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Roger Hughlett Staff
A local technology firm, after striking a deal with Columbia's
Sequoia Software Corp., is entering the lucrative applications
service provider industry and potentially starting a new company.
E.magination network llc, a Baltimore Web development and
interactive design firm, has leased its LiveFluence application
to Sequoia Software.
The deal, which involves Sequoia Software paying initial
fees of $1,500 for each of the 15 licensing agreements, marks
e.magination's first major deal for its applications service
provider division.
"It's a division now and it could turn into a new business,"
said Brian Ocheltree, CEO of e.magination, which recorded
about $7 million in sales in 1999 and is on pace to top $12
million this year.
The applications service provider industry is currently worth
$300 million. Boston-based IDC, a technology research firm,
projects the industry will generate more than $7 billion by
2004. Other research groups put that figure even higher.
The Yankee Group, a Boston research group, projects the industry
will generate $11 billion by 2002.
ASP market
"Talk to anyone these days and they will tell you
they want to be an ASP," said Jason Goldberg, an analyst
with Global Ventures in Phoenix, Ariz. "And there are
reasons why that's the case -- they're called dollars."
The ASP model basically allows software to be leased from
the host company for a monthly fee. Annapolis-based USinternetworking
Inc. has been credited as one of the first companies to
develop a successful ASP business model.
LiveFluence, which is a customer-relations application
hosted by e.magination, allows users to interact with customers
on a one-to-one basis in real time over the Internet.
Because the application is Web-based, users can access
it from anywhere as long as they have access to the Internet.
As Ocheltree explained, companies will no longer be bound
geographically when it comes to recruiting customer support
staff.
Rick Faint, chief executive officer of Sequoia Software,
said e.magination's product will enhance the company's customer
service quite a bit. Sequoia Software will pay e.magination
$150 per month for each user.
"LiveFluence gives Sequoia an easy to use, cost-effective
tool for serving the needs of our customers who use the
Web to communicate with our support personnel," Faint
said.
The deal with Sequoia makes sense for e.magination on a
couple levels. The fact that Sequoia Software develops Internet
portals for business-to-business clients using extensible
markup language (XML) is a definite advantage, Ocheltree
said.
"These guys are pioneers in XML," Ocheltree said.
"They not only will be using our applications to help
them with customer support, but they will be acting as a
reseller."
Potential clients
Other local clients who are using LiveFluence and reselling
it include SkynetWeb Ltd., of Baltimore, and e.ssociation
llc, a Baltimore company with ties to e.magination.
Ocheltree declined to say how much any of the deals are
worth for the 110-employee firm.
Ocheltree said e.magination has other deals in the works
with potential clients and resellers -- even one that would
take them to Asia.
"We're working with a firm to launch LiveFluence in
[South] Korea," he said. "The application would
be the same, but in Korean."
With the international ASP market expected to explode,
according to industry research, timing appears to be in
favor of e.magination's movement into the sector.
© 2000 American City Business Journals
Inc.
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