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Net-Native and Loving It

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Posted June 25, 2001 By Allen Bernard     Feedback

CRM software vendor Onyx was writing XML software two years ago, when writing XML software wasn't cool. That early commitment to Web-based applications has earned the PeopleSoft rival a spot on the ASPnews Top 20 list.

Onyx established itself early on as an independent software vendor (ISV) that ASPs could look to for scalable products. Today, the company's continued industry focus and Internet-native applications has landed it on the ASPnews Top 20 list.

Early Adopter
As a founding member of the ASP Industry Consortium, Onyx realized early on that the appeal of client/server software was waning and the Internet was going to play a major role in the future of software delivery. Because of this, the company gambled and rearchitected its customer relationship management (CRM) products for Internet delivery.

"We have been an early supporter of the whole ASP concept from an ISV perspective," Eben Frankenberg, Onyx's executive vice president, told ASPnews. "As a result of that, we started working with a bunch of ASPs to try to promote the industry. We spent a lot of time with our technology making sure it ran in a preferred fashion for ASPs."

So far the gamble has paid off. Today, 15 percent of its revenue in any given quarter is derived from ASP channel partners and its corporate clients are no longer interested in client/server solutions; they want Net-native applications that ease implementation and upgrade burdens.

"The big companies are looking for the kind of architecture we have and the ASPs that need to support lots of users as well ... their looking for the same kind of architecture," Frankenberg said.

Third Generation and Holding
Unlike rival People Soft, which just released v.1 of its Net-native CRM product, Onyx is currently fielding the third generation of its Net-native package and, in April, finished rearchitecting its delivery platform from the old client/server to a XML-based platform that will allow for easier integration with legacy systems and databases. Onyx has such confidence in its current technology, this latest change will be the last for the next few years at least, Frankenberg said.

"That was actually a bigger gamble (two years ago) than just saying we wanted to support the ASP environment," he said. This is because, in 1998-99, XML had yet to become the de facto data transfer protocol it is today.

Recognizing the special licensing needs of ASPs also helped the company gain ground within the industry, he said.

"We do everything from Sunday" to help ASPs license Onyx products, he said. "It totally depends on what the ASP's business model is. That's another reason we've been able to get a fair amount of traction in the space is that we've recognized it's a nascent industry and that we have to be flexible and work with each partner the way that works for them."

Partners Who Reel in Big Ones
Current ASP channel partners include Breakaway Solutions, Metavante, Encompys, Telstra (an Australian telco), Singapore Technology and Telemedia, and a Scandinavian telco. It may not seem like much on the surface, but Frankenberg said the deals these companies generate are usually large.

"You know you get bigger deals from these guys," he said. "These aren't onezie, twozie's; you get lots of users at a time."

For the foreseeable future, the company plans to continue its marketing focus on corporate sales and vertical ASPs, which Frankenberg believes have the right model to be successful in the long run.

"Our strategy going forward is to make sure we continue to build CRM applications that are highly leveragable by ASPs," he said. "We see a lot of traction in these vertical markets."

The company also plans to market to nonASP outsourcers that deliver such services as point-of-sale. With the Internet gaining traction as the delivery method of choice, the hope is these providers will want to incorporate CRM into their offerings, he said.

A New Era for ASPs
Frankenberg believes the ASP industry is entering its third incarnation where applications will be broken down into individual modules and sold through vertical providers that bundle services aimed at providing a unique set of solutions that would otherwise be too cost prohibitive for in house development. Encompys and Metavante are good examples of this, he said.

"What we're seeing is a lot of interest in vertical applications that are being offered by ASPs or traditional outsourcing companies," he said. "We think this has a much higher probability of success than the other evolutions, which were basically 'You don't need your IT department because we can run the apps for you.'"

And, even with the recent industry troubles, Onyx sees a bright future for ASPs and their associated suppliers. With Microsoft on board and Net-native architected products coming to the attention of corporate IT departments, it's only a matter of time before the industry takes off.

"It has not taken off as quickly as thought," he admits. "(But) we've been doing it for a long time and we still believe there's a huge future in it for ISVs."

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