'Chapter 2' Hosting Is for ASPs, Startup Says

FRAMINGHAM (07/18/2000) - A San Francisco startup is bundling back-office operations, security management and call center operations into a complete package for emerging application service providers.

Labeling itself "the ASP infrastructure company," Chapter 2 E-services Inc. is set to launch at the end of this month. In what is becoming an increasingly complex value chain, Chapter 2's service fits into between pure software ASPs and large Internet data centers with hosting capability.

Chapter 2 is employing 10 cages at Exodus' Web hosting center in Santa Clara to provide hosting plus continuous support capability to ASPs. Back in San Francisco, Chapter 2 has established a call center with help desk and other capabilities to answer questions from the ASP's own customers.

As a result, Chapter 2 is aimed at ASPs who are not themselves Web hosting companies but specialize in applications management. "We give them instant-on infrastructure capability," says Craig Harper, Chapter 2's chief technology officer. Harper and Chapter 2 CEO Ritu Raj cite ASPs that specialize in human resource benefits management as examples of the kind of companies that could use Chapter 2's services.

At the initial 20-seat call center, Chapter 2 is using an automatic call distributor from Aspect Communications, customer relationship management software from Oracle, and Hewlett-Packard OpenView network management. Chapter 2 also is using the HP Praesidium Enterprise Security package, claiming that seven security lines of defense are built into the architecture with multiple intrusion detection sensors placed throughout the network.

Though Chapter 2 is principally aimed at ASPs, it also will offer some outsourcing services to enterprises, particularly those with enterprise resource planning applications. The company's name reflects a philosophy that "Chapter 1" of Internet data centers was plain Web hosting, while "Chapter 2" is more intense applications management.

Chapter 2 has secured US$9.5 million in financing led by Convergence Partners, with participation by Sand Hill Capital and HP. Russ Irwin, general partner of Convergence Partners, has joined Chapter 2's board.

More information is available at: www.chapter2.net.

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