Take a package of customer-facing applications, add a dash of portal technology and stir it together in a broth of Web services. That's a recipe Kinzan Inc. hopes will fortify it in a troubled economy.
As part this strategy, the Carlsbad, Calif.-based maker of hosted software applications has announced it has acquired Portal Wave, a Mountain View, Calif.-based provider of enterprise application portal server technology, in a stock-for-stock deal valued at about $10 million to $11 million.
Kinzan has already folded Portal Wave's technology together with its own Core3 platform, which is aimed at companies with distributed systems. The resulting product -- targeted at the manufacturing industry -- is called Collaboration Center.
The decision by Kinzan to focus on customer-facing -- or sell-side -- technology makes sense, said Louis Columbus, an analyst with AMR Research in Boston.
"Sell side -- in conjunction with the Portal Wave-based enterprise application portal -- is a smart move, especially as the sell side seems to be somewhat more recession-resilient than overall e-commerce and e-business spending," Columbus said.
Of the CIOs that AMR polled in the first quarter of this year, 36% said sell-side technology is the one area they would continue to spend their IT money on.
Kinzan's new Collaboration Center offering lets companies like cosmetic maker Avon Products Inc. share with their distributors only the components of their back-end systems that they choose, said Gari Cheever, president and CEO of Kinzan. For example, he said, a distributor can access a back-end CRM system to update customer lists.
On the flip side, distributors accessing those back-end systems can either use the business processes developed by the larger organization or use their own. And employees of the distributors don't need to be as intimately knowledgeable about those systems to be able to use them, he said.
Cheever said integrating Kinzan's front-end applications with its customers' back-end systems is the key to its business -- and a service that is made easier and cheaper for its customers with the acquisition of Portal Wave and the advent of Web services.
"We see portals as a sort of universal interface to these back-end systems," Cheever said, who added that customers save money by not having to purchase an expensive integration server from an EAI vendor to connect two back-end systems.
The other part of the equation is Web services, an area where Kinzan's Java 2 Enterprise Edition (J2EE)-based platform architecture will serve it well, said Cheever.
"Web services in our mind is really Internet middleware," said Cheever. And the Internet is a cheap communication tool. "This whole Web services space becomes an ideal way to integrate, communicate and transact business among large distributed organizations."
AMR's Columbus said Microsoft's .Net initiative will likely dominate the Web services market for Fortune 500 companies, but there is room for smaller companies like Kinzan to deliver "Web services for the everyman."
Collaboration Center has been shipping for about two weeks. Cheever said implementation costs anywhere from $100,000 for about 200 users to $1.5 million for companies with "tens of thousands of users." Cheever said more typical is a $200,000-$350,000 price tag for companies with about $200 million in annual revenue.
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