Smarter Relationships
Revenue for 2005 topped $8.5 million, a 174 percent jump from the previous year, earning Apptix a spot on CRN's Fast Growth 100 list for 2006. This year, the company expects to generate about $20 million in revenue by selling its services to small businesses one e-mail account at a time.
Apptix began in 1997 as the software and engineering division of the Norwegian company TeleComputing ASA. It spun off and relocated in the United States in 2002 but is publicly traded on the Oslo stock exchange.
Bringing enterprise-class software to the little guys is what makes the company a success in the small-business market, said Jackie Funk, director of marketing. Enterprise-level software, antivirus and antispam protection and regular backups by Apptix offer small businesses something they might not be able to have on their own.
"A hosted Exchange solution is something that is very affordable for the SMB market," Funk said.
"What our solution provides is an enterprise-class solution at a small-business price. They don't have the initial capital outlay to bring in all the equipment. They don't have to have the technology expertise to put it all together, and they don't have to have the human resources to manage the outages, maintenance and user support on a day-to-day basis.
Funk said that while the market has taken some time to develop, Apptix has seen "quite a trajectory" this year and last year. "We think companies like Microsoft and Salesforce.com have gotten their stories out there, and people are able to understand it and they're able to trust it. There are more people looking for [managed services] as an on-demand service than ever before," she said.
Added Apptix CEO Amir Hudda: "Software-as-a-service, in general, has been getting a lot of attention lately. And the SMB segment is leading the charge this time around."
There are several reasons for this trend, according to Hudda. "If you think about small businesses, they're the ones that have the least amount of IT resources to buy applications, install them, support them and upgrade them. Lack of sufficient resources and a lack of sufficiently skilled resources is a big factor," he said.
The complexity of enterprise applications can be daunting to the small business, and while Microsoft's Outlook e-mail interface may be easy to use, Exchange Server is no walk in the park. "The back end has become more complicated and will continue to become more complicated," Hudda said.
Mobility also has brought a host of technologies that businesses must manage.
To meet the needs of customers, Apptix and its MailStreet and ASP-One divisions offer a variety of hosted Exchange options.
MailStreet, which Apptix acquired in 2005, is the company's entry-level solution. Users can purchase hosted mailboxes that can be accessed through Microsoft Outlook client software or Outlook Web Access 2003. Each account has 100 Mbytes of storage space and antivirus protection. Multiuser accounts are $9.95 per user, while a one-user account costs $12.95. MailStreet also sells wireless e-mail access.
The MailStreet service meets the needs of TriTek Solutions, an Annandale, Va.-based software developer with offices in New York and Boston. The company employs about 60 people, one of whom is a part-time IT staffer.
Rather than shell out the money for a dedicated server, software and a system manager, TriTek's New York office tested MailStreet's product and convinced the home office to use it companywide. TriTek now pays about $550 a month for 70 mailboxes and wireless access.
Dana Easley Richardson, corporate administration director at TriTek, said adding the hosted Exchange solution has been a perk for her company.
"We communicate so much better through the Exchange Server. I'm not very technical and I can go in and set up people's accounts. If I have any questions, I can get them answered very easily and figure out what's wrong," Richardson said. "At first it was a little bit different—but once we switched over to it, it was basically seamless."
Apptix's next tier solution is offered through ASP-One, which the company purchased in 2004. ASP-One offers businesses with between 20 and 100 users a variety of hosted services, including Microsoft Exchange, on a shared or dedicated server, Windows SharePoint site hosting, and Web and SQL Server hosting.
While mailboxes hosted on a shared Exchange Server still run customers $9.95, having a dedicated Exchange Server comes with a higher price tag of $575 for a server with 30 mailboxes.
John Lively, director of IT for Farrell Automotive, Spartanburg, S.C., a subsidiary of the Berglund Automotive Group, Roanoke, Va., signed up for ASP-One's services when the company's owner, William Farrell, needed a mobile e-mail solution. The automotive group has eight car dealerships, an auto repair shop, an ATV center and an outdoor advertising company, frequently keeping Farrell on the road.
"As long as the owner is on the local network, he can send and receive e-mail, but when he travels and he's at a hotel, he can receive his e-mail fine, but he's not able to send it. It's been my biggest challenge," Lively said.
To solve the problem, Lively purchased two Exchange accounts with mobile access from ASP-One for about $40 per month. So far, he said, the solution has been working without a hitch, and if it continues to run well, he will most likely add additional users. The company also purchased about 6 Mbytes of SharePoint space to help its various dealerships access more information.
Apptix also offers SharePoint hosting through SharePointSite.com. About 1,400 sites have been created through the portal, Funk said.
Customers can purchase SharePoint access under three programs: Bronze, which provides 150 Mbytes of storage for 50 users for $39.95 per month; Silver, with 250 Mbytes of storage for 100 users for $59.95 per month; and Gold, the level at which customers get 500 Mbytes of storage for an unlimited number of users for $99.95 per month.
All three programs include access to a primary SharePoint Web site with an unlimited number of subsites, online account management and technical support.
Because it sells through MailStreet.com and ASP-One.com, Apptix now generates about 80 percent of its revenue through direct sales. Before the acquisitions, however, about 80 percent of the company's sales came through the channel and 20 percent were direct sales, Funk said.
She pointed out that some larger companies still purchase the hosted solution through Apptix's channel partners.
In addition to expanding its user base, Apptix is looking to add additional collaboration and messaging services to its portfolio. In the future, Funk said, Apptix will offer Web conferencing and voice-enabled solutions.
"There are hundreds of people who sell hosted Exchange, but there's no one that we know of that also provides messaging collaboration and voice solutions," she said. "We're uniquely positioned to address the needs of this growing SMB segment."