Like Microsoft before them, Web services platform plays are starting to discover that the key to mainstream enterprise adoption is the mid-tier independent software vendor, systems integrator or OEM. Cape Clear knows it: just this month, the Irish company has announced deals with Choreology, Softwired, Chutney Technologies and the New Toronto Group. Cape Clear's principal rival, Prague-based Systinet, knows it as well, and has retooled its flagship product to appeal to this essential market.
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Context: Systinet, originally Idoox, is the fifth startup from Czech entrepreneur Roman Stanek, whose fourth venture, NetBeans, now forms the basis of Sun's open source Java IDE. Headquartered in Cambridge, Massachusetts, the company has 80 employees, including a substantial engineering team in Prague, as well as sales and marketing offices in San Francisco and London. Systinet closed a $2.3m seed round in October 2001 and followed up with a $21m additional round, led by Warburg Pincus, in March 2002. WASP is available for developers to download, and the company claims it has won 12,000 registered users this way. Of these, 150 have paid the license fees and deployed WASP live.
Technology: WASP 4.0 OEM Edition adds another channel to Systinet's distribution strategy. The main respects in which the OEM Edition differs from standard WASP 4.0 are customization, APIs and documentation. ISV customers can now rebrand all elements of the management console user interface. Systinet has exposed APIs that were previously hidden, and has included code examples with the documentation to help ISVs embed, customize and redistribute the software.
Customers: Systinet signed its first OEM deal with Ericsson in 2001. More recently, Cognos, Interwoven, Mercator and Primus have taken up the WASP cause. The Interwoven deal is particularly flattering to Systinet because Interwoven is using WASP to run Web services for its flagship TeamSite Front-Office 5.5 software. This package lets users collaborate on shared documents and submit content from various desktop applications. Systinet won the deal partly for its availability in both Java and C++ (Interwoven licensed both versions) and partly for its ability to interoperate with Microsoft's .NET.
Competition: Systinet faces competition on multiple flanks, from the open source Apache SOAP stack right up to BEA Systems, IBM, Tibco, Vitria and webMethods, all anxiously pushing alternatives to its Web services platform. The company's direct rivals, though, are Cape Clear and The Mind Electric (TME). Systinet argues that Cape Clear doesn't have an OEM edition of its CapeConnect, which is true, but Cape Clear does have those partnerships with Choreology, Softwired, Chutney Technologies and New Toronto in the bag, plus an avowed intention to keep wooing mid-tier ISVs. Meanwhile, TME, invigorated by a cash infusion, is starting to give Systinet a run for its money in enterprise accounts. It has yet to tackle the ISV market, but knowing TME, that's only a matter of time.
The451 assessment: Systinet's decision to work through mid-tier ISVs and OEMs is hard to fault. It has robust technology, 150 customers up and running and now, better customization, APIs and documentation to tempt ISVs into its camp. But just enabling Web services won't keep the company afloat very long. WASP 4.0 offers a certain amount of security, including authentication and authorization, but it doesn't have the kind of monitoring and analysis other companies are starting to provide. Where Cape Clear has been busily inking partnerships, Systinet has tried for a product-driven approach. It's up to the market now to determine a winner.
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