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Hot market for rent-an-app

Lotus and its partners unveil new Web applications that can be rented through ISPs, highlighting a growing trend.

Next week, Lotus and its partners will unveil new Web applications that can be rented through ISPs, highlighting a growing trend.

This week, GTE Internetworking (GTE), a major ISP formerly called BBN, announced a Web applications outsourcing service for major corporations, starting with collaborative and e-commerce applications.

Both services target business users, but perhaps the most startling example of the possibilities is the use of an Instant Teamroom--offered through an ISP and built on Lotus Notes and Domino software--to plan a wedding.

"I talked to the mother of the groom, and she liked the ability to have a side discussion with her son about who sits where and to be sure only her son can use it," said Steve Brand, senior director of Lotus's hosted Internet solutions division, which has pushed Instant Teamroom as proof that rentable groupware can work.

Also in the consumer space, Throw will debut rental "private spaces" next month. Epicon offers a service to rent Windows business applications without downloading all the code, while Intermark rents apps by the minute, month, or for each use.

The GTE and Lotus programs differ markedly, but together they point to ISPs' search for new revenue sources and the growth of outsourcing Web applications.

"We aimed at 'teamware' to facilitate projects with a beginning and an end," Lotus's Brand said. "We really believe that this will dramatically lower the barriers to a very broad set of businesses and ultimately consumers."

Lotus launched Instant Teamroom in June with Netcom, an ISP just acquired by telecom firm ICG Communications (ICGX). Companies or individuals rent a "space" on the Web where they can gather for collaborative work, using elements of the Lotus Notes collaborative software.

ISPs US West Interprise Networking and Interliant later joined Instant Teamroom, which is priced at $14.95 per month for each user, according to Lotus. The project-oriented service is designed for limited-time rentals and targeted largely to small or midsized companies that don't want to install Notes and its required infrastructure.

Next week at Lotusphere, the annual Lotus users conference, other software vendors that base their applications on Notes and Domino will unveil new rentable apps. They range from sales force automation software and help desk applications to a program for companies to get certified that they're Year 2000-compliant.

By contrast, the GTE program aims to host and essentially to outsource mission-critical applications for major companies, building its Re@ch Enterprise suite of applications on its existing Web-hosting business.

The GTE offerings include an extranet service, an e-commerce offering, and a customer self-service application due to be rolled out by midyear.

"What we provide is an outsourced service," said Amy Hall, extranet product manager for GTE Internetworking. "They can purchase an application for a one-time fee and then pay an ongoing hosting fee."

GTE is positioning Re@ch Enterprise as an extension of its product line that currently includes Internet connectivity, security services, remote dial-up access for sales forces, Web hosting, and so on.

"We are in a sweet spot between an ISP and the systems integrators," GTE spokesman Vaughn Herring said. "Neither of those markets now can satisfy the full need of what customers want."

GTE's new service uses off-the-shelf applications plus customized work for many longtime BBN customers. The e-commerce service uses applications from iCat for catalogs and CyberCash for payments.

"We could cut off as much as six months in a development cycle," Hall said.

Analyst Dan Taylor of the Aberdeen Group thinks GTE Internetworking will gain from offering its service in a suite.

"They can offer a full service. Look at other ISPs: They offer Web hosting, virtual private network service, and remote access, but they won't put them all together," Taylor said. "GTE is selling enterprises something that they need--an integrated applications suite."

Today, that differentiates the Lotus program from GTE's, but ISPs like Netcom expect to unveil more rentable apps by March. Netcom is currently running a market trial of Tumbleweed's Posta service, which delivers documents over the Net guaranteeing delivery and a signed receipt.

Pam Goncalves, Netcom's public relations manager, said Instant Teamroom has been offered to Netcom's 11,000 Web hosting customers but not marketed aggressively yet. The ISP expects to unveil a fuller set of rentable applications by March.

"It's a way of getting the average revenue per customer up," Goncalves said. "We're in the value-added business, so any time we can add a service on our offerings, we're looking to do that."