems and EMC.

However, the company has shifted its product line towards the Net. This is
in the form of Service Hub. Basically, it allows for better management of
an organization’s entire service community, which includes employees,
customers, partners, vendors and suppliers. With Service Hub, these
participants can easily collaborate. Service Hub is extremely versatile.
For example, mobile field engineers can use their wireless PDAs and cell
phones with Service Hub.

What can Service Hub do? The technology handles contracts, supply chain,
level agreements, and even auction-based asset procurement and

Since being launched in the fourth quarter of 1999, Service Hub has been
licensed by Picus Symbol, CapRock, BGE Home, and Broadwing. There are also
LOIs with five other major customers.

In the global economy, there has been the emergence of highly complex
service communities. Managing these communities effectively requires strong
technology solutions. So far, ViryaNet has been building the right

The IPO should hit the markets in late September. Expect it to get a strong

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