Applicast offers hosting capabilities to software makers

The company said its new program, called Powered by Applicast (PBA), to be announced tomorrow, will target independent software vendors (ISVs) that want to offer customers some type of application hosting service. As an application service provider (ASP), Mountain View, California-based Applicast hosts German business management software giant SAP's manufacturing applications and Siebel Systems' sales, marketing, and customer service applications.

ASPs host business applications for end users who pay transaction fees to access the software via a browser. ASP advocates argue that renting software is a sensible route for companies that want to use business software but can't afford to install or manage it. An increasing number of business software makers have been involved in some type of ASP initiative, including SAP, Oracle, J.D. Edwards, and PeopleSoft.

The ASP market, while still in its infancy, is expected to grow to $2 billion by 2003, according to market research firm International Data Corporation (IDC).

Under the Powered By Applicast program, ISVs will sell a hosting service to customers, but Applicast will manage the database, the application, the Web server, and other components of the system. The company will also provide support and help-desk services. Under the arrangement, Applicast will get a percentage of the transaction fee a customer pays the software maker.

The software maker will decide whether to market the service alone or with Applicast, said its chief executive John McGrory. "We're not actively selling [their application offerings through PBA] with our sales force."

McGrory said the service gives smaller companies a quick way to develop an ASP offering.

In September, Applicast announced its partnership with No. 1 customer relationship management (CRM) software maker Siebel to host a complete suite of applications for a company's sales, marketing, and call center needs. The offering is targeted to start-ups.

McGrory said the company, which is almost two years old, has about 15 customers, including about 12 who are using Siebel's software.

Separately, Applicast said it closed its first round of venture funding of $16 million from Trinity Ventures, Piper Jaffray Ventures, and Bowman Capital. The start-up now has about 75 employees.

In related news, FutureLink, another application service provider, said it will host Corel's WordPerfect Office 2000 application. Under the deal, FutureLink's customers will be able to buy monthly rental licenses for the software online. Pricing for WordPerfect Office 2000 starts at $9.99 per user, per month, the companies said.