AlterEgo Moves Away From ASP Model

AlterEgo Networks Inc. has revised its application service provider strategy and gone into the software and services business. This week the company will roll out a suite of wireless applications designed to let businesses slowly build up their wireless infrastructures, an approach it chose over quickly deploying a wireless infrastructure product that might be difficult to upgrade down the line.

Analysts say the company is taking cues from the top wireless technology vendors. "Last year Wireless Knowledge went from selling its services to telecommunications service providers to selling rich wireless applications directly to companies," says Jennifer DiMarzio, an analyst at Summit Strategies.

AlterEgo had a strong following of more than two dozen Fortune 2,000 companies but revamped its business plan to tap into larger markets. DiMarzio says most large companies with a strong IT support staff favor wireless applications that can be hosted and controlled behind corporate firewalls over outsourced services. In giving its customers more control, AlterEgo, she says, is aiming to please.

So far, it appears to be doing just that. Macromedia Inc. has been testing AlterEgo's applications for about four months and plans to deploy them by this fall so customers can gain wireless access to information available on the Macromedia site. "We have pretty extensive Web [server] farms in numerous locations and enormous amounts of Web traffic hitting our site, so we wanted to be able to control the applications ourselves in-house," says Norm Meyrowitz, president of the company's investment arm, Macromedia Ventures. "Repurposing and transcoding data is a very cost-effective way for us to provide our customers with wireless access. If we had to rewrite an entire Web site just for our mobile customers, we wouldn't be doing it."

The entire AlterEgo product suite will be available Tuesday starting at about $450,000 for all four applications.

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