Corio, FutureLink announce new software rental deals

The application service provider announces a $30 million round of funding, along with news that three more companies have agreed to let Corio rent their business software to joint customers.

Kim Girard
Kim Girard has written about business and technology for more than a decade, as an editor at CNET News.com, senior writer at Business 2.0 magazine and online writer at Red Herring. As a freelancer, she's written for publications including Fast Company, CIO and Berkeley's Haas School of Business. She also assisted Business Week's Peter Burrows with his 2003 book Backfire, which covered the travails of controversial Hewlett-Packard CEO Carly Fiorina. An avid cook, she's blogged about the joy of cheap wine and thinks about food most days in ways some find obsessive.
Kim Girard
2 min read
Application service provider Corio announced a $30 million round of funding today, along with news that three more companies have agreed to let Corio rent their business software to joint customers.

The privately held Redwood City, California-based company said it has added software from BroadVision, Commerce One, and Cognos to its menu of applications available to customers to rent over the Net. The companies join business software makers PeopleSoft and Siebel, which already are Corio partners.

Corio's news comes amid a flurry of applications hosting announcements today. Corio, like its main rival USinternetworking, is a pure play application service provider, concentrating solely on hosting software for customers from multiple vendors. Another application service provider (ASP), FutureLink, said today that it will host Microsoft Office 2000 applications at its data centers for a flat, monthly subscription fee.

The news came after Microsoft said it plans to rent out its Office desktop software online through its computer-making partners. Micron Electronics will be the first to do so. Customers would access the applications over the Internet, eliminating the need to install software on the user's machine.

Other companies, including Oracle, are planning to host their own software for customers, instead of using a middleman such as Corio. Through Business OnLine, Oracle is now hosting its business applications for 30 companies or 2,000 people, according to the company.

Market research company International Data Corporation (IDC) expects spending on services offered by applications service providers such as Corio to reach $150.4 million worldwide this year. ASPs argue that midsized companies can avoid management headaches and save 70 percent in up-front costs by renting all software applications rather than buying them.

On its end, Corio plans to make the three product lines from Cognos, Commerce One, and BroadVision work together for its customers, who will pay a monthly fee to access them over a secure network. BroadVision's software enables companies to personalize e-commerce transactions, while Cognos makes business intelligence software that lets business managers weed through a host of data and extract information to help make it more competitive. Commerce One helps link buyers and suppliers over the Internet.

Additionally, Corio said it has closed a $30 million round of funding led by Lehman Brothers Venture Partners. Companies that have already taken an equity stake in Corio include Siebel Systems, Concentric Network, and Sun Microsystems.