USi to help AT&T expand enterprise service offerings
Hosted software applications services provider (ASP), Usinternetworking (USi), with operations in North America, and two development centres in India at Hyderabad and Bangalore, is set to consolidate its operations following its recent acquisition by AT&T.
The Fortune 10 company AT&T, with revenues of $115 billion, had acquired USi for $300 million and saw this as a vehicle to penetrate the enterprise service offerings. The merger process was likely to be completed by October-end.
The Chairman and Chief Executive Officer of USinternetworking, Mr Andrew A. Stern, now in India, and the USi India, Managing Director, Mr Balachander Vasireddi, spoke to Business Line about what the major development meant from USi perspective and how they would complement AT&T’s diversified business.
Interestingly, USi will retain its brand name and identity and continue to offer enterprise software hosting services. The company now services over 150 corporations, a majority of them with revenues of over $1 billion, and its clientele includes Wachovia, Visa and GMAC in financial services and Motorola in manufacturing.
Mr Stern said often enterprises fail in their quest to deploy software effectively. A hosted application provider ensures that the software is customised for their requirements, be it Oracle, Peoplesoft, Sibel or Ariba.
"Typically, large financial services providers, and those in the manufacturing sector, prefer this option. The advantage is we take care of the entire software deployment and host them at our data centres located at Naples, Chicago and Denver and through alliance partner in Europe. This ensures that there is no down time and their critical software assets are protected," Mr Stern said.
"The ASP business, poised to take off in the late 90s did not happen as many companies without proper business model entered the Internet business. But the industry has matured and ASP has come in a different form — software as a service or ASP II," Mr Vasireddi explained.
"We compete with the likes of IBM. The AT&T development will help tap into new markets and new segments. Traditionally, our focus was on large enterprises. With the AT&T reach and marketing strength, we would now address the small and medium-sized enterprises," Mr Stern said.
AT&T is the second largest hosting services provider and partners 22 States in the US. Providing insight into the market as per IDC estimates, Mr Stern said the application management services is estimated at $21.5 billion and the US alone accounts for about $9 billion.
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