Hosted (Online Applications) BlueTie’s Got the Juice

In March 1999, David Koretz, founded BlueTie, which provides outsourced (hosted online) email and collaboration tools – or a “web based alternative to Microsoft Exchange”.
In speaking with him I learned that there’s an entirely new dimension to hosted applications that I had never thought of. While so many of the media, pundits and hosted application vendor executives are focused on simply serving hosted applications, David and his team are creating a user experience.
In order to get the most out of Microsoft Outlook and use all of its collaboration features you need to have Microsoft Exchange – an email server. By itself Outlook does basic to do list, calendar, email and etc. However, if you want FULL featured collaboration you’ve really got to have Microsoft Exchange, unless you use another solution such as BlueTie. BlueTie is not the only solution, of course, there’s MI8 (which has been around for a long time – they used to advertise on the back of NYC buses), HyperOffice and I’m sure others.
BlueTie’s claim to fame is that it’s not trying to just make a “hosted application”. David is making an application that works faster and is more scalable than a desktop application and delivers an efficient user experience.
He tells me that with BlueTie, email is fast, compared to Microsoft Outlook software that you often can’t tell if you are using the hosted version or a desktop application! That’s fast.
While many of today’s application hosting companies were targeting large businesses when they first started out, BlueTie has ALWAYS and ONLY targeted businesses with 1 – 250 employees. Small businesses. There’s two types of customers that BlueTie sees in their marketplace – very small businesses who rely on their ISP for email or fee email. Then there’s larger businesses who have their own email system and want the best solution their budgets can buy. This is BlueTie’s customer.
With 10GB of email storage, integrated anti-virus and more – BlueTie is tough to beat.
David told me that those businesses who can afford and also afford Siebel, for the most part these are LARGER businesses who have large business budgets. BlueTie’s not against these businesses at all, but is FOR the smaller businesses – their average customer has 14 employees (numbers don’t lie). Their passion is to democratize technology.
Although BlueTie is a hosted service, you can take your notebook PC on a plain and do “non-Internet connected” work. When you get ‘net access again – BlueTie will synch the Microsoft Outlook work you did, back to BlueTie’s servers.
As programming gets more and more advanced, hosted applications will become more and more the rule rather than the exception.
The biggest selling point for hosted applications is that they require very little infrastructure to connect a company. You don’t need a team of engineers, nor to configure a server. You just point all your users to a web page ( for example) and they can login to their custom accounts all via the Internet.
Jolt Cola a BlueTie customer, runs their entire company on BlueTie and links various geographic groups. They pay $100 per month as opposed to $5,000 per month + a $30,000 setup fee that they would
have been charged for a similar configuration.
Is Google a competitor?
I would think so, as they have hosted applications. However, David tells me that Google has been GREAT for his company as Google has helped to educate the market about hosted applications. I guess in the same way that IBM’s push for ebusiness
helped educate the boring ERP market about “eBusiness”.
David did take a job at his “software-as-a-service” competitors. He said that Successful SAAS providers have made software from the ground up for the web. Those that have failed or are struggling have tried to make their desktop applications as hosted applications. It just doesn’t work.
With hundreds of thousands of users and millions expected this year – BlueTie is doing quite well and you can expect even more. Coming soon, you’ll be able to see a history of sales contacts – this will happen automatically. By integrating contacts,
relationship history using metadata BlueTie will be able to show you a virtual map (or index) of your contacts and your relationship to them.
Right NOW there’s some real cool intelligence in BlueTie. You can type, “book dinner with John Day tomorrow” and BlueTie understands this and will do it – knowing that dinner (not breakfast) is in the evening.
David’s biggest complaint is that application companies have failed to deliver productivity and enhance the user experience. Instead many have tried to just stuff a funnel of applications to the user without thinking if their users really need the application. Does this new application provide VALUE to them?
I asked him if he plans to add more software, such as a database like QuickBase or eUnifyDB or that’s built into WebExOne. David said NO. He doesn’t feel that at this time, his customers really want a database from him and furthermore other companies provide a solution that can compliment BlueTie’s hosted email.
Business Week writes a lot about the hosted application business here. It’s article concentrates mainly on “larger businesses” but its a useful read, none-the-less. It writes What’s more, customers typically buy a monthly subscription rather than pay a huge up-front license fee that can easily run into millions of dollars for big corporations and require board approval. Even better: If the software isn’t to customers’ liking, they just stop paying.
In the old world, software was expensive and took years to install. The chances of just ripping it out were about as likely as Windows going open-source.
Public posturing aside, is any of the Big Three software vendors [Ramon injects – Oracle, Microsoft, SAP] reengineering its business around on-demand software? Oracle has been in it the longest and may be most committed. But some purists quibble with Oracle’s definition of on-demand: It is the the company’s usual software with its maintenance outsourced, not a new, lightweight application written from the ground up to take advantage of the Web.
Microsoft, Oracle, and SAP each have natural advantages and disadvantages when it comes to on-demand suites. But in the view of analysts and customers, one thing matters most: commitment. Unlike earlier software revolutions that were sparked by snazzy new technology, this one isn’t centered on the next big thing. If anything, the features and technology are stripped down.

PS – My email constantly gives me problems. Right now my email service is via Hypermart, my web host. Hypermart is a GREAT web host but sucks at email service. I might give BlueTie a try. At $3/month (I can afford it!) – for 1GB of storage, anti-virus built in, custom domain name for my email, a great online interface and more – it’s VERY compelling.