Peakhour rush to ASP

Peakhour rush to ASP

Flush with $12 million in venture capital funding, Australian Internet startup Peakhour plans to use the channel to propel its new application service provider (ASP) business into the huge SME market.

Last week Peakhour launched an application service provider (ASP) service providing hosted business applications for small-to-medium businesses.

Under the ASP model, applications are hosted and managed remotely and leased over a secure Internet line, but most ASP companies have focused on the enterprise sector.

Peakhour has enlisted more than 200 resellers in every capital city in Australia to help sell the service, and expects to have more than 10,000 customers in the first year.

`The resellers are smaller companies, typically local IT consultants and Web designers,' explained Peakhour's founder and CEO David Harrington. `We're not about putting them out of business, but adding to their bag of tools. It's like a virtual franchise.'

Businesses can also subscribe to the service through the Peakhour Web site and access a 24 x 7 call centre for customer support.

There are 906,000 small businesses and 46,000 mid-size businesses in Australia, but Peakhour believes the market is largely untapped. Peakhour aims to make enterprise-level tools available to SMEs, Harrington said.

`Our goal is to reinvent this space for small-to-medium businesses, which until now have had to deal with a local cottage industry characterised by complexity, high cost and very fragmented suppliers.'

Peakhour has bought the cost of ownership down to an affordable level for SMEs, with customised packages costing between $30 and $100 per month.

`It's a Lego approach,' explained Harrington. `The components fit together, and you can add and subtract as needed. We are targeting all SMEs, including those currently on the Web. We're also in discussion with other organisations to offer vertical market implementation.'

Harrington said currently only 15 per cent of smaller businesses have taken advantage of e-commerce.

To get SOHOs on board, Peakhour will provide basic Web site hosting services and five business e-mail accounts free for the first 12 months with its FreeStart package.

The available applications include business e-mail, Internet access and site hosting while human resources and customer relationship management (CRM) will be added to the suite eventually.

Harrington said Peakhour partnered with organisations like Microsoft, Compaq, Onyx, Portal, Calltime and GlobalCenter to provide enterprise applications previously not available to SMEs, but there are no plans to offer products such as Microsoft Office, as they are already widely available.

`I find the Citrix model of ASPs a bit clunky,' Harrington said. `There's no economies of scale on the software side and renting just adds extra costs.'

The Peakhour Web site includes an intregrated customer Dashboard, which is a single administration page where customers can manage all their Peakhour business services whilst tracking the performance of the online business.

According to Harrington, the benefits to SMEs of Peakhour's ASP model include a set-up process over a Web browser, no need to download software, free technical support over the phone or Web, economies of scale, free upgrades and a high level of security and back-up measures.

Peakhour expects 80 per cent of revenue to come from subscription fees, 15 per cent from fees for credit card transactions and 5 per cent from advertising.

Harrington, a former ninemsn founding director, founded Peakhour in June last year The company is currently in its second round of funding after raising $12 million in the first round from investors like APN News & Media, Gresham AMCF, Citadel PDF and Technology Venture Partners.

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