Features

Knitted Together, for Success

DQI Bureau

22 Oct 2001 00:00 IST

New Update

Not too long ago, in March 2000, US-based Futurelink became the first
high-profile ASP to announce that it might never break even, after reporting a
huge, $205-million net loss against a Q4 revenue of $35 million. The net loss
for the full year stood at $287 million against revenues of $126 million. A
resigned Howard E Taylor, president and CEO, Futurelink, said, "We are no
longer emphasizing the ASP market in the US. Hard reality!" …And gone
were the days of getting excited on the news of a company walking the ASP road.

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Given this depressing background, does a new player entering the ASP arena
generate response? Probably not, or at least not generally. But if names like
American Express, Tibco, WestBridge Capital Partners and Infosys come together
to form a new company driven by the ASP model, one sits up and takes notice…

Like other ASPs, this new venture called Workadia also promises to drive
substantial internal cost savings and improve employee productivity. The
solutions include a hosted intranet portal which allows clients to deploy
Web-based solutions for their employees rapidly and efficiently. Through the
Workadia portal, employees can access their company’s critical information and
applications, including e-mail, eMeetings, calendars, sales force applications
and financial reporting. But traditionally, all these benefits have been an
integral part of the ASP model. So what’s innovative about Workadia?

Points of strength

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One, Workadia is the result of the strong partnership of four major players.
Two, unlike the majority of ASPs, which focussed on core business applications,
Workadia is looking at the non-core business application model to begin with. It
intends to focus on integrating applications like travel management, expense
statements and sales force applications. And it also intends to tie up with
other vendors to have a tightly integrated product. Three, unlike other ASPs
offering similar products for small enterprises, Workadia plans to target the
mid-sized segment. Phaneesh Murthy, head of worldwide sales and marketing,
Infosys, points out, "I think the small enterprise segment is not the right
target for this."

The new company is betting on the brand positioning of global partners and
the proven skill of Infosys in system integration, to make a killing. It intends
to draw clients from the huge American Express customer base.

The partnering companies in turn, stand to benefit from the Workadia venture.
Infosys, a minority stake holder, can gain access to a large number of mid-sized
companies. Given the huge costs involved in going direct, Workadia offers a good
opportunity window for the Indian software major. Ditto for Tibco.

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‘Four’s Company’

Phaneesh Murthy, head, worldwide sales and marketing, Infosys, on the Workadia model

On
the value each partner brings to the table

American Express, the biggest partner in terms of equity, has a number
of financial offerings like travel management, expense reporting and card
services, which we think, are relevant to our target segment. These are
the needs of most of the companies in our target segment. Also, Workadia
can leverage on Amex’s client base to seek out new opportunities.

Tibco’s business integration solutions will help Workadia seamlessly
integrate existing business systems in real time. For example, these
solutions will come handy when Workadia connects its clients’ general
ledger and payroll systems with the intranet portal to gives real-time
information to employees.

Infosys is Workadia’s SI partner and will put the solution together
for the client. It has the necessary expertise to address the key
challenge of integrating the Workadia solution on a stand-alone basis with
the customer’s existing IT infrastructure. And finally, WestBridge
Capital Partners will assist the company with startup activities.

On the uniqueness of the product and the company

While there are a few products in the market based on a similar idea,
most of them are targeted at small customers. I don’t think that this is
the right target–companies in this space typically don’t pay for
employee productivity. Also, one of the key challenges for any product to
be useful is its successful integration with existing applications, legacy
or new. Non of the current products available in the market have the
advantage of having a SI partnership in place and above all none of the
companies can boast of brands like Amex, WestBridge Capital Partners and
Infosys

On the current status of Workadia

As part of the pilot project, we already have about 20,000 users in
Amex and the results have been better than expected. At present, the
company is managed by people from the parent companies but soon we will
have an independent team in place.

We are looking for a CEO and until then the pricing policy is not going
to be firmed up. It’s going to be an independent company with multiple
shareholders.

While it’s premature to comment on Workadia’s future success, the initial
pilot project undertaken for Amex is reported to be doing well–around 20,000
Amex users are currently using the Workadia solution.

According to Murthy, the pay-back period is about nine months, which makes a
very good return-on-investment deal for investors. Sally Hudson, research
manager, Internet infrastructure services, IDC, says, "This partnership and
technology combination shows that Workadia has a fundamental understanding of
what it takes to create a successful e-business."

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Yograj Varma in New Delhi

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